Portland State University faces financial challenges

Nearly 100 non-tenure track faculty at Portland State University got notice of possible layoffs last week. These notices come as the university faces a continued decline in enrollment and a budget deficit of $18 million this fiscal year. PSU President Ann Cudd joins us to explain the big picture of the university’s financial stability.

Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.

Dave Miller: From the Gert Boyle Studio at OPB, This is Think Out Loud. I’m Dave Miller.

Eighty-nine non-tenure track faculty at Portland State University were notified last week that they might be laid off at the end of the school year. The notices came as the university faces a continued decline in enrollment and an $18 million budget deficit this fiscal year. Ann Cudd is the president of Portland State University. She joins us now to talk about both the university’s financial picture and its plans going forward. Welcome to Think Out Loud.

Ann Cudd: Hi, Dave. Thanks for having me.

Miller: So I mentioned that 89 non-tenure track faculty were given notice of potential layoffs last week. Do you expect that number to go up?

Cudd: Well, actually the number is 94, but it can’t go up at this point anymore because there’s a contractual deadline for giving those notices. So it’s basically an eight month lead time notice and these were notices of notice. That’s in two months, we will be making basically final decisions about who will receive a layoff notice.

Miller: What would it take for these layoffs to not go forward? As you said, this is a notice of a notice, and the university has been very clear that these are not layoffs yet and they can’t officially be yet. But what would it take for them to not happen?

Cudd: So, we are undergoing an entire financial sustainability plan and a planning effort. And one aspect of that is what we’re calling academic revitalization and curricular efficiency. What we’re doing is trying to figure out which of our academic programs are really the most viable, which can grow, which might need to shrink a little bit and which might need to be put on moratorium. Once we decide that … and also we’re looking at our course scheduling and looking at where there are redundancies or very low enrolled courses. Once we look at that and are able to make decisions about that, then we’ll know which faculty we need and how we’re going to go forward with the layoffs.

So we don’t expect that we’re gonna need to lay off all 94. Certainly not. Well, yeah, it’s very unlikely that we would do that, but we haven’t had adequate time to plan for exactly which ones we would lay off.

Miller: Let me put it this way. I mean, if you were one of the people who got one of those notices last week, would you be looking for another job for next year right now?

Cudd: It would be premature for them to do that, I think. I think it would be best to wait probably for a couple of months. But on the other hand, somebody who’s very uncertain or who’s very risk averse, shall we say, might decide to do that.

Miller: What is a non-tenure track faculty position? It’s a term of art that makes perfect sense to you, but probably less sense to many people listening.

Cudd: Right. So our non-tenure track faculty members are faculty members who are not eligible for tenure, and they’re typically completely engaged in instruction.

Miller: As opposed to research?

Cudd: Correct. Or they might be completely engaged in research, but not the full range of teaching research and service that is the traditional tenure track and tenure faculty position.

Miller: So for the most part, we’re talking about people who may have the most facetime with students, may teach the most classes, and my understanding is also, many of them are teaching required classes. What will losing these teachers mean to the student experience at PSU?

Cudd: Well, of course, some of them are teaching required classes, but we also find that we have a pretty inefficient use of faculty time right now. And so we don’t expect this to really make a big difference in terms of our ability to serve students. But the process we’re undergoing, as I mentioned, the academic revitalization, is really a look at the entire academic portfolio and we’re trying to adjust it in order to better serve students. So it is actually part of our strategic plan to create clear pathways through our degree programs. And this is part of that effort.

Miller: What do you mean when you say that you have an inefficient use of faculty time?

Cudd: Yeah. So there are a number of things. One is that our class scheduling is not very well regimented. So classes begin at awkward times. They cross, they clash with each other sometimes, and we found that there are many redundant courses. So we have the same class being taught to 10 students or six students at different times of the day, where if we corralled them together somewhat, we could have a more robust classroom. We could have a 25 or 30 person classroom. And that would be much more efficient and actually a better experience for our students, because nobody likes to be in a class that only has about four or five other students who, if you don’t show up, you really are noticed for one thing. But the other thing is it’s all on you and a couple of others to carry on the discussion and actually work together. So it’s a better classroom experience when there are more students than that.

Miller: Are you arguing that those kinds of scenarios, where the same class is offered in small numbers on the same day, that that makes up anywhere close to the majority of the classes taught by these 94 people who got notices that their jobs might be terminated?

Cudd: Well, the reason these 94 got notices now is because they’re in a classification, and in the bargaining agreement, such that they need this eight month notice. Tenure track faculty are different and adjunct faculty are different. So it’s not necessarily these 94 that will end up being all or only the ones who might be laid off.

Miller: All or only, meaning other people could be getting layoff notices, but they don’t have, as part of their current labor contracts, the requirement to get this much advanced warning.

Cudd: That’s correct.

Miller: Can you give us a sense for how many other layoffs for different categories of faculty the university is considering right now?

Cudd: I really actually can’t because … right now we sent out a much larger number of layoff notices because we are so uncertain about which ones we’re going to lay off. OK. So we had to leave ourselves a lot more room for making those decisions as the future goes forward. So I would say that I can’t give you exact numbers on adjuncts or on tenure line faculty members. But perhaps it would be helpful for me to tell you about how many in each category we actually employ.

Miller: No, I don’t think it would be helpful unless we’re going to have a sense for how many you’re thinking you need to cut in order to make the sheets balance. Because one number without the denominator, I think is less helpful. I want to go back to the …

Cudd: Well this is the denominator.

Miller: Sorry. The numerator. One of them I think is not enough, but I appreciate your correction.

I want to go back to what you were saying earlier because, if I understood you correctly, what you’re saying is that in the end, this is actually gonna be better for students. Can you understand why students listening now would be skeptical of that if they’re essentially being told we’re gonna cut, we don’t know the full number yet, but multiple dozens of faculty who are teaching a lot of classes right now in which you have a lot of facetime. But don’t worry, we’re actually going to give you a better experience, students, after we cut your professors. Do you see why they might be very skeptical of that?

Cudd: Sure. But, you know, that’s a very partial picture of what we’re doing. What we’re doing [is] we’re adjusting the entire academic portfolio, right? So what we’re doing is we’re changing what we’re gonna be teaching which degree programs. We’re changing the scheduling of courses so that we can better streamline course schedules and better streamline our degree pathways for students to have a clearer way through their degree programs. Not, for example, having two classes that they need to take that start 20 minutes apart from each other, for example. So they can’t take both at the same time.

Now, while we are doing all this reorganization … which by the way, we haven’t done in a very long time, we haven’t looked at what we’re teaching, what kind of degrees and how those align with the market, how those might serve students better. Now, we’re taking the opportunity to do that, at the same time that we also have to have a financial sustainability plan, because our enrollments have dropped drastically and we now have an $18 million budget deficit.

Miller: So let’s turn to that because we started with the cost cutting measures, and as you’re saying, efficiency acquiring measures. But let’s turn to the underlying issues here. Why do you have an $18 million deficit this year? What are the structural issues involved?

Cudd: So if you look at our enrollment – I mean, structurally, fundamentally, it’s about declining enrollment and our enrollment has been declining over the past 12 years, such that we were nearly 30,000 students in 2012 and we are now less than 20,000 students. So obviously, we’re bringing in far less tuition revenue. We’re serving far fewer students. But at the same time, we have not reduced the faculty numbers nearly as much. So that’s why it doesn’t balance out and we can’t continue to do that.

Miller: How do you explain that decline in enrollment when OSU and U of O, they’ve gone up right, significantly in that same time period?

Cudd: Yes, they have. Or at least OSU, I’m not sure about U of O. They might be about the same …

Miller: But not a gigantic decline.

Cudd: No, no. Right. But over that time period, the national trend is that in 2010, there were 18 million college students; in 2021, 15.4 [million]. So that was a 14.6% decline. More closely to home for us, for PSU, is that over that time, the two-year college going rate declined by 38%.

Miller: And that’s a big feeder, say, PCC to PSU, two years there and then finish to get a bachelor’s at PSU. That’s been a big pipeline for you, right?

Cudd: That’s correct. That’s correct. More than half of our students are transfer students from community colleges.

Miller: So if we’re looking at the really big picture here, it’s that the number of students at PSU has declined really immensely over the last dozen years. You’re saying that faculty has not declined anywhere close to that number. And now we’re looking at a kind of major reorganization that includes some significant faculty cuts and faculty reorganization. Is that a fair, short way to put it?

Cudd: Yes.

Miller: I should note though that the faculty and the union, they say that they don’t necessarily trust the administration in terms of the way it’s spending the money that you do have. For example, they say that you’re spending more on administration than you should. And I’m just curious broadly how you respond to that?

Cudd: Yeah, so we serve a very different set of students than we did even 12 years ago. Our students are majority first generation, they’re majority BIPOC – that’s a big change in the demographic – and they’re majority Pell eligible. So that’s low income students who receive federal Pell grants. And that makes us very different from other universities, certainly very different from the U of O or OSU. We serve a lot more students who are vulnerable or who have been underserved in their past experiences, and that means that they need more help.

So a lot of this administrative cost has to do with student support. It has to do with mental health support, it has to do with advising support. So they’re not faculty members, but they are very much student support numbers. So that’s really the majority of the increase in academic professionals, for example.

Miller: Have the financial issues that you’re facing changed the way you think about capital projects? If you’re facing a kind of emergency, does it make you think twice about, for example, pitching into, or putting a pitch in, for building a replacement of the Keller Auditorium or other capital projects that maybe made more sense five years ago or six years ago, and maybe would be nice to have but are less necessary? Have there been any capital projects that you have said no to because of the dire fiscal situation you’re in?

Cudd: So first of all, funding for capital projects is completely separate from funding for operations and they’re not fundable.

Miller: So big donors who maybe want to give money for a library, wouldn’t it be possible for the development folks to go to them and say, “Hey, we know you promised money for a library, but we’re facing a kind of emergency and we’re about to lay off maybe 100 faculty. Please, would you consider not putting your name on a library, but instead putting some money into an endowment so you can have a history professor for five years?”

Cudd: Well, we do of course, make those kinds of asks and we don’t make a lot of asks for capital funding, but those that we do are capital funds that match the state funds. And the state funds are by far … so capital funding largely comes from the state for us. And every biennium, we’re able to make a request for capital funding. We’re also asking the legislature for a very large increase in the public university support fund, which we’re going to with the other public universities. We’re asking for $275 million. But every biennium, we’re also able to ask for a capital funding project.

This performing arts and culture center that we are looking forward to, we’re putting that as our ask this biennium for capital funding. That capital funding cannot go for operational funding. Operational funding would be included in that additional $275 million, of which we would only get a portion, of course, that we’re asking the legislature to authorize.

Miller: You were talking about a big drop in enrollment over the last 12 years, but nationwide, there’s something even scarier on the horizon, which is what people are calling an enrollment cliff. In the coming years, because of a drop in the birth rate during the great recession … which is, when you look at the graphs, it’s really striking how many fewer babies were born in 2008, 2009, 2010. And those are people who are not born, they’re not going to be going to college in the coming five years.

If there are fewer prospective students out there choosing among potential four-year colleges, what is your pitch to them in the coming years for why they should choose PSU?

Cudd: Well, Portland is a great place and Portland is gonna come back because we’re gonna help lead that resurgence. For example, through investing in the arts, like in the performing arts and culture center. I think that’s a really key thing, for Portland to have a rebirth and have a resurgence for Portland State to come back.

Miller: You see that they’re tied together.

Cudd: Absolutely.

Miller: Your future is tied to the narrative surrounding the city of Portland.

Cudd: That’s absolutely correct. And I believe that is part of why, since about 2019, we’ve seen such a precipitous decline at the same time U of O or OSU and many other land grant universities around the country have seen an increase.

Miller: Briefly, on that note, last year, your first year at PSU, it was marked partly by student protests over the war in Gaza. There haven’t really been major protests that I’ve seen certainly in Portland or not really big ones like last year nationwide. Do you have plans right now to do anything differently if they happen again?

Cudd: So we’ve done a lot of work over the summer to really clarify and make very clear what our free speech and protest guidelines are, and what our time, place and manner restrictions are. And so we will be making those very clear and standing by those. But we understand that there’s still a lot of people very upset by the situation in the Middle East. But you’re right, we haven’t seen much protest activity on campus about that yet. We are seeing our students get very active about the elections, not protesting, but rather getting out the vote, and learning about ranked choice voting and things like that.

Miller: Things, too, could change depending on what happens in a couple of weeks.

Cudd: That’s right.

Miller: Ann Cudd, thanks very much.

Cudd: Thank you, Dave.

Miller: Ann Cudd is the president of Portland State University.

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