OU Regents approve tuition and fees hike, FY22 budget with some opposition

Jun. 22—The University of Oklahoma's newly-approved budget projects a positive fiscal year for the Norman campus, but the financial growth will come partly at the cost of rate hikes for student tuition, fees, housing and food.

The university's Board of Regents Tuesday approved OU's fiscal year 2022 budget, a document that depends on a return to pre-COVID normalcy, expense cutting and new costs for students to create a healthy financial status for the Norman campus.

Alongside the budget, the board okayed a 2.75% increase in tuition and fees for undergraduate and graduate students Tuesday. The increase means in-state flat rate tuition for 15 undergraduate credit hours will move from $4,531.25 annually to $4,655.70, while nonresident tuition increases from $12,221.75 annually to $12,557.70. A full slate of fee and tuition changes for all students is available under Agenda Item 2 on the Tuesday agenda.

The tuition and fee hike is the first OU has seen since FY2018. Last month, the board also approved an increase in housing and food prices, which will vary depending on which campus housing facility students use.

The rate increase came with some opposition Tuesday — Regent Rick Nagel, the newest member of the board, voted against the FY22 budget, telling university leadership he could not support a tuition increase. Two members of OU's Undergraduate Student Congress also spoke against the budget during a public comment time.

"As a former member of the University of Oklahoma's Student Government Association, I also fought a lot of tuition (hikes) and I find it interesting that I continue my fight as a new regent," Nagel said. "I'm not for this budget because it has a tuition increase in it. I feel like the students have in good faith been paying it forward for several years...I do agree from a timing, affordability and transparency standpoint that now is not the time."

"I feel strongly that there were potentially other areas of the budget that could have been more thoroughly examined."

Despite Nagel's opposition and comments from students, the board passed the budget 7-1, approving the tuition and fee increases. OU President Joe Harroz, who also highlighted the university's goal of affordability and accessibility for all, said he believes the move is a necessary sacrifice to ensure other areas of the university do not suffer.

"The entire effort is to think about 'how do you balance the excellence we know our students deserve and demand with affordability," Harroz said Tuesday. "This still leaves us in a place where, I think we're 74th in terms of the percentile of our cost versus other peer institutions, but we always want to be mindful of it and provide the best value we can to our students."

Budget details

The university's $2.01 billion FY22 budget, detailed in the regents' agenda for Tuesday, shows that OU expects to have a net positive year at its Norman campus, ending $87 million above where it'll start the year.

The projection comes after the Norman campus saw a $15 million deficit in FY2021, a number more positive than the $17.6 million the university initially expected to lose in FY21. The university has gradually improved its financial position over previous years — in 2018, the regents heard from then-President James Gallogly that OU was a debt-saddled university operating in a deficit.

Since, Harroz and his team have cut millions in expenses and formulated a strategic plan laying out long term financial goals.

"I know today is a historic day in terms of where we were three years ago, two years ago, one year ago and today — the state of this university is better," Harroz said.

This year's increase in tuition and fees, along with a bigger incoming freshman class and the growth of OU Online, will give a nearly-$20 million boost to this year's tuition revenues over last year's. OU Norman will also receive a $17 million boost over last year's budget with the rate increase for housing and food.

The FY22 budget is also supported by the projection that athletics operations will go back to pre-pandemic normalcy. While the university brought in $54 million in athletics revenues in FY21, the FY22 budget projects a massive leap to more than $107 million in athletics revenues for the year.

Harroz said the restored athletics revenue is a good start, but the university is still feeling the financial losses from last year's COVID-impacted season.

"It is great to have that back — it doesn't mean that we're going to be flush this year as we approach it," Harroz said. "So, it's encouraging, numbers are looking good for filling the stadium, for donations — they're good. That's really encouraging, (but) we still lost a lot last year, as did a lot of enterprises, so our goal is to keep moving forward and to replenish those reserves that we drew from this year."

Overall, OU's Norman campus will receive $1.04 billion of this year's budget, some of which will go toward funding strategic plan projects like deferred maintenance work or marketing and rebranding initiatives. OU is also getting a bump in state aid this year — the budget shows state appropriations up to $117 million this year over $110 million last year.

Changes at Health Sciences Center

The university's Oklahoma City-based Health Sciences Center will have a different financial trajectory in the next year, the budget shows. Of the university's $2.1 billion budget, $969 million is budgeted toward the HSC this year.

The regents on Tuesday officially approved the remaining details of OU Physicians' transition to OU Health, a merged health system that should streamline care and grow Oklahomans' healthcare and specialty care access.

"The vision of the combined and rebranded 'OU Health' is to be the premier health system in Oklahoma and a top tier academic health system based on measurable results in delivering high-quality multidisciplinary care, education focused on the needs of our state, and funded research," the Tuesday agenda reads.

The rebrand and rebuild is cited in the budget as the reason some of the HSC's revenues appear to decrease in this year's budget. The campus did receive a 2.2% increase in state appropriations, and $600,000 in new state funding for a nursing initiative, the budget shows.

OU also received and recognized Tuesday a $45 million gift from the Earl and Fran Ziegler estate. $21 million is marked to support the Earl and Fran Ziegler College of Nursing, while $14 million will fund cancer research at the Stephenson Cancer Center.

Emma Keith is the editor of The Transcript, where she covers Norman Public Schools and the University of Oklahoma. Reach her at ekeith@normantranscript.com or at @emma_ckeith.