Endowed chairs backlog reaches $365 million

Published: July 15, 2008

A fundraising rush has pushed the state's backlog for matching donations to pay professors' salaries at colleges and universities to nearly $365 million.

Exactly how the state will come up with that money and how long it will take to reach the schools is still in question.

State lawmakers approved a $100 million bond issue in May that was intended to catch up on what was then believed to be a $125 million backlog. A late rush that included a $100 million gift to Oklahoma State University by billionaire alumnus Boone Pickens nearly tripled that amount.

The Oklahoma State Regents for Higher Education announced Tuesday that schools are awaiting $364.8 million in matching funds from the state to set up funds to pay professors' salaries indefinitely. The positions are often called endowed chairs.

"We are very pleased to see this tremendous outpouring of support from private donors and we thank them sincerely for these endowed chair gifts which will pay huge dividends in the future by helping us retain and attract top quality faculty," state higher education Chancellor Glen Johnson said.

Johnson said he looked forward to working with Gov. Brad Henry and state lawmakers to address the new backlog.

The Legislature placed a moratorium on the dollar-for-dollar matching program, limiting to $5 million the amount that the state would have to match for endowed chairs in any year from now on.

That led to a rush by schools to get donations before a June 30 deadline to ensure that the gifts would be matched fully. Oklahoma State University and the University of Oklahoma raised almost $128 million in the final weeks before the deadline.

"It's great that there's people willing to commit that much money into higher ed but we're going to have to take a long look at how we're going to fund that," said state Rep. Tad Jones, the chairman of the House Education Committee. "It's taken us some time to get to this $100 million this year, and it's going to be challenging for us to do it easily in the near future."

State regents spokesman Ben Hardcastle said the state's two largest universities will each receive about $47 million from the bonds early next year. The remaining $6 million will be distributed to smaller schools who have been waiting the longest for matching funds.

After that, state lawmakers will have to figure out a plan to cover the remainder of the backlog created as part of the matching program that began in 1988.

"You can't just typically in a session write a check for $264 million because everybody else will want some of that too," said Jones, R-Claremore. "Any time we have one-time money freed up, this would be a major priority for us to put it toward this program to get that paid off as quickly as possible."

After the backlog is erased, Jones said he hoped the Legislature could work to prevent further tuition increases. Both of the state's two major universities have raised tuition by nearly 10 percent each of the past two years.

"That's why we pushed the moratorium to make sure to pay this off and have money in the future for operational dollars because we know that the university will continue to raise tuition if the operation dollars aren't there," Jones said.

"They go hand-in-hand, but in a negative way when it comes to tuition."

Jones said universities typically hire new professors with the endowed chairs funding, instead of using the funds to pay professors already on staff, so the state money doesn't defray students' costs.

For instance, Jones said if the state was spending $30 million annually to pay off the endowed chairs backlog, that money could instead go toward lowering tuition once there are no more donations to match.

Provost Marlene Strathe said Oklahoma State University has yet to determine how many new professors would be hired with the donated money and how many endowed chairs would be filled by people already on the payroll. She said any additional funding from the Legislature could help keep tuition prices down, but the ideal situation would be to provide backing for endowed chairs and work on ways to keep college accessible to students.

Vice President for Public Affairs Catherine Bishop declined comment on the University of Oklahoma's position.

"I'm glad we have a moratorium because we do need to pay off that which we've raised," Jones said. "Hopefully here in the next several years we can get this taken care of and be able to put money toward operations. That will be our challenge."

Copyright 2008 The Associated Press.

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