Portland State University faculty wait voice their opinion on a new financial sustainability plan at the Sept. 26, 2025 board of trustees meeting in downtown Portland, Ore.
Tiffany Camhi / OPB
Portland State University’s budget woes are fast becoming a perennial problem. But PSU leaders say they have a multi-year plan that can pull the university out of its yearslong financial funk.
And Portland State President Ann Cudd expects this plan will come at a cost to the university.
“PSU is facing a future where it’s going to have to operate as a smaller institution than it has over the past decade,” Cudd said at a board finance, administration and audit committee Thursday.
“We cannot reach this vision without breaking the cycle of non-strategic cuts that has plagued us since before the pandemic,” Cudd continued at the meeting. “It hinders our ability to serve students, it distracts us from our academic focus and it just makes everyone who works here feel beleaguered and exhausted.”
The PSU Board of Trustees approved the university’s 2025-26 budget and a new proposal Friday that aims to close a projected $35 million shortfall by 2027. That projection does not include a $10 million deficit the university is facing this school year. The university plans to fill the gap for the current school year with reserve funds.
These consistent multimillion dollar deficits do not come as a surprise to the university.
PSU leaders say the funding gaps are caused by persistent and structural problems that many other public universities across the state are facing: rising personnel costs, a decline in student enrollment and a decrease in state funding.
Officials at Portland State say the new plan, called Bridge to the Future 2.0, will address the university’s structural deficit and create a nearly $2 million investment fund.
The latest financial roadmap is a continuation of PSU’s sustainability plan from last school year when the university closed an $18 million operating budget shortfall.
That effort included an overhaul of the school’s administrative and academic structures, early retirement offers and layoffs of 17 non-tenure track faculty. The implementation of these cuts saw significant pushback from faculty, staff and students and ultimately led to a vote of no-confidence in the previous Bridge to the Future plan from Portland State’s faculty senate.
Even more belt-tightening is on the way. University documents say the $35 million deficit is equivalent to about 220 full-time employees. But the new plan specified that the university will not make “across-the-board” cuts and will instead make strategic changes to academic programs, faculty positions and organizational structures among other actions.
There is no mention of additional cuts to be made in the current school year. Instead, PSU is planning a comprehensive review of all of its budget areas this year. University leaders expect that review to inform a phased reduction approach over the next two years. The university is targeting $17 million in cuts for the 2026-27 school year and an $18 million cut the following year.
PSU faculty and staff at the trustees meeting said they are apprehensive about the university’s plan. Leaders from the three of the university’s unions expressed their concerns, calling on administrators to think twice before slashing the university’s workforce and leaving jobs vacant.
Bill Knight, President of Portland State University's American Association of University Professors, speaks to union members at a picket protesting proposed cuts on Sept. 25, 2025.
Courtesy of PSU-AAUP
“I recognize that difficult decisions must be made, but a job left unfilled is an opportunity lost,” said Kevin Reed, vice president of Portland State’s Service Employees International Union Local 503.
“If we cannot rehire and retain workers to support this university from the ground up, who will build the bridge to the future and who will be left to cross it?”
PSU American Association of University Professors President Bill Knight said he is worried that the university’s overall pessimistic tone could impact future enrollment.
“We can do better by reaching for solutions that direct us toward growth of enrollment and growth of the institution rather than austerity and pessimism,” Knight said.
Other staff urged Portland State leaders to push state legislators to invest more dollars in higher education as a way to avoid cuts at the university.
Oregon’s public universities received $1.1 billion for the next two years, a slight increase from the 2023-2025 biennium. But any significant bump in investment from lawmakers is sure to become a harder ask as the state braces for a $15 billion loss in federal funds.
A key part of the Bridge 2.0 financial sustainability plan is a new review component called the Plan for Institutional Vitality and Organizational Transformation, or PIVOT. University leaders say this element of the plan will resolve past reorganization issues and increase transparency.
“We are redoubling our efforts to communicate early, directly and often throughout the year about our efforts to deliver on the plan,” Cudd said on Thursday.
“We’ll be hosting town halls and administrative briefings on a monthly cadence and continue to update the faculty senate every month so that we can share our progress and gather input along the way.”
