As state lawmakers grapple with a two-year revenue shortfall of more than $5 billion, nobody knows exactly where higher education in Washington is headed. But chances are that over the next few years it will start to look considerably less public.
With universities poised to lose about half their state funding over four years, legislators have ideas on the table that include looking for money from the private sector, ending tax exemptions and protecting higher ed in the state constitution, because, as it now stands, the only way to make up for cuts in state funding is to raise tuition – a lot.
“Our higher ed system is at the breaking point; any further cuts are going to be causing serious damage,” said Rep. Larry Seaquist, the chairman of the House Higher Education Committee after hearing presentations from university presidents about funding cuts earlier this month. “It just looks like wall-to-wall problems.”
Cuts proposed under the governor’s budget would take state funding for four-year universities down to about $1 billion over the 2011-13 biennium. That’s about the same amount of funding as they received in 1989, when the state operating budget was close to a third the size that it is now. And that budget may be a best-case scenario – it was proposed before Thursday’s revenue forecast predicted the state would have another $700 million less to spend.
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With higher ed funding at the breaking point, here are some of the ideas on table.
1. HIGHER AND MORE FLEXIBLE TUITION
In 2009, for the first time, tuition surpassed state money as the main source of general operating revenue coming into most Washington universities. Proposals in the Legislature at this point center around letting four-year institutions raise tuition to mitigate state cuts, with House Bill 1795 giving universities full tuition-setting authority for four years and Senate Bill 5717 allowing them to make up for reduced state funding with tuition, as long it doesn’t exceed the 60th percentile of certain competitor schools.
To cover all the cuts proposed by the governor, Paul Jenny, vice provost for planning and budgeting at the University of Washington, said tuition would have to increase about 20.5 percent per year for the next two years, reaching about $13,300 for the 2012-13 school year. If that happens, tuition at the university will have nearly doubled since 2008, when students paid $6,802 for a year of school.
Tied to tuition flexibility are proposals to allow universities to charge different amounts for different undergraduate programs rather than having a set level of undergraduate tuition for all majors.
Jenny said different costs for different programs could make sense, because some majors, such as engineering, cost much more to run than others. He said other state schools, including the University of Michigan and the University of Indiana, already had started charging undergraduates different rates.
2. ASK FOR HELP FROM BUSINESS
One funding idea that has picked up support from both parties involves trying to bring more private-sector money into the state university system.
In its January report, the governor’s Higher Education Funding Task Force recommended that the state offer tax incentives to businesses that contribute to a scholarship endowment for Washington students.
The proposal, which is under consideration in the Legislature as part of House Bill 1666, would aim to raise $1 billion over 10 years. Because students would only be able to use the interest off of that amount, however, it probably would not go very far toward meeting the total amount of financial need in the state.
According to the Higher Education Coordinating Board, the state would need about $125 million over the next biennium just to fully fund the State Need Grant, Washington’s main financial aid program for low-income students, at current tuition rates; the cost could be much more if tuition goes up as predicted.
During the 2009-10 academic year, about 22,000 Washington students who were eligible for the need-based grant program did not receive it because the program ran out of money and, the higher education board estimated in the fall, that number grew to about 25,000 students during the school year that ends in June.
Megan Lewis, a senior majoring in psychology at the University of Washington Tacoma, said she was one of the students who lost need grant funding this year. She said she had been struggling to pay for books and rent and, already having taken out all the loans she can, she wasn’t sure she would be able to finish the last three classes she needed to get her degree.
Lewis said she worried that her classmates were unprepared for the cuts that could be coming to higher education and financial aid when the Legislature passes the biennial budget this year.
“I think a lot of students are going to have to cut their education short,” she said.
3. TARGET TAXES TO HIGHER ED
In response to the rising need for financial aid and rising tuition, some legislators have suggested dedicating tax revenue to higher education.
Seattle Democrat Rep. Rueven Carlyle, the primary sponsor of the House tuition-setting bill, suggested dedicating some of the money from the state business and occupation tax to the public university system, though a bill to do so has not been introduced in the Legislature.
Another idea would add taxes to pay for education, though that could be politically difficult because voters approved Initiative 1053 in November, which requires a two-thirds vote of the Legislature to raise taxes.
Rep. Seaquist, D-Gig Harbor, introduced House Bill 1980, which would authorize a citizen commission to recommend ending certain tax exemptions so the money could be used to invest in all levels of public education in the state. The proposals would have to be approved by the Legislature.
4. CONSTITUTIONALLY PROTECT FUNDING
With state money draining out of the higher education system and tax revenue an unlikely solution, some lawmakers have suggested constitutionally protecting funding to higher education in Washington to prevent it from being cut disproportionately in the future. Under the Washington Constitution, the state must fund basic K-12 education, but not higher ed.
Rep. Larry Haler, a Richland Republican, said the state should no longer view higher education as a discretionary budget item, especially given the importance of a college degree in today’s job market.
“The constitutional mandate was written at a time when high school was the college of that time,” Haler said. “We simply can’t consider sending a young man or young woman through K-12 and then saying, ‘good luck.’”
So far, a constitutional amendment to protect higher education funding has not been introduced.
Student lobbyists said they supported an amendment to protect higher education funding as a way to keep the state from continuing to pull money out of the system.
“There’s absolutely no substitute for funding,” said Quinn Majeski, director of government relations for the Associated Students of the University of Washington. “There’s nothing you can do at the policy level to make up for the fiscal situation.”
Sen. Rodney Tom, chairman of the Senate Higher Education and Workforce Development Committee and a Medina Democrat, agreed that state funding needs to return to higher education. He said the state is caught in a dilemma where the urgent needs of social service programs get more attention than higher education, but failing to fund higher education will lead to a greater demand for social services in the future.
States around the country have been cutting funding to higher education programs. According to a report from the State Higher Education Executive Officers, per-student funding at colleges and universities in the U.S. fell to $6,454 in 2010, a 25-year low in inflation-adjusted dollars.
The amount that students are contributing to their own education also is increasing nationwide. Since 1985, the percentage of the cost of higher education that comes from tuition went from 23.3 percent to 40.3 percent.
Katie Schmidt: 360-786-1826 firstname.lastname@example.org