House Ways & Means committee chair’s budget proposal would suspend financial aid programs

House budget writers Monday released a 2011-13 budget proposal that would raise tuition from 11 to 13 percent annually at public higher education institutions, suspend  all student financial aid programs except for State Need Grant, and cut higher education funding $482 million overall.

The House budget makes deeper cuts than those proposed by Gov. Chris Gregoire in December, before the Governor and others learned state government would be losing another $800 million in projected revenue due to the continuing effect of the recession on the state’s economy.

“It’s incumbent upon us to produce a budget that actually works, and we’ve done our best to do that,” said House Ways & Means Committee Chair Rep. Ross Hunter, who introduced the new proposal as a substitute to HB 1087. The bill is scheduled for executive action in the Ways & Means Committee on Wednesday.

The committee chair’s budget proposal would close a projected $5.05 billion revenue shortfall through the next biennium by implementing $4.4 billion in program reductions, and additional changes in the form of program transfers, privatization of liquor distribution, revenue source consolidations, and other actions.

In many cases, the proposed reductions represent a continuation of funding decisions made in December and February to address revenue shortfalls during the 2009-11 biennium. A summary of the proposed budget has been posted on the Legislative Evaluation & Program Accountability website.

Although the proposed House budget would reduce state General Fund appropriations for higher education by $482 million, about $379 million of that amount would be offset with additional tuition revenue. The budget proposes annual tuition increases of 13 percent at the UW, WSU and WWU, 11.5 percent at CWU, EWU and The Evergreen State College, and 11 percent at community and technical colleges.

 “You cannot avoid the fact that we have fundamentally changed the mix between state support and tuition, particularly in our research institutions and our other four-year institutions,” Hunter said.

Because of that, Hunter said, it will be necessary to adopt policy changes that reflect the new situation.  He said the options include proposals contained in SHB 1795 sponsored by Rep. Reuven Carlyle of Seattle and others. It would allow public baccalaureate institutions to set tuition rates for all students through the 2014-15 academic year. If a four-year institution raises tuition beyond thresholds provided in the bill, that institution would be required  to mitigate the effects on middle class students with incomes up to 125 percent of median family income.

The thresholds triggering this institutional aid requirement for low and middle income families are 11 percent for the UW, WSU and WWU, and 9 percent for CWU, EWU and The Evergreen State College.  In addition, public institutions are required to set aside 5 percent of tuition revenue for institutional financial aid, up from the current requirement to set aside 3 and one-half percent of tuition revenue for such aid.  Finally, public institutions are authorized to charge Running Start students a fee of up to 10 percent of tuition.

A more in depth discussion of SHB 1795 was posted earlier in the HECB Legislative Report.    

The House Ways & Means Committee chair’s budget proposal also would make further reductions in student financial aid programs. Although the proposal calls for adding $103 million to the State Need Grant program to mitigate the effects of tuition increases on low-income students, it would reduce awards for students at private schools to the amounts students at the regional institutions can receive, and would eliminate new awards for students at for-profit institutions.

In addition, the budget proposal would:

• Suspend the State Work Study program, which provides both state support and employer matching funds to low-income students who work in jobs related to their academic or career interests.
• Suspend new awards under the Health Professionals Conditional Scholarship Program, which provides scholarships or loan forgiveness for health professionals who agree to work in rural or underserved areas of the state.
• Suspend funding for future awards under the Washington Scholars and Washington Award for Vocational Excellence programs.
• Suspend the Educational Opportunity Grants (EOG) program. The EOG provides grants to financially needy, placebound Washington residents as an incentive to complete their first bachelor’s degree. About $5.2 million in savings would be transferred to the State Need Grant program.
• Suspend other small grant programs, including the College Assistance Migrant Program, the Community Scholarship Matching Grant program, Western Interstate Commission for Higher Education student exchange, the Foster Care Endowed Scholarship, and the Child Care matching grant.   

At a public hearing on the budget proposal Monday, Sam Shaddox, a University of Washington law student and the student member on the HECB, said continuing to provide adequate funding for Washington’s public higher education system is important because the state currently produces insufficient numbers of educated workers to meet demand.  As a result, businesses have to import educated workers from outside Washington.