Legislature and Governor take action on supplemental budget

Governor Gregoire today approved most of a supplemental budget bill passed by the Legislature that further narrows the gap between state spending and available revenue for the remainder of the biennium.

ESHB 1086, the early action supplemental budget bill that received legislative approval, included $242 million in additional savings. However, the Governor vetoed several sections, including one that would have implemented a 3 percent pay cut for many non-represented state employees starting April 1, and a prohibition on the use of funds by the Department of Information Services to purchase or install equipment for the new State Data Center.  The Governor contended the latter would not save money and could delay future savings from the consolidation of existing data centers.

The supplemental budget measure reduces General Fund appropriations for the State Need Grant program by $25.4 million.  However, individual State Need Grant student awards will not be affected because institutions will be required to make up the difference through local funds such as tuition waivers. 

Education Council bill gets hearing in House Education Appropriations

A bill that would create a new state council charged with developing a plan to restructure state-level oversight of public education from early learning through college received a hearing in the House Education Appropriations & Oversight Committee on Tuesday.

While commending the goal of the legislation—creating a more efficient and effective education delivery system in the state—some people who testified expressed concern over the council’s proposed composition and its ambitious timetable for completing an overhaul plan of the state’s entire public education oversight and supervision structure.

Under HB 1849, the Washington State Education Council would be tasked with developing a transition plan that would enable the Superintendent of Public Instruction to exercise supervision over all matters pertaining to the public school system including, for the first time, postsecondary education.

The bill would not affect the statutory authority of local school districts or college boards of regents or trustees. It might significantly change the duties of or eliminate a number of state-level agencies, including the State Board of Education, the State Board for Community and Technical Colleges and the HECB.

The council would be required to submit a progress report to the Governor and Legislature by January 2012, and a final restructuring plan and implementing legislation by December 2012.

“This council will make a recommendation as to where we go into the future,” said Rep. Kathy Haigh of Shelton, the bill’s prime sponsor and chair of the education appropriations committee.

“It’s very important to me to have higher education in the same room when we’re talking about early childhood and how we put this all together. If anybody is left out, we won’t hit the mark that I believe we need to hit in creating a really student-centered, strong education system in this state.”

“We do appreciate the sentiment and spirit from which this bill arises,” said Chris Thompson, the HECB’s Director of Government, College & University Relations. However, he expressed concern that the legislation presumes the council’s work should end with the state school superintendent having oversight of all public education.   

Another concern was that the bill as drafted would give K-12 a stronger voice in the council’s decisions than higher education. In addition to the Superintendent of Public Instruction, the council would include nine members appointed by the Superintendent, nine members appointed by the Governor, and four members of the Legislature.

Even before the first person testified Tuesday, Haigh announced she would offer at least one change related to that issue. The change would give the council authority to select its own chair and vice chair.  The current version makes the state school superintendent the council’s permanent chair and chief executive officer. 

Haigh’s bill addresses some of the same concerns reflected in Governor’s Gregoire’s proposal to create a new Department of Education responsible for early learning through college.  SSB 5639, which passed out of the Senate Early Learning & K-12 Education Committee Wednesday. It reflects some of the Governor’s ideas but removes higher education state-level entities from the new department. Instead, the Governor would be encouraged to create a follow-up transition team to consider the possible inclusion of state-level higher education governing functions within the new department.

HB 1973, which was just introduced this week, is the Governor’s original proposal. It would include the functions of various state-level higher education agencies in the new Department of Education. However, that bill has not been scheduled for a public hearing, and the cutoff for bills to be voted out of policy committees is Monday.

Another higher education governance bill that did move out of a legislative policy committee this week was SSB 5182, sponsored by Sen. Scott White of Seattle. It would eliminate the HECB and create a new Office of Student Financial Assistance to carry out many of the same financial aid responsibilities now performed by the HECB. The director of the new office would be appointed by the Governor.

The bill also would establish a new Council for Performance and Accountability to administer the financial aid office and develop performance-based measures and goals for higher education institutions, consistent with each institution’s particular role, mission and strategic plan. The council would consist of a representative from each of the state’s public colleges and universities, the director of the state system of community and technical colleges, a community or technical college president (or designee), and one president or designee from an accredited, private non-profit college located in Washington.

The HECB consists of citizen members appointed by the Governor.

House and Senate reach compromise on latest supplemental budget

The House and Senate have reached agreement on a supplemental budget bill that further narrows the gap between projected revenue and state spending for the remainder of the 2009-11 biennium.

The agreement that will be reflected in changes to ESHB 1086 was the result of work by a Senate-House conference committee that met after each chamber passed its own version of the bill.

The agreement calls for an additional $242 million in spending reductions.  That is less than the $254.6 million in cuts approved by the Senate, but more than the $221.8 million in the original House version.

Like the Senate version of the budget bill, the conference agreement reduces General Fund appropriations for the State Need Grant by $25.4 million.  However, individual State Need Grant student awards will not be affected because the agreement requires institutions to make up the difference through local funds such as tuition waivers.  The Senate version had required institutions to transfer tuition money to financial aid to make up the difference.

Online university bill moves out of House committee

The House Higher Education Committee on Monday recommended passage of a substitute bill intended to increase online access to college programs through Western Governor’s University (WGU).

Under SHB 1822, WGU-Washington would offer “online, competency-based degrees and provide enhanced access to postsecondary education for all Washington students, including dislocated workers and place-bound students.”

Unlike the original version of the bill, the substitute bill specifically names WGU-Washington as the institution that would partner with the state to deliver online programs to Washington students. WGU is a private, non-profit institution created in the mid-1990s by 19 U.S. Governors, including former Washington Gov. Mike Lowry.

Under the substitute bill, WGU-Washington would be allowed to operate under Washington’s Degree Granting Institutions Act as an independent, self supporting, non-profit university not eligible for state funding

WGU is not currently authorized under the Degree-Granting Institutions Act, but it is recognized as an accredited institution whose degrees are legal in Washington.  

Institutions not exempt from the Act are authorized by the HECB if they maintain offices in Washington, offer courses in the state (online courses from out of state typically don’t apply), or advertise and recruit specifically to Washington citizens.

The prime sponsor of SHB 1822 is Rep. Phyllis Gutierrez Kenney of Seattle. A companion bill, SB 5136, offered by Sen. Jim Kastama of Puyallup, had a public hearing in the Senate Committee on Higher Education & Workforce Development on Feb. 1.

House committee approves bill allowing tuition hikes and renewing public funding commitment

A substitute bill that gives public baccalaureate institutions wide latitude to set tuition rates for all full-time students over the next several academic years received a favorable vote from the House Higher Education Committee on Monday.

SHB 1795, or the Higher Education Opportunity Act, passed out of committee on a 10-5 vote with a number of major changes. The changes include ones giving institutions more options for mitigating the impact of tuition increases on low- and middle-income students, and including additional data the HECB would gather to determine the level of progress made by institutions to achieve the state’s long-term higher education goals.

The revised bill includes new language reflecting the Legislature’s continuing commitment “to public funding of higher education through state appropriations that are essential for providing access, affordability and quality in higher education for all students across the state.” In recent years, the trend has been in the other direction—toward a greater reliance on tuition revenue as opposed to state appropriations.

The bill also includes a new section establishing a “baccalaureate degree innovation program,” which would provide for the distribution of award money—if any is appropriated—to institutions that make progress on goals related to increased access, affordability, and quality of degrees.

 SHB 1795 would give baccalaureate institutions authority to reduce or raise tuition for full-time students by any amount beginning in the 2011-12 academic year and continuing through the 2015-16 academic year.  Current law caps tuition increases at 7 percent annually, although the Legislature authorized baccalaureate institutions to raise tuition 14 percent in each of the past two years.

The revised bill requires four-year institutions to take steps to mitigate tuition increases above certain levels for middle class students with incomes up to 125 percent of median family income.  Financial aid resources that could be used for that purpose include:

• Tuition revenue or locally held funds;
• Tuition waivers for middle-income students
• Local financial aid programs.

The original bill required institutions to set aside for financial aid half the tuition revenue generated from annual tuition increases above 7 percent.

Under the revised bill, the financial aid requirements would become effective at any of the following institutions where annual tuition increases rise above 11 percent: the University of Washington, Washington State University and Western Washington University. The requirements would be effective at these institutions if tuition rises above 9 percent annually: The Evergreen State College, Central Washington University and Eastern Washington University.

Under the bill passed by the House committee Monday, maximum tuition increases for resident undergraduates at community and technical colleges would be established in the omnibus appropriations act passed for the next biennium.

In the original bill, local community and technical colleges would have been authorized to increase tuition to the maximum amount established in the budget act if the State Board for Community and Technical Colleges (SBCTC) did not take that step for all 34 institutions.  The revised bill removes that provision and gives the SBCTC authority to pilot or institute differential tuition models.

The revised bill also strengthens accountability provisions for public four-year institutions by requiring the HECB to gather additional data on program participation and degree completion rates in science, technology, engineering and math (STEM) disciplines, including participation among students from traditionally underrepresented populations.

The bill eliminates a provision that would have required a report on the impact of tuition increases on the Guaranteed Education Tuition (GET) college savings program. Instead, the substitute bill requires the state Actuary to evaluate the soundness of the program, and the GET governing body to make changes necessary to meet the program’s long-term obligations.

Another bill provision calls on the HECB to consult with the SBCTC to develop State Need Grant award criteria that are based on level of need, and not solely on “first-come, first-served.” However, institutions already do have the ability to consider level of need when making grant award decisions, and many do.  The HECB previously published a more in-depth discussion of this issue.

House committee recommends passage of aid program for less-than-half-time students

The House Higher Education Committee on Wednesday endorsed a bill that would allow students enrolled less than half time at higher education institutions to receive State Need Grant (SNG) assistance, assuming they meet other eligibility requirements for the program.

HB 1650 makes permanent a pilot program begun in 2005 that extended SNG eligibility to students attending less than half time.  The pilot program expires June 30, 2011.

In 1990, the Legislature extended SNG eligibility to students enrolled at least half time, but less than full time.

Rep. Bob Hasegawa of Seattle, the prime sponsor of HB 1650, called the less-than-half-time pilot program “extremely successful,” adding, “our desire is to institutionalize it as a permanent part of the State Need Grant.”

Hasegawa said the bill is especially aimed at helping continuing or older students who often work, have child care obligations or are dealing with other life situations that prevent them from taking a half-time or greater college load. Approximately 4,000 of the 70,000 students who received SNG awards last year were less-than-half-time students.

Rachelle Sharpe, Acting Director of Student Financial Assistance for the HECB, spoke in favor of the bill. She said 81 percent of less-than-half-time students in the pilot program attend community or technical colleges, and 69 percent enroll in that category for just one term.

Hasegawa said making SNG available to eligible less-than-half-time students keeps them from dropping out of school, thereby preserving the state’s investment in those students.

The bill would not add to the state’s financial aid costs. The pilot program was funded at $500,000 annually.  If the budget for the next biennium does not reflect a similar amount, less-than-half-time students would be served through whatever amounts institutions receive for the SNG program, Sharpe said.

Work under way on revisions to higher education opportunity legislation

Most who testified at a public hearing Wednesday on Rep. Reuven Carlyle’s proposed Higher Education Opportunity Act agreed it represented a good start at addressing higher education funding needs during the current state fiscal crisis. 

The Act, HB 1795, would give the governing boards of the public baccalaureate institutions authority to set tuition levels for all students during the next three academic years.  However, it also would require them to set aside additional tuition revenue to support financial aid programs if those tuition increases exceed 7 percent per year.

The legislation states that Washington is experiencing a “profound structural shift in the funding of higher education.” State support has declined dramatically over the past 20 years, necessitating tuition increases to supplant the support of higher education from general taxpayers.

The Higher Education Opportunity Act does not specify a limit on the tuition increases for the three-year period. Currently, state law limits tuition increases for resident undergraduates to 7 percent per year at public baccalaureates, although the Legislature authorized 14 percent increases in each of the past two years.

Under the bill, the SBCTC would be authorized raise tuition to levels specified in the 2011-13 omnibus appropriations act. If the SBCTC does not raise tuition to these levels, the bill grants the boards of the 34 community and technical colleges the option of increasing tuition to the level specified in the budget act.

Rep. Carlyle, of Seattle, said a substitute bill is in the works incorporating changes suggested by stakeholders and fellow legislators.

Currently, public baccalaureates whose boards decide to increase tuition above 7 percent would be required to set aside half the tuition revenue above 7 percent to support financial aid programs for low- and middle-income students. Students with incomes up to 125 percent of median family income (MFI) would be eligible to use the money to help offset the impact of the tuition increases.  Students eligible for the State Need Grant program must have an income no more than 70 percent of MFI, which is $54,500 for a family of four.

The bill has a strong accountability provision. It would require the HECB to develop, monitor and report on progress achieved by the baccalaureate institutions on specific performance measures such as bachelor’s degrees awarded, graduation rates, transfer rates, time and credits to degree, retention rates, and course completion. It also would require institutions to develop specific action plans to achieve the goals, and to report biennially to the Governor, Legislature and HECB.

Finally, HB 1795 would direct the Guaranteed Education Tuition (GET) Committee to evaluate the impact of tuition increases on the college savings program, and to report back to the Legislature later this year on whether a “second phase” of the program might be appropriate.

During Wednesday’s hearing before the House Higher Education Committee, HECB Executive Director Don Bennett joined institution representatives, students and others in generally supporting the bill, while agreeing that more work still needs to be done.

HB 1795 is one of several higher education funding measures before the Legislature. Governor Gregoire’s 2011-13 budget proposal would permit resident undergraduate tuition increases ranging from 9 to 11 percent annually and would make even larger cuts in state General Fund support for higher education. 

Another proposal included in HB 1666 and SB 5717 would implement the recommendations of the Governor’s Higher Education Funding Task Force. It would provide additional tuition flexibility for four-year institutions but would limit tuition to the 60th percentile of tuition at similar institutions in the Global Challenge States with which Washington is often compared. The legislation also would set new degree production targets for the institutions.