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Tuition Policy Debate
Washington’s public higher education costs continue to shift from the state to the student

By Kathy Witkowsky

Olympia, Washington

WASHINGTON STATE Senator Derek Kilmer’s daughter is only three, but already he’s taught the pre-schooler some harsh realities about higher education.

Washington State Senator Derek Kilmer says he is probably the only member of the legislature who is still paying off his student loans. His three-year-old daughter, Sophie, says she will pay for college “with scholarships.”
“Why does daddy go to work?” he’ll ask. Her response: “To pay for college.” The 35-year-old Kilmer, a Princeton graduate who chairs the Senate Higher Education and Workforce Development Committee, is fond of reminding people that he’s quite possibly the only member of the legislature who is still paying off his student loans.

“And how are you going to pay for college?” Kilmer will follow up. “With scholarships,” his daughter Sophie will answer, as she’s been coached.

The exchange makes for a great “party trick,” as Kilmer calls it, and nearly always gets a laugh. But it underscores the deep concerns of the Democrat from Gig Harbor, who readily acknowledges that the state of higher education in Washington is no laughing matter. The state’s six public baccalaureate institutions lost up to a quarter of their state funding this biennium, and are likely to suffer more cuts before it is over. To mitigate the impacts, the institutions are raising tuition by 28 percent over the next two years. Given a bleak economic forecast for the remaining part of this biennium as well as the next, higher education is not likely to give Kilmer—or anyone else who cares about it—much reason to smile any time soon.

“Whenever there’s a budget downturn, higher education gets thrown under a bus,” said Kilmer. “That is not a sustainable model for the institutions or the students. Or for the state’s economic future.” As vice president of the economic development board for Tacoma-Pierce County, Kilmer regularly hears from employers who are struggling to find the skilled workforce they need.

The state’s community and technical colleges boast one of the highest participation rates in the nation, and although its total per-student funding at public baccalaureate institutions is well below the national average, its six-year graduation rate for first-time freshmen enrolled at those institutions—more than 66 percent—is the nation’s third highest. Washington’s overall graduation rate of 63 percent also compares favorably with other states. But, partly due to limited capacity and selectivity at the upper-division levels, Washington’s overall college participation rate is substantially below the national average: Only 29 percent of 18-to-24-year-olds are enrolled in college. (The national average is 34 percent.)

A 2008 master plan approved by the legislature called for improving overall degree production by 40 percent within a decade, including increasing the number of undergraduate and graduate degrees awarded annually by 33,600. Since the economy has tanked, that timeline has been extended to 2030, and the number has been modified downward to 20,700 (11,400 more bachelor’s degrees and 9,300 more graduate degrees). But there is no additional money available to help the institutions achieve those ambitious goals.

Following the latest round of cuts, tuition revenues now exceed state appropriations at four of Washington’s six public baccalaureate institutions.

University of Washington President Mark Emmert called it a crossing of the Rubicon. Terry Teale, executive director of the Council of Presidents, agreed. “We have really seen a radical shift in the way that we are funded. That worries us in terms of what public means anymore,” Teale said.

The trend has intensified both the discussion about the appropriate role of the state in supporting higher education and the ongoing debate over tuition policy. It also has administrators and higher education advocates trying to figure out better ways to plead their case to lawmakers, who will have to make more cuts when they meet again in January.

Democratic Governor Chris Gregoire has long been a staunch supporter of higher education, and worked diligently to protect it during the last legislative session. The governor will continue to do so, said Leslie Goldstein, executive policy advisor to the governor, because she understands that higher education is key to economic recovery. “The governor is completely, passionately committed to higher education,” Goldstein said. “We are in crisis management right now. When we get through the crisis, we will go back to improving both access and quality in higher education.”

“Higher education in general is the easiest place to cut,” says Ann Daley, executive director of the Washington Higher Education Coordinating Board.
Yet the state is hamstrung by its tax structure and spending obligations. Because it has no income tax, Washington relies heavily on revenues from sales tax and from a business and occupation tax, both of which drop when consumer spending decreases, as it has during this economic downturn.

Meanwhile, at least half of the state’s revenues are obligated to K–12 education and other expenses. That leaves higher education as the largest single area of the discretionary budget, and historically it has been the first place lawmakers turn for cuts when times are tough, said Ann Daley, executive director of the Washington Higher Education Coordinating Board.

“Higher education in general is the easiest place to cut,” Daley said. And higher education is at a disadvantage, because lawmakers know it can generate some of its own revenues through tuition. “Over time, that’s resulted in higher ed getting less and less of the state pie,” said Daley, a longtime veteran of state politics, who held her same position at the Higher Education Coordi-nating Board from 1989 to 1993.

In spring 2009, the trend accelerated. Faced with a projected $9 billion shortfall for the 2009-11 biennium, the legislature cut $550 million in appropriations—about 17 percent—for all of higher education, including the community and technical colleges. Factoring in increases for state financial aid programs, the reduction comes out to 14 percent—still one of the largest percentage reductions in any sector of the state’s budget. (By comparison, K–12 was cut by ten percent; health and human services by about 11 percent.)

Higher education administrators said they sympathize with both the governor, whom they see as an ally, and the legislature. “I don’t think anyone is holding anything against the legislature, that’s for sure,” said Jane Sherman, vice provost for academic policy and evaluation at Washington State University. Sherman lives and works in the state capital of Olympia, where she often deals with lawmakers. “You could practically see some of these people nearly in tears about what they were doing to higher ed,” she said.

Still, the frustration within higher education circles is palpable. “Universities can’t just be turned off like a faucet, and then turned back on when times are a little better,” Western Washington University President Bruce Shepard told the Senate Higher Education and Workforce Develop-ment Committee in October. “Productive capacity is built over decades, and if we let it go it will take decades to build it back.”

In an attempt to soften the blow, lawmakers approved a measure allowing the public baccalaureate institutions to increase resident undergraduate tuition by up to 14 percent annually for this biennium. All of them have done so, bringing tuition to $7,100 this year at WSU and UW, and $4,900 at the state’s other four-year public institutions (not including activity or technology fees, which are an additional $450 to $600). Prior to this year, annual tuition increases had been limited to a maximum of seven percent; that constraint remains in place for community and technical colleges.

But the tuition increases have not kept students away. Preliminary, unofficial data showed enrollment is up at each of the state’s six baccalaureate institutions—even at UW, which reduced the size of its freshman class by 300 students, or six percent—and total enrollment at all of them is up 3.2 percent over last year, to a record 105,000 (full-time equivalent). Administrators say that is in part due to increased retention, which they chalk up to the poor economy.

Yet even after factoring in $1.86 billion in tuition revenues ($230 million more than would have been generated at last year’s rates), as well as $81 million in federal stimulus money, the institutions are having to do more with less: This year’s operating budgets are an average of six to seven percent below last year’s budgeted level.

To deal with budgetary constraints, the four-year institutions are eliminating nearly 1,550 positions—about 11 percent of their fiscal year 2008 workforce. Seven hundred forty-three of those were filled positions, and more than 775 vacant positions have gone unfilled—the vast majority of them at UW and WSU, the state’s two largest institutions.

In keeping with a directive from the legislature to protect instruction and student services, about two-thirds of the positions that were eliminated are in non-instructional activities. But even those affect the ability of the institutions to achieve their missions, said Joan King, WSU’s executive director of planning and budget. “I think we have some folks in government who think you can cut administration and not have an impact on anything else,” King said. “That’s not the case. It is all connected.”

Faculty and teaching and research assistants make up the other third of positions that were eliminated. That means fewer classes—the institutions have done away with hundreds of courses—and larger class sizes.

All of the institutions had begun bracing for this biennium before it began, through hiring freezes and other spending reductions. Yet administrators say that the suddenness and severity of the economic crisis has forced their institutions to make cuts that are not necessarily in their best long-term interests. For instance, at Central Washington University in Ellensburg, faculty have bargained contracts, and tenure-track faculty have to be notified in Novem-ber if they are to be dismissed the following year. But the budget was not finalized until April, so CWU was forced to cut only non-tenure track positions, which tend to have the highest teaching loads.

UW also chose to protect its tenure-track faculty and current staff by taking the brunt of the cuts in vacant positions, and hired only about 20 new faculty members, compared to 200 in a normal year. “A lot of good programs right now are being hurt in this process,” said Doug Wadden, executive vice provost of academic affairs and planning. “It is a messy business, because you’re not doing it necessarily for academic purposes. You’re doing it for budgetary purposes.”

The cuts were equally painful at WSU, the state’s land-grant institution. But there the administration was somewhat ahead of the curve, thanks to an internal analysis of its programs that had largely been completed when the economy took a nosedive. The Academic Affairs Prioritization Pro-gram, known as A2P2, was begun in 2007, in an attempt to focus and strengthen the university.

Through A2P2, the university had identified its lowest priority programs, ranking them based on demand and enrollment. Still, “the budget reduction process was extremely stressful,” said WSU Provost Warwick Bayly.

Washington’s four-year institutions are eliminating nearly 1,550 positions. “It is a messy business,” says Doug Wadden, executive vice provost at the University of Washington.
After an exhaustive process that included more than a dozen public forums, the administration eliminated 950 courses this fall, about 18 percent of the university’s total offerings. Among the casualties: the departments of theater and dance, community and rural sociology, and the German major, all of which will be phased out.

The economic crisis also prompted the president of WSU, Elson Floyd, to voluntarily reduce his salary by $100,000, bringing it down to $625,000. (Floyd’s counterpart at UW, Mark Emmert, whose annual compensation package is more than $900,000, made a similar gesture, turning down a raise this year.) In addition, Floyd and other high-level administrators have agreed to contribute five percent of their base salaries to WSU scholarship funds, a move that is expected to raise about $330,000. Those actions haven’t gone unnoticed, said Derick En’Wezoh, president of the Associated Students of Washington State University. “I think students are very appreciative of President Floyd’s commitment to this university,” said En’Wezoh, who described Floyd as “a general who fights alongside his troops.”

That’s small comfort to Melissa Johnson, 22, a senior from Camano Island, who said she relies heavily on financial aid. The legislature provided an additional $58 million in financial aid for the 25 percent of students who receive direct state aid, and it also required institutions to dedicate seven percent of the additional revenue raised by tuition increases to financial aid this year. (The Evergreen State College went well beyond that, devoting 20 percent.) But Johnson, who is majoring in psychology and human development, said she did not receive any additional monies. “As tuition goes up, and financial aid stays the same, there’s that gap I need to figure out how to fill,” she said. “So that’s been really hard. I’m now working full time, and I’m a full-time student.”

Students aren’t the only ones working more. Faculty and staff at all the institutions have taken on additional workloads in the wake of personnel reductions and increased class sizes. With more budget cuts likely, faculty at WSU are “very nervous” about keeping their jobs, and are wondering whether they should search for positions elsewhere, said Michael Swan, chair of WSU’s faculty senate.

Faculty are making other sacrifices as well. At Western Washington University, for instance, the faculty union agreed to delay until 2010 a merit pay raise for 47 faculty members, in order to support additional instruction this year.

And that’s the good news. The bad news is that higher education is likely to suffer yet another round of cuts later this winter, when the legislature will grapple with a projected shortfall of at least $1.2 billion for next year. And then there’s the upcoming 2011-13 biennium budget, which is also expected to pose significant challenges, especially without the one-time $3 billion federal stimulus that helped the state to offset costs this year.

At the Senate Higher Education and Workforce Development Committee hearing in October, the presidents reported that, thanks largely to the dedication of their remaining faculty and staff, their institutions are making do—for now.

But they warned that larger class sizes, fewer courses, less advising and counseling staff, longer waits for financial aid, and an inability to hire faculty all will add up to longer time to degrees at precisely the moment when the state wants the institutions to produce more. And if investment in universities continues to decline, the quality of those degrees will diminish, said WWU President Shepard. “The education may cost the state less and less,” Shepard told the committee, “but it also will be worth much less.”

Such predictions have lent a greater sense of urgency to ongoing debates about tuition policy and state support. While all the institutions would like to see more state support, there is no consensus among them about tuition. UW is advocating for increased autonomy, including tuition-setting authority. “Whether we like it or not, the most reliable revenue stream we have is tuition dollars, not the state budget,” Emmert told the committee.

But at Eastern Washington University, where more than half the students are first-time college-goers, and 80 percent work, higher tuition is not seen as a viable answer. The state must look for new sources of revenue, EWU President Rodolfo Arévalo told the committee. “I know there’s a break point at which the students who come to us will no longer come to us, because it’s too expensive in terms of tuition,” he said.

In October, the Washington Higher Education Coordinating Board released a draft of a study that called for connecting tuition to state support. The proposed goal: The state would pick up 55 percent of instructional costs, and tuition would pay for the remaining 45 percent. (The board was scheduled to consider the recommendation at the end of November, as National CrossTalk went to press.) The idea is to force lawmakers to consider the relationship between the two sources of revenue. “There is a public benefit from educating our citizens,” said Ann Daley, the board’s executive director. “The recommendation is based on the belief that the state is the primary shareholder, and so it should pay more than the student.”

In theory, tying tuition to state support is a good idea, said Dennis Jones, president of the National Center for Higher Education Management Systems, a non-profit consulting organization. “The problem with all of these grand schemes,” he said, “is they presume that the state’s going to have revenue.”

The proposal received an equally skeptical reaction from UW’s Doug Wadden and a representative from Western Washington University. During the Higher Education Coordinating Board’s October meeting, they said it would limit their flexibility, and questioned what would happen during economic downturns, wondering whether tuition would have to decrease to keep pace with any reductions in state dollars.

“The budget reduction process was extremely stressful,” says Washington State University Provost Warwick Bayly. The administration eliminated 950 courses this fall.
“This is a very affordable place,” Wadden said in a separate interview at UW. “Why should students who are capable of paying more be subsidized by everyone?” UW submitted an analysis of a high-tuition, high-aid model that was included in the appendix of the draft HECB tuition report.

Daley said she personally opposes such a model because it hurts middle-income students. “The analysis that we’ve done shows that higher tuition makes it unaffordable for more than half the families in our state,” she said.

And low-income students, especially minorities, are likely to be scared off by the sticker price, without investigating what kind of financial aid might be available to them, said Democratic Representative Phyllis Gutierrez Kenney, who sits on the House Ways and Means Committee and is a former chair of the House Higher Education Com-mittee. Kenney firmly opposes giving greater tuition-setting autonomy to UW. “We’d end up having an elitist school,” she said.

The solution, according to Kenney, lies in finding new sources of revenue. “We need tax reform in our state, which everyone talks about but no one does anything about,” she said.

But given the current economic climate, the chances of tax reform are slim, certainly in the near term. So for now, higher education advocates say that the institutions must do a better job of making their case to get a bigger piece of the current pie. “In the past, I don’t think we’ve organized the story in a way that has connected the dots,” said Terry Teale, of the Council of Presidents, who has been organizing a public relations campaign in advance of the upcoming legislative session.

One lawmaker who has yet to be won over is Republican Representative Glenn Anderson, the ranking minority member of the House Higher Education Committee. “The cost management of the institutions is atrocious. And there’s a culture of coming to Olympia and bullshitting us about the money,” said Anderson, who vigorously opposed the tuition increases. “If you’re going to ask more from a public that’s under (economic) stress, then you should be offering reforms that justify whatever you’re asking from the customer.”

Anderson believes the economic situation is so dire that it might merit closing one of the institutions. “It’s a legitimate alternative,” he said.

State Senator Derek Kilmer prefers a different approach: He’s in favor of developing performance agreements for each institution that would tie funding to outcomes. “We need to do a better job collectively of not just holding higher education institutions accountable but holding the legislature accountable, too,” he said.

When it comes to lobbying the legislature, the baccalaureate institutions do not enjoy nearly the political sway that the community and technical colleges do. That’s partly because the 34 community and technical colleges are all represented by the Washington State Board for Com-munity and Technical Colleges, and therefore speak in a unified voice. They also have a distinct geographical and numerical advantage, pointed out Chris Reykdal, the board’s deputy executive director of finance. “Our colleges are all over our state,” said Reykdal. “And every legislator has at least one college that overlaps their legislative district.”

Even so, the community and technical colleges did not dodge the latest round of budget cuts. They took a 10.7 percent reduction in state funds that was partly offset by a seven percent tuition increase. The end result was an average 7.6 percent reduction in funding. At the same time, enrollment is up 9.5 percent over last year, to a record high of 161,000 full-time equivalent students, about 60 percent of the state’s total higher education enrollment.

Like the four-year institutions, the community and technical colleges have reduced their staffs: So far, there have been 230 layoffs, with another 90 projected. They have also eliminated low-enrollment programs and courses, and have increased class sizes, which are up by an average of 23 percent this year. Already, the effects are being felt: Colleges are reporting waitlists in many programs, especially in allied health, said Reykdal. Some students take other classes while they wait; others simply go away. “There is definitely more demand than we can accommodate,” Reykdal said.

Currently, some 13,000 community college graduates transfer each year to a public institution, another 3,000 to a private one. But as enrollment increases, the community colleges expect to see a bottleneck at the junior level, because the public baccalaureate institutions will not be able to handle all the students who want to transfer in.

Reykdal believes that a more cohesive message needs to be coming from all sectors of higher education. “The entire education pipeline has to be healthy,” he said. “I hope we will band together and continue to talk about ourselves as the economic engine of the state.”

Kathy Witkowsky is a freelance reporter in Missoula, Montana.

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National CrossTalk December 2009



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