WashACE Blog

Higher ed funding cuts force rethinking of how we do college

Since higher education is unprotected by constitutional provisions (like basic K-12 education) or by federal program matching (like Medicaid) it is often a prime target for budget writers looking to cut spending. AP reporter Molly Rosbach writes about it here.

Among the changes currently in play for legislative consideration are tuition increases and tuition-setting flexibility at the state's 4-year institutions; accepting more out-of-state students, who pay higher tuitions yet; programs cuts; both cutting and increasing various state aid programs supporting tuition assistance for middle and low-income students; as well as fashioning better systems for moving students more smoothly and more productively through the education system from pre-Kindergarten through college and beyond.

The Greater Seattle Chamber of Commerce continues to advocate  for SB 5915 which grants Washington's 4-year institutions greater tuition-setting authority and the Washington Roundtable recommends that the state: 

...avoid disproportionately large cuts to higher-education funding in the 2011-13 budget, develop a more stable long-term framework for funding higher education and provide institutions with increased tuition-setting authority and operating flexibility, accompanied by clear accountability for results.

Stateline Staff Reporter David Harrison reports on education funding solutions being considered in other states, like three-year degrees in Ohio.

And, community colleges have long provided a less expensive alternative to the first two years of a four-year degree. They typically experience their largest enrollments during recessions when people are out of work and taking the time to get more education or to retrain for a different career. Stateline's Harrison writes on the community college role: 

With unemployment rates still stubbornly high, many laid-off workers now look to community colleges for the training and education they need to find a job. And steep tuition hikes at four-year schools have many high school graduates turning to community colleges as a more affordable alternative. 

 In his report Harrison describes the difficult challenge facing community colleges around the country and links to a helpful interactive map of the 50 states showing each state's community college enrollment and funding compared with the national average over time.

And, because education doesn't begin with college, the College and Work Ready Agenda (CWRA) and the Washington Partnership for Learning both have positive agendas for important solutions necessary in the state's K-12 system, like

1. Performance-based policies for teachers' reductions in force;
2. Alternative pathways to qualify new principals;
3. Mutual consent in teacher hiring policies; and
4. Maintaining our K-12 graduation requirements

...all promote greater efficiency and effectiveness in education spending and should be adopted by the legislature.

The CWRA says:

Whether they choose to attend a four-year college or go directly into the workforce after high school, we want our children to have the tools for success in hand once they have their diploma clasped in the other. The goal of the College & Work Ready Agenda is to ensure all Washington students graduate from high school with a more meaningful diploma that signifies they are ready for their next step in life. 

The Workforce Training and Education Coordinating Board has a side-by-side comparison of the Governor's and House budget proposals, showing how each affects various resources for K-12, workforce, community college, and Higher Education Coordinating Board funding.

We should be able to add the Senate's version soon...stay tuned.

 

 

 

With revenue and certainty down, biennial spending plans should undershoot forecasts

Chief state economist Arun Raha announced this morning that estimated revenues available for the 2011-13 biennium are down an additional $700 million from earlier forecasts.

Governor Gregoire, responding to Raha's report, urged the Legislature to develop long-term budget solutions, avoiding one-time fixes. 

“We can’t rely on short-term solutions,” Gregoire said. “Short-term solutions may cause less pain now, but we need a budget that is both sustainable and long-term.”

WRC President Richard Davis wrote in January that the earlier $4.5 to $5.5 billion budget deficit should more accurately be understood to be about $2.5 billion. This is because the higher deficit estimates include about $2 billion in spending that has never actually been spent...on programs like voter-approved initatives 728 and 732 (class-size reduction and teacher pay). These programs, as well as more recent education finance reforms, are on hold due to insufficient funding. 

Nonetheless, even without counting these items, the budget hole has now deepened to more than $3 billion and there is no reason to believe that future forecasts will improve the revenue outlook. On the contrary, global economic conditions are more likely to contribute to a worsening revenue picture yet. Anticipating continuing reductions in revenue forecasts, Davis wrote earlier this week that lawmakers "should underspend the forecast..." for the next biennium.

We can't afford the government we've created, says Davis. Savings outlined in Thrive Washington papers being produced jointly by the Washington Research Council and the Washington Roundtable provide a roadmap for how to prioritize spending within the budget shortfall that exists.  In dialing back the state's spending commitments we should...after funding those mandated activities like basic education and public safety and health...maintain our commitments to the greatest extent possible to those activities, like higher education and transportation infrastructure, that will contribute to the state's long-term economic recovery.

Effective education reform must include consolidation & restructuring

   Depending on who's speaking and what precisely they're talking about, education reform and consolidation proposals in Olympia are moving, stalling, changing or dying. The AP reports:

The governor's plan would eliminate the State Board of Education, the Department of Early Learning and nearly 10 other departments, boards and committees and place their functions under a new Department of Education. The Office of the Superintendent of Public Instruction would still oversee K-12 education but most administrative matters would move to the new department.

Under Gregoire's proposal, the governor would - starting next year - nominate a secretary of education, who would need confirmation from the state Senate. Gregoire said she foresees a nationwide search for a professional to head the department, someone with vision and leadership skills but also expertise in education...

Gregoire said she has heard some people think she is trying to change things too quickly.

"We can't go fast enough," she said.

   On the other hand:

[State Rep. Sharon Tomiko] Santos said everyone agrees that the state's education system is fragmented and that Washington needs a seamless system from early learning through college, but she supports a different approach...

   And at least one legislator would go further:

Sen. Rodney Tom has taken the idea one step further and proposed eliminating the superintendent of public instruction as an elected position. His idea would require a constitutional amendment because the superintendent's job was established by the state constitution. His proposal, which consists of two bills, was heard in the Senate Education Committee but has not come for a vote.  

    At a gathering of business lobbyists today in Olympia, Attorney General Rob McKenna said the idea of eliminating the superintendent's elected position has zero chance of being supported by the legislature. He said there were divides between democrats and republicans or between house and senate, but those divides pale against the divide between the legislative and executive branches of state government. The legislature is not going to give the executive more power by eliminating the elected education superintendent...even if it makes sense to do so, he said.

Jerry Cornfield's report in the Everett Herald confirms that this proposal is moot for now...he quotes Gregoire:

"I think everyone believed we need to move forward and that [this part of the proposal] can't hold us back," she said. "This is not about Randy Dorn and Chris Gregoire. This is about our children and their future."

   Meanwhile, Jim Camden reports in the Spokesman Review quotes the governor:

“It’s not adequate for tomorrow; it’s not even adequate for today,” she said of the state’s scattered authorities on education. “Everybody’s defending their turf.”

  In their Thrive Washington paper on consolidation of the executive branch the Washington Roundtable and the Washington Research Council recommend that the state should:

Place a constitutional amendment on the ballot that eliminates the elected office of superintendent of public instruction.

 

More reactions to governor's education consolidation

The Senate Democrats' blog questions whether the governor's call for an education agency is radical or conventional. They lean toward conventional.

...looking at the rest of the nation, including Washington, D.C., what is being proposed is, in fact, the way of life in nearly three-quarters of the states.

According to the Council of Chief State School Officers, 37 states and the District of Columbia have unelected administrators with various titles heading up state departments of education.

I'm not sure it's the right question. Better to wonder whether the unified agency makes more sense than the current mishmash. I think the nod, details to be worked out, goes to Gregoire.

At Olympia Business Watch, AWB president Don Brunell credits the governor for an overdue shakeup.

...Gov. Chris Gregoire (D) is on the right track to shake state government to the core.  Some would say that desperate times call for desperate actions.  More correctly, it is change that is long overdue.

...Nowhere is the change more sweeping than education which consumers more than half of the state's budget.  Her announcement on Wednesday creating a single department of education such as is the case in Florida may or may not be a good idea; however, it is sure worth looking at.

RIght. Also at OBW, Jason Hagey has the video of SPI-candidate Randy Dorn saying he supports eliminating the elected office he eventually won. Here's how he explains the change.

A busy pre-session week for gov: workers' comp, UI, higher ed announcements

For the governor, 2011 started with a flurry of announcements. (A day out of the office backed me up on some of this.)

Consider: Her higher education task force ran out its recommendations yesterday. They make a lot of sense. Task Force Chair Brad Smith, Microsoft SVP and General Counsel, summarizes in this blog post:

...the task force settled on a limited number of direct and important recommendations (available at http://www.microsoft.com/about/corporatecitizenship/en-us/our-actions/in-the-community/washington-state/#Educationtab ), which are very much linked together to form a comprehensive approach. These recommendations fall into three categories:

First, the state should adopt a new financial formula that combines direct state budget support of higher education with increased tuition-setting authority for the public four-year universities...

Second, the task force recommended that the state take an innovative and sustainable step to establish a new revenue source to provide financial aid for low- and middle-income college students...the group recommended creation of a new Washington Pledge Scholarship Program. This program would provide scholarships to Washington residents attending public community colleges and universities in Washington. It might focus special attention on STEM education.
 
This program would be based on an endowment funded through new, private donations from individuals and businesses. It would be encouraged in part by a new state tax incentive to encourage companies in the state to donate to the endowment fund...

Finally, the task force recommended steps to strengthen accountability by the state’s public universities... the group recommended specific performance criteria, including degree production, based in part on the “Complete to Compete” initiative of the National Governors Association. We also recommended that the legislature create a small fund to reward those campuses that meet or exceed specific metrics in helping more students to graduate.

I cut a lot to make it fit and encourage you to read, at a minimum, Smith's complete post, if not the full report. The News Tribune was quick to endorse the call for radical change in the way we fund higher ed. The Seattle Times also urges lawmakers to give serious consideration to the task force's financial blueprint. Other stories in the SeattlePI and Seattle Times.

Yesterday Greogoire also proposed unemployment insurance and workers' compensation reforms.

Gregoire will introduce legislation to reduce and cap the shared-cost portion of unemployment taxes in 2011, which will reduce businesses’ unemployment taxes by $300 million. In order to take effect this year, the Legislature must pass the bill by Feb. 8, 2011.

...Gregoire will introduce legislation to create a network of credentialed health care providers for state and self-insured employers.

...To save an additional $560 million over four years, the Governor proposed fundamental changes to the workers’ compensation system. She plans to reduce lifetime pensions – which represent 85 percent of workers’ compensation costs but only eight percent of claims – by offering lump-sum benefits to older workers unlikely to reenter the workforce and adjusting pensions of totally disabled workers who earn income through limited work.

Stories in the Seattle Times, Spokesman-Review, and SeattlePI. Business is waiting for details before weighing in definitively. The Association of Washington Business, however, released a statement noting that these are good initial steps.

“Today’s announcements by the governor about proposed changes to the UI and workers’ comp systems would be a positive step forward for businesses on both of these issues. The combined forces of a challenging economy and higher taxes continue to take their toll on private employers and their ability to create jobs,” said [AWB president Don] Brunell. “The governor’s efforts to rein in costs and reduce taxes comes at a time when many businesses are seeing multiple tax rate increases. If enacted, these changes would offer employers a small dose of certainty when they need it most.

“Make no mistake: The governor’s proposals are a good start. But our members believe more must be done this session, for example, to shore up the long-term health of the workers’ comp system and maintain the integrity of our UI trust fund,” added Brunell.  “We appreciate Gov. Gregoire’s leadership on these two vital issues for private employers, and look forward to working with her and the Legislature when session convenes next week.”

It's going to be a difficult session. We know that. It's good to see several positive initiatives rolled out now, reminding us that some good things can be done in tough times.

WashACE Friday Phone Conference Podcast is Up

Listen to it here

And thanks to the members and supporters who joined us this morning. I'm looking forward to next week's conversation.

Practically the End of a Tough Legislative Session - Some Good Competitiveness Outcomes

About 11 hours after the 2009 legislative session adjourned, Gov. Gregoire announced her plans to call lawmakers back for a special session to clean up unfinished business. She'd like it to be short, a day or two, and limited to a handful of items necessary to implement the budget. Not everyone's enthusiastic.

It's important to take time to recognize that in a very difficult year, the Legislature accomplished some noteworthy things, foremost among them: balancing a budget without general tax increases. Critics may point at the heavy reliance on one-time money, including the federal stimulus cash, and the likelihood of another shortfall in the next budget. While that argument has validity, it's more important to note that lawmakers bought themselves - and us - another two years to transition to a sustainable spending level, we hope in a stronger economy. Tax hikes would have further hammered struggling families and businesses, delaying the recovery. Commend lawmakers for making the right budget decisions and avoiding new taxes.

Also, at the eleventh hour (literally), lawmakers adopted a clean unemployment insurance reform bill after the House receded from problematic amendments that would have led to a certain tax hike, particularly on mid-size Main Street businesses. Along with a balanced budget that did not rely on new taxes, UI reform has been a top WashACE priority. Thanks to all who contacted their legislators in the last few weeks!

Some other good things:

• Higher eduction budget cuts, inevitable this year, have been made less challengng (not easy) with tuition flexibility for colleges and universities.
• Progress on two critical transportation projects - the 520 bridge and a bored tunnel replacement for the Alaskan Way Viaduct.
• A three-year delay in paid family leave. (Better to see it repealed, but we'll take a delay.)
• The Employer Gag Rule (aka Worker Privacy Act) disappeared, at least for a while.

We'll have more on what did and didn't happen this session in the coming weeks. Facing considerable challenges, lawmakers were able to take meaningful steps to improve our economic competitiveness. That's no small accomplishment.

Early Reactions to Governor's Budget

As she predicted, reactions to the governor's budget have been swift. While the scramble to understand the details will take us all a while, the broad brush strokes are enough to frame the likely debate.

As we posted earlier today, Sen. Joe Zarelli likes the approach Gregoire has taken, saying it puts the process on the proper course. Zarelli is ranking Republican on the Senate Ways and Means Committee. His counterpart in the House, Rep. Gary Alexander, also likes the direction.

I commend the governor for putting forth a balanced budget that does not raise taxes or fees.  House Republicans have long believed that increasing taxes or fees is not the right approach while families are struggling with everyday expenses and workers are losing jobs.

While there are certainly some details of her plan that we might do differently, the governor has offered a good first step in correcting the past four years of overspending. 

Alexander and Zarelli both emphasize the importance of building early savings into the 2009 supplemental budget.

AWB president Don Brunell issued a brief statement.Noting that AWB continues to review the budget proposal, Brunell emphasizes the groups support for her decision not to raise taxes on families and employers. He adds:

It is critical that Washington state look beyond the current budget woes and prepare for what happens after we emerge from this recession. Part of that discussion must include creating the conditions for a healthy business environment so that when we do emerge from the recession, Washington is positioned as a good place to create those jobs.

 

As devastating as the economic conditions may be, the recession is an opportunity to reshape the way government operates and position our state to attract and retain businesses.

The largest union representing state workers call Gregoire's plan dead on arrival. They say that approvingly, looking for legislative support for tax hikes.

?Our biggest concern is that everything should be on the table and that includes tax loopholes and revenue enhancements,�� Federation Executive Director Greg Devereux said.?If the economic parts of our negotiated contracts that were ratified two months ago can be suspended, why can?t a campaign pledge on no revenue increases be retracted?��

Senate Majority Leader Lisa Brown has reservations as well. She calls reliance on $1 billion in federal assistance a "glaring flaw" and, pointedly, does not pledge to resist tax hikes. Brad Shannon notes her concern in his Olympian story, which includes Alexander's assessment that the estimated federal money is a "reasonable assumption." Today's Wall Street Journal story on the Obama stimulus plan adds weight to the Gregoire/Alexander position.

The broad parameters of the package are known already. It will include a tax cut designed to pump $50 billion to $100 billion into the economy almost immediately; about $100 billion in aid to state governments, primarily to temporarily assume more of the cost of Medicaid, in hopes of staving off benefit cuts or tax increases; and funding in five main areas: traditional infrastructure, school construction, energy efficiency, broadband access and health-information technology.

Finally, both the Evergreen Freedom Foundation and the Washington Policy Center have posted first impression comments on the new budget.

Update University of Washington president Mark Emmert says the proposed budget would "seriously harm" the UW.

More Questions About Rankings: Universities This Time

I hadn't planned on writing again so soon about rankings studies, but this Instapundit post intrigued me. He linked to a longer post by University of Wisconsin law professor Ann Althouse questioning Forbes methodology.

Good questions. And relevant to our "best states" discussions. (Read the comments - some clever stuff there.)

"H.S. Graduation Standards, Higher Education, and Gaining the Competitive Advantage"

A couple of recent reports link several themes relevant to the competitiveness of our state and nation.

Education Week (free registration required) reports that states that have tied their accountability standards to high school graduation face increased calls to relax the requirement.

Though 26 states have adopted such mandates?most of them since 2000?that number has remained static since last year, according to a report scheduled for release this week by the Center on Education Policy, a Washington-based research and advocacy organization that has tracked the trend for the past seven years.

And for nearly a dozen states, compliance deadlines that once seemed far off have begun to bite, leading Arizona, Alabama, Maryland, and Washington, among others, to soften their mandates by offering alternative paths to a diploma, or by also weighing factors such as a student?s grade point average.

Chester Finn, a supporter of standards-based accountability, aptly frames the challenge.

Mr. Finn, the Fordham Institute president and an assistant U.S. education secretary in the Reagan administration, said the struggle for states is to strike a balance between enforcing a rigorous policy and understanding students? needs.

?I really do think a kid shouldn?t have his entire life blighted because he can?t do well on a particular kind of test,�� Mr. Finn said.?Yet at the same time, you allow too many alternative paths and too many exemptions and you dilute the meaning of having a graduation test.��

It's a good overview of the national debate, a debate mirrored in this year's OSPI campaign.

Three valuable reports by AeA underscore the value of education to our state's economic competitiveness. 

Cyberstates, an annual state-by-state overview of the high tech industry, looks at the  contributions of technology to state economies. Washington regularly ranks near the top, led by software publishing.

"Washington?s tech industry remains strong, experiencing it's third year of job growth with average wages that are more than double those of the private sector,�� said J.D. Hammerly, Vice President, Energy Infrastructure. "While many people associate Washington state with the software industry, they may not realize how fast it continues to grow. This growth runs on the knowledge and intellectual capital of some of the smartest and most skilled workers in the world. Washington's challenge is that we are not graduating enough scientists and engineers to maintain this growth. All you have to do is look at the websites of our technology companies? large and small? and you?ll find thousands of positions going unfilled."

"Our Evergreen state needs to do more to prepare our workforce for careers in the tech industry, from the K-12 system to our universities,�� continued Hammerly.

Cybercities, the metro area equivalent, reports Seattle is now the ninth largest "cybercity" in the nation by employment. Again, Hammerly cites the education challenge.

"... future growth depends on our ability to make high-tech careers attractive to our children. We need to spark more excitement and enthusiasm for technology, sciences, and math. These skills are critical to prepare young students for an increasingly technical world, providing them with the foundation to become highly paid tech workers.��

In We Are Still Losing the Competitive Advantage, a March 2007 update of a previous study, AeA clearly lays out the challenge.

The United States trails other countries in the number of people graduating with bachelor degrees in engineering.  While the United States is the largest economy in the world and the third most populous nation, it only ranks seventh in the number of bachelor degrees awarded in engineering.  China graduates almost six times as many engineers as the United States, according to the most reliable data available.  Japan, with less than half the population of the United States, graduates 60 percent more engineers.?

On a country-by-country basis, the United States still leads in the number of science and engineering (S&E) doctoral degrees granted by a wide margin.  But significant portions of these are awarded to foreign nationals who increasingly cannot or choose not to stay in the United States after graduation. Between 2001 and 2005, U.S. S&E doctorates awarded to foreign nationals increased by 25 percent and comprised nearly all of the overall growth in S&E doctorates awarded over this time period.

While our state - like many states - faces a significant budget shortfall, technology has been the key to our strong economic performance during these tough times. We cannot afford to see our position erode because of a failure to adhere to standards and make critical investments in higher education a priority, even during these straitened days.