FOR IMMEDIATE RELEASE - June 27, 1996

Governor's Higher Education Task Force recommends new financing structure

OLYMPIA - Gov. Mike Lowry today officially released the recommendations of a special task force on higher education, which spent the past year looking at ways to fund Washington's future higher education needs.

Warning that state colleges and universities face an impending crisis, the Governor's Task Force on Higher Education recommends that the state establish a new dedicated source of funding to ensure that young adults - children of the "baby boom" generation - and existing workers who need job retraining have access to the state's higher education system.

The report also includes recommendations designed to expand the availability of student financial aid, ensure predictable tuition rates for resident undergraduate students, and increase efficiency and accountability at state colleges and universities.

"These recommendations provide a solid foundation for meeting the challenges facing our state's higher education system as we move into the 21st century," Lowry said. "Higher education is a major factor in our state's economic future, and I truly appreciate the efforts of the task force to help ensure that we can meet our commitment to the next generation."

Created by Lowry last July, the 23-member task force included members of the Legislature, regents and trustees of state higher education institutions, business representatives and a student member, who met over the past year to develop their recommendations. Their mission was to recommend an approach to funding higher education that would support "efficient, effective, and innovative institutions" during a time of rapid growth in the state's 17- to 29-year-old population.

As noted in the report, the percentage of the state budget allocated to higher education has declined steadily over the past decade, consistent with relatively slow growth in the state's prime college-going population during that period. However, now that the "baby boom echo" is reaching college age, state forecasts indicate that colleges and universities will have to accommodate an additional 94,510 students by the year 2010 to meet enrollment goals established by the Higher Education Coordinating Board and the Workforce Training and Education Coordinating Board.

The task force warns that the state will be hard pressed to provide the financial support necessary to meet increasing enrollment demands under current funding trends, especially given the restrictions on expenditures from the state general fund established by Initiative 601. If current trends continue, the state Office of Financial Management estimates that state support for higher education will fall about $700 million short of the amount needed to meet enrollment goals for the year 2010.

To address this projected shortfall, the task force recommends that the state direct current revenues for higher education into a new dedicated fund, which would grow at the rate of inflation plus the rate of change in the primary college-going population (18-23). It also proposes creation of a new Innovation Fund, through which businesses could claim a dollar-for-dollar credit against their Business and Occupation tax liability for contributions to higher education.

Together, those accounts are expected to generate approximately $2 billion for higher education in the year 2010, enough to support enrollment goals essential for successful participation in the global economy, said Joe King, the former Washington House Speaker who chaired the task force.

"Under the current system, higher education will face increasing competition from other programs supported by the state general fund," King said. "The approach recommended by the task force will ensure that Washington State can maintain its commitment to higher education within the context of Initiative 601."

The Governor's Task Force on Higher Education report also recommends the state:

• Increase the availability of financial aid so students with family incomes of up to 75 percent of the statewide average could qualify for assistance by the year 2010 (compared to the current threshold of 40 percent of median family income).

• Hold increases in tuition rates for resident undergraduate students to the annual rate of inflation, while giving institutions greater flexibility to set tuition for graduate, professional, and non-resident students within a prescribed range.

• Require colleges and universities to adopt efficiency measures that will allow them to serve more students with available funding; they would also be required to adopt new academic performance measures to ensure greater accountability.

The recommendations were endorsed by all but three members of the task force, who submitted a minority report opposing the establishment of a dedicated fund for higher education. Despite the lack of consensus, Lowry said he was pleased that the task force recognized the need for a comprehensive response to the challenges facing higher education.

"These recommendations set out clear choices with regard to the state's commitment to higher education," Lowry said. "We need to stop passing the buck and step up to the challenge before us, and I applaud the task force for developing recommendations that meet the challenge head-on."

For more information, contact the Governor's Communications Office at 360-753-6790. Copies of the task force report may be obtained by contacting Jessie Brunswig at 360-753-1802.