Office of Planning and Budgeting

The U.S. Census Bureau recently reported new, encouraging numbers about educational attainment in the United States for the 2010 Census year. According to the report, the percentage of people 25 and older who held a bachelor’s degree or higher increased to 30 percent in 2010 from 26 percent in 2000. Additionally, the percentage earning a high school diploma or higher was 87 percent, up from 84 percent ten years earlier. Interestingly, women are earning more bachelor’s degrees than men in the 25-29 age group—36 percent of women earned a BA or higher, compared to 28 percent of men.

While the Census Bureau has not yet released disaggregated data that lists educational attainment by state, a few sites have interesting information about Washington degree attainment from the 2000 Census, as well as predictions from surveys since then. According to these numbers, Washington was ahead of the national average in 2000, with 87 percent of the population 25 and over holding at least a high school degree, and 27.7 percent holding at least a bachelor’s degree.

To see more interesting information about the 2010 Census, check out the Seattle Times’ maps and interactive features or visit the Census website directly.

Last year, the UC Board of Regents increased the system-wide cap on nonresident undergraduate enrollment from 6 percent to 10 percent based on final recommendations from  the University of California Commission on the Future. Newly released 2011 UC freshman admissions statistics for all nine campuses show how aggressively UC has moved to increase nonresident enrollment as a result.

Like in Washington, steep state funding cuts have forced California’s public research institutions to rely more heavily on nonresident students who pay, on average, three times the price that resident students pay. As a result, the average percentage of nonresidents (international and out of state) admitted to UC campuses has increased sharply in just two years:

  • 2009: 11.6%
  • 2010: 14%
  • 2011: 18.1%

Note that at the ‘flagship’ UC campuses, Berkeley and UCLA, where the applicant pools are much deeper and acceptance rates much lower, the numbers are much higher. At Berkeley, 31.2 percent of admitted Freshman were nonresidents, and at UCLA, 29.9 percent were nonresidents.

However, the system anticipates that nonresident students will ultimately make up less than 10 percent of the enrolled 2011 UC system freshmen class due to an overall lower yield rate among nonresident admits, and due to the fact that the system offered 12,700 Californians who were denied spots at their preferred UC campuses the option of enrolling at the newest UC campus in Merced even though they did not apply there (this move also keeps UC in compliance with the Master Plan, which requires that the system admit at least the top 12.5 percent of California high school students).

UC notes that, like the UW, while they are increasing nonresident enrollment, they continue to hold nonresident applicants to higher academic standards than residents. They also point out that peer institutions such as the University of Colorado, the University of Michigan, and the University of Virginia continue to rely far more heavily on nonresident students,  who comprise  over one third of enrolled undergraduates.

While the move to increase nonresident student enrollment at public institutions is sometimes heavily criticized, the tuition rates paid by these students help institutions keep resident tuition down while maintaining the quality of education despite significant funding cuts.

A new GAO (Government Accountability Office) report released last week provides an update to an ongoing assessment of State and Local Government fiscal health. The GAO has been publishing fiscal simulations for the state and local public sector (in aggregate) since 2007, and their modeling has consistently shown structural problems facing state budgets into the future.

The April update notes that, absent major policy changes, state operating budgets will face continuing decline through 2060 primarily due, in the short term, to decreased tax receipts, and, over time, to rising healthcare-related costs (both for Medicaid and Medicare as well as to meet the cost of providing health benefits to state employees and retirees).

The report concludes that in order to close the ‘fiscal gap’ (estimated action required today to ensure long-term fiscal balance), the state and local sector would have to, on average, decrease spending or increase revenue by about 12.5 percent and maintain that change in each successive year.

The conclusions in the report reflect adjustments made  for costs and savings associated with the Patient Protection and Affordable Care Act (PPACA) passed by Congress in 2010.

See our previous post for links to sources that provide updated assessments of state budgets as they continue to evolve.

The Washington State Senate passed its budget last night after adopting two floor amendments. The budget cuts, compensation reductions, and policy issues we outlined were not amended in any substantive way in the engrossed budget passed by the Senate last night. Readers can examine the evolution of the House and Senate versions in detail here and here.

Regular session is scheduled to end this Sunday, but legislators will not be in Olympia over the weekend due to Easter. A special session will likely be called after the holiday and reaching agreement on a conference (negotiated) budget would be at the top of the agenda. For more information, TVW’s Capital Record blog provides an excellent summary of special session details here.

In an effort to give more students the opportunity to earn a bachelor’s degree and enter the workforce early, the legislature passed SB 5442, “Requiring the development of three-year baccalaureate degree programs.” The bill, which was delivered to the Governor for approval on April 12th, requires institutions of higher education to provide degree programs that enable academically qualified students to graduate in three years. The bill does not explicitly define “academically qualified students,” thereby leaving it up to the higher education institutions to make their own rules. According to the bill, qualified students must not be required to enroll in summer school or take a more than full-time credit load in any term in order to graduate early. They must also be able to take classes in their major starting in their first term. The legislature hopes this will have a positive effect on graduation rates, as well as lower the cost of a baccalaureate degree for both the state and the student.

Of course, the idea of three-year degree programs is not new. In fact, students coming into the UW with 45 credits or more can already, with attentive advising and careful planning, earn a bachelor’s degree in three years. However, the degree must still meet the same university requirements as those earned in four years. While legislators want to make it easier to apply existing credits to students’ degrees, those students must still earn at least 180 credits total and meet all distribution requirements. With more and more students coming into the UW with AP and IB credit, this option has become increasingly attractive to students eager to graduate and enter the work force. However, others have actually found that the push to graduate in three (or fewer) years is detrimental to their college experience. This prompted the ASUW Senate to pass a resolution giving students the right to waive excess AP and IB credits if they so choose. Either way, students’ options for shaping their educational experience, be it three years or four, are likely increasing.

Senate Ways & Means leadership released their bipartisan budget last night after a 7PM press conference. Budget reductions total $4.8 billion and the largest cuts are targeted to K12 education, higher education,  employee compensation across all sectors of state governemnt, and basic health.

The UW’s general fund appropriation is cut more in the Senate budget ($217 million) than the House engrossed budget, but the Board of Regents would be authorized to increase resident undergraduate tuition higher (16% per year). BEFORE tuition increases, the Senate budget cut would be a 34.2% reduction from our maintenance level.

The Senate budget contains two compensation related cuts, which are limited to employees paid from state general fund (GOF), the medical account, and the accident account (the latter two provide critical funds for Public Health).

  1. Like the House engrossed budget, the Senate budget includes 3% “compensation savings” reducing our appropriation by $24 million over the biennium. Individual salaries will not be affected but our general fund, medical aid, and accident approprations would be reduced.
  2. The Senate budget would require stepped furloughs for “highly paid” employees, excluding faculty and Harborview personnel. The budget bill does not contain language to this effect but rather, the budget overview indicates that the policy will be included, perhaps in SB 5860. The general fund cut for furloughs would be $10.2 million over two years.

A full OPB brief is available for review.

After considering numerous floor amendments last Friday evening, the House passed their operating budget on Saturday afternoon. The House budget appropriates $32.2 billion in general fund state operating funds and makes significant cuts to health and human services, K-12 education, and higher education.

Like the House Ways & Means chair budget, the engrossed budget cuts $204 million from the UW’s state general fund appropriation over two fiscal years. However, that reduction is somewhat mitigated by the fact that all UW units took part of these cuts in November 2010 permanently. As a result, our brief outlined the approximate cut (before tuition revenue) that would be implemented in Seattle should the House budget ultimately pass after negotiations between the chambers.

The engrossed budget contained an extremely important amendment which exempts university and college employees from individual salary reductions of 3%. However, institutions will still need to come up with requisite “savings” (read: cuts) of 3% from all appropriated funds, which for the UW, are general fund state and the medical aid and accident accounts.

The Senate is expected to release operating and capital budgets this evening. After the Senate passes its budget, leadership in each chamber will begin negotiations toward a conference budget.

Preserving the access to and quality of higher education is paramount in the face of massive budget cuts. Two bills, HB 1795 (Enacting the higher education opportunity act) and SB 5915 (Regarding higher education funding and performance), seek to achieve this goal by:

1.       Giving tuition-setting authority to universities

2.       Reforming Financial Aid

3.       Strengthening accountability

Legislators hope this will preserve the quality of higher education while protecting affordability for students and their families. The House Higher Education committee passed a substitute version of HB 1795 in February, while SB 5915 just had its first hearing in the Senate Ways & Means committee on April 6th. While HB 1795 has not been altered since its hearing more than a month ago, the issues that it seeks to address are still relevant, and we anticipate both bills to remain in play. Please click on the table below to see a summary of the similarities and differences between the two bills.

Earlier this week, the Chicago Council on Global Affairs released a new report authored by current professor and former  University of Michigan President James Duderstadt. The report, A Master Plan for Higher Education in the Midwest: A Roadmap to the Future of the Nation’s Heartland, chronicles the overall failure of the Midwest to transform itself from economic engine of the industrial age to being at the forefront of the knowledge economy.

Duderstadt identifies what he calls lifelong and lifewide education as the key to succeeding in today’s economy and in the future. Like many, he argues that more Americans will  increasingly need to access different forms and levels of education throughout their lifetimes if they are to succeed in a rapidly and continually changing economic landscape. The report lays out a roadmap for a newly imagined, highly collaborative, mission-diverse and better funded regional higher education system.

Duderstadt’s proposals include:

  • Broadening boundaries beyond the state, increasing collaboration between institutions and governments, and creating a more systemic perspective that integrates all of the entities that comprise a ‘knowledge ecology’.
  • Increasing higher education engagement with the K-12 system to increase educational performance and transition.
  • Facilitating movement between institutions in the region, but also emphasizing the importance of mission differentiation.
  • Adopting best practices from other countries, specifically highly successful European models including polytechnic universities and alternative ways of dealing with the transitional years of grades 11-14.
  • Shifting the funding paradigm for public higher education including a high tuition, high financial aid model, and  implementing differential taxing of future earnings as Britain currently does.
  • Expanding higher education, including the creation of new institutions focused on non-traditional students.
  • Increasing regional investment in R&D, strengthened focus on tech transfer activities, and investment  in cyberinfrastructure.
  • Rebuilding the perception that education is a critical public good that requires healthy investment and support.

Overall, Duderstadt imagines more autonomous institutions that can react quickly to a changing environment, are accountable to the public through specific and measurable performance targets, are adequately funded through higher tuition levels and increased public investment, are differentiated strongly by mission, and serve a much larger and diverse population of students.  He imagines that both public, independent, for-profit and new kinds of institutions will all have an important role to play in this system.

Duderstadt acknowledges the large influence of both the California Master Plan and the Bologna Process in the creation of his roadmap. He lays out next steps for a more detailed study and creation of an implementation plan, and also also allows his inner futurologist to to come out in the last chapter where he envisions how these system changes will  prepare the region to succeed in a longer-term future that will be transformed again and again by technological discovery and development.

Read at least the executive summary if you get the chance. And if you are interested in other imaginative proposals that have been put forward in the last year, check out a few of our previous posts:

As state legislative season wears on, here is an update on some of the efforts in other states to achieve greater financial and regulatory freedom for public higher education institutions facing another year of steep budget cuts.

  • Virginia: The legislature passed the Virginia Higher Education Opportunity Act of 2011. For details on the major aims of this legislation, see our earlier post. The State Council of Higher Education for Virgina (SCHEV) provides an overview of how the final bill differs from the original bill, including, among other things, the addition of a goal to recognize the unique missions and contributions of different institutions.The Act now awaits the signature of the Governor, who proposed the initial bill.
  • New York:  The Legislature passed a budget that did not include provisions contained in the Public Higher Education Empowerment and Innovation Act proposed by the SUNY system. The Act sought increased autonomy from state processes and freedom in managing institutional resources, especially in light of significant budget cuts since 2008. The state not only decided to include none of the flexibility measures, but hit the system with another $210 million in cuts. Having lost 30 percent of its state funding in three years, this huge network of over 60 campuses is determined to continue fighting to maintain access and quality.
  • Wisconsin: The New Badger Partnership proposed by UW Madison continues to be controversial in Wisconsin. Feeling left behind by the proposal to ‘set free’ the flagship institution, the UW System Regents have endorsed their own proposal, the Wisconsin Idea Partnership, which includes freedoms and flexibilities for all system campuses. The Legislature will consider both proposals in the coming month.
  • Oregon: University of Oregon President Richard Lariviere has made an agreement with Governor John Kitzhaber to put the University’s ‘New Partnership’ legislation on hold for a year in favor of supporting passage of the Governor’s legislation, which creates an independent public university system in place of treating each institution as a  state agency. In exchange, the Governor has signaled an intention to support the University of Oregon’s New Partnership proposal for greater autonomy, including a new financing structure that replaces annual state operating support with a public endowment, in the 2012 Legislative session.

Note that the Washington State Legislature is also currently considering a number of proposals, both large and small, that might lead to regulatory relief and increased autonomy of varying types for the UW. Check out the bills that the UW ‘strongly supports’ and ‘supports’ in the BillTracker for more information on some of these bills.

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