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Obama Addresses National Governors Association and Talks Higher Education

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At the end of February President Obama addressed the National Governors Association (NGA) with an eye to education.

President Obama challenged the nation’s governors to ensure all students in their schools get the education they need to compete for the jobs of tomorrow.  “Nothing more clearly signals what you value as a state as the decisions you make about where to invest,” he asserted.  “Budgets are about choices.  So, today, I’m calling on you to choose to invest more in teachers; invest more in education; invest more in our children and their future.  That doesn’t mean you’ve got to invest in things that aren’t working.  That doesn’t mean it doesn’t make sense to break some china and move aggressively on reform.  But, the fact of the matter is we don’t have to choose between resources and reform.  We need resources and reform.” 

President Obama focused on the blueprint he has laid out, to work with Congress, to  establish a set of policies focused on increasing post-secondary education opportunities in the U.S.

The proposal put forth by the President would include several components.

  • Reform student aid to promote affordability and value: To keep tuition from spiraling too high and drive greater value, the President will propose reforms to federal campus-based air programs to shift aid away from colleges that fail to keep net tuition down, and toward those colleges and universities that do their fair share to keep tuition affordable, provide good value, and serve needy students well. These changes in federal aid to campuses will leverage $10 billion annually to keep tuition down. The President’s plan calls for shared responsibility between the federal government, states, and institutions of higher education to tackle rising college costs by  improving the distribution of federal financial aid and increase campus-based aid. This reform will reward colleges that are succeeding in meeting the following principles:
      • Setting responsible tuition policy, offering relatively lower net tuition prices and/or restraining tuition growth.
      • Providing good value to students and families, offering quality education and training that prepares graduates to obtain employment and repay their loans.
      • Serving low-income students, enrolling and graduating relatively higher numbers of Pell-eligible students.

In his proposal the President is proposing to change how funds for the Supplemental Educational Opportunity Grants (SEOGs), Perkins Loans, and Work Study are distributed by implementing an improved formula that shifts aid from schools with rising tuition to those acting responsibly, focused on setting responsible tuition policy, providing good value in education, and ensuring that higher numbers of low-income students complete their education. He is also proposing to increase the amount of campus-based aid to $10 billion annually. The increase is primarily driven by an expansion of loans in the federal Perkins program – which comes at no additional taxpayer cost.

Under his plan colleges that can show that they are providing students with good long-term value will be rewarded with additional dollars to help students attend. Those that show poor value, or who don’t act responsibly in setting tuition, will receive less federal campus-based aid.  Students will receive the greatest government grant and loan support at colleges where they are likely to be best served, and little or no campus aid will flow to colleges that fail to meet affordability and value standards.

 

  • Create a Race to the Top for college affordability and completion: The president will create incentives for states and colleges to keep costs under control through a $1billion investment in a new challenge to states to spur higher education reform focused on affordability and improved outcomes across state colleges and universities. The Race to the Top: College Affordability and Completion will reward states who are willing to drive systemic change in their higher education policies and practices, while doing more to contain their tuition and make it easier for students to earn a college degree.The President is proposing a program that would spur systemic state reforms to reduce costs for students and promote success in our higher education system at public colleges. This $1 billion investment would incentivize states to: (1) Revamp the structure of state financing for higher education; (2) Align entry and exit standards with K-12 education and colleges to facilitate on-time completion; and (3) Maintain adequate levels of funding for higher education in order to address important long-term causes of cost growth at the public institutions that serve two-thirds of four-year college students. The intention is that the Race to the Top for College Affordability and Completion would incentivize governors and state legislatures around the nation to act on spurring this innovative reform. Through cost-saving measures like redesigning courses and making better use of education technology, institutions can keep costs down to provide greater affordability for students.

 

  • A first in the World competition to model innovation and quality on college campuses: The president will invest $55 million in a new First in the World competition, to support the public and private colleges and non-profit organizations as they work to develop and test the next breakthrough strategy that will boost higher education attainment and student outcomes. The new program will also help scale-up those innovative and effective practices that have been proven to boost productivity and enhance teaching and learning on college campuses.  This initiative would provide modest start-up funding for individual colleges, including private colleges, for projects that could lead to longer-term and larger productivity improvements among colleges and universities – such as course redesign through the improved use of technology, early college preparation activities to lessen the need for remediation, competency-based approaches to gaining college credit, and other ideas aimed at spurring changes in the culture of higher education.

 

  • Better data for families choose the right college for them: The president will call for a College Scorecard for all degree-granting institutions, designed to provide the essential information about college costs, graduation rates, and potential earnings, all in an easy-to-read format that will help students and families choose a college that is well suited to their needs, priced affordably and consistent with their career and educational goals. The Administration will create a College Scorecard for all degree-granting institutions making it easier for students and families to choose a college that is best suited to their needs, priced affordably, and consistent with their career and educational goals.  The administration will also make an updated version of the ‘Financial Aid Shopping Sheet,’ announced in October, a required template for all colleges, rather than a voluntary tool, to make it easier for families to compare college financial aid packages. Finally, the President is also proposing to begin collecting earnings and employment information for colleges, so that students can have an even better sense of the post post-graduation outcomes they can expect.

 

  • Federal Support to Tackle College Costs In his State of the Union, President Obama called on Congress to: (1) Keep student loan interest rates low. This summer, the interest rates on subsidized Stafford student loans are set to double from 3.4% to 6.8% – a significant burden at a time when the economy is still fragile and students are taking on increasing amounts of debt to earn a degree. The President is asking Congress to prevent that hike from taking place for a year to keep student debt down, a proposal that will keep interest rates low for 7.4 million student loan borrowers and save the average student over a thousand dollars; (2) Double the number of work-study jobs available:  The President also proposes to double the number of career-related work-study opportunities so that students are able to gain valuable work-related experience while in school; and (3) Maintain our commitment to college affordability: Over 9 million students and families per year take advantage of the Obama Administration’s American Opportunity Tax Credit – supporting up to $10,000 over four years of college.  In his State of the Union address, the President called on Congress to make this tax credit permanent and prevent it from expiring in 2012.

2012 Special Session Begins

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Today the Washington Legislature convened the 2012 special session. On Friday Governor Gregoire called legislators back to Olympia at noon today to finish work on a supplemental operating and capital budget as well as the necessary policy bills needed to implement the budgets.

The special session is likely to be focused but it remains uncertain if it will go the entire thirty days. Governor Gregoire announced that she reached agreement with lawmakers to remain focused on a limited agenda, including the budgets and potentially a jobs plan that could inject $1.2 billion in state money into school construction, community projects, and environmental cleanups across the state. 

In addition a handful of other policy items may be considered, especially as vote counts are realized. Among these issues include the repeal of Initiative 728, various revenue-raising ideas, and reforms focused on a new way of budgeting and the creation of a new health-insurance pool for K-12 public school employees.

However the time it will take to reach agreement even on this limited agenda is uncertain.

Legislators left late Thursday night after failing to reach agreement on a supplemental operating budget to close the remaining $1 billion budget gap. A primary barrier to resolution during the regular session was the different approaches taken to close the budget gap. The Republicans – with support of three Senate Democrats- support skipping a penion payment and the Democrats support delaying a payment to K-12 schools.  Solving this hurdle along with a multitude of reductions and other policy changes will be the primary order of business this special session and will take time.

Progress is likely to be slow. This week it appears the House is not scheduled to convene and the Senate is scheduled only for pro forma sessions until Wednesday when a possible session is scheduled. In the meantime the Governor has indicated her desire to begin to set up negotiations between the “five corners” – meaning the Governor’s Office and the leaders of the Democratic and Republican caucuses in the House and Senate.

Sine Die Followed By Special Session

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At midnight last night the Washington Legislature ended the 2012 supplemental legislative session. The  session ended without the passage of an operating or a capital budget or several policy bills that would be necessary to implement any of the budgets proposed this session.

As a result, soon after the supplemental session was called Governor Gregoire announced the beginning of a special session. The Legislature will return to Olympia on Monday at noon to work on a budget compromise.

House Passes Senate Budget with Striking Amendment

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Early this evening the Washington House took action on the Senate-passed operating budget. 

In a vote of 53-45 the House passed a striking amendment to the budget. The striker replaces the Senate Republican language adopted late last week when Republicans took control of the budget on the Senate floor.

This new budget looks much the same as the Senate Democratic budget introduced early last week in that there are no additional cuts to higher education. However, there is language in the bill that requires Evergreen to use $639,000 of its own appropriations solely for the expansion in enrollments in science, technology, engineering and math (STEM). There are no cuts to financial aid.

The House-passed bill now moves back to the Senate for further consideration.

House of Representatives Introduces Striking Amendment to the Senate Budget

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In another turn of events, Democrats in the Washington House of Representatives introduced a new budget this morning.

The House Democrats introduced a striking amendment to the Senate supplemental budget. This striker, if passed on the House floor, will replace the Senate Republican language adopted late last week when Republicans took control of the budget on the Senate floor. If passed in the House, it will move back to the Senate where Democrats must find one additional vote to move it forward.

This new budget looks much the same as the Senate Democratic budget introduced early last week in that there are no additional cuts to higher education. However, there is language in the bill that requires Evergreen to use $639,000 of its own appropriations solely for the expansion in enrollments in science, technology, engineering and math (STEM). There are no cuts to financial aid.

 

Gubernatorial Candidate Rob McKenna’s Higher Education Plan

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Last week Gubernatorial Candidate Rob McKenna released his plan to take higher education in a “new direction” in Washington if elected Governor. McKenna, currently Washington’s Attorney General and the Republican front-runner for the office, declared on his campaign website “It is time to end the  cuts, rebuild state support for our schools, and give Washington families an affordable path to college graduation.”

McKenna notes the discrepancy between the “rhetoric from our state capitol” and “leaders’ actions” when it comes to funding higher education. As Governor, McKenna argues he will be the “champion” needed in Olympia.

He lays out several goals, challenges, opportunities and reforms needed in the higher education sector. Among his goals for the four year public baccalaureate sector, McKenna asks to:

  • End the erosion of state support for higher education and restore funding levels to their historical average.
  • Return to a 50/50 deal with our university students, where the state covers half the cost of a college education while students and their families pick up the other half.
  • Enroll more in-state students in our universities, produce more college graduates, and increase the number of graduates attaining higher levels of post-secondary education.
  • Emphasize degree programs that align with our future job needs, such as science, technology, engineering, math, math education, business management, accounting, and health science.

When it comes to challenges he sees an increased demand for a college-educated workforce in the state and an acknowledgment that higher education has “borne the brunt of state budget reductions.” He also notes that inconsistent funding has lead to tuition increases and a recognition that Washington is struggling with enrolling students per capita compared to other states in the nation.

In terms of opportunities McKenna sees the need for higher education growing. With this in mind, he argues “we can improve our higher education system and address access, funding, degree attainment, workforce needs, and reforms,” and as a candidate that recognizes these facts, he can get us there if elected Governor. Among them are:

  • “Education at all levels as the state’s top responsibility” – a budget devoted to higher education and K-12 as the economy and state budget grow.
  • More meaningful government reforms to find savings in current spending levels, including using performance management to increase productivity and connecting compensation to performance.
  • A 50/50 breakdown of state support and tuition. As state support increases, the ratio of state support to tuition should be stabilized.  
  • Increasing access to financial aid by establishing a Washington Pledge Scholarship Program –  a voluntary program with an endowment fund goal of $1 billion, funded by private donations from individuals and businesses. This fund would help families that cannot afford college but don’t qualify for state or federal need-based grants.
  • Financial aid for all who qualify.

Finally, McKenna argues that reforms will need to be made. Among these he asks for:

  • Every part of state government  performs at a higher level, including higher education.
  • Greater use of online courses to increase course access and contain costs.
  • A significant share of increased state resources for our universities to be focused on the branch campuses, such as UW-Tacoma and WSU-TriCities, as well as on the programs offered away from their main campuses by the regional comprehensive universities, such as EWU at Bellevue College.
  • Expanded University Centers and applied baccalaureate programs at the community colleges.
  • For new hires, move from a tenure system to a long-term contract system. Instead of guaranteeing lifetime tenure, giving new professors a rolling five year contract that can be renewed. Such a system would protect academic freedom without tying universities down to lifetime tenure.
  • Using technology to reduce costs. Look for opportunities, especially in large introductory courses, to utilize technology to save money on instruction, facilities, testing, and textbooks.

2012 Supplemental Session: Week 9

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This week represents the ninth week of the 2012 supplemental session and the final week.

March 8 marks the end of the supplemental session and sine die.  The focus for both the House and Senate is primarily on floor action in an effort to move bills to the Governor’s desk prior to the end of the session.

This week would normally be focused on passing a supplemental budget and any policy bills necessary to implement the budget. However given the events of Friday evening it is unclear if the Legislature will be able to find agreement on the budget prior to the March 8 deadline.

As both chambers continue to meet to discuss a potential budget agreement, committees – both policy and fiscal committees – are holding some hearings to focus on interim planning which are posted on the Legislature’s website.

Budget Changes Direction Overnight

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On Friday Senate Republicans took control of the Senate floor early in the evening. The Senate Republicans along with three Democrats voted together to bring an alternative budget proposal to the floor.

Though Senate Democrats made a series of procedural motions, these efforts failed to keep the Governor’s supplemental operating budget from being moved to the Senate floor for consideration.  The Senate Republicans and three Democrats then moved to amend the Governor’s budget bill with the Senate Republican budget proposal and passed the budget proposal to the House for further consideration on a 25-24 vote.

The Senate Republican budget proposal reduces funding for higher education by $30.4 million compared to the Senate Democrat budget proposal which makes no cuts to higher education.

The reductions to higher education in the Senate Republican budget are focused on institutions. The proposed budget makes no reductions to the State Need Grant program or Work Study programs. The proposal does restore awards to students who attend for-profit institutions from the 50% award reduction passed as part of the 2011-13 biennial budget.

Under the Senate Republican proposal the the maximum level of authority to waive tuition is reduced for the public baccalaureate institutions and community and technical colleges. The impact to Evergreen is a reduction of $332,000 in the second year of the biennium.

Some of the public baccalaureate institutions are further reduced to reflect update revenue projections as a result of non-resident undergraduate tuition increases implemented by an institution. Evergreen did not see a reduction for changes in revenue for non-resident undergraduate tuition increases.

Higher Education Committee Work Session on Interim Planning

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The House Higher Education Committee conducted a work session on interim planning this morning, Thursday, March 1. Chairman Representative Larry Seaquist lead a panel discussion with legislators and stakeholders on next steps in higher education planning, specifically addressing the question, “what is the important problem in higher education that the legislature should address next?”

Invited to present were three separate panels consisting of students, faculty and the business community.

The first panel saw two students from the University of Washington and one from the community college sector. Adam Sherman, a law student at the University of Washington, spoke to the importance of a dedicated funding source for higher education. Representative Larry Springer noted that within the legislature, specifically on the House Ways & Means committee, there is finally an emerging dialogue and acknowledgement that a dedicated funding source is crucial to higher education. Representative Larry Seaquist followed Springer’s statement with a larger question on what sort of “system” Washington wants in terms of higher education offerings and what a dedicated funding source would go towards. He noted that this question will need to be tackled during the interim and in future legislative sessions.

Following the student panel, faculty were invited to present. Dr. Bernal Baca of the community college sector, and Dr. Jim Fridley, a faculty member at the University of Washington, shared their perspectives on the next important steps. Bernal touched on recruitment issues, specifically in a time when adjunct faculty are becoming more and more of the norm in times of budget distress. Representative Chris Reykdal noted that we are reaching a point with the use of adjuncts where “quality” is becoming a very large issue.

Dr. Jim Fridley followed Dr. Baca asking the members to remember why we are all here. He talked about the three “big things” educators do.

  1. Translate and disseminate knowledge
  2. Create and discover new knowledge
  3. Use knowledge to help and support the community

With these three in mind he asked the legislature to look at three important areas where work will need to be done:

  1. How do we pay for all of this/where will state investment come from?
  2. How do students and families’ contributions play into this?
  3. The need to stay competitive in terms of faculty, staff and students and how this translates into quality.

The final panelist to present was Mike Hudson from the Association of Washington Business. Hudson noted the skills gap that exists for businesses and argued that it is not a quality issue, but instead a “pipeline” issue. He urged the legislature to focus on the problem of getting students at a young age exposed and interested in science, technology, engineering and mathematics (STEM).

In closing, Representative Seaquist let the committee and audience know that this conversation would be extended into the next work session (next week) with members of the Council of Presidents and the State Board for Community and Technical Colleges sharing their perspectives on the issue.

House Democratic Freshman Propose Tax Proposal

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House Democratic Freshman unveiled a long-term tax proposal during a news conference this morning, Wednesday, February 29th.

In total 12 freshman were in attendance showing support for the proposal. Among those 12 was Representative Chris Reykdal who represents Evergreen and parts of Thurston county.

The proposal would establish a state tax on capital gains. A capital gains tax (CGT) is a tax on the profit realized on the sale of non-inventory assets that are purchased at a lower price than the sales price. The most common capital gains are realized from the sale of stocks, bonds, and real estate.

According to legislative staff research, under the federal tax code, individuals and corporations pay income tax on the net total of all their capital gains just as they do on other sorts of income. The amount of federal CGT depends on both the tax bracket of the individual and the amount of time the capital asset was held before being sold. In addition to the federal CGT, capital gains are often subject to state income taxes. Many states do not have separate capital gains tax rates. Instead, most states tax capital gains as ordinary income subject to the state’s income taxes rates. Washington has neither an income tax nor any specific excise tax on capital gains.

Introduced as HB 2563, the tax would begin January 1, 2013.  An annual state net capital gains tax would be imposed on the sale or other voluntary exchange of capital assets by resident individuals, trusts, and estates during the year. The tax rate would be five percent and applied to the capital gains amount reported on the federal income tax return. For resident individuals, all capital gains are apportioned to the state, regardless of the location of the asset. For taxpayers filing joint federal tax returns, a $10,000 deduction is provided. For taxpayers filing other returns, a $5,000 deduction is allowed. The sale of a person’s primary residence is not subject to CGT.

The bill is up for public hearing this morning in House Ways & Means.