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UW faces financial test: is tuition the only answer?

University of Washington (2007) Credit: Paul David Gibson/Flickr

For the University of Washington, the uncertainty about its future is growing. And the concern is much more about finances than the upcoming change in leadership as President Mark Emmert, leaving to run the NCAA, is replaced by an interim successor.

As the state’s premier research institution, the university plays a big role in the economy of the Puget Sound region and the state as a whole. But the university is definitely feeling under-appreciated by state government.

Given the economy in the country, that’s hardly unique. Higher education has taken particularly hard hits as state legislatures and governors balance their strained budgets.

But the UW long has found itself working with considerably less state support than many similar institutions around the country, and even less than schools that don’t have its high academic rankings. In the past two legislative sessions, says Randy Hodgins, the UW’s vice president for external affairs, the university lost one-third of its direct state support in 15 months due to budget cuts approved by the lawmakers and the governor.

In a recent discussion with Crosscut writers and editors, Hodgins talked about how the UW can control its own finances to maintain a top-quality state university, continue to serve the higher education needs of young people in Washington, and act as a strong engine in a recovering economy. He focused on approaches that would raise tuition, but far less drastically than some have feared, and would allow the university to manage its own affairs more effectively.

The kinds of moderate policies Hodgins outlined ought to keep the the university an institution of opportunity for the most academically talented young people in the state. But, other than through its branch campuses, at Bothell and Tacoma, it probably won’t open its doors to a lot more Washington students. The UW is admitting as many Washington students as before for its next freshman class, Hodgins said, but it will create more spots than usual for out-of-state students to reap the higher tuition they pay.

That’s much more reasonable a choice than, say, admitting much larger numbers from elsewhere at the cost of fewer spots for Washington students. And it gives the university some extra revenue for the undergraduate programs (the heart of the school) that are particularly dependent on the plunging state budget support.

But there’s considerably more the university might do to deal with its finances, if given some modest additional authority by the legislature. In fact, the UW built a rather surprising amount of momentum toward larger solutions during this year’s legislative session.

On a bipartisan vote, the Senate passed a measure championed by Sen. Derek Kilmer from Gig Harbor to grant the UW’s regents the authority to raise tuition on their own by limited amounts (no more than 14 percent in any one year, for instance, and not to exceed the 75th percentile of similar institutions’ tuition). The bill died when a House committee chair, Deb Wallace, wouldn’t bring it to a vote.

The bill’s constraints against runaway tuition hikes and the university’s financial challenges were clear enough that students even showed some interest in the measure. As long as the university continues to expand free tuition for the lowest-income students (something the UW and the state’s four-year schools generally do well) and make more middle-income students eligible for at least modest help, the plan could appeal to broad sections of the public. And the university has a good track record since the legislature gave it control over the graduate and professional school tuition over recent years: “We raced right to the middle,” said Hodgins, meaning that the school raised tuition rates but only in keeping with prevailing levels.

Beyond getting the ability to raise undergraduate tuition generally, the university would also like to be able to set variable rates, that is, to charge more for preparing people for high-demand, high-paying fields such as engineering or some of the sciences. Those areas also tend to be fields in which the costs of instruction and lab facilities are higher than for a literature or history student.

In addition, the university also could do more to contain its costs if it were given more exemptions from state regulations on contracting, Hodgins said. Again, the UW has made some gradual progress in recent years and found some interest in this year’s relatively short legislative session in moving further in that direction.

But interest and modest progress don’t resolve problems caused by the kinds of cuts in state support the university has faced. Nor do they alleviate the kind of impatience many faculty feel over years without pay raises. And, especially under Emmert, the university has had trouble getting the ear of many in Olympia. The university may have deserved a better hearing than it received, but legislators and staff also faced more pressures than Emmert was able to acknowledge.

Whoever succeeds Emmert, the university seems to be laying the groundwork for better communications with Olympia. Hodgins, whose extensive background in Olympia includes serving as chief of staff for the state Senate Ways and Means Committee, mentioned recent polling that shows high favorable ratings for the UW among the public. The university also has been putting the finishing touches on a study of its economic impacts in the state. Hodgins said the university appears to generate considerably more in tax revenues for state and local governments than it receives from the state budget.

That, of course, is due in part to the university’s consistent ability to be among the nation’s leaders in winning federal research grants. But however much the research does for the economy and tax revenues, it contributes little to the core of undergraduate education, because of tight federal controls on the use of grant money. That’s one of the messages the UW must stress if it wants state action to let the school do more to manage its own budget.

Hodgins said the UW’s challenges with legislators are exacerbated by having a particularly strong community college system, with schools spread across the state’s legislative districts. It’s easier, he said, for a legislator to point to what he or she has done for the community college at home than to brag on helping the university keep higher education strong in the state generally. The university needs to do more to make sure the public and politicians know about the partnerships it has in their communities for health care, research, and other activities, Hodgins said. He talked about a beefed-up effort under the theme of “the UW in your community.”

With the community colleges more tied into job creation programs supported by labor unions, the Democratic control in Olympia might also count as a challenge. But Hodgins also sees ways to work with unions. And he says a tuition model that charges more to higher-income families while spreading more aid and opportunity to lower- and middle-income students is an idea that ought to appeal to the most powerful Democrat of them all, House Speaker Frank Chopp.

There was a time when Republican control in Olympia was said to be as good or better for higher education. The dynamics of the party may have changed too much for that to be the case any more, although the Senate Republicans’ budget leader, Joe Zarelli, has proven willing to look at higher education (and other issues) very fairly. Hodgins credits him with giving Democrat Kilmer’s tuition-setting bill its chance in the Senate.

The upcoming elections have the potential to shake up both the state Senate and the House. Whatever the political dynamics there, the university will need a legislature that can at least consider options for keeping the UW strong.

Under any political scenario, of course, the UW will survive, which is a lot more than you can say for many state programs and offices. The real question is how well the University of Washington will serve the students, the public, and the the state’s need for a strong economy in a world where knowledge is income, as well as competitiveness and jobs.

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