January 29, 2004
Performance contracts, Bothell bill among issues of interest in Legislature
The current 60-day session of the state Legislature, while officially a “short” session, is long in items of interest to the higher education community.
While this session will not deal with major budget issues, it will tackle a number of significant policy matters that could affect the UW, according to the University’s new director of state relations, Randy Hodgins.
“Higher education is very much on the forefront of legislative concerns,” he says. “This is partly due to the Phase 2 Report from the Washington Competitiveness Council, which focused on the importance of investing resources in higher education.” Gov. Locke has requested funds to increase general enrollment in the state’s colleges and universities. He also has asked for increased targeted enrollment in high-demand disciplines as well as additional funding for promise scholarships and research matching funds.
Hodgins called these requests significant for a supplemental budget year but would not predict their fate given the state’s tight fiscal situation. He considers the governor’s request ambitious, but it reflects much current sentiment concerning the role of higher education in the state’s economy.
A major issue for this Legislature will be performance contracts for higher education institutions. A joint legislative committee spent several months prior to the session taking testimony and studying the issue.
Hodgins calls the proposed bills exciting: “It’s an opportunity to be explicit about what the state expects from higher education. A performance contract can have benchmarks that describe what the state wants from the University, in terms of bachelor’s degree production, diversity, contributions to regional business, jobs creation, and other things. Once we settle on goals, then we can negotiate over the resources necessary to achieve those goals, the chief resources being the general fund appropriation and tuition.”
The contracts would set six-year targets for both goals and the resources.
Up until now, Hodgins points out, the pieces of the higher education puzzle have been handled separately. While one committee would decide on funding, another would decide on long-term enrollment goals, while yet another might consider the University’s role as an engine of economic development. The performance contract would bring all the “moving parts” of higher education together in one document, relating desired outcomes to the necessary financial inputs.
Each performance contract would be specific to the institution; contracts would be negotiated between representatives of the institution and the governor’s office with support from the Higher Education Coordinating Board. Once these contracts are negotiated, they would be presented to the legislature, in the 2005 session, for adoption.
Naturally, that is not the end of the story. Performance contracts do not bind the Legislature to any specific level of appropriation. But they acknowledge that there needs to be a relationship between the level of resources that are provided and the outcomes that are sought.
“The challenges facing higher education are enormous,” Hodgins says. “We have demographic pressures requiring more access, and the need to provide citizens with heightened skills for today’s job market. Matching expectations with resources is long overdue. We’d like to have clear discussions about what resources exist and what we can create as desirable outcomes.”
Hodgins says the University’s goal with performance contracts is not to gain unfettered control over tuition increases. President Lee Huntsman emphasized in testimony in Olympia that the University expected that its tuition-setting authority, particularly for resident undergraduates, would continue to be limited. But under the performance contract, tuition levels would be linked to the level of state appropriation.
The current bills would identify several institutions to test the idea of performance contracts during this “pilot” period, with others joining at a later date.
Another important item came as a surprise to UW leadership. Rep. Helen Sommers has proposed combining UW Bothell with Cascadia Community College to form a new four-year regional institution, Cascadia State University.
“This state needs more baccalaureate capacity, and this certainly represents a bold proposal to achieve that,” Hodgins says. “While Cascadia/UW Bothell has successfully achieved the original goals established by the Legislature, the UW is willing to be part of changing that vision to a four-year regional campus. Ultimately, truly significant increased capacity will require an investment of new resources.”
The bill has provoked considerable discussion, and at the very least will likely result in a legislative study.
Hodgins also will be tracking a bill that would prevent expiration of tax incentives for the construction of high technology research and development facilities. With the current exemption, high-tech corporations do not pay sales tax for construction of certain research facilities. The bill, as introduced by the governor, would also extend the sales tax exemption to the UW and WSU for research facilities that the schools would build for high-tech research.
“There is considerable debate,” Hodgins says. “On one side, the technology community and the UW see the exemptions as necessary for the continued growth in high wage jobs in this sector. But a coalition of labor and social services advocates sees this tax revenue as necessary for meeting social services needs. Much of the debate now is focused on accountability, which some groups are advocating as a way to determine if such tax breaks achieve their objectives.”
A host of other bills that could affect higher education have been filed as well and it’s the job of the state relations office to track them all. Hodgins, who moved here from a position as senior staff coordinator for the Senate Ways and Means Committee Jan. 9, hoped for a longer handoff with retiring director Dick Thompson. But Thompson was tapped as interim athletic director, effective Jan. 17, making for a much quicker transition.
But in many ways this is Hodgins’s dream job. “This is my alma mater. I’ve always been a big University supporter,” he says. “And if I ever was to leave Olympia and become an advocate, it could only be for something about which I feel strongly. I’m in familiar territory in Olympia, but I’m learning a new role. For me, it’s a perfect blend.”
