A state constitutional amendment that will allow higher
education permanent fund trust monies for the six public baccalaureate institutions
to be invested in equities has been introduced in each house of the Legislature
at the request of Washington State University.
The proposal is expected to bolster capital investment for
public college students and programs without any additional cost to taxpayers.
If successful in the Legislature, it will appear on the November ballot for
final voter approval.
Many states allow equity investment. Fourteen states have
land grant permanent funds that support higher education. Of the 14 states
only Colorado, Montana, and Washington do not allow equity investments. That
is, Washington and two other states do not allow a state investment fund that
includes stocks in private companies. Washington, which manages WSU trust
revenues through the state Investment Board, is largely limited to lower-yielding
government bonds. WSU’s agricultural and scientific permanent funds actually lost
money during the past year due to an unfavorable bond market, while the states
investing in equities realized gains of 5.4 percent to 11 percent.
The House version (House Joint Resolution 4215) is sponsored
by Representatives Phyllis Kenney, D-Seattle, House Higher Education Vice
Chairman Mike Sells, GOP Minority Floor Leader David Buri, R-Colfax, State
Government Chair Sam Hunt, D-Olympia, and Rep. Alex Wood, D-Spokane. WSU Regent
Ken Alhadeff has been directly involved in briefing legislators on the issue.
The
statutory change to implement the constitutional amendment is House Bill 1784. Both
HJR 4215 and HB 1784 have been referred to the House Capital Budget Committee
and a hearing is scheduled for Thursday, Feb. 8 by Chairman Bill Fromhold,
D-Vancouver.
The Senate version of these bills (Senate Joint Resolution
8220 and Senate Bill 5766) were introduced this week sponsored by Sen. Karen
Fraser, D-Olympia, and Sen. Dale Brandland, R-Bellingham. Fraser and
Brandland lead capital budget efforts on the Senate Ways and Means Committee,
where the bills were referred. No hearing has yet been scheduled. WSU
President Lane Rawlins was directly involved last week, signing up some of the
co-sponsors on the bills who also include Senate Transportation Vice Chair
Chris Marr, D-Spokane,
Senate Higher Education Chair Paull Shin, Senate Republican Floor Leader Mark
Schoesler, R-Ritzville, and Republican Deputy Whip Jerome Delvin, R-Richland, the
ranking member of the Higher Education Committee, and Sen. Brian Hatfield,
D-Raymond, the vice chair of the Senate Agriculture Committee.
The
ten-year average for WSU’s trusts is about 6 percent, while other states had
about an 8 percent return on their investment for higher education.
And while
Washington State’s constitution does not permit higher education trust money to
be invested in equities, that authority has been extended over the years to the
state pension funds, Labor and Industries funds, K-12 trusts, and other parts
of government.
Institutional
funds that would benefit from this proposal include Washington State University, University of Washington, Eastern Washington University, Western Washington University, Central Washington University, and The Evergreen State College.
In other
recent legislative developments:
Fueling Washington. Marc Cummings, of Battelle’s Pacific Northwest National Laboratories, testified
with WSU in the House Higher Education Committee about the vision the two
institutions have for “biofuels.” They described a plan in which about 35
percent of the fuel consumed by automobiles could be cleaner biofuels made from
plant material grown and processed in the state.
The plan,
prepared in cooperation with the state Department of Agriculture and the state
Department of Ecology, would explore the short-term benefits of converting fuel
from field corn, cull potatoes, barley, canola, sugar beets, etc. But Battelle
and WSU believe the research that holds the greatest promise for increasing
volumes of biofuels is in the area of converting wheat straw, orchard prunings,
slash piles from forests, lawn clippings, cull potatoes, food processing waste,
municipal garbage, new generation crops, and other biomass.
Governor
Christine Gregoire recommended $4 million in funding to move the research
ahead, including setting up a team of 10 PNNL-WSU researchers at the Tri-Cities
Bioproducts Facility, which is now under construction. Legislators in both
houses are considering Gregoire’s proposal. Sen. Jim Kastama, D-Puyallup, has
suggested that his “Star Researcher” proposal could provide another $3 million
to bring a National Academy researcher in to lead WSU’s biofuels and bioproducts
efforts.
WSU
Supports The Governor’s Budget. WSU continues to open and close budget hearings
by expressing support for the Governor’s higher education budget. The operating
budget funded more than 85 percent of the enrollment increases sought by the
university at all campuses.
UW-WSU Local
Borrowing Authority. WSU has testified in the House and the Senate for
legislation requested by the University of Washington that may allow the
research universities to save money on bonds sold to finance certain buildings.
The legislation is currently in the House Capital Budget Committee. The sponsor
of the House bill (HB 1398) is Rep. Bill Fromhold, D-Vancouver. A hearing has
been held in the House Capital Budget Committee. The Senate bill (SB 5384) is proposed
by Sen. Karen Fraser, D-Olympia.
Unified
Agriculture Request. Many agricultural leaders testified in the Senate
Agriculture Committee on a public hearing for the WSU “Unified Agriculture
Request.” More than 36 agricultural organizations have formally endorsed the
request. Gov. Christine Gregoire invested $3 million seed money into the
proposal, specifically providing funding for agricultural experiment stations
and competitive research grants. Some House leaders are pushing for funding for
other programs contained in the request including a statewide viticulture and
enology program leader, a cherry breeder, a scientist to develop new tree fruit
varieties, etc. Support for these programs topped the list of “key issues” of
the “2007 Ag Package” submitted recently to legislative leadership and the
governor by 25 major agricultural organizations.
The Port of Seatac is among those that are weighing in to support expansion of WSU Small
Business Development Centers. The port supports the funding provided for the
SBDC at Highline Community College, part of the WSU SBDC system. The WSU budget
request was fully funded by the governor.
Representatives
of the UW Medical and Dental Schools have accompanied WSU Spokane Chancellor
Brian Pitcher on legislative visits of legislative offices this session. They
have been working to support the proposal to bring more doctors, dentists and
nurses to the Inland Northwest. The $15 million proposal is a partnership of
WSU, UW, and Eastern Washington University and was completely funded by the
governor.
Rising
higher education utility costs for universities emerged as an issue in front of
the new House Appropriations Subcommittee during budget hearings on Jan. 30. Like
other higher education institutions, WSU has sustained high costs from
increasing utility prices, estimated to be $3.6 million for the 2007-2009
biennium. Unlike other institutions, WSU has additional costs of $2.8 million
associated with the conversion from coal to natural gas at its new Pullman power plant. The committee will begin meeting next week to set priorities for
higher education in the operating budget. The committee is chaired by Rep.
Kathy Haigh, D-Shelton.
WSU’s
Alumni Information Network chaired by Lorie Dankers hosted more than 20
legislators at a reception attended by 109 people in the state Capitol on Jan.
29. Speakers included two prominent alums, state Sen. Linda Evans Parlette,
R-Wenatchee, and Rep. Sam Hunt, D-Olympia.
