This follow-up to Emily’s earlier post on the Senate’s early action supplemental budget proposal (Engrossed Substitute House Bill 1086) provides a bit more detail with respect to higher education.

The Senate-passed early action budget (the Senate Ways and Means Committee staff summary of the chair’s proposal is available here, the bill [big file] is available here) cuts near general fund–state (NGFS) spending by about $253 million. Of this $27 million, a bit less than 11 percent of the total, comes out of higher education. A $25,385,000 reduction in NGFS funding to the Higher Education Coordinating Board for the state need grant accounts for the bulk of the higher education cut.

In order to maintain funding for the state need grant, the Senate budget appropriates $25,385,000 from the higher education operating fees accounts to the Washington opportunity pathways account and increases the existing appropriation from the opportunity pathways account to the Higher Education Coordinating Board by the same amount.

The higher education operating fees accounts receive tuition and other fees paid by student, with fees for each institution accounted separately. The $25,385,000 appropriated to the opportunity pathways account is apportioned across the institutions in this way: University of Washington loses $5,658,000; Washington State University, $3,718,000; Eastern Washington University, $765,000; Central Washington University, $705,000; The Evergreen State College, $386,000; Western Washington University, $1,010,000; and the State Board for Community and Technical Colleges, $13,143,000.

While the budget summary describes this rearrangement as “tuition transfer for financial aid,” it is ultimately a cut in general fund support for the higher education institutions.

This rationale has been offered for the cut: Following the September reduction in the state revenue forecast, Gov. Gregoire administratively ordered across the board cuts of 6.287 percent in spending from budgeted levels for the FY 2011. However, maintenance of effort requirements related to federal moneys the state accepted under the American Recovery and Reinvestment Act of 2009 and the 2010 Education Jobs Fund prevented the state from cutting NGFS appropriations to higher education institutions by more than 4.2 percent. These 4.2 percent cuts were formalized in the December 2009 supplemental budget bill (HB 3225).

The federal maintenance of effort requirements do not apply to financial aid, so the state is free to cut support for that purpose, as the Senate now proposes to do. The specific amounts of operating fees taken from each institution to backfill the NGFS cuts to financial aid were chosen to bring the funding loss for each institution up from 4.2 percent to 6.287 percent.

In 1992, Engrossed Senate Bill 6285 created a separate operating fee account for each institution. Prior to this point, tuition was deposited into the general fund. In 1993, under 2ESSB 5982, the operating fee accounts became local accounts under control of the institutions and not subject to appropriation by the legislature.

This arrangement has served as a guarantee to students and their parents that tuition increases would be used to maintain the quality of education in the face of declining state support. If it stands, the precedent set by the Senate’s tuition transfer will erode that guarantee.