BILL REQ. #:  S-2824.1 

Read first time 05/31/13.   Referred to Committee on Ways & Means.

     AN ACT Relating to a performance and enrollment-based methodology of distributing state appropriations to public institutions of higher education; amending RCW 28B.10.776 and 28B.77.090; creating new sections; repealing RCW 28B.10.778, 28B.10.780, 28B.10.782, 28B.10.784, and 28B.15.101; and providing an expiration date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that public institutions of higher education have experienced dramatic reductions in state support over the last four fiscal years, which have necessitated large increases in tuition prices. The legislature further finds that the combination of decreases in state funding and increases in tuition have led to a scenario where public higher education is being funded disproportionately by the students and their families. Therefore, it is the intent of the legislature to more equitably distribute the support of public higher education between the state and students and their families by (1) establishing a funding methodology that is based on enrollment levels with which to provide predictable and stable baseline state funding to the institutions of higher education; and (2) establishing a process whereby any state funds over and above the level needed for the baseline levels of state funding are distributed among the institutions of higher education based on their performance in meeting statewide goals and expectations, and to reward the highest performers.

Sec. 2   RCW 28B.10.776 and 1993 sp.s. c 15 s 2 are each amended to read as follows:
     ((It is the policy of the state of Washington that the essential requirements level budget calculation for)) (1) Beginning with fiscal year 2014, institutions of higher education ((include enrollment levels necessary to maintain, by educational sector, the participation rate funded in the 1993 fiscal year. The participation rate shall be based on the state's estimated population ages seventeen and above by appropriate age groups)) shall receive a level of state funding that is equal to the maintenance level appropriations in the omnibus appropriations act for the 2013-2015 biennium expressed as a per-resident student rate that is based on a three-year average of the number of actual full-time equivalent enrolled resident students for the current academic year and the two previous academic years as reported in the state-funded public higher education enrollment reports produced by the office of financial management.
     (2) The per-resident student rates specified in subsection (1) of this section shall increase each fiscal year by the rate of inflation as measured by the implicit price deflator.
     (3) The per-resident student rates specified in subsection (1) of this section in existence at the time when specific appropriations are made for creation or expansion of new or existing programs of study shall receive a step adjustment in the following fiscal year to reflect this additional level of funding.
     (4) State universities, regional universities, The Evergreen State College, and the state board for community and technical colleges are legally entitled to receive the levels of state funding specified in subsections (1) through (3) of this section.
     (5) Beginning with fiscal year 2014, any state funds appropriated for institutions of higher education that remain after satisfying the per-resident student rates specified in subsections (1) through (3) of this section, or any increases in state appropriations for the institutions of higher education, must be distributed as provided in this subsection (5).
     (a) A proportionate share must be distributed to the state board for community and technical colleges for disbursement to the community and technical colleges based on performance in accordance with the student achievement initiative.
     (b) A proportionate share must be distributed to the public four-year institution sector of higher education. This share must be disbursed to the state universities, the regional universities, and The Evergreen State College that have met the requirements in RCW 28B.77.090(2), and disbursement must be as specified in the omnibus appropriations act based on a three-year average of performance, or in recognition of the highest performing four-year institution of higher education, in the following metrics:
     (i) Average time to degree for undergraduate students;
     (ii) Number of undergraduate high-demand degrees produced;
     (iii) Freshman retention;
     (iv) Low-income population; and
     (v) Space utilization.
     (6) For the purposes of subsection (5) of this section, "proportionate share" means the proportion of near general fund appropriations to either (a) the state board for community and technical colleges or (b) the state universities, the regional universities, and The Evergreen State College, relative to the total near general fund appropriations to the institutions of higher education.
     (7) For the purposes of this section, the inflation adjustment shall be computed using the percentage change on the implicit price deflator for personal consumption expenditures for the United States for the previous calendar year, as compiled by the bureau of economic analysis of the United States department of commerce and reported in the most recent quarterly publication of the economic and revenue forecast council or successor agency.

Sec. 3   RCW 28B.77.090 and 2013 c 23 s 60 are each amended to read as follows:
     (1) An accountability monitoring and reporting system is established as part of a continuing effort to make meaningful and substantial progress towards the achievement of long-term performance goals in higher education.
     (2) To provide consistent, easily understood data among the public four-year institutions of higher education within Washington and in other states, the following data must be reported to the education data center annually by December 1st, and at a minimum include data recommended by a national organization representing state chief executives. The education data center in consultation with the council may change the data requirements to be consistent with best practices across the country. This data must, to the maximum extent possible, be disaggregated by race and ethnicity, gender, state and county of origin, age, and socioeconomic status, and include the following for the four-year institutions of higher education:
     (a) Bachelor's degrees awarded;
     (b) Graduate and professional degrees awarded;
     (c) Graduation rates: The number and percentage of students who graduate within four years for bachelor's degrees and within the extended time, which is six years for bachelor's degrees;
     (d) Transfer rates: The annual number and percentage of students who transfer from a two-year to a four-year institution of higher education;
     (e) Time and credits to degree: The average length of time in years and average number of credits that graduating students took to earn a bachelor's degree;
     (f) Enrollment in remedial education: The number and percentage of entering first-time undergraduate students who place into and enroll in remedial mathematics, English, or both;
     (g) Success beyond remedial education: The number and percentage of entering first-time undergraduate students who complete entry college-level math and English courses within the first two consecutive academic years;
     (h) Credit accumulation: The number and percentage of first-time undergraduate students completing two quarters or one semester worth of credit during their first academic year;
     (i) Retention rates: The number and percentage of entering undergraduate students who enroll consecutively from fall-to-spring and fall-to-fall at an institution of higher education;
     (j) Course completion: The percentage of credit hours completed out of those attempted during an academic year;
     (k) Program participation and degree completion rates in bachelor and advanced degree programs in the sciences, which includes agriculture and natural resources, biology and biomedical sciences, computer and information sciences, engineering and engineering technologies, health professions and clinical sciences, mathematics and statistics, and physical sciences and science technologies, including participation and degree completion rates for students from traditionally underrepresented populations;
     (l) Annual enrollment: Annual unduplicated number of students enrolled over a twelve-month period at institutions of higher education including by student level;
     (m) Annual first-time enrollment: Total first-time students enrolled in a four-year institution of higher education;
     (n) Completion ratio: Annual ratio of undergraduate and graduate degrees and certificates, of at least one year in expected length, awarded per one hundred full-time equivalent undergraduate students at the state level;
     (o) Market penetration: Annual ratio of undergraduate and graduate degrees and certificates, of at least one year in program length, awarded relative to the state's population age eighteen to twenty-four years old with a high school diploma;
     (p) Student debt load: Median three-year distribution of debt load, excluding private loans or debts incurred before coming to the institution;
     (q) Space utilization: For each academic year, the average number of hours per week each classroom seat and classroom lab is utilized;
     (r) Data related to enrollment, completion rates, participation rates, and debt load shall be disaggregated for students in the following income brackets to the maximum extent possible:
     (i) Up to seventy percent of the median family income;
     (ii) Between seventy-one percent and one hundred twenty-five percent of the median family income; and
     (iii) Above one hundred twenty-five percent of the median family income; and
     (((r))) (s) Yearly percentage increases in the average cost of undergraduate instruction.
     (3) Four-year institutions of higher education must count all students when collecting data, not only first-time, full-time first-year students.
     (4) In conjunction with the office of financial management, all four-year institutions of higher education must display the data described in subsection (2) of this section in a uniform dashboard format on the office of financial management's web site no later than December 1, 2011, and updated thereafter annually by December 1st. To the maximum extent possible, the information must be viewable by race and ethnicity, gender, state and county of origin, age, and socioeconomic status. The information may be tailored to meet the needs of various target audiences such as students, researchers, and the general public.
     (5) The council shall use performance data from the education data center for the purposes of strategic planning, to report on progress toward achieving statewide goals, and to develop priorities proposed in the ten-year plan for higher education.

NEW SECTION.  Sec. 4   (1) The office of financial management shall convene a work group to review the per-resident student rates established in section 2, chapter . . ., Laws of 2013 1st sp. sess. (section 2 of this act) and make recommendations for achieving equal funding for similar institutions by the 2017-2019 fiscal biennium. In making final recommendations, the work group shall consider that there is a legislative goal to achieve the following per-resident student rates by the 2017-2019 fiscal biennium:
     (a) Ten thousand dollars for the research institutions as defined in RCW 28B.10.016;
     (b) Seven thousand five hundred dollars for the regional institutions as defined in RCW 28B.10.016; and
     (c) Five thousand dollars for the community and technical colleges.
     (2) The work group must include the following members:
     (a) One representative from the student achievement council;
     (b) One representative from the education data center created in RCW 43.41.400;
     (c) One representative from each state university, regional university, and state college as defined in RCW 28B.10.016; and
     (d) One representative from the state board for community and technical colleges.
     (3) The office of financial management shall submit a final recommendation of the work group to the governor and appropriate committees of the legislature no later than December 1, 2014.
     (4) This section expires August 1, 2015.

NEW SECTION.  Sec. 5   The following acts or parts of acts are each repealed:
     (1) RCW 28B.10.778 (Budget calculation -- New enrollments -- Funding level -- Inflation factor) and 1993 sp.s. c 15 s 3;
     (2) RCW 28B.10.780 (Budget calculation -- Funding level) and 1993 sp.s. c 15 s 4;
     (3) RCW 28B.10.782 (Budget calculation -- Increased enrollment target level -- Availability of information) and 1993 sp.s. c 15 s 5;
     (4) RCW 28B.10.784 (Budget calculation -- Participation rate and enrollment level estimates -- Recommendations to governor and legislature) and 2012 c 229 s 517 & 1993 sp.s. c 15 s 6; and
     (5) RCW 28B.15.101 (Authority to modify tuition rates -- Performance-based measures and goals -- Institutional performance plans) and 2011 1st sp.s. c 10 s 5.