October 5, 2007
The 2007 November general election is about one month away so I thought it might be a good idea to provide some focus on each of the statewide ballot measures that will be considered over the next several weeks. We have already posted quite a bit about Initiative 960 which is sponsored by Tim Eyman and would enact new restrictions on tax and fee increases. Check some of my previous postings for a refresher on the so-called “Taxpayer Protection Initiative.”
Today, I’d like to focus on the only statewide measure that directly impacts the University of Washington which is Substitute House Joint Resolution 4215. This proposed amendment to the state constitution would authorize the investment of higher education permanent trust fund monies in equities. Under current law, investments from these funds are limited to lower-yield government bonds.
There are four higher education trust land funds managed by the state Department of Natural Resources — two are established for the benefit of Washington State University, one for the UW and one for the four comprehensive institutions (Western, Eastern, Central and Evergreen). The state constitution currently prohibits these university permanent funds from being invested in the stock of any company, association or corporation which means that the proceeds of the sale of the timber from these higher education trust lands are invested primarily in government bonds instead of stocks.
The state constitution has been amended in the past by voters to permit other state education and pension trusts (common schools permanent fund, pension funds, Labor and Industry funds and disability trust funds) to be invested in equities. Proponents of the ballot measure argue that the constitutional change will result in signficiantly higher rates of return on the higher education trust funds providing additional financial resources for all six public baccalaureate institutions.
Supporters of the measure include Rep. Phyllis Gutierrez Kenney (D-Seattle) who was the prime sponsor of the measure in the legislature as well as State Senator Mark Schoesler (R-Ritzville), former Governor and UW Regent Dan Evans, and Ken Alhadeff, chairman and member of the WSU Board of Regents.
Opponents to the measure are Rep. Bob Hasegawa (D-Seattle) and Rep. Glenn Anderson (R-Fall City) who were the only legislators to vote against the measure during the 2007 session. They argue that the proposed constitutional amendment would put the earnings of the trust funds at high risk and could result in lower revenues available for higher education.
Secretary of State’s information page on this issue: Go >