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Legislature Poised to Take Early Action to Achieve Limited Cuts

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At 3:30 PM today, the Senate Ways & Means Committee will hear an early action bill addressing 25% of the current $2 billion deficit in the form of $323 million in budget cuts and $106 million in fund transfers. Both chambers are expected to move legislation forward quickly in order to sine die at the end of this week.

This bill would cut $248,000 from the UW’s general fund base  to address expected workers compensation rate increases that are charged to all state agencies, based on staffing levels. Otherwise, the bill affects the University and all of higher education very little.

Agencies most affected by the reductions in this bill are Human Services, DSHS, and K12. Human Services reductions (-$127 million) include expenditure savings and reclaiming state appropriations made unnecessary due to unanticipated, higher federal funding. Budget cuts to K12 (-$75 million) include central administrative reductions, school bus depreciation payment shifts, and enrollment funding adjustments. DSHS budget cuts (-$56 million) include delaying payments for programs, capturing savings generated by lower than anticipated costs, and reducing administrative costs.

Regular session begins on January 10, 2012 and reducing expenditures in the current biennium to address the deficit will be the primary focus of session.

New OPB Website!

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We’ve been a bit quiet on the blog front lately. Mainly due to our focus on redesigning the OPB website, which has just gone live!

In particular, we have:

  • Created a new office directory that allows the user to search for staff by content area.
  • Created multiple ways to identify or locate the content you are searching for, including OPB department homepages, quicklinks for popular destinations, topical top-bar navigation that seeks to direct users to popular content even if they are not familiar with UW/OPB terminology or departmental divides, and a search button specifically for OPB content.
  • Added a homepage SlideDeck feature that highlights more recent content in a user friendly way.
  • Created an automated blog feed on the homepage!

While the website will be a work in progress, we hope it represents a major step forward in terms of the user experience. Look out in the coming months for a great interactive data portal, as well as new interfaces for the BillTracker and for accessing current and historic tuition and fee rates.

Many thanks are owed to Creative Communications for their amazing work with us throughout this project! Their creativity and professionalism (not to mention patience with those of us who knew far too little about all things technical) has been invaluable. We look forward to continuing to work with them as we continue to build out the site!

Please contact us with any feedback, questions, or problems regarding this new website!

Governor Cuts UW Funding by $37M, Proposes Offsetting Tax Increase

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The Governor’s budget office released the first supplemental budget proposal today, further reducing state expenditures for the 2011-13 biennium by $1.7 billion. All told, higher education institutions would absorb about nine percent of the total cut.

Under the Governor’s proposal, each of the state’s six baccalaureate institutions  would receive 16-17 percent cuts in state funding for Fiscal Year 2013 (FY13), while community and technical colleges would receive a 13 percent cut.

Funding cuts are once again disproportionately concentrated at four-year institutions even though the Governor discussed making equal across-the-board cuts as recently as October, because, as noted by budget staff, four-year institutions have a greater ability to   generate tuition revenue than community colleges.

Note that the Governor’s budget eliminates funding for the state’s Work Study program next academic year but importantly, preserves funding for the State Need Grant program.

For more information about budget increases for the College of Engineering, aerospace innovation funding, and financial aid impacts, please review our Planning & Budgeting brief.

Californians Concerned About the Future of Higher Ed

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A new telephone survey, conducted by the Public Policy Institute of California, suggests that although Californians appreciate the quality of their higher education system, they are concerned about the direction in which it is headed. In fact, only 28 percent of Californians think that the system is headed in the right direction, while 62 percent claim it is headed in the wrong direction. While respondents still believe higher education is integral to future success in the workplace, they are worried that affording higher education is becoming increasingly difficult.

Californians’ main concern for the future of higher education is affordability. 61 percent believe affordability is a big problem. Among parents of college students in California, 77 percent are very concerned about the increasing tuition. Fully 69 percent of Californians do not believe we should increase fees to fund higher education. Furthermore, only half of respondents agree that financial help is available for those who need it, and 75 percent believe that students must borrow too much for college.

Respondents mainly blame California’s government for the declining affordability of higher education. Only 29 percent think Governor Jerry Brown is handling higher education well, and only 14 percent think the legislature is doing a good job. 74 percent say the state does not fund higher education adequately. This assertion breaches the ideological divide, with 58 percent of Republicans agreeing that more funding is needed. However, respondents are split on their willingness to pay higher taxes to support higher education (52 percent unwilling, 45 percent willing).

More about the survey is available in the full report in this PDF document.

State Revenue Down Again as Governor Prepares Budget

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Released this morning, the November state revenue forecast indicates that the state is short another $122 million below needed revenue for the current biennium. Dr. Arun Raha, Executive Director of the Economic Revenue and Forecast Council, wrote that uncertainty over Southern Europe’s debt crisis and potential political gridlock in Washington, D.C., produced largely expected economic results predicted in September’s dismal forecast. In essence, we still have a $2 billion budget problem and since September, it has grown by $122 million.

The Governor will use this forecast as her benchmark for budget reductions in the 2012 Supplemental budget (first supplemental budget of the 2011-13 biennium). All told, the Governor will need to cut over $2 billion from the current biennial budget in order to produce a balanced budget, which she is required to do before proposing any revenue increases to offset reductions.

This budget will be released this Monday, November 21. We will release a budget brief and blog detailing the impact of the Governor’s budget on the UW as soon as possible. While the Governor’s budget release is a critical first step of the special and regular legislative sessions, we are months away from a final legislative budget.

Higher Education Increasingly Key to Entering the Middle Class

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A new report by the Georgetown Center on Education and the Workforce finds that higher education is becoming increasingly integral to earning a middle class wage. The Center predicts that, in 2018, while there will still be jobs for high school dropouts and workers with only a high school degree, good jobs for these candidates will be scarce and an associate’s degree, and for many, a bachelor’s degree will be necessary.

The report seeks to paint a picture of the likely employment landscape in 2018, including those job fields (or “clusters”) that are expected to be growing and pay higher wages. It further analyzes what educational qualifications jobs in that cluster will require, finding that upward mobility for workers without higher education will be difficult to achieve—most workers do not stay in the same job for very long and most higher-paying jobs require more education, not simply more experience. Other key findings include:

  • In 2018, 37 percent of jobs are expected to require a high school diploma or less. Of these jobs, however, only one third will pay over $35,000 a year (defined here as the Minimum Earnings Threshold necessary to enter the middle class) and will be concentrated in the areas of Transportation, Distribution and Logistics, Architecture and Construction, and Manufacturing. The higher paying clusters are also heavily male-dominated, making higher education even more determinant for women seeking higher paying employment.
  • Completing any degree significantly improves a worker’s job prospects and earnings. 54 percent of workers with an A.A .degree earn more than $35,000 a year, as do 69 percent of workers with B.A.s and 80 percent of workers with M.A.s.
  • Health Sciences, Information Technology, Law, Public Safety, Corrections and Security are career clusters defined by this report as High Wage, High Demand, and High Skill. This means that wages are higher than the average wage, employment is growing quickly (more than 10 percent expected between 2008 and 2018), and most workers in these industries hold a postsecondary degree.

To read more about the report, refer to the Executive Summary or the Full Report. Also see the Chronicle of Higher Education’s article on the topic.

Is Higher Education the Next Bubble?

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As we continue to experience a very slow recovery from a deep recession, the ideas of long-time critics of modern, inclusive American higher education who question the value of college for many have gained traction and blossomed into widespread public speculation about whether undergraduate education might be the next economic bubble to threaten the US economy. We explore this topic in the latest OPB brief and hold that, in the context of data, the ‘bubble’ metaphor, though effective at capturing public attention in an economic climate characterized by fear and uncertainty, is ultimately inaccurate, misleading, and harmful.

We would love to hear your feedback on this topic!

Does America Have a STEM Supply Problem?

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Georgetown University’s Center on Education and the Workforce released a report that investigates the importance of American science, technology, engineering and math (STEM) positions in the US economy and the perceived shortage of qualified STEM workers to fill them. The report finds that, contrary to popular belief, America already has enough students studying STEM related fields to potentially satiate the demand for STEM workers in the economy without seeking talent from abroad. However, they hold that a process they label ‘diversion’ redirects many students majoring in STEM fields toward employment in non-STEM areas because their professional interests and values do not correspond with traditional STEM jobs. The Center estimates that 43 percent of students that graduate with STEM majors immediately choose non-STEM jobs. It also finds that many high school students capable of entering STEM majors, as measured by their math SAT scores, choose not to because of their preferences or values.

The Center also provided some interesting statistics on the present and future of STEM professions, including:

  • Wages in STEM fields are, on average, higher than wages in other fields (no matter what level of educational attainment), though healthcare and professional and managerial occupations still have higher wages
  • Women and minorities are still underrepresented in STEM jobs, with women constituting only 23 percent of STEM workers. Women and minorities also make less than Caucasian men in STEM positions, though the wage gap is smaller than for other occupations.
  • STEM jobs will grow to represent 5 percent of the labor market in 2018.
  • Two thirds of STEM jobs will require a Bachelor’s degree or higher by 2018.

To read more about this report, check out the Executive Summary or the full report. Also note Inside Higher Ed’s discussion of the report and our previous blog posts on Georgetown Center reports:

As Expected, Federal Loan Borrowing Has Increased

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The US Department of Education’s Stats in Brief from October 2011 entitled “Borrowing at the Maximum” investigates the percentage and demographics of students who take out federal subsidized and unsubsidized Stafford loans, and how this has changed over time. The report also seeks to differentiate between those who take out the program maximum loan amount and those who take out their personal maximum amount (adjusted for their financial need and the cost of their education). Some interesting findings include:

  • the proportion of borrowers has increased significantly over time, from 27 percent of students receiving federal Stafford loans averaging $7,200 (inflation adjusted) in 1989/90, to 46 percent borrowing an average of $10,300 by 2007/08.
  • 43 percent of those borrowing in 2007-08 took out the program maximum Stafford loan amount, while 60 percent took out their personal maximum amount (which can equal the maximum amount for some).
  • 30 percent of those taking out Stafford loans also took out private loans, whereas only six percent of students not taking out federal loans did. Furthermore, 16-18 percent of the parents of those students borrowing through the Stafford program also took out Parents PLUS loans.
  • Students taking out Stafford loans to help finance their education were less likely to have full-time jobs.
  • 73 percent of students who took out Stafford loans also received grants.

To read more about the findings or methodology of this report, check out the full report here.

Governor’s Budget Options Include 20% UW Cut

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The Governor released a preliminary list of potential budget reductions for FY13 today. The list includes a set of severe cuts across state government but demarcates which reductions she would include in her formal November budget. For higher education, the Governor would cut colleges and universities 15 percent in FY13 and suspend the State Work Study program. Last year, UW students received $2.3 million in State Work Study funds.

The Governor also included potential general fund state reductions at 10 and 20 percent (click on the chart below to enlarge it).

More information about these potential reductions are included in a Planning & Budgeting brief. Note that the reductions outlined in the Governor’s letter are preliminary and we are many months away from resolution on a 2012 Supplemental Budget.