State task force says colleges, not Legislature, should set tuition

If the Legislature won't cough up more money to grow the state's four-year colleges and universities, the schools should have the power to raise tuition significantly to cover the cost, a state task force recommends.

Although it's a proposal that's failed in the past, the latest effort has momentum from some of the state's top business leaders who have grown increasingly concerned the state doesn't produce enough college graduates to meet demand.

If adopted, the plan could open the door to significant tuition increases over the next eight years, bringing rates at many of the state's four-year schools in line with those charged by comparable state schools in California.

The proposal would blunt the impact on lower- and middle-income families by creating a private financial-aid endowment.

The Legislature currently sets tuition — one of a handful of state legislative bodies nationally that does so. In most states, a higher-education governing board is charged with the task.

"These universities know best where their competitive line is, in terms of the tuition they can ask for," Gov. Chris Gregoire said at a news conference where the recommendations were unveiled. "So why not allow them the discretion?"

The task force, made up primarily of business leaders and formed by Gregoire eight months ago, laid out the groundwork Monday for a 27 percent increase in the number of students who graduate from the state's four-year colleges and universities by 2018.

And it proposed a new path, rooted in private money, to get there.

The task force is prepared to "walk the halls in Olympia, and make the case that this is the right thing, and this is the right time, because we don't want these kids' futures to be put on hold for an economic recovery to come," said task-force leader Brad Smith, senior vice president and general counsel at Microsoft.

The tuition-setting proposal — which would set a maximum rate based on tuition charged at comparable universities — is similar to an idea that failed in the 2010 Legislature.

But if members of the task force make good on their lobbying promise, the proposal has a much better chance this time, said Randy Hodgins, vice president of external relations for the University of Washington.

Rep. Larry Seaquist, D-Gig Harbor — the newly designated chairman of the House subcommittee on higher education — attended Gregoire's news conference and later said he supported the concept of tuition flexibility "in principle," although details needed to be worked out.

Seaquist said he was impressed with the group's thoughtfulness, "and I fully agree with the sense of urgency we have" to rapidly grow the number of graduates. He said support from the business community might make the proposal more likely to pass.

The tuition-setting power would be part of a complicated formula that would let tuition rise or fall depending on the level of state higher-education funding.

Smith said the state's universities and colleges have struggled with long-term planning because their funding is dependent on the ups and downs of the economy, coupled with the vagaries of state politics.

Both Smith and Gregoire said the task force wanted to link tuition increases to state funding cuts because it could put political pressure on the Legislature to be more generous toward higher education.

"We're saying this deserves to be a high priority" for the Legislature, Smith said.

Gregoire has proposed budget cuts and tuition increases that would result in a 4.2 percent decrease in state higher-education funding to help bridge a projected multibillion-dollar state budget shortfall in the next biennium.

Two years ago, each of the state's four-year universities identified a list of peer institutions across the country, and aimed to eventually set tuition at a little above the median of those schools. That limit was echoed in the task force's recommendations.

For example, the UW compares itself to 10 other research universities from New Jersey to California.

If UW charged tuition at or above the midway point for those schools, annual tuition today would be more than $11,000, interim President Phyllis Wise said — about the cost of some of the peer institutions in California. UW tuition currently is about $8,600.

It's unrealistic to think the university could raise its tuition that much in a year's time, Wise said. But, despite double-digit increases over the past two years, UW's tuition charges still are the lowest among those 11 schools, because the other schools also have raised rates substantially.

Along with more money from tuition, the task force's proposal would lessen the impact to lower- and middle-income families by creating a private financial-aid endowment, with a goal of raising $1 billion in the next decade.

Modeled after large endowments at some of the top private universities in the Northeast, it would be the first of its kind created by a state to cover financial aid at all public higher-education institutions, both two-year and four-year schools, Smith said. Businesses would receive a special tax break for contributing.

"This is all focused on trying to generate a new source of revenue," Smith said.

The task force also recommended an incentive program that would give more money to colleges and universities that meet graduation goals. And it called for efforts to increase the number of college degrees in science, technology, engineering and mathematics.

The lag in the number of students who graduate with baccalaureate degrees long has been an issue for the business community. By one count, Washington ranks 36th in the nation in the production of bachelor's degrees. Yet, by 2018, two-thirds of jobs created in the state will require workers with college degrees, according to the task force's report.

The task force says the state's public universities and colleges need to graduate 6,000 more undergraduates annually in the next eight years to keep the state's economy strong.

Katherine Long: 206-464-2219 or klong@seattletimes.com