Report Title:

UH; Funding Formula; Base Budget

 

Description:

Establishes the funding formula task force to develop an equitable, consistent, and responsive funding formula for the distribution of fiscal resources throughout the UH system, with the assistance of an independent consultant.  Makes a one-time appropriation of funds to supplement the base operational budgets of UH campuses that have demonstrated a significant increase in enrollment.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

2978

TWENTY-FOURTH LEGISLATURE, 2008

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO EDUCATION.

 

 

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

 


PART I

     SECTION 1.  In the emerging global economy of the twenty-first century, education is Hawaii's strongest currency and human capital, its greatest asset.  With its unique location in the mid-Pacific between the mainland United States and Asia, Hawaii is ideally positioned to compete economically on a global stage.

     The legislature finds that the state requires a well-developed workforce and jobs to lend itself to statewide growth and competition in the global market.  The challenge lies in cultivating a well-trained workforce that has obtained the post-secondary education necessary for jobs in the new economy.

     Thus, the legislature recognizes that the higher education provided to our residents by the University of Hawaii system is vital to stimulating the economic growth and success of the state.  Investment in higher education, which includes providing quality academic programs taught by capable educators and strong student support, will allow us to reap wide-reaching, long-term benefits.

     The purpose of this Act is to:

     (1)  Establish the funding formula task force to develop an equitable, consistent, and responsive funding formula for the distribution of fiscal resources throughout the UH system, with the assistance of an independent consultant; and

     (3)  Appropriate funds as a one-time allocation to address the base operational needs of University of Hawaii campuses that have demonstrated a significant increase in enrollment.

PART II

FUNDING FORMULA TASK FORCE

     SECTION 2.  The legislature recognizes that increased student enrollment at the University of Hawaii, especially the enrollment of full-time equivalent students, corresponds to a greater number of highly-educated residents in the state and therefore contributes to the overall well-being of the state, in particular, by supporting a more solid workforce and economy.

     Increased enrollment however, demands increased commitment on the part of the university campuses, and this involves increased costs.

     The legislature sees the need for a procedure by which the legislature can ensure an equitable, consistent, and responsive distribution of fiscal resources to the various University of Hawaii campuses, similar to the funding formula used by the majority of other states across the nation to allocate state dollars to campuses within their higher education systems.  The underlying principle on which these funding formulas are based is that funding should be linked proportionally to student enrollment, thus ensuring the welfare of all students.

     The purpose of this part is to establish and appropriate funds for:

     (1)  A funding formula task force to develop a funding formula for the University of Hawaii system that provides for an equitable, consistent, and responsive distribution of fiscal resources to the various University of Hawaii campuses; and

     (2)  To hire an independent consultant to assist the task force in the development of the funding formula.

     SECTION 3.  (a)  There is established the funding formula task force, to be attached to the University of Hawaii for administrative purposes.  The task force shall:

     (1)  Develop a funding formula that ensures an equitable, consistent, and responsive distribution of fiscal resources to the various University of Hawaii campuses, including the University of Hawaii at Manoa, University of Hawaii at Hilo, University of Hawaii at West Oahu, Leeward community college, Honolulu community college, Kapiolani community college, Windward community college, Kauai community college, Maui community college, and Hawaii community college; provided that the funding formula shall:

         (A)  Be linked to the enrollment of full-time equivalent students at each campus;

         (B)  Recognize the varying costs of educating different categories of students, such as two-year, undergraduate, graduate, and professional program students;

         (C)  Recognize the unique missions of the University of Hawaii's various campuses;

         (D)  Be as simple and transparent as possible, and designed to allow the funding formula to be used as a basis for planning; and

         (E)  Provide for transparency and accountability to ensure the efficient use of state resources;

          and

     (2)  Hire an independent higher education finance expert or experts to provide technical and other assistance in the development of a funding formula; provided that any expert hired has experience working with policymakers in other states to successfully develop or improve funding formulas to allocate public funds to campuses within the respective state's higher education system.

     (b)  The members of the funding formula task force shall consist of five members as follows:

     (1)  The chancellor of the University of Hawaii at Manoa, or the chancellor's designee;

     (2)  The chancellor of the University of Hawaii at Hilo, or the chancellor's designee;

     (3)  The chancellor of the University of Hawaii at West Oahu, or the chancellor's designee;

     (4)  The vice-president or interim vice-president of the University of Hawaii community colleges, or the vice-president's or interim vice-president's designee; and

     (5)  One member jointly appointed by the speaker of the house of representatives and the president of the senate.

     (c)  The members of the funding formula task force shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

     (d)  The task force shall select a chairperson by a majority vote of its members.  A majority of the task force shall constitute quorum to do business.  The concurrence of a majority of all the members to which the task force is entitled shall be necessary to make any action of the task force valid.

     (e)  The funding formula task force shall be exempt from chapter 92, Hawaii Revised Statutes; provided that the task force shall make a good faith effort to make its proceedings and work products accessible and available to the general public in a manner consistent with the intent of chapter 92, Hawaii Revised Statutes.

     (f)  The funding formula task force, in consultation with the independent higher education finance expert or experts, shall submit to the legislature:

     (1)  No later than twenty days prior to the convening of the regular session of 2009, an interim report on its progress and findings; and

     (2)  No later than twenty days prior to the convening of the regular session of 2010, a final report of its findings and recommendations, with proposed legislation to establish and implement the funding formula.

     SECTION 4.  There is appropriated out of the general revenues of the State of Hawaii the sum of $250,000 or so much thereof as may be necessary for fiscal year 2008-2009 to support the operations of the funding formula task force.

     The sum appropriated shall be expended by the University of Hawaii for the purposes of this part.

PART III

BASE OPERATING BUDGET APPROPRIATIONS

     SECTION 5.  The legislature recognizes that while a funding formula task force to ensure a more equitable, consistent, and responsive distribution of fiscal resources to the various University of Hawaii campuses should be developed in the long term, the university is currently suffering from a funding crisis that requires immediate attention.  In the face of increasing student enrollment, the system-wide shortage of funds to support essential operations must be addressed without further delay to allow the university to fulfill its mission to provide quality higher education to Hawaii's people.

     Certain campuses within the University of Hawaii system have already maximized the use of existing resources and have increased organizational efficiency to respond to the growing demand for services due to increased enrollment.  Further stretching of existing financial and human resources will inevitably result in decreased quality of education, reduced access for underserved populations, and increased institutional liability.

     Unless the university campuses are provided a sufficient financial foundation, the University of Hawaii will be unable to even begin to stimulate the growth of the state's economy.

     Therefore, the purpose of this part is to address the needs of University of Hawaii campuses that have demonstrated a significant increase in the enrollment of full-time equivalent students over the past ten years by making a one-time appropriation of funds to supplement the base operating budgets of the campuses.

     SECTION 6.  There is appropriated out of the general revenues of the State of Hawaii the sum of $      or so much thereof as may be necessary for fiscal year 2008-2009 for the base operating budgets of University of Hawaii campuses with needs that must be addressed due to a significant increase in the enrollment of full-time equivalent students over the past ten years.

     The sum appropriated shall be expended by the University of Hawaii for the purposes of this part.

PART IV

     SECTION 7.  This Act shall take effect on July 1, 2008.

 

INTRODUCED BY:

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