March 2006

The 2006 Utah legislative session was another difficult one for many state entities including higher education. There were both positive and negative developments, set against the backdrop of a very strong state economy. The biggest winners in terms of funding increases were transportation and public education. Road construction received nearly $200 million in new funding and public education received a record 6 percent increase in the weighted pupil unit. Legislators also reduced the sales tax on unprepared food by 2 percentage points and gave $20 million in business tax cuts. The governor plans to call a special session to deal with the proposed, but not passed personal income tax changes.

For higher education, the Legislature provided ongoing funding increases for salaries, health care benefits, fuel and power, operation and maintenance of new facilities, the Engineering and Nursing Initiatives, the Utah Museum of Natural History's work in Range Creek, information technology, and student financial aid. One-time funds were appropriated for student financial aid, the Engineering and Nursing Initiatives, Range Creek, and scholarships. Significant new operating and capital funding was provided for the Utah Science and Technology Research Initiative (USTAR). The Legislature did not provide funding for salary retention, mission based priorities, or student success initiatives. The Legislature’s failure to approve a revenue bond for the non-state funded student recreation center was a big disappointment.

Overall Funding Change. The University’s ongoing state funding was increased by about $10.8 million or 4.84 percent, excluding funding that will come to the University through allocations made by the Utah State Board of Regents, the Technology Initiative Advisory Committee, and the new USTAR Governing Authority.

Compensation. The Legislature provided funding for a 3 percent salary increase for state-appropriated faculty and staff, and requested that the University adjust its health care costs to fund another half percent for salaries. The Legislature also provided support to help partially offset increases in the cost of the University’s health insurance premiums.

Fuel and Power. The Legislature appropriated $2.3 million in ongoing funds to cover the increased cost of fuel and power projected for 2006-07. The same amount was provided as a one-time supplemental appropriation to address the current year’s increased costs.

Operation and Maintenance. The University will be opening a number of new facilities in 2006-07. The Legislature provided ongoing funding of just under $1 million, or about half of the cost of operating and maintaining these facilities. For the coming year the shortfall will be covered through increased tuition.

Engineering Initiative. The Legislature appropriated $500,000 in ongoing funding and $700,000 in one-time funding to the Utah System of Higher Education (USHE) for the Engineering Initiative, now in its sixth year. The Technology Initiative Advisory Committee, comprised of Utah industry representatives, will recommend to the regents how these funds should be distributed. In past years, the University has received a significant share of the available funds.

Nursing Initiative. The Legislature appropriated $61,100 in ongoing funds and $122,000 in one-time funds to the University as part of the Nursing Initiative. These funds will help the College of Nursing educate additional graduate students to expand the pool of nursing faculty as well as allow the college to expand its baccalaureate program.

Utah Museum of Natural History. The Legislature appropriated $50,000 in ongoing funds and $30,000 in one-time funds to the museum for archeological activities at Range Creek.

Student Financial Aid. The Legislature appropriated $2 million in one-time funds to the USHE for need-based student aid (UCOPE) and $200,000 in one-time funds for New Century Scholarships. The University will receive a share of these funds.

Information Technology. The Legislature appropriated $900,000 in ongoing funds and $500,000 in one-time funds to the USHE to address the costs of information technology such as software licensing. The University will receive a share of these funds.

USTAR. The Legislature appropriated $15,250,000 in ongoing funds in support of USTAR, an economic development initiative. These funds will be distributed to The University of Utah and Utah State University to recruit senior scientists in an effort to accelerate research on each campus and subsequent commercialization of new discoveries, and will be used to develop several technology innovation centers. The funds will be distributed by a new agency, the USTAR Governing Authority.

Capital Funding. The Legislature appropriated funding for several capital projects in higher education including a major new research facility at the University as part of the USTAR initiative. The new University facility is expected to cost about $130 million with $100 million coming from the state.

Tuition Increase. The regents approved a 4 percent increase in tier one tuition for all USHE institutions. The University will ask the regents to approve a 5.45 percent tier-two increase. The University’s tuition proposal was discussed at an open meeting with students. A large portion of the increase in tuition revenue will be used to match tax funds allocated to compensation. The rest will cover a variety of programmatic and staffing needs across the University.

Legislation of Interest to the University Community

Among the hundreds of bills filed this year, the USHE tracked dozens of them for possible impact on higher education. Among them were:

HB 7 1S, Repeal of Exemption from Nonresident Tuition, sponsored by Rep. Glen Donnellson, repeals the provision that a student is exempt from the nonresident portion of tuition if the student attended high school in Utah for three or more years and graduated from a Utah high school. The bill failed to pass the House 35-34.

HB 84, Income Tax - Education Funding, by Rep. Lou Shurtliff, requires that 90 percent of income tax funds be spent on K-12 Public Education. Failed

HB 144, Benefits for National Guard Members and Families, by Rep. Greg Hughes, waives undergraduate tuition for up to eight semesters for dependents of any Utah National Guard member who dies while federally activated. Failed

HB 151 1S, Adjustments in Funding for Concurrent Enrollment, by Rep. Margaret Dayton, is aimed at providing more funding for higher education institutions that provide instruction for concurrent enrollment by allowing those institutions to charge up to $30 per credit hour as partial tuition. Passed

HB 192, Instructional Materials for Disabled Students, by Rep. Gregg Buxton, requires providers of college textbooks to provide an electronic edition for disabled students at no additional cost by January 1, 2009. Passed

HB 215 1S, PEHP Risk Pool Amendments, by Rep. Dave Clark, allows USHE institutions to be considered as part of Public Employees Health Program (PEHP)’s risk pool for the purposes of health insurance. Passed

HB 230 2S, High School Curriculum, by Rep. Brad Daw, requires the Utah State Board of Education to establish an alternative college prep curriculum and to advise parents and students of the option. Failed

HB 273, Sales and Use Tax Exemption for Textbooks for Higher Education, by Rep. Duane Bourdeaux, exempts college textbooks from sales tax, resulting in a $3.5 million loss in state revenue. Failed

HB 326, New Century Scholarship Amendments, by Rep. Kory Holdaway, provides that students are eligible for the New Century Scholarship by completing either an associates degree or by completing a math and science curriculum as approved by the regents with a “B” average (for both options). Passed

SB 75, 1S, USTAR Initiative, by Sen. Al Mansell, establishes the USTAR Governing Authority for a Utah Science and Technology Research Initiative. Passed

SB 121 1S, Small College Enhancements, by Sen. Bill Hickman, appropriates $11.5 million to seven USHE institutions to enhance, begin, or expand specific programs. Failed

SB 174, In-state Tuition for Members of the Utah National Guard, by Sen. Pete Knudson, provides that members of the Utah National Guard are entitled to resident tuition at USHE institutions. Passed

HB 66, Tuition Waivers for Higher Education, by Rep. Craig Buttars, increases the number of scholarships the regents may grant for the waiver of the nonresident portion of total tuition charged to nonresident students and removes the sunset date from a nonresident tuition waiver program. Passed

HB 81, Tuition Program for Students Seeking Teacher Licensure, by Rep. Ronda Menlove, modifies the class of students eligible for the Terrel H. Bell Teaching Incentive Loans program; gives the regents sole authority to make standard awards; modifies prioritization criteria; allows the Utah State Board of Education to select certain recipients, subject to program appropriation levels; and makes technical changes. Passed

HB 82, Education Information Technology Systems, by Rep. Kory Holdaway, requires coordination between public and higher education information technology systems, including the use of a unique student identifier. Passed

HB 119, Board of Regents Amendments, by Rep. Jeff Alexander, requires all appointments to the Utah State Board of Regents to be made on a nonpartisan basis. Passed

HB 232, Higher Education Tuition for Active Duty Military, by Rep. Mike Morley, allows active duty military personnel to re-establish resident status at state institutions of higher education. Passed

SB 112, Centers of Excellence Amendments, by Sen. Tom Hatch, provides funds to support interdisciplinary research in specialized Centers of Excellence in technologies that are considered to have potential for economic development in this state. Passed

For more information about specific bills, legislative membership, or committees, see the legislative Web site at http://legislature.utah.gov.