UW and the State of Washington

Higher education

isn’t simply a line-item

expenditure‌

... it’s the best investment our state makes.

In this time of unprecedented economic challenges, we’re all tightening our belts, including the state of Washington. While it makes perfect sense to scrutinize budgets, public colleges and universities in our state have been hit hard with cuts that are hampering our ability as a state to get out of this recession and be a leader in the future.

Lately, there has been a lot of angst over the value of public higher education. Is it worth it? Why should we care about it? We all should care because this is about more than just higher education. It’s about the shared future that we as Washingtonians envision and build together. It’s about educating future generations to make sure our state’s existing companies have a well-educated work force and that new companies will be created as well.

It’s about securing the health and welfare of our citizens.

And it’s about pursuing innovative ways to solve the toughest challenges of our time.

Today’s University of Washington is the result of generations of strong partnerships and strategic public and private investments in higher education. In return, the UW has become critical to the economic strength and vitality of our state. Education is the best investment our state can make toward a better life and economic security for all. So when the state cuts funding to the UW,

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we all suffer. All four-year institutions in Washington state have taken significant cuts in state funding, yet the demand for college-educated workers and access to higher education has never been greater.

State appropriations and tuition are the foundation of UW funding. These funds support teaching and specifically our professors who, in turn, win federal grants and inspire private donations. Unfortunately, in the last budgeting session, the state cut funding to the UW by $132 million — more than 30 percent of the UW’s state support. A significant tuition increase brought $75 million back to the UW, but that still leaves a $57 million budget shortfall.

These are difficult times, indeed, but make no mistake — the University of Washington is committed to its mission to educate and serve the people of our state.

The UW does have serious funding challenges, but we’re not alone. Across Washington, state agencies are facing massive budget cuts. Here at the UW, we’re thinking outside of the box to come up with creative solutions to our funding challenges.

Being Public, it’s Who We Are For almost 150 years, UW students, faculty, staff and alumni have helped to shape Washington state. As a public university we are deeply committed to serving all our state’s citizens. Together, with partners from across our state and around the world, we work to improve the lives of Washingtonians through education, health care and research, as well as through significant economic impact. What matters most to our alumni, friends and the general public guides our decision-making and influences our vision for the future.

“If we’ve got a controversial issue and we want to understand it, we go to the people at the university. I’ve been very impressed and more so with the passage of time at the degree to which the university has been reaching out to those of us in the community.”

One of the greatest values we all share in our state is to keep the UW affordable and accessible to Washington students. We believe money should never be a barrier to higher education. That’s why in 2006 we created the Husky Promise®, a program that allows academically qualified, low-income students to attend the UW without the burden of paying tuition or fees.

Four years ago, approximately 5,000 students attended the UW under the Husky Promise. Today, over 7,800 UW students attend the UW under the Husky Promise.

And almost 30 percent of incoming freshmen will be the first in their families to attend college. More and more Washington families are feeling financial strain. As a result, more and more students need financial help in order to go to college.

— Denis Hayes President and CEO, Bullitt Foundation Founder of Earth Day

Renee Plummer, Junior, Biology Husky Promise Student

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I’ve wanted to be a doctor since fourth grade. And I’ve always felt the UW would be the best place for me to achieve my goal. By going into medicine I hope I can reach people in a way that can help improve lives.

Having a real connection with another human being — being there and being supportive — that’s something I know I’ll do well. Without the Husky Promise and financial aid, I don’t know what I would’ve done.

I absolutely would not have been able to go to college.

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State Funding is Our Foundation State funding, together with student tuition, covers the costs for faculty who teach and mentor our students.

State funding provides financial aid and access for students who otherwise couldn’t afford college. It supports student advising services, helps maintain classrooms and lab facilities, makes possible student research opportunities and more. Federal research grants do not pay for these things, and private support alone cannot meet these needs.

Undergraduate in-state tuition at the UW is $8,700 for the 2010–11 school year. Compared with other peer in-state tuitions — $11,867 at University of California, Los Angeles, and $10,836 at University of Virginia are just two examples— the UW’s is one of the lowest in the country. To put this in perspective, undergraduate tuition at the UW is approximately $1,700 less than the annual cost of Seattle-area day care. While low tuition makes the UW a great bargain, it also puts pressure on the state to fill the shortfall between tuition revenues and the actual cost of educating students.

Why is tuition going up beyond the rate of inflation?

In Washington, students’ costs are increasing mostly in response to declining state support, not because of increased costs at the UW. Last year for the first time, tuition dollars exceeded state support.

Beyond tuition increases, UW students are feeling the effects. Reductions in course offerings and job losses in academic support services such as counseling and advising are making it hard for students to be successful and graduate on time. And the number of students and families in need of financial aid is increasing, while the dollars to support them are dwindling. This is a national trend — and, for the first time in history, the current generation of college-aged Americans may be less educated than their parents. Our kids deserve better.

In Washington, budget decisions are preventing many young people from going to college because they can’t afford it. Programs like the Husky Promise are helping, but more needs to be done.

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The cost of educating a student at the UW hasn’t changed much in 20 years.

What has changed is that tuition now represents the majority of educational funding.

* Funding per Full Time Equivalent (FTE) Students Student FTE data derived from Legislative Evaluation and Accountability Program (LEAP) data. (leap.leg.wa.gov)

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Committed to Excellence and Efficiency This new era of economic challenge demands that we take an even harder look at how we conduct our business. The UW continues to make decisions now to work smarter well into the future. This includes developing a creative yet sustainable academic “business plan” that reflects our mission, takes into account current economic realities, and allows the UW to excel well into the future. This plan — still a work in progress — will look at where we are going, what we must do to continue to be a premier public research university and how to achieve and sustain that vision. We’re also working to implement a new internal budget model that will be more efficient and transparent since our current budgeting methods limit our ability to manage our resources effectively.

We have taken more immediate, tangible measures to reduce costs. The UW is maximizing our human resources by centralizing core services (such as HR, payroll and IT).

Over the past 10 years, we have reduced our utility costs by $230 million through reduced consumption (more efficient lighting and fixtures, etc.). We’re making use of cloud computing to access more services and technologies.

We’ve improved student services by making greater use of electronic services such as tuition payments and financial aid distributions. These are just a few of the academic and operational improvements we continue to make.

To offset the $132 million cut in state funding, we eliminated more than 950 staff positions. We reduced administration costs by 16 percent and despite our best efforts, we had to cut funding for academic programs by 12 percent. The unfortunate result of these budget decreases is that it may now take longer and cost more to graduate from the UW.

Why can’t the UW use private funding to make up the budget shortfall? Because approximately 95% of private gifts are designated by the donor to a specific purpose and thus can’t be used as a substitute for state funding.

We’ve taken steps to curb our costs and remain good stewards of our state’s investment in us. Our No. 1 priority continues to be providing a high-level education that is accessible to all our state’s citizens.

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When University of Washington Medical Center diagnosed my cancer, it was the beginning of a kind of medical odyssey. I had surgery, radiation, chemotherapy — and my care was the absolute best. Today, I feel very fortunate to be in remission, and I want to make life better for other patients. That’s why glassybaby supports several cancer-related programs at UW Medical Center through our White Light Fund.

My care team meant everything to me, and glassybaby loves giving to the University of Washington.

www.jgarnerphoto.com

Lee Rhodes, UW Medical Center Patient, Cancer Survivor, and Founder of glassybaby

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Creating Jobs, Delivering Washington’s Work Force The UW drives nearly 70,000 jobs in our state — 28,000 at the UW and 42,000 more throughout the state’s economy. That’s one out of 50 jobs in the state and one out of every 18 jobs in Seattle. And the jobs at the UW are quality, well-paying jobs with benefits packages.

As the third-largest nonmilitary employer in Washington behind Boeing and Microsoft, the UW is a major contributor to the economic well-being of our state through hiring and helping to develop Washington’s work force.

“I’m excited about the role the University of Washington will play with Microsoft, to drive and shape the future of technology. There’s no more important research institution, source of talent, partner and friend for Microsoft than the University of Washington.”

— Steve Ballmer, Microsoft CEO More than 40 percent of the bachelor’s degrees awarded in the state of Washington come from the UW, and 76 percent of UW alumni stay here in Washington after graduation. Today, more than 213,000 alumni live in Washington — more than the population of Tacoma. UW alumni teach our students, care for our sick, build our cities and protect our environment. As Washington’s flagship university, it’s imperative that we continue to educate our students right here in our own backyard.

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The University’s research operations alone make tangible and measurable economic contributions by supporting nearly 22,000 jobs. These jobs include not only direct employment of research professionals but also indirect jobs created for vendors, contractors and laborers for the construction and renovation of laboratory facilities, jobs for staff who support the research infrastructure, and jobs created in the community by the disposable income of the scientific work force.

Along with creating jobs for research staff and support personnel, UW scientists are developing new products and bringing new technologies to market, which often lead to the creation of new companies that promote entrepreneurship, economic development and job creation. To date, more than 250 companies have been started based on UW research or by UW students or faculty, adding even more jobs and bringing more revenue back to the state.

Our state’s innovation-driven economy has one of the highest demands in the nation for an educated work force. By providing Washington students with a quality education in high-demand fields, the UW gives area companies the chance to hire and retain local talent.

A Catalyst for Our State’s Economy Though our primary missions are education, research and community engagement, the UW’s daily operations provide ongoing financial benefits to our state’s economy through spending, taxes, employment and return on investment. This includes not only spending on goods and services with a variety of in-state vendors and the spending of their staff and visitors, but also the volume of business generated by Washington companies that benefit from the UW’s spending.

In 2009, the UW’s operations and expenditures on goods and services had an overall economic impact on the state of Washington of more than $9 billion. This spending supports local businesses, which in turn employ people to sell the goods and provide the services that University constituencies need.

As well, state and local governments all received tax revenues that were University-related. Tax revenues attributable to the University of Washington totaled $618 million in 2008–09. The UW pays two-thirds more in taxes than the state supplies the University in funding.

And for every $1.00 invested in the UW by the state, $1.48 in tax revenue is returned to the state.

Last year, UW research attracted an impressive $1.15 billion in sponsored research funds. The only other university in the country to receive more funding

is Johns Hopkins. The money received for sponsored research translates into a significant economic impact — $3 billion — one-third of the total UW impact.

“The true impact of the University of Washington goes far beyond the $9 billion in annual economic impact, as the university is a magnet for attracting fresh dollars and human capital from outside of the state.”

— Paul Umbach Founder and Senior Principal, Tripp Umbach Renowned Economic Impact Strategist

And for every $1.00 the state invests in the UW, the UW returns more than $22.00 into the state’s economy. By comparison, a typical state university returns $10.00 for every $1.00 invested by the state. The UW returns more than twice that amount.

If the UW were not located in our state, $9 billion in “fresh dollars” — money that is generated and spent in-state — would be lost, and approximately 70,000 jobs would not exist.

Marc Barros, ’03, Co-Founder, Contour, Inc.

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When we were seniors studying entrepreneurship at the Foster School of Business, Jason Green, ’03, and I were part of a team that took third place in the UW Business Plan Competition. We won $20,000, and we used it to start a company. Five years later, we have 40-plus employees, many of them UW grads, and we’re one of the fastest-growing companies in Washington.

We’re selling our ContourHD hands-free cameras in hundreds of outdoor sports retailers globally. We expect to sell tens of thousands this year.

And none of it would have happened without the UW. 6

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What’s Next?

The UW and the state of Washington are at a critical point. Because of this, we must act now to renew our commitment to solving our toughest challenges in higher education — remaining accessible and sustaining a level of excellence to help secure our state’s economic future. In order to do so, we as Washington citizens must consider the following:

Make higher education a budget priority.

State funding keeps the UW affordable and accessible to Washington kids. Times are tough, but we must protect state funding for higher education. Our children are worth it, and our economy depends on it.

Take a new approach to funding.

Rather than take funds away from other state programs, we must grant the UW greater ability to manage our local resources and daily operations. It’s the quickest path towards managing strict budget constraints while continuing to provide our students with the excellent education they deserve.

Do more with less.

The UW needs to ensure students and taxpayers receive the highest value for their investment. We must continue to find innovative ways to increase efficiencies and demonstrate fiscal discipline.

Learn more at uw.edu/staterelations