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Bluffing on higher ed funding

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By John Burbank
Published:
At a poker table, the Washington Roundtable's latest education report would amount to a bold bluff. Our elected representatives in Olympia should call them on it. The leaders of Washington's biggest corporations say they want more graduates from the state's colleges and universities to employ -- but they're hoping no one notices the billions of dollars in tax breaks they get from the Legislature.
Who is the Washington Roundtable? They are the major corporate leaders of our state including JP Morgan Chase, Bank of America, Boeing, Microsoft, Weyerhaeuser, BP, and TransAlta. They are deeply invested in the Washington state economy, and they are worried that our state won't be producing the high school, community college, and college graduates they need to keep their companies profitable. The Roundtable report claims that our state currently has 25,000 unfilled jobs, most of which are in high-tech and health care. In five years, if we don't change anything, the gap will grow to 50,000 jobs.
So policymakers are faced with a question: How do we enable more students to go to Everett Community College, Western Washington, and UW? Now, if this were about increasing access to higher education, you might assume they would try to keep tuition down to ensure higher education is available to all students -- including low income and middle class kids. But the reverse has happened. Tuition at EvCC now exceeds $4,000 a year. At Western, a middle class student is expected to come up with $8,800. The UW charges $12,393 and there's no telling what it will be by the time a student earns her degree. That's almost one quarter of the median income in our state -- one quarter of the typical family income, before taxes!
One result of this is that the number of students at UW has dropped by about one percent in the past year, Western's student body has not grown at all, and close to 9,000 fewer students are in community colleges.
What does it take to increase the number of students graduating from our state's colleges? Money. But it's clear that most students and their parents are maxed out in paying tuition. Well over half of graduates start out their careers with a diploma and $25,000-plus in student debt. That wasn't the situation a generation ago, or even five years ago. What happened? It's pretty simple. While legislators protected tax loopholes and subsidies for corporations, they starved higher education. In 1990, the total cost of educating a student at UW was $17,000, of which the state paid more than 80 percent. Now the total cost is $16,800, of which students pay more than 60 percent.
This is the math that is ignored by the Washington Roundtable. They make a strong case for increasing the number of graduates in high-tech fields by tens of thousands. They show how this can increase overall employment, money spent in the local economy, and ultimately, tax receipts for state and local governments, which then could go to furthering higher education. It is a nice story, but the problem is how to get there.
We can't continue to raise tuition and expect students to pursue higher education at the same rates. So we have to inquire of the Roundtable: Where is the money? They are the right people to ask. After all, they have succeeded in carving out tax loopholes for their corporations, and they are demanding that the state invest more in education to directly benefit their bottom lines.
It would cost about $17 million a year for 1,000 students to participate in STEM programs -- science, technology, engineering, and math -- at UW. Right now, Microsoft enjoys a $20 million "high tech" sales tax waiver each year. That is about .1 percent of Microsoft profits. The Legislature could close this loophole. Indeed, Microsoft should encourage this. Why? Because that money could fund more students in the STEM college pipeline, and from there right into Microsoft. It is good for the state, it is good for students and it is good for Microsoft.
And that's just one little loophole out of several hundred. Altogether, this and similar loopholes make for a leaky bucket draining billions of dollars out of public services -- like education -- to pad the profits of already wealthy corporations. Now these same corporations are waving the banner of education. They have identified a problem. It is up to our Legislature to put forward a solution which will allow these corporations to help solve a problem they helped create.

John Burbank is the Executive Director of the Economic Opportunity Institute (www.eoionline.org). He can be reached via email at john@eoionline.org

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