As the economy slips higher education is a possibly sinking ship

By Alex Su and Alexa Villatoro

The consequences of COVID-19 continue to show no mercy to the domestic and global economy. As of April 2020, the unemployment rate reached 14.7% in the U.S, according to the U.S. Bureau of Labor Statistics. Shocking declines in the U.S. economy promise dramatic state budget reductions for the 2020-2021 fiscal year. Washington State plans to address these reductions during a special legislative session this summer, where legislators will convene to assess budget related decisions across the state, including that of community and technical colleges. 

According to Mari Leavitt, D-WA 28th District Representative and Vice-Chair of the WA House College and Workforce Development Committee, the state can likely lose $3-5 billion in revenue for the upcoming fiscal year. Dependent only on estimations at the moment, Washington State Legislature won’t get a better sense of the financial situation until June, during the special session. Rep. Leavitt adds that the state won’t have a full idea of the fiscal picture until the beginning of 2021. 

With over 30 community and technical colleges across Washington state, organizations and administrations have previously experienced severe financial distress in regards to supporting higher education during The Great Recession in 2008. 

“The social safety net was decimated in 2008,” says Rep. Leavitt. “The colleges are nimble and flexible for any situation now.”

Washington State legislature had begun to invest in higher education after colleges and universities lost major ground during The Great Recession. The College Affordability Program in 2015, and the Washington College Grant in 2019, were implemented to aid in access to post-secondary education by reducing and regulating cost of attendance. Now, students of higher education and their advocates are faced with greater obstacles to, at least, restore colleges and universities to what they once were. 

“They’ve (community and technical colleges) never really gotten back to the 2008 level,” adds Rep. Leavitt. “It feels like the tide was turning positive before the pandemic.”

With expected budget cuts, furloughs and lay-offs become possible options for savings, as faculty at Seattle Central account for roughly 70% of costs. Washington State’s Office of Financial Management (OFM) says 10-20% of the amount Central receives from the state allocation may have to be cut. According to Shouan Pan, the Chancellor of Seattle Colleges, the Seattle Colleges District is modeling with 17% reductions to budgets to be allocated by the State Board of Community and Technical Colleges. 

With an estimated 25% reduction in revenue from international enrollment, and the OFM instructions to model options for a 15% reduction to funding, Seattle Colleges derives an estimated 17% state funding reduction. 

“The forecast is not encouraging,” says Chancellor Pan. “This spring quarter (2020) we are also down in enrollment by 22% in comparison to last year’s spring quarter (2019).”

The state plans to reconvene during a special session in the summer. Only then can the school cut their budget accordingly, develop an extensive strategy for financial allocation between programs, and analyze enrollment patterns relative to budget cuts. At this time, Seattle Colleges will also be able to explore options for possible salary cuts, furloughs, or lay-offs. 

“It may be July before we know how much we have to cut, and thus know if there will be any furloughs or layoffs,” says Executive Vice President at Seattle Central, Bradley Lane. “We do not yet have all the information for that.” 

Reduction in fiscal support may test the ability for the American Federation of Teachers (AFT) to retain faculty. Annette Stofer, Seattle Colleges AFT President, says she can’t speak on behalf of the union, but assumes the executive board will not be willing to negotiate salary cuts. If so, Stofer details that professional development programs that improve the teachers’ skills and what they offer to students could be sacrificed. 

“One of the things that budget cuts do is limit our ability to retain the teachers that we have and to attract new ones,” says Stofer. “We also have a commitment to increasing the diversity of the faculty so that it reflects the student body. If we’re not offering good salaries and good working conditions, we are not going to be the ones who can attract that really highly qualified diverse group.”

If the state were to declare an emergency situation, the college administration would have the authority to lay-off faculty. However, currently Seattle Colleges must establish an agreement with AFT before executing furloughs, lay-offs due to budget reductions, and salary cuts.  

“You can’t go very deep in a cut scenario before you start affecting employees. Furloughs may be an option,” says the Director of Business Operations John Boesenberg at the WA State Board of Community and Technical Colleges (SBCTC). “But our teachers do a great service, we’d hate to lose them.”

SBCTC receives the funds for community and technical colleges (CTC’s) before using an allocation model to apportion funds to the respective 34 community and technical colleges across Washington. This allocation model accounts for enrollment statistics, minimal operation costs, and high demand services. The funding that Seattle Colleges receives will be dependent on this model, which will then determine decisions regarding instructor employment. 

Like many other decisions, SBCTC won’t be able to analyze this model closely until the special session releases official budget cut numbers to the board. 

Stofer also outlines the Collective Bargaining Agreement, which details pay benefits and working conditions for contracted faculty. However, in order to renew accurate contracts and agreements for staff, a comprehensive review of the budget must occur, which is being delayed. Due to this, the renewal of the Collective Bargaining Agreement is also seeing postponement. 

“The current one expires on June 30th, but we are in the middle of negotiations so we’re talking about an extension, probably for 6 months,” says Stofer. 

With the uncertain financial situation, the district needs more time to settle on further agreements with AFT. As of now, the AFT has signed a few memorandums of understanding (MoU) and is developing MoUs for the summer and fall quarter’s to support faculty shifting operations online. However, Stofer emphasizes that faculty numbers remain proportionate with enrollment statistics, assuring that AFT already has experience adjusting to enrollment numbers. 

“If there are enrollment drops that are affected by the budget, then we are not hiring as many–especially part-time faculty– as we would when enrollments go back up,” says Stofer. “So we already kind of instantly adjust with the number of students we already have.”

Boesenberg says these decisions are up to individual districts, but may be guided by legislature and the governor’s office. Any decisions made on faculty employment, financial allocation, and protections in place to support maintenance of quality education, will occur at a local level. Boesenberg confirms that SBCTC is only responsible for providing a general oversight to the allocation of funds. 

“That’s the kind of, beauty, of our system, that we have this general oversight that facilitates communication and connection that brings people together,” says Boesenberg. “We provide some general guidance, we try not to interfere with local decision making, they know their communities better than we do here in Olympia.”

Rep. Leavitt says it’s too early for the legislature to draft and develop protections and policies in the form of bills that retain high quality education in community and technical colleges. As college administrations and the SBCTC develop models for reduction scenarios while awaiting official legislative budget reports, the goal to develop academia is not left behind. Don Bennett, Deputy Officer at Washington Student Achievement Council (WSAC), believes that higher education proponents must keep their commitment to academia. 

Changing employment patterns in the 21st century reflect decreasing jobs in the economy that require little to no skill, and increasing amounts of jobs that require higher educational levels. With an increasing demand for higher education, Bennett says WSAC is staying focused on its goals to increase accessibility to higher academia despite budget cuts. 

“This is not the time to back off the commitment to make sure that more of Washington residents get more credentials and degrees to fill jobs in the economy,” says Benett. “Raising education attainment is our core mission. Making sure we advocate for the resources and policies that do that in Washington, that won’t stop.”

Dramatic reductions to public education’s fiscal support won’t derail WSAC’s 2013 10-Year Roadmap goal to help provide 70% of Washington residents a technical certificate/degree and 100% a high school diploma. 

The issue of dramatic fiscal reduction to higher education in Washington State also begs to prod at tax revenue collection and national constitutional support for colleges, technical schools, and universities. A state mostly dependent on property and sales tax for tax revenue, Stofer wonders if an income tax would support higher education in the future by providing a safety net to emergency circumstances such as COVID-19.  

“I think the basic flaw of our tax system is it is not an income tax,” says Stofer. “Those with the means are not contributing a fair share to the system. So, any of the social services and education or higher education that we know build a strong and equitable society don’t have funding to keep doing what we’re supposed to do. We are constantly in a state of need.”

COVID-19’s consequential nature has led to budget reductions for higher education, and highlights the necessity to invest in possible safety nets for public academia. As higher education had begun to cover major ground in the past few years, the pandemic has diverted attention from quality, to simply sustainment. 

“It feels like we’re always in a panic,” adds Stofer, “because we never get the funding that we need.”

Chancellor Pan believes this is an opportunity to discuss policies surrounding tax structure and additional support for higher education. 

“I hope Washingtonian tax payers are willing to reconsider the crisis for higher education,” says Chancellor Pan. “I certainly hope this will convince people to do things that normally they may not be willing to.”

But these conversations may not be brought to light by legislature until after the Covid-19 crisis settles. According to Rep. Leavitt, there are no plans to discuss tax structure or anything other than immediate concerns regarding COVID-19 during the upcoming special session. 

“Not this summer,” says Rep. Leavitt. “Any special session we’ll be going into will be focused on relief to COVID-19. I don’t expect that’s gonna be part of the conversation during a special session.”

Enrollment numbers have plummeted due to the pandemic, according to Chancellor Pan. With travel restrictions and the looming threat of a global pandemic, international students are choosing not to study abroad. Because 30% of Seattle Colleges’ income are derived from student tuition, tough decisions have become seemingly inevitable, in addition to facing a recession. 

Jennifer Strothers, Interim Vice Chancellor of Finance and Operations at Seattle Colleges, says the district is working on digital and calling campaigns to encourage enrollment numbers for the summer and fall. 

“We don’t know what is going to happen to student enrollment,” says Steve Hill, Chair of Seattle Colleges’ Board of Trustees, “which is important for two reasons. One is for tuition, associated with students as you know, and the other thing is that state funding we could get relative to other colleges will depend on our enrollment.”

Higher education is not constitutionally protected, like K-12 instruction. Laura McDowell, Communications Director at the SBCTC, says colleges and universities have always been vulnerable to budget cuts. Tuition increased by double digits when the state Legislature cut funding for higher education during The Great Recession in 2008. 

“After The Great Recession, colleges and universities never fully recovered from the budget cuts,” said McDowell. “State funding was stagnant while college costs for things like compensation and operations increased. Higher education was losing ground.”

McDowell says Washington State recognizes how damaging these tuition rates were for the students, passing the College Affordability Program in 2015, in which tuition was cut back down. Within this program tuition was cut at colleges and universities in fall of 2015 by 5%. In fall of 2016, tuition at CTC’s was held flat and university tuition, alongside costs for CTC applied bachelor’s degrees, dropped an additional 15%.

Since the fall of 2017, tuition increases have been tied to a 14-year average percent increase in the median hourly wage. This has kept tuition increases at both colleges and universities at about 2-3%. 

Another defense implemented to shield higher education despite a lack of constitutional protections is Washington’s first dedicated funding source for higher education- the Workforce Education Investment Act, created by the state Legislature in 2019. It is also named the Washington College Grant, which covers full tuition for eligible students at any approved in-state college or university. 

Funded by a small B&O tax surcharge, the act provides funding for college students and the institutions that serve them. Most of the funding guarantees financial aid to eligible students and extends aid to more low-income and middle-income families. Both McDowell and Rep. Leavitt hope this act can be prioritized at the legislative level. 

“Starting this fall, an eligible student in a 4-person family that makes about 53,000 or less will get enough financial aid to cover tuition. Partial grants are available to 4-person families making up to about $97,000 a year,” Laura said. “The higher the income, the lower the grant.”

Funding for community and technical colleges is crucial to the recovery of the state’s economy. Dollars that are appropriated by the state board are distributed to the colleges. This directly impacts student access to programs and services they need to fill the jobs posted by employers across Washington. But it’s up to individual colleges to organize their budgets and handle shortfalls while prioritizing students and faculty. 

“As a state, we need to prepare for the long haul,” says Chancellor Pan. 

The rapid evolution of the COVID-19 pandemic has caused economic deterioration, leading to national and state budget reductions, worrying higher education from coast to coast. From businesses to education, many are scrambling to organize financial assistance and budget analysis. With a high risk of budget cuts multiplying into greater hardships for workers and students, Washington looks ahead to this summer’s legislative special session for budget cut confirmation and to begin adjusting academia.