Impact of I-884 tax considered

Following is a summary of the impact on Washington State University of Initiative 884, if it were approved by the people of Washington state who will vote in the Nov. 2 elections. The summary is provided for information purposes. WSU takes no position on the initiative.

Summary of the ballot measure
According to the Washington secretary of state, I-884 would create a fund designated for preschool through college education by increasing the retail sales tax rate by 1 percent. The fund would support:

• preschool assistance for low-income children
• additional K-12 programs selected by school districts with citizen input
• additional higher education enrollments, scholarships and research
• salary increases for certain teachers and other employees of the school districts and community and technical college districts.
A citizen oversight board would be established and audits would be performed. See more at

Impact on higher education, WSU
Initiative 884 devotes 40 percent of the new revenue to higher education. According to Gov. Gary Locke’s estimates, this amount would be approximately $400 million per year. Here’s generally how the money would be divided.

Student access: $250 million per year would fund new enrollments in the first biennium, and $275 million in subsequent years. These amounts would fund a minimum of 25,000 enrollments in higher education at community and technical colleges, comprehensive and research institutions. Enrollment growth would be appropriated to the various institutions by the Legislature.

WSU has almost 10 percent of the state’s public college and university enrollment. Thus, if the Legislature allocated the new enrollments proportionately, WSU would receive approximately 2,500 students. Because urban campuses accounted for half of the statewide upper division and graduate enrollment growth since 1990, WSU plans for much of the future growth to take place in Vancouver, Tri-Cities and Spokane.

Of the $275 million annually:

• $175 million would fund new enrollments.
• $75 million would fund additional high-demand enrollments at rates that may be as high as double the peer average funding level for research universities. The new funding for high-demand enrollments would be distributed by the Higher Education Coordinating Board (HECB) through a competitive process.

WSU historically has been successful at competing for high-demand enrollment in such fields as management information systems, engineering, computer science, nursing and pharmacy.

• $25 million, beginning in 2008, would fund additional enrollments to be divided, as determined by the legislature, between new enrollments and high-demand enrollments.

All new enrollments would be funded at rates competitive with rates used at similar institutions in other states. Rates in other states are above those funded in Washington; accordingly, the growth in enrollments would improve funding available to pay competitive salaries and buy needed equipment and instructional materials, or meet other operational needs of the institutions.

Financial aid: $50 million per year would increase the affordability of higher education opportunities for students by expanding two aid programs used by WSU students at all campuses: the Promise Scholarships and the State Need Grants Program (which will be fully funded at 65 percent of median family income beginning in 2006, including newly eligible and new general and high-demand enrollments).

Research: $100 million per year in the first biennium and $75 million in subsequent years (i.e., in 2008 and each year thereafter) would be invested in university research that will generate the jobs and economic opportunities of the future in Washington.

These funds will be distributed as follows:

• 80 percent is driven by formula: 30 percent to WSU, 60 percent to University of Washington, 10 percent to regional colleges.
• 20 percent is distributed competitively through the HECB.

WSU’s share of the research funds would be:

• $24 million per each year of the first biennium (80 percent x 30 percent x $100 million), plus any amounts awarded competitively.
• $18 million in each year thereafter (80 percent x 30 percent x $75 million), plus any amounts awarded competitively.

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