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Special Report on the
2009 Legislative Session

March 2009

State CapitolYou’ve heard it said that there is nothing more constant than change. The difference between the state’s budget at the close of the 2008 legislative session to the opening of the 2009 legislative session demonstrates the truth of that statement. In 2008, legislators grappled with what to do with $1 billion surplus. In the 2009 session, legislators were faced with a $1.8 billion deficit. To balance the budget, legislators went through the extremely difficult process of making deep cuts in all areas of state government. However, the arrival midway through the session of federal stimulus funds (American Recovery and Reinvestment Act of 2009) greatly reduced the impact—for one year—of the state’s budget shortfall.      

For higher education, the Legislature enacted a base budget cut of 17 percent. For the coming 2009-10 fiscal year, the Legislature used the stimulus funding and other one-time funding to reduce the cut to 9 percent. They did not use the $417 million in the “rainy day” fund or another $100 million held in reserve for K-12 growth. The Legislature appropriated ongoing funding for operation and maintenance of new facilities and a modest amount of ongoing and one-time funding for student financial aid. One-time funds were appropriated for the Engineering Initiative and USTAR. Capital construction funding was approved for a number of higher education buildings. The Legislature also transferred small amounts of funding from other agencies to higher education. Details are provided in what follows for appropriations specific to the University of Utah.


Overall Funding Change
The University’s ongoing state funding was reduced by $42 million, compared to the original 2008-09 base, along with an additional $3 million one-time cut, or a total reduction of approximately 17 percent. That cut was reduced considerably for the coming year—and the coming year only—thanks primarily to the federal stimulus dollars that were used to help fund higher education. In the end, the University was left with a 2009-10 budget reduction of about $23 million, or 9 percent, compared to 2008-09. The School of Medicine faces a $10 million reduction in federal support, in addition to their share of the 9 percent state cut (about $2.1 million). All of that funding, both federal and state, has been used by the School of Medicine for educational purposes.

Compensation
The Legislature provided no funding for an increase in compensation for faculty and staff paid from state funds. It is expected that the Utah State Board of Regents will direct Utah System of Higher Education (USHE) institutions, including the University, to use a half-percent of the 2009-10 tuition increase to offset the increase in the cost of health and dental insurance premiums. For the University, that amount will be sufficient to cover the entire increase, so the cost borne by employees will not change.

           
Operation and Maintenance
The Legislature provided ongoing funding of $1,055,100 to the University for operating and maintaining the new business buildings soon to be constructed. The University will not receive that funding until the buildings are up and running. The University’s request for just over $1 million for buildings recently occupied was not funded, adding to our current budget problem.
           
Engineering Initiative
The Legislature appropriated $2 million in one-time funding to the USHE for the Engineering Initiative. The Technology Initiative Advisory Committee, comprised of Utah industry representatives, will recommend to the Board of Regents how these funds should be distributed. In past years, the University has received a significant share of the available funds. 

Range Creek
The Legislature transferred $188,000 in ongoing funds from the Department of Natural Resources to the University for security at Range Creek. 

Occupational and Environmental Health
Through SB 15 (Ed Mayne), the Legislature directed that the Workman’s Compensation and Premium Assessment and Related Funding provide $150,000 to the University’s Rocky Mountain Center for Occupational and Environmental Health.

Student Financial Aid 
The Legislature appropriated an additional $150,000 in ongoing funding to the USHE for the Regents’ Scholarship program, along with one-time funding of $500,000 for the Utah Centennial Opportunity Program for Education (UCOPE). The University will receive a small share of these funds.

USTAR
The Legislature appropriated $33 million in one-time funding from the federal stimulus funds for the USTAR program. The University and Utah State University will receive most of these funds.

Capital Funding
The Legislature provided $22.9 million in bonding authority for the construction of replacement business buildings. The new facilities, which are being built with significant private funds as well, will provide additional general-purpose classrooms as well as upgraded facilities for the David Eccles School of Business and the campus. Ground-breaking will occur soon. 

Tuition and Fees Increase
At its March 27, 2009 meeting, the Regents are expected to approve a
1 percent increase in tier-one tuition for all USHE institutions. Combined with a requested 8.5 percent tier-two increase and fee increases averaging 4.05 percent, the cost of attending the University will increase by 8.76 percent in 2009-10, if approved by the Regents. Revenue from the tier-one increase will be used to cover increases in health and dental insurance premiums as well as provide additional need-based student financial aid. Revenue from the tier-two increase will be used to address a variety of needs created by the budget reductions.

Non-State Capital Building Projects Approved
The following building projects do not require state funding, but were approved:

  • Ambulatory Care Complex Design
  • South Campus Housing Project
  • USTAR “Green Field” Infrastructure
  • Neuropsychiatric Institute
  • Kennecott Building Renovation/Addition
  • Sorenson Arts and Education Complex
  • Meldrum Civil Engineering Building
  • Universe Project

 

 

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 35S3
Higher Education Tax Contribution, by Rep. John Dougall, allows a resident or nonresident individual to designate on the individual’s income tax return a contribution to a Utah Educational Savings Plan (UESP) account in the amount of the individual’s entire individual income tax refund. Passed.

HB 165S3
Health Reform—Administrative Simplification, by Rep. Merlynn T. Newbold, provides standards for the exchange of information between health care providers, health care insurers, and patients regarding payment for services. Passed.

HB 188S2
Health System Reform—Insurance Market, by House Speaker David Clark, amends the Insurance Code and the Governor’s Office of Economic Development Code to expand access to the health insurance market, increase market flexibility, and provides greater transparency in the health insurance market. Passed.

HB 208
Modification of Exemption from Nonresident Tuition, by Rep. Richard Greenwood, would have added a requirement for eligible students who are not U.S. citizens or permanent residents to file an affidavit each semester promising not to be employed until their immigration status is normalized. Defeated by the House, 40-34.

HB 331S2
Health Reform—Health Insurance Coverage in State Contracts, by Rep. Jim Dunnigan, requires certain state entities to require a contractor who contracts with a state entity to offer the contractor’s employees qualified health insurance coverage during the duration of the agreement if the contract is over a certain amount, and if the contract is for a construction or design contract. Passed.

HB 364
Border Student Amendments, by Rep. Don Ipson, provides new tools for university presidents to grant waivers to students who live near Utah’s borders, or are children of alumni. The bill also amends the definition of a resident student for tuition purposes within the state system of higher education, allowing an institution to establish stricter criteria for determining resident student status.  Passed.

HB 432
Higher Education Budget Authority Amendments, by Rep. Kory Holdaway, gives temporary authority to college and university presidents to shift funds between line items in order to best respond to budget cuts. Similar authority was granted during the Legislature’s September 2008 Special Session, and in previous years when budgets were reduced. Passed.

HCR 4
University of Utah Championship Football Team Concurrent Resolution, by Rep. Jim Bird and Governor Huntsman, recognizes the players and coaching staff of the 2008 University of Utah football team for their perfect winning season. Passed.

SB 18S1
Utah Transparency Advisory Board Amendments, by Sen. Wayne Niederhauser, requires certain local governments and other entities, including institutions of higher education, to provide information to and participate in the Utah Public Finance Web site. Higher education has a one-year delay to begin participation in the Public Finance Web site. The Utah Transparency Advisory Board will now include one member appointed by the governor from a state institution of higher education. Passed.

SB 79S3
Health Reform—Medical Malpractice Amendments, amends the standard of proof necessary for a malpractice claim in an emergency room. Passed.

SB 81S1
Concurrent Enrollment Amendments, sponsored by Sen. Margaret Dayton, makes several improvements to the program including making classes that are a high school graduation requirement ineligible for concurrent enrollment, and modifying how funds are distributed. The substitute bill does not include a proposed honors program. Passed.

SB 100
Financial and Economic Literacy Education Amendments, sponsored by Sen. Pat Jones, requires public schools to provide parents of kindergarten students information about the Utah Education Savings Plan (UESP) at the time of school registration. Passed.

SB 104
Higher Education Scholarship Program Amendments, sponsored by Sen. Lyle Hillyard, makes technical changes to the Regents’ and New Century Scholarship programs, and, effective with the high school class of 2011, changes the maximum award from 75 percent of tuition to $5,000 for New Century and $6,000 for Regents’ Scholarships. Passed.

SB 105
Engineering and Computer Science Initiative Amendments, sponsored by Sen. Lyle Hillyard, changes the existing loan program for engineering and computer science students to a scholarship program. Passed.


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

If you would like to become involved in the University of Utah’s Legislative Advocacy Program, go to www.alumni.utah.edu/advocacy.