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January 13, 2006 :: Funding Issues Highlight State Regents’ Legislative Agenda

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Additional funding in key areas heads the list of priorities for the 2006 legislative session, the Oklahoma State Regents for Higher Education have announced.

The State Regents recently adopted their annual legislative agenda that will guide them in discussions with legislative leaders this spring. The priorities for 2006 include:

“It may appear to some that these priorities may not be the big, blockbuster types that we’ve had in past years, such as the passing of a $500 million capital bond issue last year. But, nevertheless, each one is extremely important as we continue to put higher education in the forefront of our state legislators,” Chancellor Paul G. Risser said.

Risser pointed out that without the proper funding for higher education, Oklahoma will continue to lag behind other states in the number of college graduates and higher-paying jobs that all states covet.

“Our legislative leaders stepped up this year and provided higher education with a 9 percent increase in state appropriations over FY2005, which allowed our colleges and universities to restore some of the staff and faculty positions and programs that had previously been cut. But, our per-student funding level is not where it needs to be,” Risser said, noting that Oklahoma spends approximately $1,200 less per student than other states. “The $123 million request in additional appropriations in FY2007 will go a long way in helping narrow that gap.”

This marks the second straight year that the State Regents have made securing additional dedicated funding sources for Oklahoma’s Promise-OHLAP a legislative priority.

Oklahoma’s Promise-OHLAP is a state scholarship program that provides free college tuition to high school seniors from low- to middle-income families who meet certain academic and behavior requirements. The program is funded through a variety of sources, including taxes and a portion of gaming and lottery revenues. And it’s those last two revenue sources that worry higher education officials the most.

“Gaming revenues represent about $7.2 million or 27 percent of the total Oklahoma’s Promise-OHLAP appropriation, and so far, collections are significantly below original estimates,” said State Regents’ Chairman Cheryl P. Hunter, who noted that lottery revenues also make up about $4 million or 15 percent of the total appropriation. She said the State Regents won’t know how much will be made available from lottery proceeds until Jan. 15 when state officials make their first deposit of lottery collections.

“We’ve already seen the uncertainty of predicting gaming revenues. The same may hold true for lottery revenues,” Hunter said. “The Oklahoma’s Promise-OHLAP scholarship program is such a vital tool for our state’s future prosperity that any adverse funding issues could have a negative impact on the program. We are hopeful that our legislative leaders will identify additional funding sources for the program.”

Enrollment in Oklahoma’s Promise-OHLAP continues to rise as do the costs to keep the program going. More than 12,000 college students are currently receiving Oklahoma’s Promise-OHLAP scholarships this year and another 27,000 high school students are enrolled in the program. Officials project scholarship expenses could increase by more than $10 million for 2006-07 and even more in the next two years, depending on enrollment, the number of completers and tuition rates.

As a result of lower-than-expected gaming revenues, the State Regents will also request a $4.6 million supplemental appropriation for FY2006 to help pay for Oklahoma’s Promise-OHLAP scholarship obligations this semester.

Under legislation that was signed into law more than a year ago, 12 percent of revenues generated from casino gambling are earmarked to help pay for Oklahoma’s Promise-OHLAP scholarships. However, gaming revenues collected for the program during the last half of FY2005 were 47 percent below the State Board of Equalization’s original estimates. Even worse, revenues collected during the first half of FY2006 are 78 percent below estimates.

State Regents are also asking for a supplemental appropriation of $10 million to help colleges and universities with their energy costs this year. In addition, $300,000 is needed for unbudgeted Office of State Finance CORE transaction charges.

And, because thousands of higher education employees are currently part of OTRS, the State Regents would like state lawmakers to add the Chancellor to its board of trustees. The board is comprised of 13 individuals, including ex-officio members representing K-12 and career technology. There is no ex-officio representation for higher education, however.