House Committee Approves Bill to Mitigate HB 331

Nonresident students considering a Utah education shouldn't have to worry about the burden of crushing tuition.

That's the message lawmakers hope to send with the passage of a new substitute bill that will grant tuition waivers to out-of-state students in an attempt to counter the negative impact of last year's House Bill 331.

The Utah House Education Committee voted unanimously Friday to approve a watered-down version of House Bill 75. The proposed legislation -- sponsored by Rep. Loraine Pace, R-Logan -- is scheduled to be heard on the House floor Wednesday.

If passed, the modified law will authorize the State Board of Regents to grant 500 nonresident tuition scholarships to attract new students from other states. The scholarships will be divided among universities based on the effects of residency changes.

The measure was originally intended to lower Utah's residency requirement from 60 to 45 credit hours for nonresident undergraduate students and 30 hours for graduate nonresident students. But that effort failed in the face of financial challenges.

"The fiscal note [or cost of the rollback] was $3.5 million," Pace said. "There was no way we could get it through."

The new law, which takes effect in 2004, is a compromise measure that provides a five-year transition to HB 331. However, it is more than just a stopgap solution, lawmakers and university officials point out.

"This bill will help us attract students from a market we lost with HB 331," said Utah State University President Kermit L. Hall.

Without the transition, it would take more than three in-state students to make up the revenue loss of one out-of-state student paying nonresident tuition, he explained.

That might spell trouble for some divisions, like the College of Agriculture.

The college saw its out-of-state enrollment take a considerable hit following the passage of HB 331, with many students from Idaho and Wyoming deciding to attend universities in their own states instead of paying top dollar to attend USU.

Idaho students, for example, were presented with the option of remaining in their state and paying $2,700 per year in tuition or attending USU and paying $9,300 per year for two years.

"The college is at risk [of not being able to serve in-state students]," Pace told the committee. "It becomes difficult to support programs, and there are already some on the cut list."

"USU lost 249 accepted out-of-state students and more than 140 accepted out-of-state transfer students," Pace said. "That's not all. If you have empty dormitories, you're losing money on those auxiliary services as well, because most in-state students are Logan residents."

"The average out-of-state student brings $10,000 in added value to the economy of northern Utah," Hall explained. "Without this measure [HB 75] we will lose 24 percent of out-of-state students next year. This is economically and fiscally detrimental."

Additionally, HB 331 missed the mark in terms of the money it was expected to raise.

A study published by Utah Foundation, a Salt Lake City-based nonprofit organization, quotes a Board of Regents report in pointing out that of the projected $5 million to be generated by stricter residency requirements, $4.9 million failed to appear, leading some lawmakers to question why they voted for the measure in the first place.

"I'm sorry to say I voted for that," said Rep. Carol Moss, D-Holladay. "It was too bad more people didn't write us before."

Still, there is broad consensus that Utah's residency requirements are more lenient than other states. The problem with HB 331 is that it does not provide a viable transition period.

Hall said the transition bill provides hope for the university to recover from its out-of-state enrollment decline.

"It represents a moment of realism in Utah policy," he said. "The Utah Foundation report pointed out two things: that residency requirements were lenient and that HB 331 does not work. This bill takes care of both those problems."

Without it, using a multi-year analysis, the net tuition loss attributable to HB 331 could be more than $3 million for the 2003 freshman class, with a similar or greater loss for the 2004 class and beyond, Hall said.

For Associated Students of USU President Celestial Bybee, passage of the bill is a diluted, but important victory.

"It's frustrating to see it so watered down, but something is better than nothing at all," Bybee said.

By Leon D’Souza; leon@cc.usu.edu