STAND. COM. REP. NO. 2425

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2573
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Education and Technology, to which was
referred S.B. No. 2573 entitled: 

     "A BILL FOR AN ACT RELATING TO THE UNIVERSITY OF HAWAII,"

begs leave to report as follows:

     The purpose of this measure is to change the general fund
formula for the University of Hawaii from a percentage of tuition
revenues to 12% of all general fund appropriations under the
budget acts.

     Testimony in support of the measure was received from the
University of Hawai'i and University of Hawai'i Professional
Assembly.  Testimony in opposition to the measure was received
from the Department of Budget and Finance.  Comments on the
measure were received from the Tax Foundation of Hawaii.

     Your Committee finds that general fund appropriations for
higher education have steadily decreased from 11.8% of the state
budget in 1992 to its current level of 9.8%.  Although the
University substantially raised tuition to compensate for the
reduced general funds during this period, it is insufficient to
meet the financial obligations of the University under its
strategic plans for higher education in Hawaii.

     Your Committee agrees that authorizing a percentage of
general funds in each budget act to be appropriated for the
University would allow for reliable estimates of future state
general fund levels.  This would assist the University in

 
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stabilizing its funding base and enable it to engage in more
orderly, effective short-term and long-term planning for its
financial and operational needs.

     Your Committee amended the measure to clarify that the
following are excluded from the University's general fund request
submitted to the legislature:  employer's share of health fund
premiums, debt service, and contributions for retirement, social
security, and medicare.  Technical, nonsubstantive amendments
were made for clarity and consistency.

     As affirmed by the record of votes of the members of your
Committee on Education and Technology that is attached to this
report, your Committee is in accord with the intent and purpose
of S.B. No. 2573, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 2573,
S.D. 1, and be referred to the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Education and
                                   Technology,



                                   ______________________________
                                   DAVID Y. IGE, Chair

 
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