CONTENTS
BUDGET, APPROPRIATIONS & TAX ISSUES
- Short-Term FY17 Continuing Resolution Expected Next Week
- House Hearing on Endowments Focuses on Cost of College, Debt
OTHER
- COGR Reports on How Institutions Will Handle New Overtime Rules Affecting Postdocs
- Associations Respond to U.N. Report Blaming Drug Access Problems on Intellectual Property Rights
- Golden Goose Award Announces Third Group of 2016 Winners
BUDGET, APPROPRIATIONS & TAX ISSUES
SHORT-TERM FY17 CONTINUING RESOLUTION EXPECTED NEXT WEEK
A bipartisan group of Senate leaders and appropriators will continue negotiations over the weekend on a short-term FY17 continuing resolution (CR) to keep the government funded into December.
The measure, which includes supplemental monies to combat the spread of the Zika virus, would fund federal agencies and programs largely at their current levels through December 9. This would allow time for legislators to negotiate a year-long appropriations package in a post-election session.
Although Senate leaders had hoped the Senate could approve the short-term CR this week, a dispute over the ability of Planned Parenthood to receive funds to help stem the spread of Zika has been a major sticking point. Anticipating a resolution of this and other issues over the weekend, Senate Majority Leader Mitch McConnell (R-KY) has scheduled a Monday evening procedural vote on the package.
HOUSE HEARING ON ENDOWMENTS FOCUSES ON COST OF COLLEGE, DEBT
The House Ways & Means Oversight Subcommittee on September 13 held a hearing entitled, “Back to School: Review of Tax-Exempt College and University Endowments.” The hearing, despite its title, focused largely on tuition and student debt. However, the role that institutional endowments play or should play in making college more affordable was discussed.
The witnesses were: Neal McCluskey, Director of the Center for Educational Freedom, Cato Institute; Jeff Amburgey, Vice President for Finance, Berea College; Sheila Bair, President, Washington College; Mark Schneider, Vice President, American Institutes for Research; and Sandy Baum, Senior Fellow, Income and Benefits Policy Center, Urban Institute.
Mr. McCluskey emphasized that numerous variables affect college prices and that there is no single solution to the college cost problem. He acknowledged that the uses of endowment funds are often restricted by donors and that very few institutions have multibillion dollar endowments. He said the only way to address college costs is for “consumers” to pay for college with their own money or money they receive voluntarily from others.
Mr. Amburgey described Berea College’s tuition-free model and underscored in his written testimony that mandatory endowment pay-outs would cripple Berea’s ability to continue to offer its students a tuition-free education.
Dr. Schneider, formerly Commissioner of the National Center for Education Statistics, asserted that the tax-free “subsidy” granted to private nonprofit postsecondary institutions is “far greater” than subsidies (whether direct financial contributions or tax benefits) given to public two-year and four-year schools. He called for greater transparency regarding the “public” costs of private, nonprofit colleges and universities through improvements to the IRS 990 Form that tax-exempt universities file annually. He also recommended eliminating 529 college savings plans and proposed an excise tax on large endowments to encourage institutions to allocate a larger share of their endowments to financial aid. Revenue from the endowment tax would aid students attending community colleges.
Dr. Baum explained that concerns about endowments are focused on a small number of elite institutions and most colleges and universities are not as well-resourced. She supports providing incentives in the tax code, but not necessarily tax credits, which, even if refundable, might not benefit some students because they would not provide ready money to pay bills.
Subcommittee Chairman Peter Roskam (R-IL) appeared to agree on the limitations of a tax credit. He raised the notion of providing incentives for donors to contribute to scholarships, along the lines of Section 170(e)(3), which provides an additional tax benefit for donations of inventory that benefit the needy. Rep. Tom Reed (R-NY) said in a press release that he continues to work on his Reducing Excessive Debt and Unfair Costs of Education (REDUCE) Act, to require colleges with endowments larger than $1 billion to distribute a portion of the profits earned as tuition relief for students from working families.
Members of the Oversight Subcommittee also took aim at substantial “golden parachute” payments to fired football coaches; luxurious amenities, such as lazy rivers and indoor beach clubs; preferential stadium seating for donors; and university presidents’ and investment managers’ compensation.
The subcommittee did not set forth any next steps or timeline for future action, but Chairman Roskam said the panel is soliciting creative ideas for tackling the college affordability problem. The higher education associations, led by the American Council on Education, are preparing a statement for the record.
OTHER
COGR REPORTS ON HOW INSTITUTIONS WILL HANDLE NEW OVERTIME RULES AFFECTING POSTDOCS
The Council on Governmental Relations (COGR) has released results of a survey of its member institutions on implementing new overtime rules for postdoctoral researchers on their campuses. Many campuses will raise postdoc salaries to the new overtime threshold; most will look to individual investigators first to cover the additional costs, followed by departments and schools or colleges.
The Department of Labor’s new overtime rules will require many entities, including colleges and universities, as of December 1, 2016, to provide “white collar” employees a salary of at least $47,476 a year in order for them to be exempt from overtime pay. The COGR survey was limited to postdoctoral researchers.
The executive summary of the survey showed that 63 percent of the 109 responding institutions had already made a decision about whether or not to create a university-wide policy requiring all postdoc salaries to be raised to the new threshold. The remaining institutions said they would make a decision this month or in October.
Of those institutions that had made a decision, 74 percent said they would implement an institution-wide policy to raise postdoc salaries, while 26 percent said they would not create an institution-wide policy but would allow the option for time reporting/paid overtime.
Regarding who would cover the additional costs, schools were permitted to name more than one source. About 72 percent of respondents indicated they would look to individual investigators, 45 percent to departments, 38 percent to the school or college, 31 percent to some other unspecified level, 22 percent to the central administration, and eight percent to the campus level (for multi-campus institutions).
ASSOCIATIONS RESPOND TO U.N. REPORT BLAMING DRUG ACCESS PROBLEMS ON INTELLECTUAL PROPERTY RIGHTS
AAU, together with the Association of American Medical Colleges (AAMC), the Association of Public and Land-grant Universities (APLU), the Association of University Technology Managers (AUTM), and the Council on Governmental Relations (COGR), issued a statement today expressing the higher education community’s serious concerns about the conclusions of the September 14 Report of the United Nations Secretary General’s High-Level Panel on Access to Medicines.
The organizations said that the report misguidedly focuses on intellectual property rights – particularly patents – as the reason why medicines, vaccines, diagnostics, and other health technologies are not more widely available and affordable around the world.
When the panel was first constituted in early 2016, the U.S. government questioned its mandate, noting that its single-minded attention to patent rights would result in “predetermined outcomes” and that such a narrow review of a complex problem would result in a report that was “imbalanced and of limited use, or even counterproductive in building consensus among stakeholders and national governments.” The higher education organizations effectively showed that the U.S. government’s preliminary concerns were prescient.
They stated that the report incorrectly suggests that the patenting of university research somehow limits access to academic discoveries and obstructs follow-on innovation. The statement explains why this conclusion is wrong, noting that, on the contrary, a strong patent system is what allows universities and related technology transfer organizations to transmit the knowledge and innovations they produce for the public good and broader societal benefit. The statement also reiterates universities’ longstanding commitment to ensuring that university research advances worldwide public health.
AAU and the other higher education associations are working closely with a federal interagency group to explain the potential negative impact of recommendations made by the U.N. panel.
GOLDEN GOOSE AWARD ANNOUNCES THIRD GROUP OF 2016 WINNERS
Five scientists and engineers whose work on honey bee foraging patterns led to development of a powerful web-hosting tool are the third group of 2016 recipients of the Golden Goose Award. The award honors federally funded research that may have been considered silly, odd, or obscure when first conducted, but which has resulted in significant benefits to society.
The five individuals will be honored at an award ceremony on September 22 at the Library of Congress. Also being honored are the five researchers behind a landmark longitudinal adolescent and adult health study, and the two scientists whose work on the sex life of the screwworm led to control of a major livestock pest.
The Golden Goose Award is supported by a bipartisan group of Members of Congress, including Rep. Jim Cooper (D-TN), who originally had the idea for the award. AAU is among the nine founding organizations of the award, which was created in 2012.