Historically, as the Hawaii legislature increased state funds for higher education there was an expectation that student tuition would also rise, but those funds were returned to the state as general revenues. During the Cayetano administration, the governor and the legislature moved to allow the UH to keep its tuitions, so that any increases would increase UH’s total budget. The goal was to establish a fixed percentage of the state budget allocated to the UH system, but allowing the UH budget to grow through increased tuition. At the time, UH was receiving about 13.5% of the state’s budget, but returning tuitions. The legislature and the governor felt there was no incentive for the Board of Regents to raise the tuition rates, especially on out-of-state students, thus the plan. Earl Anzai, the then Director of State Department of Budget & Finance stated that if the change were made, the percentage of state revenues to UH would not decline. In the first year, after the law was approved, the legislature reduced the UH general fund revenues by the exact amount of the student tuitions collected. The UH’s share of the state budget fell below 8%. The future scheduled tuition increases were to try to recover the fall in state revenues allocated to the UH.
The recent comments about tuition increases linked to faculty salary adjustments is a matter of coincidence not a response to the UHPA contract ratified in 2003. The salary increases over the six year time was a method used to make up for two years of zero salary increases because of the Governor’s unwillingness to reach an a collective bargaining agreement with the faculty and an effort to close the significant salary gap between UH faculty salaries and the salaries paid to faculty at comparable institutions on the mainland.
It was not until the 4th year of the contract (2006) that larger raises went into effect reflecting a desire by the Governor, in 2003, to be able to plan ahead for these future costs. The UH Board or Regents agreed to pick up a portion of those salary increases from its own funds in the last three years, at the request of the Governor, over the objection and warning of UHPA that such an agreement would take away the state’s responsibility to fund salaries through general state appropriations thus shifting the funding of salaries to exclusively UH sources of revenues. It is that agreement that has brought tuition increases into a direct relationship with underfunded state commitments to its faculty.