A constitutional amendment on this year’s ballot could help Washington State University earn a little more investment income in the future.
If approved, Senate Joint Resolution 8223 would allow WSU and the University of Washington to invest certain operating funds in stocks and bonds.
The bill doesn’t specify which funds could be invested, although it does provide for some legislative oversight. Opponents are concerned this will result in the universities gambling with tuition revenue.
The institutions say, however, that the investment is a way to earn better returns on revenue they don’t need for immediate operations.
The Washington Constitution currently prohibits public entities from investing in stocks and bonds, but exceptions are made for such things as the state retirement and workers’ compensation funds, the permanent school fund and state trust land funds.
Chris Mulick, director of state relations for WSU, said the type of funds the universities might invest in include construction bond revenue or housing and dining fees.
For example, WSU received funding last year for the $52 million Biomedical and Health Sciences Building on the Spokane campus, Mulick said. But more than a year later the building is only about 40 percent complete.
Right now, those construction funds are invested in government-backed securities – a very safe, but low-yielding investment – until they’re needed.
This constitutional amendment would allow the institutions to invest a portion of such funds in stocks and bonds.
A companion bill that’s not on the ballot indicates the universities would decide how much money they want invested, but the Washington State Investment Board would handle things from there.
The companion bill also requires the board to issue an annual report, so there would be some transparency to the type and amount of funds the universities were using to buy stocks and bonds.