Lifetime Citizen Portal Access — AI Briefings, Alerts & Unlimited Follows
Committee approves amendment to sweep excess UH tuition fund balances after university seeks alternatives
Loading...
Summary
The House Higher Education Committee voted to pass SB2602 with amendments after University of Hawaii officials opposed an immediate sweep of the tuition-and-fee special fund; the bill now limits the sweep to balances above a two-month reserve and requires a report on drawdown plans by 2027.
The House Higher Education Committee on March 25 passed SB2602 with amendments that delay and limit a proposed sweep of the University of Hawaii's tuition-and-fee special fund.
Luis Oliveria, vice president and chief financial officer of the University of Hawaii, told the committee the fund's current balance is $351,622,400 and that the university maintains a reserve policy equivalent to roughly 16% of general operating expense (about two months). "The current balance of the special fund right now, the tuition of this special fund is 351,622,400," Oliveria said in testimony and explained that COVID-era federal support and maintenance-of-effort rules contributed to higher cash balances.
Committee members said they were not seeking a one-time sweep immediately. The chair proposed and won amendments to collapse any unencumbered balance above two months (16% of average general operating expenditures over the prior three fiscal years) to the general fund on June 30, 2029, giving the university three fiscal years to draw down excess cash. The chair also directed that special-fund balances be locked to the campus where students paid the tuition and fees, limited campus-to-campus loans, and added a reporting requirement: the university must provide an update on its plans to draw funds down 20 days before the 2027 legislative session.
Oliveria told the committee that the university views available balances as a source for strategic investments but that planning a responsible multi-year drawdown—rather than an immediate sweep—would be prudent. "We would need, you know, several years in order to basically start spending it down in a systematic and strategic way and not just to spend money, to spend money," he said.
The committee adopted the chair's recommendation to pass SB2602 with the amendments. The clerk recorded the vote and noted several members were excused; no opposing vote was recorded in the hearing transcript. The measure will proceed with the committee's amendments for further consideration.
What it means: The amendment preserves a two-month operational reserve for the university system, sets a target date for transferring excess funds to the general fund (06/30/2029), and requires an implementation plan from university leadership before the legislature considers sweeping the balances.
