Statehouse roundup, 3.26.24: Senators vote to revamp and rescue Phoenix deal

One day after quickly introducing a bill to rework the University of Phoenix purchase, the Senate State Affairs Committee sent the bill on to the full Senate Tuesday morning.

Praising the innovative nature of the deal, a Senate committee made a late-session attempt to revamp and rescue the University of Phoenix purchase.

Senate Bill 1450 seeks to fix the legal questions surrounding the University of Idaho’s $685 million plan to acquire Phoenix. But it is also an attempt to limit the state’s risk — and defuse some of the political backlash over the proposal.

“I think this is a good path forward,” said Senate Assistant Majority Leader Abby Lee, R-Fruitland, praising U of I President C. Scott Green for his “tenacity” and his willingness to work through the rewrite.

A day after introducing SB 1450, the Senate State Affairs Committee sent it to the Senate Tuesday morning. It still must pass the full Senate, and get through the House, in the waning days of the 2024 session.

If it passes, SB 1450 would overhaul the deal:

  • It scraps the U of I’s original plan to put Phoenix under the umbrella of an affiliated non-profit, Four Three Education. Several lawyers have questioned whether this plan is constitutional. So SB 1450 would instead create an “independent body politic and corporate,” a quasi-governmental entity of the Legislature’s making.
  • It forbids Four Three from seeking any state funding. It says that the state would be in no way liable for Four Three’s Phoenix debts, and codifies and caps the U of I’s risk at $9.9 million per year or $50 million total.
  • It would siphon Phoenix’s proceeds — potentially millions of dollars per year, according to U of I officials — into a state fund. The Legislature would be able to put this money into “Idaho specific postsecondary initiatives.”
  • It would put Four Three under the control of an 11-member board — including six independent members with no ties to Four Three or the U of I, and two legislators.

Tuesday’s hearing came almost a month after two days of tense meetings in the House State Affairs Committee — when lawmakers grilled Green and State Board of Education member Kurt Liebich. The House committee, and the House, passed a separate resolution that threatened a lawsuit to block the Phoenix purchase.

The Senate has never taken up this resolution. Meanwhile, U of I, Phoenix and State Board members have spent weeks in closed-door discussions with legislators searching for a compromise.

“We’ve done lot of listening over these past many weeks,” Caroline Nilsson Troy, the U of I’s governmental relations liaison, told senators Tuesday.

The Senate hearing took on a starkly different tone. Green and other U of I officials, and a group of Phoenix administrators, quietly watched from the audience as Phoenix lobbyist Kate Haas fielded questions about the new bill.

Senators seemed to focus on the potential of the purchase — as a moneymaker for the state, and a new educational opportunity for Idahoans.

“If you’re going to move the needle … you’re going to have to spend some time outside your comfort zone,” said committee Chairman Jim Guthrie, R-McCammon, decrying Idaho’s chronically low college go-on rates.

“There’s more than enough need for any one institution in the state of Idaho to fulfill,” Lee said.

Sen. Melissa Wintrow, D-Boise, cast the sole vote against the bill. She tried, without avail, to get answers Tuesday morning about Idaho’s exposure, if the federal government writes off more Phoenix student loans. And she said the bill inextricably ties the state with Phoenix.

“I hope I am wrong on all of this,” she said.

House Education approves a variety of last-minute bills

The House Education Committee endorsed the House’s version of a “trailer” bill making major changes to House Bill 521, the far-reaching school facilities bill that has passed both houses.  

In other late-session moves, House Education: 

  • Approved a bill setting a new baseline for charter school facility funding. House Bill 745 would restore charter school facility funding inadvertently lost through last year’s House Bill 292, an omnibus property tax relief law. Moving forward it sets a $400-per-student base for charter facility payments.
  • Signed off on changes to the Empowering Parents program. Senate Bill 1358 allows recipients to spend grant funding within three years rather than within the current two-year timeframe. It also would clarify that students can use the grants for fee programs, such as sports or FFA, and that only Idaho students are eligible for the grants.
  • Introduced a new bill making a small correction to House Bill 500, which the Legislature approved earlier this year. That bill prevented students from double-dipping in the Opportunity Scholarship and Idaho Launch programs. The new legislation clarifies that the regulation starts with the graduating high school class of 2025.

Senate passes bill to rein in state-run nonprofits

A bill seeking to rein in state-run nonprofits is one step closer to Gov. Brad Little’s desk.

Without debate, the Senate passed House Bill 708, which would serve two main purposes.

It would ban the state or state agencies from creating new nonprofit corporations. It also requires agencies to file reports identifying the nonprofits that are already in place.

State-affiliated nonprofits are not uncommon; for example, college and university foundations and alumni associations fall under this heading.

As currently proposed, the University of Idaho’s proposed University of Phoenix would move the online school under the jurisdiction of a nonprofit — although a Senate bill would scrap this model.

HB 708 passed the Senate on a 29-4 vote.

Because the Senate amended this bill, it must go back to the House for one more vote. If the House approves the amended bill, it will go to the governor.

Launch changes head to House floor, barely

A bill that tries to tighten up the Idaho Launch postsecondary grant program survived a challenge from House hardliners.

On an 8-6 vote, the House Commerce and Human Resources Committee passed House Bill 741, the House’s attempt to tweak the fledgling program.

Like a similar, Senate-passed bill, HB 741 seeks redefine “in-demand careers,” the metric that determines whether a high school graduate can quality for up to $8,000 in Launch money. The current metric is based solely on job growth and job openings. But many lawmakers, in both houses, want to tie the definition to other factors — such as the length of a required training program, and “positive economic output” for the state.

Lawmakers are hoping to fast-track some kind of a change to Launch, in the waning days of the session. HB 741 was introduced only Monday, and now the bill heads to the House floor.

A separate bill, funding the Launch program, has passed the House and awaits a Senate vote. If passed, this $70.8 million bill would fund close to 8,900 grants to graduating seniors.

Proposed DEI study heads to Senate

Legislators could spend part of the off-season looking at diversity, equity and inclusion issues.

An “interim committee” could study DEI issues and make recommendations to the 2025 Legislature.

“(Let’s) gather the facts on this issue before anything is done,” said Senate President Pro Tem Chuck Winder, R-Boise.

Winder and House Speaker Mike Moyle are co-sponsoring a resolution to create a study committee.

The Senate State Affairs Committee approved the idea, but not without debate.

Sen. Melissa Wintrow, D-Boise, said the study committee sounded like a “witch hunt,” with echoes of 2021, and former Lt. Gov. Janice McGeachin’s anti-indoctrination education task force. Wintrow also pointed to a sentence of the resolution, which says the Legislature seeks to oppose spending any “state-appropriated funds” on DEI.

“I don’t think that’s about investigating,” she said.

The interim committee carries a price tag of $10,000, for travel costs.

The proposal now goes to the full Senate.

Kevin Richert and Ryan Suppe

Kevin Richert and Ryan Suppe

Senior reporter and blogger Kevin Richert specializes in education politics and education policy. He has more than 30 years of experience in Idaho journalism. Senior reporter Ryan Suppe covers education policy, focusing on K-12 schools. He previously reported on state politics, local government and business.

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