This bill aims to reform the funding methodology for higher education in Washington State by eliminating the current "fund split" approach, which has led to structural inequities and financial instability for public colleges and universities. The legislation highlights that the existing methodology inadequately funds compensation increases and central services, forcing institutions to rely on tuition revenue to cover mandatory costs. This has resulted in budget deficits, reduced educational offerings, and diminished student support services, ultimately threatening the quality of higher education in the state. The bill intends to restore state funding for prescribed increases in compensation and central services, ensuring that tuition revenue can be utilized to enhance educational quality.

Additionally, the bill mandates a comprehensive study by the Washington State Institute for Public Policy to define and evaluate essential higher education student services standards. This study will assess various aspects, including academic support, wellness infrastructure, instructional quality, and career readiness, while soliciting input from diverse stakeholders. The findings will be reported to the legislature by June 30, 2027, along with a proposed "student service adequacy index" to guide future budget requests. Furthermore, starting in the 2029-2031 biennium, the bill stipulates specific funding levels for employee compensation and central services, with a gradual increase in state funding until fully covered.