This bill aims to reform the funding methodology for higher education in Washington by eliminating the current "fund split" approach, which has led to structural inequities and financial instability for public colleges and universities. The legislation recognizes 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. 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 of student support, including academic resources, wellness infrastructure, instructional quality, and career readiness. The findings will inform future budget requests to ensure that state appropriations meet the defined standards. Starting in the 2029-2031 biennium, the bill also stipulates specific funding percentages for employee compensation and central services, with a gradual increase in state funding levels until fully funded. The section detailing these funding requirements will expire on August 1, 2027.