Frustrated with a state college system that produces degree-holders in fields that are in low demand and provide limited income opportunities even as higher-paying jobs go unfilled in Oklahoma, state senators have opted to do an end-run around the college system.

Senate Bill 1358, by state Sen. Adam Pugh, creates a “Workforce Development Revolving Fund” that will be controlled by the Oklahoma Workforce Commission. Money from the fund would be used to support students pursuing degrees and employment in high-need areas.

Under the Oklahoma Constitution, state lawmakers can only set total appropriations for state colleges but cannot direct money to any specific college or degree programs. Pugh said SB 1358 provides an alternative that will allow lawmakers to address workforce shortages that are largely ignored by Oklahoma college leaders.

“We have a unique system where we’re not able to reward individual institutions that maybe are going above and beyond in terms of producing a skillset or a degreed professional that the state is trying to solve—for example, health-care workers, engineers, teachers, etc.,” Pugh said. “By doing this, not through the State Regents or doing it through CareerTech, by doing it through the Workforce Commission we kind of have the ability to have some control over what things we want to fund.”

He noted the commission maintains data on skilled jobs that are experiencing a shortage of workers in Oklahoma.

The failure of Oklahoma colleges to produce more skilled workers in high-paying jobs such as nursing or engineering is not only a product of the limited legislative oversight allowed by the state constitution, but also of college officials’ focus on maximizing tuition revenue by supporting degree programs that are cheap to administer, which include many fields where labor demand (and associated worker pay) is lower.

At a 2021 legislative hearing, Jeff Hickman, chairman of the Oklahoma State Regents for Higher Education, drew lawmakers’ attention to that problem.

“There are programs that generate revenue for an institution, and there are programs that cost money to an institution,” Hickman said. “You would think engineering and nursing would be programs that would generate revenue. Quite the opposite. They’re very expensive programs for several different reasons.”

Even though there was a shortage of nurses, the University of Oklahoma was turning away students seeking nursing degrees at that time. OU received 612 applications for its traditional Bachelor of Science in nursing program’s Fall ‘21 start term, and admission was offered to 323 students to fill just 249 available slots. The college received 301 applications for its accelerated Bachelor of Science in Nursing program’s Summer ‘21 start term. For that program, admission was offered to 147 students to fill 106 available slots.

Pugh said SB 1358 will help boost degree-holders in high-need areas because decision-making will be shifted away from those who effectively reap greater profit from other degree programs.

“It’s a perverse incentive, because right now in higher ed it’s cheaper to make things we don’t need,” Pugh said. “That’s not necessarily higher ed’s fault. But engineering programs are expensive to run because the professors tend to be much harder to get and have a higher salary requirement. The facilities necessary, whether it be STEM labs or research facilities, to produce those types of degree programs are more expensive than throwing 500 kids in a big hall that are pursuing a philosophy degree.”

Pugh’s proposal would set aside $200 million for the program.

Several lawmakers expressed concern about increasing spending by $200 million if state college funding is also increased or even maintained at its current level given that SB 1358 is meant to address college shortcomings.

State Sen. Lonnie Paxton, R-Tuttle, noted he has heard complaints about Oklahoma’s workforce shortage throughout his eight years in office even as college officials keep “telling me how great of a job they’re doing with developing workforce.”

“Yet it seems like we’re in a worse position today than we were eight years ago with having a prepared workforce,” Paxton said.

He suggested lawmakers should redirect funding from state colleges to the Workforce Development Revolving Fund rather than providing new funding to the fund.

“If they’re not taking care of this need, why don’t we just pull the money out of there and fund this or hold off any future increases in appropriations in order to fund this?” Paxton asked.

Pugh indicated that he expects the Senate will recommend a flat budget for higher education that includes no increased funding this year.

“We are working through what a flat budget would look like,” Pugh said.

SB 1358 passed the Senate Education Committee on an 8-3 vote. The bill must next receive a hearing in the Senate Appropriations Committee.