As the Kansas Legislature looks for ways to bulk up funding to state universities, a legislator from Lansing is touting an idea: Get help from the endowments.
But rather than force them to spend more, State Rep. Kenny Wilk would like to let the endowment associations at the six state universities manage the cash that flows from the state to the colleges. Right now, that money is invested by the state with a return of about 5 percent.
The endowments, on the other hand, earned an average return of about 9 percent in the past year. Kansas University Endowment Association's return last year was even better.
"We've been working with several interested parties," said Wilk, R-Lansing. "We did the tax credit for deferred maintenance last year and through that process, and others, ideas have come up. I think this is an idea whose time has come."
Wilk said that, on any given day, the six universities have about $300 million in the state's pooled money investment fund.
"It's tuition money, it's federal money, it's fee money. It's the dollars those universities collect on a daily basis," Wilk said. "They don't just sit on it, they move it to the pooled money fund."
But Wilk said the return would be better if the endowments were allowed to manage the money. Each percentage point - gain or loss - would equal about $3 million.
But Dale Seuferling, president of KU Endowment Association, said endowments and foundations at state universities would have to examine the proposal carefully before determining how well they could do with the money.
"(Friday) is the first we've heard of the proposal. We're still in the learning stage," he said. "We would look forward to learning the specifics of the plan."
Seuferling cautioned, however, that most of the money the endowment manages is placed in long-term investments. Generally, the longer the money is locked in, the higher the return.
Assuming the funds that Wilk is talking about need to be accessible more quickly, they'd have to be invested in shorter-term funds - probably at a lower rate of return.
"We're focused on the long-term, we're not a short-term investor," Seuferling said. "This would present a question of how liquid the university needs to keep the money."
Despite that, Seuferling said KU Endowment would look at the legislation and do what it can to assist the university.
Wilk said since floating the idea in an appropriations committee meeting Thursday, he's gathered a lot of support for fully discussing the idea.
"We're going to go forward with it and draft the legislation," he said.