Yesterday, Governor Gregoire submitted a new budget that she believes “better reflects Washington values and principles”.

The budget focuses on restoring cuts through additional revenue, either from the federal government or state revenue, that would benefit K-12, public safety, higher education, and set a stage for the state to move forward.

As it relates to higher education, the Governor restores $146.4 million to the Higher Education State Need Grant, an amount that restores full funding to the State Need Grant. Eligibility with this restoration would cap 70 percent of the state’s median family income (MFI) and serve an additional 12,300 students. The grant awards would also be restored to the levels enacted in the 2009-11 budget.

The Governor does not restore funding to any of the other state financial aid programs, including State Work Study, nor does she restore funding to 2-year and 4-year institutions.

The Governor proposed restoration of funds to the state budget by seeking additional revenues. She plans to submit proposals to introduce greater tax fairness by closing loopholes and seek additional resources through the Federal Medicaid Assistance Percentage (FMAP), fiscal stabilization dollars, and possibly waivers for the Basic Health Plan. The extent to which federal dollars will be available will not be know until the President gives his State of the Union address at the end of January. In addition, it is unknown at this time whether the fiscal stabilization dollars required to restore cuts to the State Need Grant would be permanent or one-time dollars. It is important to note that the fiscal stabilization dollars received for the 2009-11 biennium were one-time infusions.

Even with the restoration of these programs in higher education and others in basic health and K-12 the Governor’s proposed budget for 2010 contains more cuts than revenues to address the $2.6 state shortfall.