Monthly Archives: April 2011

A Deeper Dive into the House’s Proposed Budget for Higher Education

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The proposed budget, released by the House, is expected to move out of committee tomorrow (April 6 ).

The proposed biennial operating budget reduces state funding for higher education by $482 million. In addition to these reductions the budget also makes several changes to higher education in Washington with regard to funding for high demand fields, underrepresented students, and financial aid.

The Higher Education Sector
The majority of the total reduction to higher education  came in the form of straight-up cuts to the four-year and two-year sector- $353.8 million. In addition, the across-the-board reductions taken during the December supplemental budget by all public higher education institiutions were biennalized and included in the 2011-13 budget – $102.2 million. Finally, the baccalaureate institutions and the community and technical colleges were reduced one-time to reflect the fact that enrollment levels may be temporary – $26.3 million.

Though not represented as a cut in the budget, all public higher education institutions are required to put a specified amount of state fund dollars into reserve for each year of the biennium. The Office of Financial Management may release these funds to the institution only after each institution has demonstrated improvement in metrics which measure academic progress and completion rates as determined by the Governor. The metrics will be chosen by the Governor from the National Governor’s Association’s Complete to Compete initiative.   

Finally, state funding levels were  reduced to reflect a funding cap on higher education retirement plans (HERPs) of 6% – $57.1 million. This is recognized as savings in the proposed budget.

These reductions were offset in part by tuition increases at all public higher education institutions. The proposed budget authorizes tuition increases of 13 percent per year for the University of Washington, Washington State University, and Western Washington University; 11.5% per year for Central Washington University, The Evergreen Staate College, and Eastern Washington University; and 11% per year for the community and technical colleges – $379 million.

Despite the dramatic reductions in state funding and the tuition increases, the four-year public higher education institutions received some additional funding. This funding came in two forms:

  • $1.5 million was allocated to Eastern Washington University, Central Washington University, and The Evergreen State College to provide, wrap-around services for low-income students.
  • $1.4 million was allocated to each four-year, public institutiono to support 25 full-time enrollments in the STEM fields.

The Evergreen State College

Under this proposed budget state funding for Evergreen is reduced by $16.3 million over the biennium.   This includes a combination of reductions in state funds and policy additions:

  • -$10.38 million in reduced state funding
  • -$1.97 million to reflect a proposed 3% salary reduction
  • -$1.55 million for biennialized across-the-board reductions in December supplemental
  • -$1.49 million to hold-back in reserves based upon future performance on academic progress
  • -$1.024 million as a result of the 6% funding cap on HERPs
  • -$940,000 in one-time reductions
  • $500,000 to provide for wrap-around services for low-income students
  • $250,000 to provide for 25 full-time enrollments in the STEM fields (10 enrollments in FY12 and 15 additional enrollments in FY13).
  • $225,000 in various studies for the Washington State Institute for Public Policy

The reductions to Evergreen’s state funding were offset in part by tuition increases for the 2011-13 biennium as stated in the budget. As a result, the net cut state funding for Evergreen is $9.02 million (-8.6%) (total state funding reduction minus tuition revenue).

Financial Aid
The primary victory for higher education was increased funding for the State Need Grant ($103.1 million). The increase in funding from the $91 million proposed in the Governor’s budget will accomodate the proposed budgeted tuition increases at  two-year and four-year higher education institutions. It is unclear at this time how this will impact the 22,000 current students who are eligible for the grant but do not receive it due to a lack of funds.

In addition the budget proposes two major policy changes to the State Need Grant. First, award amounts are reduced for students at private institutions. The award amount is no longer linked to tuition and fees at the UW but rather to tuition and fees at the comprehensive institutions. Second, awards are eliminated to future students who attend for-profit institutions. 

Despite the increased financial support for the State Need Grant, financial aid took a large hit in the House’s proposed budget. Several state financial aid programs are suspended for the 2011-13 biennium.  These programs include:

  • Washington’s Work Study program
  • Health Professionals program
  • Washington Scholars
  • Washington Award for Vocational Excellence
  • College Assistance Migrant Program
  • Community Scholarship Matching Grant Program
  • Leadership 1000
  • Western Interstate Commission for Higher Education student exchange
  • Foster Care Endowed Scholarship
  • Child Care matching grant
  • Educational Opportunity Grants

House Releases Budgets…Nearly A Half Billion Reduction to Higher Education

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Yesterday the Washington House released its proposed biennial operating and capital budgets along with a supplemental budget for the current fiscal year.

2011-13 Operating Budget
The proposed budget (HB 1087) makes approximately $4.4 billion in total reductions. The budget reduces funding for higher education by $482 million.  The Evergreen State College is reduced by an additional $13.9 million and authorized to increase tuition by 11.5% per year for the biennium.

Reductions greater than $50 million include:

  • $1.2 billion for I-728 and I-732
  • $482 million in a general reduction to higher education institutions (in part, offset with tuition)
  • $362 million from making changes to how certain future pension benefits are calculated for Plan 1 retirees
  • $216 million from elimination of the K-4 class size enhancement
  • $176 million from a 3 percent reduction in state employee salaries
  • $141 million from hospital rates and related changes
  • $108 million from changes to the Basic Health Plan
  • $104 million from biennializing the ESHB 1086 across-the-board reduction for higher education institutions
  • $100 million in reduced Disability Lifeline cash grants
  • $97 million for reduced personal care hours for long-term care and developmentally disabled clients
  • $89 million from a change in the Federally Qualified and Rural Health Centers payment methodology
  • $61 million from changes to the K-12 National Board Bonus program
  • $57 million from limiting state contributions to certain higher education pension costs to 6 percent
  • $56 million from freezing K-12 steps
  • $53 million from a K-12 alternative learning program funding adjustment
  • $53 million in reduced nursing home rates and quality incentive payments

The budget bill also adds approximately $500 million in policy additions, some of which are expected to achieve additional savings. Policy additions include the following items:

  • $240 million (net) repayment of the K-12 apportionment delay in the 2011 supplemental budget.
  • $103 million for the higher education State Need Grant to accommodate authorization to increase tuition.
  • $72 million in K-12 related items (mostly related to converting to a new funding formula).
  • $30 million for increased debt service.
  • $23 million related to the Special Commitment Center trials/hearings.
  • $11 million for repayment to the State Efficiency and Reorganization Account.

In addition the budget also makes the following changes, transfers, and consolidations.

  • Assumes a net receipt of $300 million to the General Fund-State from the privatization (lease) of the state liquor distribution center.
  • Assumes that higher education institutions are authorized to implement tuition increases totaling $379 million for the biennium 
  • Assumes net fund transfers into the General Fund-State of $214 million, and another $124 million by permanently consolidating certain revenue sources into the state general fund.
  • Medical Purchasing Administration: The DSHS Medical Assistance Administration becomes part of the Health Care Authority.
  • Consolidates the following into the Department of Enterprise Services: The Department of General Administration, the State Printer, and parts of the Department of Information Services, the Department of Personnel, and the Office of Financial Management are merged into the new Department of Enterprise Services. Remaining portions of the Department of Personnel and the Department of Information Services are consolidated into other agencies, including the newly created Consolidated Technology Services Agency.
  • Consolidates the Department of Heritage, Arts, and Culture: The Arts Commission, the Washington State Historical Society, the Eastern Washington Historical Society, and the Department of Archaeology and Historical Preservation are merged into the new Department of Heritage, Arts, and Culture.
  • Consolidates the Indeterminate Sentence Review Board and the Sentencing Guidelines Commission are merged into the Department of Corrections.

2009-2011 Supplemental Budget

This proposal addresses the remainder of the shortfall and leaves a projected near general fund ending balance of approximately $36 million. There are two main elements to this proposal: 

  • Incorporating the latest projection of federal rates used to match Medicaid expenditure costs, $128 million; and
  • Delaying a portion of the apportionment payments that would otherwise be made to school districts in June 2011 until July 2011.  This saves a net of $240 million in the 2009-11 biennium and increases net 2011-13 costs by an equal amount.

2011-13 Capital Budget
The proposed capital budget (HB 1497) provides for approximately $1.43 billion in bond-supported capital budget capacity for the state. Of this $801 million in bond capacity is available in FY 2012 with the balance available in FY 2013.

Approximately a quarter of the capital budget is appropriated for projects that preserve the state’s public assets through renovation, preservation, and minor works projects. Higher education received $453.2 million for major renovations, preservation, and preventative facility maintenance.

In addition the capital budget creates a $10.5 million pool of emergency funds under the Office of Financial Management to address unforseen emergency repairs at state-owned facilities statewide.

The capital buget proposes $626.7 million in total funds for higher education, including $407.6 million in state bonds.  The four-year public baccalaureate institutions receive $167.3 million in state-bonds.  This includes funding for Evergreen’s Communications Building, science lab renovation, and a predesign for the Lecture Hall.

Next Steps
The House Ways & Means Committee and the House Capital Budget Committee have scheduled actions to move both budgets from committee tomorrow. The House Ways & Means Committee will convene at 3:30 tomorrow (April 6) and the House Capital Budget Committee will convene at 1:30.

2011 Legislative Session: Week 13

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Budgets, budgets, budgets…this is the focus of the upcoming week.

On Monday the House will release a proposed 2011-13 biennial budget around noon. This will be followed by a public hearing at 3:30 pm before the House Ways & Means Committee.

As predicted the House capital budget will follow with a public hearing on Tuesday at 8:00 am before the House Capital Budget Committee.  The Senate will likely release their budget either late next week or early the following week.

In addition to action on the budgets, legislators will have a long week on the floor of each chamber. 

On Friday (April 1), the Legislature passed another major deadline requiring all fiscal related bills to move from an appropriation committee to the floor.

With that in mind, this week’s schedule includes limited committee meetings – primarily focused on the budgets or interim planning – with most of the time spent on the House and Senate floor as another major deadline looms.

Both the House and the Senate have until April 12 to consider bills from the opposite chamber.

Coming Soon…Proposed Operating Budget

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The Washington House will release a proposed 2011-13 operating budget on Monday, April 4.

Representative Ross Hunter, Chair of Ways & Means and the lead House budget-writer, will hold a press conference at 12:15. It is expected that the budget will be available soon after the press conference.

The press conference will be followed at 3:30 by a public hearing on the proposal in the Ways & Means Committee.