Monthly Archives: July 2011

Debt Ceiling Plans Would Impact Higher Education

Posted on by

Over the last few days the U.S. House and Senate have each released separate proposals to raise the national debt ceiling. Both proposals include impacts to higher education.

Financial Aid

An analysis by the National Association of Student Financial Aid Administrators shows many similarities between the House and Senate proposals as they relate to student financial aid.

Both plans provide additional mandatory funding for the Pell Grant program for FY12 and FY13.  Senator Reid’s plan proposes $10.5 billion in FY12 and $7.5 billion in FY13 and Representative Boehner’s plan identifies $9 billion in FY12 and $8 billion in FY13.

In addition both plans eliminate the graduate student Stafford Loan interest subsidy. The savings from this are applied to the Pell Grant. The impact of this falls on graduate and professional students in programs beginning on or after July 1, 2012 who will not be able to receive a subsidized Federal Direct Stafford Loan. A subsidized stafford loan does not accrue interest as long as a student is in school at least half time, or during any future deferment periods.

The one major difference between the two proposals is the inclusion of language in the House proposal to eliminate the Direct Loan Repayment Incentives, including the Interest Rate Reduction for Electronic Debit Account Repayment and Up-Front Interest Rebate.

Federal Appropriations

Both the House and Senate proposals would establish caps on annual appropriations for the next 10 years. In addition both proposals would include enforcement rules with regard to these caps.  Identified as “sequestration” the caps would be enforced by across-the-board spending cuts.  In other words if the caps are exceeded then Congress would imlement across-the-board spending cuts in the area in which the cap was exceeded. The caps are divided between defense and non-defense spending.

The proposed caps in each proposal are similar.

 Debt Ceiling Proposal Caps, Discretionary Spending 
($ in billions)
  2012 2013 2014 2015 2016
Sen. Reid 1.045 1.047 1.068 1.089 1.111
Rep. Boehner 1.043 1.047 1.066 1.086 1.107

Both of these elements would squeeze education funding over the next decade as nearly all federal education programs are funded through the annual appropriation process. Though, as noted above, both proposals take steps to fund the Pell Grant program and mitigate the squeeze that appropriation caps would have on the program these efforts are only for a two-year period.

What’s Next

As August 2 looms both the U.S. House and Senate are moving forward with their proposals, though it is expected that no real movement will occur until a compromise is agreed upon. If Congress is unable to reach an agreement by August 2 there is speculation that a short-term debt ceiling increase will be passed.

Teacher Compensation Work Group Convenes

Posted on by

After two years since the passage of legisation to examine and potentially modify how teachers are paid in Washington, the Compensation Technical Working Group convened for the first time this week.

The Compensation Technical Working Group, a fifteen member group, was established in HB 2261 in 2009 and modified through HB 2776 in 2010.  The focus of the group is to examine the current enhanced salary allocation model (SAM) for teachers and compensation issues related to classified staff and administrators.

The Work Group is charged with recommending details of an enhanced model that aligns state expectations for educator development and certification with the compensation system and providing an implementation schedule.  The law requires the Work Group to make recommendations on several issues, including:

  • How to reduce the number of tiers within the existing model
  • How to account for labor market adjustments
  • How to account for different geographic regions and recruiting/retention challenges
  • The role of and type of bonuses available
  • Ways to accomplish salary equalization
  • Fiscal estimates for implementing recommendations

The Work Group faces a demanding schedule over the next 18-months. The recommendations and report of the Work Group are due to the Governor and Legislature by December 1, 2012.

Governor Names Lead for Restructuring Effort and Head of New Department

Posted on by

Governor Gregoire announced that Joyce Turner will oversee the effort to retructure several state agencies. The restructuring comes as part of legislation (SB 5931) passed during the 2011 session. 

The restructuring effort will merge five agencies into three and eliminate four other agencies.  As part of this effort the Department of General Administration, the Department of Personnel, the Department of Information Services, the state printer and the Office of Financial Management will be reconfigured.

The final product will be the establishment of a new Department of Enterprise Services (to include the Department of General Administration, Department of Personnel, and parts of the Office of Financial Management), a reconfigured Office of Financial Management, and a new Consolidated Technology Services.

Once the restructuring effort is formalized on October 1, Turner will become the new Director of DES and Mike Ricchio will serve as the new Director of Consolidated Technology Services. Turner currently serves as the Director of the Department of General Administration and Ricchio serves as the Director of the Department of Information Services.

Gregoire Names New Chief of Staff

Posted on by

Earlier this week Governor Gregoire named Mary Loesch as Chief of Staff.

Loesch joined the Governor’s staff as General Counsel in 2009 and later added the role of Director of External Affairs to his work. Prior to joining Gregoire’s team Loesch was Director of Intergovernmental Affairs for the Swinomish Indian Tribe and worked in private practice with three firms.

Loesch replaces Jay Manning who announced his resignation as Chief of Staff last month.

Revenue Collections Dip in June

Posted on by

This week the latest revenue collections report was issued and shows state revenues dropped another $22.3 million since the June economic and revenue forecast.

The drop in state revenues is a combination of unanticipated tax refunds ($4.1 million) and a drop in economy-related activities ($18.2 million).

Despite the decline in revenue, the state remains in the black at this time for the remainder of the 2011-13 biennium.

Three Ballot Measures Likely on November Ballot

Posted on by

Last Friday marked the deadline for initiative campaigns to submit signatures for the November ballot.

Three campaigns turned in more than 1 million signatures, nearly assuring that they will be placed on the ballot this fall, including measures to privatize the sale of liquor, restrict highway tolls, and reinstate a training program for home health care workers.

Initiative 1183 would close state liquor stores and sell their assets, including the liquor-distribution center. The initiative would allow private stores to sell liquor and create licensing fees for sale and distribution of liquor based on sales and revenues.

Initiative 1125 would require the Legislature, not the state Transportation Commission, to set tolls, and mandate that a toll on a particular road or bridge be used only for construction, operation or maintenance of that project.

Initiative 1163 would require background checks and training for long-term care workers and providers. 

A fourth campaign, to provide for better conditions for egg-laying hens, did not submit signatures. Earlier in the week supporters of Initiative 1130 were expected to be among the campaigns to submit signatures by the deadline. Initiative 1130 would prohibit keeping egg-laying hens in stacked cages or in cages that prevent them from moving freely and fully extending their wings. The initiative would also bar the sale of eggs from businesses that did not comply with this law.  The law would take effect January 1, 2018.

However in a turn of events late last week, the sponsors of the Washington initiative campaign dropped their effort after reaching a national deal with commercial egg producers to pursue federal legislation.

Four Initiatives Bound for November Ballot

Posted on by

This week the November ballot took shape. At least four intiatives are likely to meet the July 8 signature deadline for ballot measures.

Initiative 1130 would prohibit keeping egg-laying hens in stacked cages or in cages that prevent them from moving freely and fully extending their wings. The initiative would also bar the sale of eggs from businesses that did not comply with this law.  The law would take effect January 1, 2018.

Initiative 1183 would close state liquor stores and sell their assets, including the liquor-distribution center. The initiative would allow private stores to sell liquor and create licensing fees for sale and distribution of liquor based on sales and revenues.

Initiative 1125 would require the Legislature, not the state Transportation Commission, to set tolls, and mandate that a toll on a particular road or bridge be used only for construction, operation or maintenance of that project.

Initiative 1163 would require background checks and training for long-term care workers and providers. 

Initiative supporters must turn in valid signatures for at least 241,153 registered voters to the Secretary of State’s Office by July 8 to qualify for the November 2010 ballot.

2012 Governors Race Becomes Two Person Race

Posted on by

Over the weekend, current Washington State Auditor Brian Sonntag formerly declared that he would not seek the Governorship in 2012.

In an email statement, Sonntag stated,  “I truly appreciate all the encouragement from a variety of people and organizations about a possible candidacy for Governor.  This support has caused me to give this serious consideration.  However, I will not be a candidate for Governor in 2012.” 

The decision by Sonntag not to run likely makes the race for Governor in 2012 a two-person race.

In June both  current U.S. Representative Jay Inslee (D-WA) and Washingotn’s Attorney General Rob McKenna launched their bids for Washington Governor.

Though other names have not confirmed one way or the other- such as Bill Bryant, Seattle Port Commissioner; and Aaron Reardon, Snohomish County Executive -it appears that the candidates for Governor have been declared.

2012 State Races Shaping Up

Posted on by

This past week the 2012 race for Washington Governor filled in a bit more and candidates lined up to consider following in Secretary of State Sam Reed’s shoes.

Last week current U.S. Representative Jay Inslee (D-WA) launched his bid for Washington Governor. This follows on the announcement earlier this month by Washington’s Attorney General Rob McKenna that he would seek the Governorship. 

Other names continue to be rumored as potential candidates- such as Bill Bryant, Seattle Port Commissioner; Aaron Reardon, Snohomish County Executive;  and Brian Sonntag, Washington State Auditor- though no one else has officially declared.

Also last week current Secretary of State Sam Reed announced that he would retire from his positon after a 35-year run in public office. This announcement opened the door for potential candidates.

State Senator Jim Kastama (D-Puyallup) and Kim Wyman (Thurston County Auditor – R) both formerly announced that they would seek the position of Secretary of State in 2012.

Other potential candidates rumored to be interested in the Secretary of State role include State Representative Zack Hudgins (D-Tukwila), Kathleen Drew (Policy Advisor to Governor Gregoire), State Senator Craig Pridemore (D-Vancouver), and former State Senator Eric Oemig (D-Kirkland).