This morning Governor Gregoire released a list of budget reduction alternatives. The list of alternatives is designed to jump start budget conversations for the upcoming special session on November 28 which will focus on solving the state’s projected $2 billion shortfall.
The list is not the Governor’s 2012 supplemental budget, though it does provide some insight into where potential budget reductions will take place and where future reductions may occur if revenues continue to decline over the biennium.
The total budget reduction alternatives includes reductions beyond the $2 billion shortfall to provide legislators and stakeholders with a full array of potential budget reduction options. However, the Governor does identify specific reductions from the list that may be included in her 2012 supplemental budget proposal to be released in late November (estimated date is November 28).
The budget reduction alternatives make several reductions that will impact higher education, though not all of these are identified as potential items to be included in her 2012 supplemental budget. The items identified as tentative for inclusion in the Governor’s supplemental budget are in bold.
- $303 million – Eliminate the State Need Grant
- $68.4 million – Alternative to Elimination: Reduce maximum State Need Grant award by 25%
- $30.6 million – Alternative to Elimination: Limit State Need Grant eligibility to public institutions
- $25.5 million – Alternative to Elimination: Reduce State Need Grant eligibility to 55% of Median Family Income
- $8 million – Suspend State Work Study program
- $222 million – Reduce state support to college and universities (two- and four-year) by 20%
- $166 million- Reduce state support to colleges and universities (two- and four-year) by 15%
- $111 million – Reduce state support to colleges and universities (two- and four-year) by 10%
- $40 million- Eliminate National Board certification bonuses for teachers
- $8.4 million – Alternative to Elimination: Reduce National Board certification bonuses for teachers
- $38 million - Impose 10 furlough days
- $37 million – Impose additional 1% salary reduction or K-12 employees (one year)
- $32.7 million – Impose additional 1% salary reduction for state employees (one year)
- $28 million – Impose health contributions for general government employees (one year)
- $16 million – Alternative to Imposing health contributions: Reduce employer (state) monthly per-employee contribution from $850 to $825
- $20 million – Reduce monthly state allocation for K-12 employee health benefits
- $15 million – Reduce LEOFF Plan 2 employer contribution to actuarially necessary rates
- $11.4 million – Suspend step increases (one year)
- $9.7 million – Alternative to suspending step increases: Exclude employees who earn less than $2,500 per month
- $4 million – Adjust contributions to Judicial Retirement System to payout rate
- $476,000 – End sick leave cash-outs for employees who are not retiring
Further details regarding the 2012 supplemental budget will emerge over the next two months. Important dates along the way include the November 17 revenue forecast, the release of the Governor’s supplemental budget in late November, and the call by the Governor for legislators to return to Olympia at Noon on November 28 for a thirty-day special session, during which we will see additional budget proposals. Finally conversations regarding revenues continue at the state level as the Governor and legislators engage in discussions about potential options to consider during the special session.