Author Archives: jgarver

Washington’s Public Four Year Institutions Release Proposal for Investment in Higher Education

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Today Washington’s public four-year universities are asking the Legislature to bolster sagging state investment in higher education in order to freeze resident undergraduate tuition for the first time in a quarter century.

The proposal asks for a $225 million investment in state funding for the 2013-15 biennium to sustain current enrollment levels and build capacity to expand access in the state’s public baccalaureate system.  In exchange the institutions would implement a tuition freeze for resident undergraduate tuition for the next two years.

This investment would support Evergreen’s basic needs and make an initial investment in sustaining and building capacity for student success. This would also provide Evergreen the necessary funds to build upon the quality of academic programs and improve student success, sustain and improve student recruitment and retention efforts through improved research capacity and investments in academic advising and financial aid as well as targeted support for entering students. In addition these funds would provide support to establish a dedicated Veterans Center at the College and increase support for the College’s science curriculum.

The investment by the state would be disbursed to the institutions on a pro-rata basis. Evergreen’s portionwould be $8.3 million.

Governor Gregoire’s Proposed 2013-15 Biennial Budgets

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On Tuesday Governor Gregoire released her proposed 2013-15 Operating and Capital budgets. As required by law, Governor Gregoire submitted an all-cuts budget that reflects existing revenues.

The all-cuts budget would reduce levy equalization by $100 million and eliminate the State Food Assistance Program and other services. In addition, higher education would receive a $52 million across-the-board cut to public universities and colleges. For Evergreen this is a reduction of $836,000 for the two-year budget.

Governor Gregoire in releasing the all-cuts budget stated it  “would have unacceptable consequences for our state and its people”. Given the drastic nature of an all-cuts budget the Governor also proposed a new revenue budget.

The new revenue operating budget proposed by the Governor relies on a combination of new revenues, program reductions, reform savings, and one-time transfers to address an anticipated $900 million shortfall in the next biennium and to take the first step towards  meeting the state’s basic education needs identified by the state Supreme Court in the McCleary decision.

Governor’s Proposed Biennial Operating Budget

The Governor’s proposed new revenue budget addresses the anticipated $900 million shortfall in 2013-15 through a combination of spending reductions, reform savings, and revenue.

The new revenue budget is balanced in large part by spending reductions and reform savings. The budget:

  • Suspends teacher cost-of-living pay raises required under Initiative 732 – $360 million
  • Delays implementation of the state’s paid family leave law – $14 million
  • Reduces funds to dozens of state programs
  • Trims funding for local government programs – $57 million
  • Assumes savings from the consolidation of “back office” functions via the consolidation of five agencies into a single agency – Department of Enterprise Services – $20 million
  • Assumes savings under the Patient Protection and Affordable Care Act (Obamacare) $140 million

In addition the budget assumes new revenue. This includes new or increased user fees, the repeal of a use tax exemption for fuel produced and used internally by extractors and manufacturers, and extends the Hospital Safety Net Assessment which is an inpatient fee that leverages increased Medicaid matching funds. Finally, the budget assumes $172 million in one-time transfers to the General Fund from a variety of accounts.

Though the new revenue budget holds the line on spending for state agencies, the budget does include some targeted investments. Among the investments is $50 million to add enrollment slots to the state’s early childhood education system, $20 million to expand STEM opportunities in higher education, and $8 million to improve prison safety.

The largest investment, however, is in K-12. The Governor’s budget represents a 12.3% increase to K-12 over the current biennium. This investment includes $1 billion – a first installment- to phase in legislation that will meet the requirements for basic education identified through the McCleary decision.

Under this legislation (HB 2776 passed in 2010) funding for K-12 would be provided to:

  • Reduce class sizes in grades K-2
  • Continue the phase-in of full-day kindergarten programs
  • Improve instructional practice through improved teacher and principal evaluations
  • Increase funding for maintenance, supplies, and operating costs
  • Fund 100% of the state’s new pupil transportation funding formula

To fund the investment in K-12, Gregoire proposes a balance between reductions in other services combined with new revenue. This would include a wholesale excise tax on gasoline and diesel fuel dedicated to pay the costs of pupil transportation services for the next three biennia and the extension of two temporary tax surcharges: (1) A 0.3% increase to the B&O tax paid by professionals (i.e. doctors, lawyers, accountants) and (2) a 50 cent per gallon beer tax.

Higher Education

The new revenue budget proposed by the Governor Gregoire provides a good starting point for budget discussions this session. Her budget builds on the momentum of the Washington Legislature in the 2012 supplemental session to stop any further erosion of state funding for higher education. The budget does not reduce funding for higher education and prohibits tuition increases for Washington’s universities and colleges. In addition the proposed budget maintains funding for the State Need Grant program.

The budget also makes a handful of investments in higher education. Among these investments is the creation of a competitive STEM enrollment pool for the public baccalaureates to compete for enrollment funds in STEM fields – $11 million; expansion of aerospace and STEM offerings at the community and technical colleges – $5 million; support for the colleges of engineering at WSU and UW – $4 million; and an increase in funding for the College Bound Scholarship program – $35 million.

The challenge for higher education under the Governor’s proposed new revenue budget is the total level of funding that is provided. While the budget proposes no reductions or ability to raise tuition, the level of funding for Washington’s public baccalaureate institutions does not meet the basic maintenance funding levels.

Evergreen

Although the Governor fully restores the temporary 3% compensation base reduction, there are no new resources provided to support increases in costs.

Under the new revenue budget, Evergreen is funded at a level that is below the maintenance level needed for the 2013-15 biennium. This means while the budget reflects the restoration of one-time transfers and reductions taken in the 2011-13 biennium, it does not reflect increases in operating costs (i.e. utility rates and collective bargaining agreements).

In addition the Governor’s proposed budget does not provide any funds to support investments requested by the College for IT and business infrastructure; student recruitment, retention and success; and faculty and staff recruitment and retention.

Capital Budget
Governor Gregoire also proposed a biennial capital budget for higher education. The Governor provided funding for a small number of projects across higher education. This includes funding for two projects at Evergreen – the renovation of the Science Lab 1 Basement and the Science Lab 2 second floor.

In addition the budget includes funding for minor works preservation and preventative maintenance.

Though the  Governor’s budget does provide some funding for minor works preservation it does not fully fund the College’s request. In addition, the proposed budget does not fund the design phase of the Lecture Hall Renovation, the predesign for the renovation of Seminar I, and the acquisition of land and design for the Tacoma Campus.

Next Steps

The Governor’s budget is the first of many budgets that will be released to address the 2013-15 biennium. While the Governor’s budget is the first step in the budget development process, there will be at least four more legislative budgets to review as the legislative session progresses.

The next budget is expected to be proposed by Governor-Elect Jay Inslee after he takes office in mid-January.

The Washington Legislature will convene on January 14 to begin its work to develop a biennial budget.  Over the next 105 days, the House and Senate will hold work sessions and public hearings on the gubernatorial proposed budgets as well as the budgets put forth by each chamber before finalizing a conference budget in late-April.

 

Inslee Names Chief of Staff

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In an announcement today, Governor-elect Jay Inslee named Renton Schools Superintendent Mary Alice Heuschel as his chief of staff.

Heuschel, one of three co-chairs of Inslee’s transition team, led Renton schools for seven years and last year was a finalist for national superintendent of the year. She also served as deputy superintendent of the Office of the Superintendent of Public Instruction for six years.

Inslee pointed to Heuschel’s experience in Renton, particularly her leadership style and use of metrics, as reasons for the choice. He described the selection as “about as far away from status quo as you can get.”

House Democrats Announce Leadership Team

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There will be little change in leadership in the Washington House for the Democrats. 

House Democrats re-elected several leaders from the prior legislative session. Among those re-elected were:

  • Rep. Frank Chopp – House Speaker designate
  • Rep. Pat Sullivan – Majority Leader
  • Rep. Eric Pettigrew – Majority Caucus Chair
  • Rep. Kevin Van De Wege – Majority Whip
  • Rep. Tami Green – Majority Floor Leader

The House Democratic Caucus must still elect a Speaker pro tem designate.

Governor-Elect Inslee Announces Transition Committee

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This week Governor-Elect Jay Inslee announced the members and organization of his transition committee. The transition committee will advise Inslee as he fills cabinet positions, builds a staff and turns his campaign agenda into legislative and executive action.

The 34-member transition committee will be co-chaired by Dr. Elson Floyd – President of Washington State University, Dr. Mary Alice Heuschel – Superintendent of the Renton School District, and Brad Smith – Vice President at Microsoft. The committee will be divided into issue-specific work-groups coordinated by transition staff.

Washington Senate Democrats Name Leadership Team and Committee Chairs

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Yesterday Democrats, the majority party in the Washington Senate, proposed a leadership strategy to  navigate the narrow partisan divide within the chamber.

The proposed leadership strategy for the 2013 and 2014 legislative sessions would reduce the partisan majority on Senate committees by giving the majority party a single vote more than the minority party on Ways & Means as well as the Transportation Committee and all policy committees.

In addition the strategy calls for the creation of a new committee – the Committee on Education Finance & Results – to be equally split between both parties and led by a co-chair from each party. The new Committee would continue the current work of the legislative task force on education funding whose focus has been to look for ways to comply with the state Supreme Court’s ruling in the McCleary case. Specifically, to explore ways to improve education funding in a manner that ensures state education programs are effective such as reducing remediation rates, increasing graduation rates, and eliminating the acheivement gap.

Senate Democrats plan to discuss their proposal with Republicans after the Republicans identify their leadership team.

The Senate Democrats also identified their leadership team and committee leadership. Some of the key appointments for higher education include:

  • Ways & Means: Chair Sen. Hargrove (Operating) and Vice-Chair Sen. Nelson (Capital)
  • Committee on Education Finance and Results: Co-Chair Sen. Frockt
  • Higher Education: Chair Sen. Tom and Vice-Chair Sen. Hasegawa

The 2013 legislative session will convene on Monday, January 14.

Washington Primary Sets Stage for General Election

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Yesterday Washington held the 2012 primary election. The election helps to clear a crowded field of state and local candidates in Washington’s top-two primary system.

Though the top-two vote “getters” advance to the general election in November, some races remain unclear due to low statewide voter turnout.  Currently only 27.5 percent of voters turned out for the primary election. This includes ballots already counted and ballots that arrived at county elections offices but must still be run through the machines. Though the turnout number is expected to increase it is also expected to be very shy of the expected turnout for a presidential election this fall.

In the last presidential election, in 2008, participation was 84.6%. In comparison in a presidential election year, Washington turnout for the primary usually attracts between half and two-thirds of those who participate in the general election. The low voter turnout makes it more difficult to predict what will happen in November – which is not usually the case – because it will be hard to tell which subset of the population actually voted.

Moving forward to the general election in  November, at the time of this post (August 8 2012)  are the following federal, state and local candidates:

  • U.S. Senate: Maria Cantwell (56%) and Michael Baumgartner (30%)
  • U.S. Representative 6th District: Derek Kilmer (54%) and Bil Driscoll (18%)
  • U.S. Representative 10th District: Denny Heck (41%) and Dick Muri (27%)
  • Governor: Jay Inslee (47%)  and Rob McKenna (43%)
  • Lieutenant Governor: Brad Owen (49%) and Bill Finkbeiner (25%)
  • Secretary of State: Kim Wyman (39%) and Kathleen Drew (21%)
  • State Auditor: James Watkins (46%) and Troy Kelley (24%)
  • Attorney General: Bob Ferguson (52%) and Reagan Dunn (38%)
  • Commissioner of Public Lands: Peter Goldmark (52%)  and Clint Didier (41%)
  • Superintendent of Public Instruction: Randy Dorn (55%) and Ron Higgins (16%)
  • Insurance Commissioner: Mike Kreidler (55%) and John Adams (22%)
  • Legislators for the 22nd District: Karen Fraser (100%), Chris Reykdal (100%), and Sam Hunt (100%)
  • Legislators for the 35th District (Position 1): Kathy Haigh (54%) and Dan Griffey (46%)
  • Legislators for the 35th District (Position 2): Drew MacEwen (41%) and Lynda Ring-Erickson (29%)

Executive Branch Projects Billion Dollar Deficit Next Year

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This week the Washington Office of Financial Management (OFM) released a new state budget outlook that puts the state in the red by June 2015.

According to OFM, the Washington state budget would experience a $1 billion shortfall for 2013-15. This doesn’t include the estimated $1.1 billion increase for the McCleary K-12 decision (HB 2776) or leaving any reserves other than the constitutional budget stabilization fund.

OFM identifies the major budget costs that would drive a budget shortfall as:

  • $366 million for actuarially recommended pension payment changes
  • $292 million for K-12 pay increases based on I-732
  • $242 million for increased debt service
  • $171 million to restore the 3% temporary salary cut for state workers
  • $166 million to restore K-12 salary reduction
  • $30 million for federal health care reform
  • $14 million for the “new” paid family leave benefit

The Outlook assumes state tax revenues will grow by $1.5 billion in the next biennium, from $31.2 billion to $32.7 billion.  This expected revenue increase is based on the state’s June Revenue forecast which was adopted with the caution that there is a 40% chance that this increase could be wiped-out depending on economic developments in Europe and actions (or lack thereof) in Congress. It also incorporates the spending-cut decisions made by lawmakers this year and assumes restoration of temporary measures included in the current budget

While OFM has consistently conducted budget outlooks for the state, this year the Office is required to show how the state’s future budgets could be balanced with available resources as a result of legislation passed in the 2012 supplemental budget requiring a balanced four-year budget outlook instead of a two-year forecast.

Governor Names Members to Washington Student Achievement Council

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This week Governor Gregoire named the citizen members to the Washington Student Achievement Council.

On July 1 the Washington Student Achievement Council (WASAC) was established to replace the Washington Higher Education Coordinating Board.  The Council, established in House Bill 2483 during the 2012 session,  will focus on raising educational attainment in Washington state.

Under the legislation, the council is charged with the following duties:

  • Proposing goals for increasing educational attainment, securing resources to support those goals and monitoring progress;
  • Developing a two-year strategic action plan and 10-year roadmap; and
  • Facilitating the development and expansion of innovative practices, developing policy recommendations based upon data and collaborating with other organizations to set minimum college admission standards.

Additionally, the council has been tasked with helping students prepare for and access postsecondary education and training, improving transitions, administering financial aid programs and approving private degree institutions.

The council will be composed of nine members. Four members are selected by four educational entities. The governor’s five appointees are:

  • Brian Baird, former U.S. representative for Washington’s 3rd Congressional District;
  • José Gaitán, managing member of The Gaitán Group, PLLC, and past president of the Hispanic National Bar Association;
  • Jay Reich, attorney at Pacifica Law Group and former deputy chief of staff to former Commerce Secretary Gary Locke;
  • Dr. Constance Rice, managing director for Knowledge Management for Casey Family Programs; and
  • Student trustee Lindsey Jahn, a student at Washington State University earning a bachelor of arts degree in business administration.

Other members of the council are:

  • Jane Sherman, interim executive director of the Council of Presidents, selected by the presidents of the public baccalaureate institutions;
  • Charlie Earl, director of the State Board for Community and Technical Colleges, selected by the SBCTC;
  • Ray Lawton, director and chairman of Lawton Printing in Spokane, selected by the Independent Colleges of Washington; and
  • Scott Brittain, former principal in the Puyallup School District now working in the assessment office at the Office of Superintendent of Public Instruction, selected by OSPI in consultation with the Department of Early Learning and the State Board of Education.

Congress Reaches Deal on Student Loan Interest Rates, But Loans Still to Become More Expensive

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The U.S. Senate reached an agreement on legislation to prevent student loan interest rates from doubling on July 1.

Earlier this week the U.S. Senate agreed to extend the current 3.4 percent rate on Stafford loans for one year and provide $700 million extra for deficit reduction. The $6.7 billion agreement would primarily be funded from two pension measures.

The first would change how private pension interest payments are calculated. The second would increase premiums for companies participating in the Pension Benefit Guaranty Corporation. The two changes to pension measures would provide $5.5 billion.

The additional $1.2 billion would come from limiting how long a student could receive Stafford loans to 150% of the average time it takes to complete a degree. Currently there is no limit on loans.

The agreement now goes to the House for consideration. The U.S. House previously passed a loan extension bill that paid for the legislation by using funds from a preventative care fund in the health care law.

House leadership is signaling that a vote on the agreement will come early next week.

Despite this deal, college students will still see an increase in the cost of their federal loans.

Beginning on July 1 students seeking an advance degree will be responsible for paying the interest on their federal loans while they are in school and immediately after they graduate.

In addition undergraduate students who take out federally subsidized loans will no longer have their interest covered by the government during the six months after they complete school. This change applies to new loans issued through July 2014.

These students may benefit from the lower interest rate, but they will be charged this interest as soon as they graduate. For students who apply for federal loans next year they will have a higher interest rate – 6.8% – and have to pay as soon as they get done walking across the stage.