After 80 cumulative days in session, the Washington State Legislature adjourned sine die around 11:30 pm on Tuesday, March 29^th. It marked the end of the 2016 Legislature and the special session that convened following the end of the regular session on March 10^th. After hard-fought negotiations on important policy issues, the House of Representatives and Senate agreed on both a supplemental operating and supplemental capital budget. The Legislature debated 1,818 pieces of legislation, passing 292 to be signed into law by Governor Inslee.

Operating Budget

The supplemental operating budget increases spending from the 2015 biennial budget by $191 million. The Legislature prioritized $14 million towards addressing homelessness, $7 million towards recruiting and retaining public school teachers, and $41 million towards mental health programs. In addition to the new spending, $190 million was redirected from the Budget Stabilization Account (also known as the Rainy Day Fund) to address the damage done by the record-breaking wildfires of 2015. This budget does not raise taxes or include an increase to base teacher pay, both ideas that received much attention during the beginning of the session.

Evergreen will be experiencing a negative fiscal impact in ‘backfill’ tuition revenue from the tuition reduction plan passed in 2015. Due to lower than projected enrollments, we have a loss of $132,000 in state funding.

The operating budget also includes several provisos that are relevant to Evergreen and the higher education sector in Washington:

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The 2016 regular legislative session adjourned last night with the House and Senate at odds over a supplemental budget agreement. Immediately following adjournment, Governor Inslee issued a proclamation calling the legislature back into a special session, starting immediately. Special sessions have become the norm in Olympia, with 5 of the last 6 sessions resulting in at least one special session.

Following announcement of the special session, Governor Inslee held firm on a previous promise to start vetoing bills if the legislature did not reach an agreement on the supplemental budget by the end of business on March 10^th.

In total, 27 bills were vetoed. The bills covered a wide range of topics, from wholesale vehicle dealers to the growing of industrial hemp.  Most had passed unanimously. Only two bills of those vetoed impact higher education, SB 6466 relating to services for students with disabilities and SB 6354 concerning reverse articulation agreements. The Governor also signed 10 bills, all relating to health and public safety.

With much work left to do on both the capital and operating budgets, both chambers continue to work to reach a deal with hopes of sending a budget to the governor’s desk within the next few days and avoiding any additional exercise of veto power. The final day of the 30-day special session will be Friday, April 8^th.

On Wednesday the Senate released their 2015-2017 supplemental budget proposal, the third and final proposal before negotiations between the House and Senate begin. Now the legislative leaders must work to come to an agreement that both chambers can agree on.

The Senate budget, penned by the Ways & Means Chair Andy Hill, adds about $49 million overall to the two-year $38 billion budget that was adopted last July. Unlike the proposals by Governor Inslee and the House, the Senate budget does not repeal or limit any tax exemptions.

The Senate budget, much like the House budget, continues the commitment the legislature made last year in SB 5954 to reduce tuition in Washington’s institutions of higher education. The Senate budget goes one step further to ensure the funding, or ‘back fill’, provided by the state for the lost tuition revenue is accurate for each school based on actual enrollment numbers.  For Evergreen, this would reduce our biennial appropriation by $132,000.

Other notable items in the Senate budget include:

• $6.6 million in support for the state charter school system
• $173 million towards damage caused by the 2015 wildfires
• $54 million towards mental health services
• The Senate also set aside $15 million for possible claims against the state following the computer error that led to the early release for over 3,000 prisoners

On Thursday evening the House moved their budget off of the floor with a 50-47 vote and over 50 amendments offered. The Senate budget was passed out of the Ways & Means Committee last night during Executive Session and is expected to be heard on the Senate floor today.

Today is the opposite house policy cut off, meaning all of the Senate bills need to be passed out of the House policy committees and all of the House bills must be moved out of the Senate policy committees for the bills to remain ‘alive’. Monday is the fiscal cut off, the final cut off date before the legislature moves into the home stretch with 10 days of floor action.

On Monday, the 43^rd legislative day, the House of Representatives released their 2015-2017 supplemental operating budget proposal. The House was the first since Governor Inslee’s supplemental budget was released in December.

With Representatives Pat Sullivan, Kristine Lytton, and Timm Ormsby beside him, Representative Hans Dunshee, the Appropriations Committee chair and chief budget writer for the House, called the proposal “a balanced budget that meets our constitutional and moral obligations”.

The plan, penned by House Democrats, includes funding for Representative Hansen’s Free to Finish program for students 15 credits or less shy of their degree who have been out of school for three or more years. Overall, the budget proposal maintains funding levels for higher education as set in the biennial budget signed by Governor Inslee last July.

New investments are focused in early learning and K-12 education, mental health, homelessness and response to state-wide emergencies. The plan utilizes additional revenue from the closure of tax exemptions on real estate excise tax and sales tax for non-residents ($56.3 million), repealing the tax exemption on bottled water ($23.2 million), and repealing the preferential B&O tax rate on resellers of prescription drugs, international investment services, and travel agents and tour operators ($40 million).

Notable investments in the budget include:

• $99 million to recruiting and retaining quality teachers, including increasing starting teacher pay to $40,000
• $189 million from the state’s “Rainy Day Fund” to pay for the 2015 wildfires
• $60 million to address homelessness, truancy reduction and the educational opportunity gap
• $47 million to fix Washington’s mental health care system
• $6 million in improving the foster care system

The Senate budget is expected later this week. Once both budgets are release the House and Senate can begin the collaborative budget writing process in hopes of wrapping up the final budget by March 10^th, the last day of the regular legislative session.

SB 6409 passed off of the Senate floor with a 46-3 vote on Tuesday evening, the 37^th day of session. The bill, sponsored by Senator Barbara Bailey of Oak Harbor, would create efficiencies in higher education by streamlining processes and eliminating unnecessary reporting requirements. This legislation is the product of many years of collaborative work by Evergreen, Western, Central, Eastern, UW, and WSU.

The bill is aimed at improving efficiencies and reducing costs in the following areas:

Art in Public Places: An institution of higher education may expend up to 10 percent of the one-half of one percent during the design phase of a project, in order to integrate the art in the building design. The one-half of one percent to be expended by the Arts Commission must be adjusted downward by the amount expended by the institution during the design phase of the project.

Capital Budget: The minor works project threshold for higher education institutions is raised from $2 million to $5 million to keep up with project cost inflation and better address the growing backlog of preservation projects.

Procurement and Contracting: Institutions of higher education that exercise independent purchasing authority for commodities are not required to notify the Department of Enterprise Services. The institutions may develop independent training or certification programs, or both, to ensure consistency in procurement practices. Each institution exercising its authority to develop independent training or certification must require employees responsible for procurement to complete the training or certification program.

Research Records: Institutions of higher education are exempted from the laws governing the release of individually identifiable records for research purposes.

SB 6409 will now head to the House Higher Education Committee for a hearing, which has not yet been scheduled.

This morning the Washington State Economic and Revenue Forecast Council released their February revenue forecast, predicting a $78 million decline in revenue collections for the current biennium.

The decline in collections is due to weak economic growth on the national and global level. This morning’s forecast marks the first time in two years that the council has lowered their projection for the current biennium.

In addition to lowering the projections for the current biennium, the council also lowered their forecast for the 2017-2019 biennium by a significant $436 million.

For more details on the economic outlook for Washington, you can view the full report by the Economic and Revenue Forecast Council.

The next revenue forecast is scheduled for release on Wednesday, June 15th.

February 5^th marked the first major hurdle in the 2016 Legislative Session- the house of origin policy cutoff! This means that all of the Senate bills needed to have been passed out of the Senate policy committees and onto the fiscal committees or the Rules Committee in order for the bills to remain in play or ‘alive’ as we continue along in session. The same goes for House bills in House policy committees. If a bill was not passed out of committee by last Friday,  it is considered ‘dead’. The only exception to this rule is if the budget writers decide a bill is necessary to implement the budget, or NTIB.

There are numerous higher education bills impacting The Evergreen State College that made it through the first cutoff date:

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The 2016 legislative session kicked off this Monday, January 11th. This is a short session and, in addition to adopting a supplemental budget, will focus on a plan to meet the State’s constitutional basic education obligations.  The supplemental budget is expected to address costs incurred during the worst fire season in state history and cover increased Medicaid caseloads that provide health care for some of Washington’s most vulnerable citizens.

Governor Inslee’s proposed budget, which was released in late December, focuses on addressing a K-12 teacher shortage by raising starting salaries to $40,000 and mandating a minimum 1% cost of living adjustment for all existing teachers. Inslee’s plan also strengthens mental health services by increasing staffing at state psychiatric hospitals and boosting community-based programs that minimize hospitalization.

The legislature got right to business yesterday with the Senate Ways & Means Committee public hearing on the Governor’s proposed supplemental budget. The House Appropriations Committee will be hearing Governor Inslee’s budget on Wednesday, January 13th. With just 60 days to adopt a supplemental budget, both fiscal committees have full agendas for the first week of session.