Author Archives: garverj

Special Session Underway

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This morning the Washington Legislature convened the second special session of 2010. Facing a $1.2 billion budget shortfall in the current fiscal year, the Governor and the Legislature convened the special session, hopefully a single-day session, to reduce the current shortfall by hundreds of millions of dollars.

Thursday the Governor along with the four legislative caucuses reached a deal to be reached without amendments to reduce the current shortfall by $590 million.  The deal includes cuts to state programs and services, fund shifts, and additional revenue through tax compliance efforts. In addition, the Governor will implement an additional reduction of $200 million through across-the-board cutts. This brings the total budget reductions to be achieved  to $790 million.

Highlights

K-12 & Higher Education Spending Reductions – $311.4 million

  • Use of federal education dollars (Education Jobs Act) – $208 million
  • Higher education across-the-board cuts  – $51 million
  • Elimination of K-4 enhancement (effective February 1) – $39 million
  • Reduction of education reform programs – $9.2 million
  • Reduction of OSPI administration and program funding – $3.7 million

Human Services Spending Reductions – $154.1 million

  • Department of Corrections reductions – $46 million
  • Basic Health Plan Cap Trend – $27 million
  • FQHC Reimbursement Method Change – $20.3 millin
  • Reduction of Disability Lifeline Unemployable cash grant – $12.3 millin
  • Children’s Administration reductions – $11 million
  • Additional CHIPRA Performance Bonus – $10 million
  • Extension of temporary layoff to all staff (DSHS) – $9 million
  • Elimination of non-emergency adult dental  – $7 million
  • Extension of temporary layoff- adds two days (DSHS) – $4 million
  • Closure of McNeil Island – $3 million
  • Elmination of child support pass-through (Economic Services) – $1 million
  • Reduction of diversion cash assistance (TANF) – $900,000

Other Spending Changes – $24 .8 million

  • Reductions of separately elected officials, OFM & judical  – $11 million
  • Reductions Department of Natural Resources – $17 million

Fund Transfers – $54 million

  • State Toxics Control Account – $20 million
  • Disaster Response Account – $15 million
  • State Treasurer’s Service Account – $10 million
  • Financial Services Regulation Account – $5 million
  • Tobacco Prevention and Control Account – $3 million
  • Nisqually Earthquake Account – $1 million

Both the House and Senate Ways & Means Committees met this morning. The House Ways & Means Committee held a public hearing and took action on three bills:

  • House Bill 3223: Allows the Department of Revenue to waive penalties for companies that owe back taxes and pay up promptly. The measure is estimated to raise over $44 million over six months.
  • House Bill 3224: Suspends child support pass-through payments to families receiving Temporary Assistance for Needy Families benefits.
  • House Bill 3225: Reductions to the 2009-2011 operating budget

The Senate Ways & Means Committee held a public hearing and took action on two bills:

  • Senate Bill 6892: Allows the Department of Revenue to waive penalties for companies that owe back taxes and pay up promptly. The measure is estimated to raise over $44 million over six months.
  • Senate Bill 6893: Suspends child support pass-through payments to families receiving Temporary Assistance for Needy Families benefits.

Both chambers are expected to take further action on the bills passed out of committee  on the House and Senate floor early this afternoon.

After today’s actions, the Governor and the Legislature will still need to resolve a remaining budget shortfall of approximately $540 million when the 2011 legislative session convenes in January.

Governor’s Budget Task Force Releases Recommendations for Change

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On Wednesday, the House Ways & Means Committee received a brief presentation regarding the recommendations put forth by the Governor’s Committee on Transforming Washington’s.

The Governor’s Office released a list of ideas representative of committee members. The ideas fall into five major catgories.

  • Restructuring Ideas
  • Budget Ideas, Cost Savings and Other Ways to Pay for Services
  • Privatization or Outsourcing Ideas
  • Better Customer Service Ideas
  • Regulatory Ideas

No votes were taken by the Committee. In addition, the recommendations provided were not developed with an  attempts to achieve consensus or to represent a majority opinion. Instead, the list contains ideas put forward by at least one of the committee members.

Several ideas were put forth that would impact the four-year higher education sector if implemented. In addition, several more would impact higher education institutions as public agencies.

Restructuring Ideas

  • Decide if four-year universities are state agencies or not. If they argencies or not. If they are agencies, then the Higher Education Coordinating Board (HECB) should become a cabinet agency with full authority over the four-years. If they aren’t agencies, funding could be switched to block performance agreements with additional funds structured around the student achievement initiative the two-years are using.

Budget Ideas, Cost Savings, and Other Ways to Pay for Services

  • Consider moving to an outcome-based funding model for higher education including: (1) Fund students on a per-credit basis rather than funding institutions; and (2) Pay for degree completions rather than student enrollment.
  • Increase tuition so students pay a higher proportion of higher education costs.
  • Negotiate master contracts and require joint purchasing of reference data bases by law libraries and higher education institutions. The state should buy in bulk in order to get better prices. Regarding law libraries – this purchasing at lower rates could also benefit county law libraries. Purchasing should allow at least some public access.
  • Limit state support to one baccalaureate degree per individual. Individuals seeking another BA degree would pay full cost of second degree.
  • Increase the building fees on student tuition – so students contribute more to the cost of higher education buildings.
  • Dedicate a portion of revenues from patents and royalties generated from research at universities and colleges to a higher education building funds.

Privatization and Outsourcing Ideas

  • Incentivize greater private higher education investment in the state. Look at options to privatize programs and components of colleges and universities. Balance with concerns regarding quality and cost-effectiveness of some of the current private for-profit programs.

The Governor will now study each of the ideas and determine which are viable either in the short or long term. Ideas that can be successfully implemented, save money, or improve the delivery of services to the people of the state will be included in the Governor’s budget proposal in December. Ideas which the Governor chooses not to pursue at this time may be picked up by members of the Legislature or others for consideration at any time.

Washington House Meets in Olympia

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On Wednesday members of the Washington House arrived in Olympia for caucus meetings and committee hearings. They are expected to be in Olympia through Friday.

Assembly Days, as they are known, kicked-off Wednesday morning with a joint hearing of the House Education Committee and House Higher Education Committee. The hearing focused on teacher preparation in Washington.

The Committee heard from a variety of individuals and organizations regarding the recruitment of teachers in Washington and math and science instruction.

Vauhn Foster-Grahler, an Evergreen faculty member and the Director of the QuaSR Center participated in a three-person panel on math and science instruction and how to improve instruction in these areas in Washington.  Foster-Grahler was joined by reprsentatives from UW-Seattle and St. Martin’s.

In the afternoon House Ways & Means held a public hearing to listen to concerns from Washingtonians regarding potential reductions to programs and services in the current fiscal year and in 2011-13.

The Committee received a brief presentation on the across-the-board cuts issued by the Governor and the recommendations of the Governor’s Committee on Transforming Washington’s Budget.

Both Committee hearings can be viewed via TVW.

Latest Tax Agreement Includes Extension of Education Credits

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The tentative federal tax deal dominating the news includes potential benfits for students and their families. 

Yesterday, the Obama administration struck a tentative deal with Republicans to temporarily extend Bush-era tax cuts in order to garner support for additional tax breaks, including a two-year extension of the American Opportunity Tax Credit.

The American Opportunity Tax Credit, which is scheduled to expire at the end of this year, provides a tax credit of up to $2,500 per student for those who make less than $80,000 ($160,000 for joint filers). This credit is partially refundable making it available to low-income families that don’t owe any taxes.

Despite the deal, there is a lack of consensus, making final passage of the tax-cut extension deal uncertain, especially in the House where there appears to be more opposition to parts of the agreement.

In addition to the American Opportunity Tax Credit several other provisions are scheduled to expire at the end of this year if the 111th Congress is unable to extend expiring higher education tax breaks before it adjourns.

  • Section 127 Employer Provided Education Assistance — Allows employers to offer up to $5,250 in tuition assistance to employees annually. These funds offer tax benefits to both employers and student employees.
  • Enhanced Student Loan Interest Deduction (SLID) — Improvements made to SLID in 2001 are set to expire this year. If not extended, SLID will be drastically limited by reduced income thresholds and a 5-year limit
  • Expanded Coverdell Education Savings Accounts (ESAs) — Expansions to Coverdell ESAs made in 2001 are also set to expire this year. If allowed to expire, Coverdell ESAs will revert to allowing only $500 in tax-free annual contributions (currently $2,000).

Students and parents will be able to take advantage of these benefits when they file taxes in April 2011, but won’t know if they will be able to take advantage of them for the 2011 tax year (when they file in 2012) until Congress makes it clear if they will be extended or not.

In addition, several higher education tax benefits expired in 2009, including:

  • The above the-line deduction for qualified tuition and related expenses — Ideally, Congress will permanently extend the American Opportunity Tax Credit, which would eliminate the need for the tuition deduction to apply to undergraduate students in the future.
  • The Individual Retirement Account (IRA) Charitable Rollover — helps colleges and universities generate new or increased charitable contributions that can be used in a myriad ways to benefit students, including financial aid.

Committees Review Work Completed During the Interim

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The Washington Senate arrived in Olympia yesterday. Members from both parties were in caucus or committee meetings for most of Monday and will likely do the same today.

Yesterday, the Senate Ways & Means Committee met. Committee members received budget updates and outlooks for both the operating and capital budgets.

Today, the Senate Higher Education and Workforce Development Committee met to hear several reports completed during the interim. In particular the Committee focused on:

  • An update on employment opportunities in Washington, training needs, and current training efforts from the Workforce Training Education Coordinating Board.
  • An update on the mission study, progress on applied baccalaureates, and e-learning as well as a briefing on the efficiency study work plan from the State Board for Community and Technical Colleges.
  • An update on the state’s progress toward the goals indentified in the Statewide Strategic Master Plan. Report on system design plan implementation from the Higher Education Coordinating Board.

Both Committee hearings can be viewed via TVW.

Washington Senate Senate Democrats Finalize Leadership and Committee Make-Up

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This afternoon the Washington Senate Democrats finalized 2011 leadership positions and committee assignments. Committee assignments have yet to be announced for the Senate Republicans and House Democrats and Republicans.

2011 Leadership positions

  • Senate Majority Leader:  Lisa Brown 
  • Senate Majority Caucus Chair: Karen Fraser  
  • Senate Majority Floor Leader: Tracey Eide
  • Majority Whip: Scott White
  • President Pro Tempore: Margarita Prentice 
  • Vice President Pro Tempore: Paull Shin
  • Majority Caucus Vice Chair:  Debbie Regala
  • Majority Assistant Floor Leader: Phil Rockefeller  
  • Majority Assistant Whip: Keven Ranker

Senate Ways & Means

  • Sen. Ed Murray (chair)
  • Sen. Derek Kilmer (vice chair – Capital Budget)
  • Sen.-elect Steve Conway
  • Sen. Brian Hatfield
  • Sen. Karen Fraser
  • Sen. Karen Keiser
  • Sen. Jeanne Kohl-Welles
  • Sen. Craig Pridemore
  • Sen. Debbie Regala
  • Sen. Phil Rockefeller

Higher Education & Workforce Development

  • Sen. Rodney Tom (chair)
  • Sen. Paull Shin (vice-chair)
  • Sen. Jim Kastama
  • Sen. Derek Kilmer
  • Sen.-elect Scott White

National Debt Commission Takes Vote on Proposal

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On Friday, the bipartisan National Commission on Fiscal Responsibility and Reform voted on the final proposal released earlier last week.

The proposal received 11 of 18 votes in favor of the final plan which would reduce the deficit by  nearly $4 trillion over the next decade.

Though this is too few votes to command quick action in Congress, it does constitute more votes in favor of the plan than was expected.

The Commission’s final report proposed ideas and solutions to bring the federal budget into primary balance in 2015 and improve the long-run fiscal outlook.

The Commission recommended that a cap on discretionary spending be put into place through 2020. Higher education would be impacted by this cap. The intention of this recommendation was to hold spending to 2012 or lower than 2011 spending levels and return spending to precrisis 2008 levels in real terms in 2013. In addition, the recommendation limits spending growth to half the projected inflation rate through 2020.

Another recommendation by the Commission was to eliminate the in-school interest subsidy on federal loans. This would allow for the elimination of income-based subsidies for federal student loan borrowers and better target hardship relief for loan repayment.

Federal FY 2010 Budget Extended; FY 2011 A Question Mark

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Last week, the U.S. House and Senate passed a Continuing Resolution (CR) that extends the FY 2010 budget until December 18. The original Continuing Resolution expired on December 3.

Both the House and Senate ,the 12 appropriations bills they must now close the budget process through either an omnibus spending bill, which combines all 12 bills in to one, or through yet another CR.

Many speculate that the House will pass a CR that will extend throughout the entire FY2011. The scenario in the Senate is a little less clear. There appears to be some support for an omnibus bill, though it may not be able to garner enough votes for passage. If the Senate does not pass an omnibus bill they could pass a year-long CR, or another temporary CR extending only through the early part of the year. The latter would allow the new Congress to address the issue.

New Version of DREAM Act Introduced in U.S. Senate

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A new version of the Development Relief and Education for Alien Minors (DREAM) Act (S. 3992) was introcuced by U.S. Senator Harry Reid.

S. 3992 would authorize the Secretary of Homeland Security to grant conditional nonimmigrant status to undocumented students who were brought to this country before the age of 16, have been here at least five years as of the enactment date, and are under 30 years of age. After 10 years, individuals could have their status adjusted from conditional nonimmigrant to legal permanent resident status if they have received a degree from an institution of higher education, completed at least two years toward a bachelor’s (or higher)degree, or served at least two years in the military.

Key provisions in the bill include:

  • Increasing the conditional nonimmigrant status from six to ten years
  • Lowering the age requirement, so only those younger than 30 are eligible
  • Expanding the definition of “institution of higher learning” to include vocational institutions
  • Requiring the children to be brought to the U.S. before the age of 16 and live here at least five years when the legislation is enacted into law
  • Requiring a U.S. high school diploma or GED credential

A vote on S. 3992 coud come as early as next week in the Senate. It is unknown if the House will introduce and vote on its own version of the bill or take up the Senate’s version.