Author Archives: garverj

Good News for State Budget

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The November Caseload Forecast shows a slight increase in Washington’s budget. 

Washington’s Economic and Revenue Forecast Council indicates collections over the past month have increased by $18.3 million. While not a game changer, this was unexpected good news.

The savings identified in the report came in the form of caseloads for nursing homes and home care, which are attributed to savings from lower-than-predicted numbers of people getting care.

The additional revenue reduces the $55 million increase in the state budget deficit because of the passage of I-1107 which repealed taxes on pop, bottled water, and candy. The revenue reduces the state’s shortfall to approximately $40 million which is likely to be addressed in a supplemental budget instead of another across-the-board cut.

Despite the good news, the overall forecast was mixed. Washington faces approximately $15 million in higher-than-budgeted costs for the state’s Disability Lifeline program. In addition, though the number of children enrolled in public schools decreased slightly the potential savings from this were erased by increases in special-education and bilingual education enrollments. Finally, enrollments are climbing much higher than anticipated in Temporary Aid to Needy Families (TANF).

In response state agencies are looking at actions to remedy these increases in the long-term.

National Commission Recommends Reductions to Higher Education to Balance National Budget

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Yesterday, the bipartisan National Commission on Fiscal Responsibility and Reform released a draft proposal to reduce the federal budget deficit.

Among the recommendations in the proposal is to eliminate the in-school interest subsidy on federal loans and discontinue administrative cost allowances paid through the Pell and campus-based programs.

The Obama Administration is withholding comment on the draft proposal until the Commission releases final recommendations.

The Commission was created by President Obama to recommend policies to address the nation’s fiscal challenges and balance the budget by 2015. The Commission, which is made up of a bipartisan set of legislators and other fiscal experts, was charged to produce a final set of recommendations no later than December 1, 2010. A final report would rquire the approval of at least 14 of the Commission’s 18 members.

Election Results- The Latest

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For many Election Day seems a thing of the past. However for the Washington Legislature election day is still playing out.

With each passing day the number of ballots left to count is shrinking and it appears that the Democrats will retain their majorities with the re-election of several incumbents in the House and Senate.

Races, that even a week ago seemed to close to call, are emerging with clear leaders. For example, Senators Eide, Tom, and Hobbs continue to lead their Republican challengers with sufficient margins. In addition, Rep. Goodman is likely to retain his seat and Democrat Luis Moscoso’s lead continues to widen over Republican candidate Heidi Munson in the open seat in Snohomish County.

Unless ballots shift drastically, it appears that only two races will require a recount in Washington.

  • Rep. Dawn Morrell leads Republican challenger Hans Zeiger by less than 70 votes setting the stage for a machine recount
  • Republican callenger Vincent Buys leads Rep. Kelli Linville by 300 votes also potentially requiring a recount

If trends continue as they have over the last couple of weeks, it appears that the Senate Democrats will retain the majority in the Senate, 27-22 and the House Democrats will retain their majority with 57-41 seats.

Congressional 2nd District Looks Like Win for Democrats; Update on State Races

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Today reports declare U.S. Representative Rick Larsen the winner in the race for the 2nd Congressional District in Washington.

Though John Koster, the Snohomish County Councilman running against Larsen, has not conceded election totals show that Larsen leads Koster 51% to 49%  with more than 281,000 votes counted as of Monday night.  This lead is outside the range for a mandatory recount.

State
At the time of this blog, the Democrats it appears that the Democrats will retain control of both the Washington House and Senate.

Regardless of the outcome, the majorities in both chamber will be much smaller than in the prior biennium.  Republicans  won several seats this election, closing the prior 13 member gap held by the Senate Democrats to five (27 Democrat; 22 Republican) at the time of this blog.

In the House, the Democrats held a 61-37 advantage. All 98 seats were on the November ballot, with 16 open seats. The latest poll numbers show the Democrat advantage has been reduced, closing the gap from 24 to 16 votes (57 Democrats; 41 Republicans) at the time of this blog.

What is Next
On November 15, the next revenue forecast is scheduled. The preliminary forecast showed little change from September, but an increase in caseloads is expected.

Between now and the end of December any unknowns regarding the election will be cleared. In addition, information regarding legislative leadership and committee chairs should emerge.

Finally, towards the end of December Governor Gregoire will release her budget. Followed by the beginning of the 2011 legislative regular session on January 10.

“All-Cuts” Budget on the Horizon

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Reports indicate that Governor Gregoire heard the message from Tuesday’s election – no on taxes- and is now preparing the state for an all-cuts budget next session.

The 2011-13 budget shortfall ($4.8 billion), which increased slightly with the repeal of the soda and candy tax on Tuesday, will need to be addressed when legislators arrive in Olympia for the 2011 session. In addition, it is assumed that legislators can expect little help from the feds on issues such as extention of employment benefits to help ease the burden here at home.

There is speculation that a December special session may be in the works. Governor Gregoire remained open to the idea of a special sesion if lawmakers can agree on quick passage of her supplementa budget. Gregoire expects to share that proposal with lawmakers soon after the November 18 revenue forecast.

The November forecast will be the basis by which Governor Gregoire rewrites the current two-year budget to respond to the $520 million shortfall in the current biennium and drafts a new budget for the 2011-13 biennium.

With a potential for increases in caseloads in November, the Governor predicts she will either need to order additional across-the-board cuts in December or call a special session.

Election Update: Murray Wins, Democrats Appear to Hold Washington Legislature

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Leadership and structure at the federal and state levels continues to take shape as the week ends.

Federal
On Thursday evening Dino Rossi conceded the U.S. Senate seat  to Patty Murray. As of Thursday night, Murray led Rossi by more than 46,000 votes statewide, taking 51% to Rossi’s 49%.

Results for the 2nd Congressional District seat remain undetermined. As ofyesterday, Democrat Rep. Rick Larsen maintained a narrow lead over Snohomish County Councilman John Koster in the latest vote tallies.

Larsen trailed on Election Day by about 1,200 votes. On Thursday, he had pulled ahead by 1,451 votes, or 0.66 percent. A recount is required if the candidates are less than one-half a percentage point and fewer than 2,000 votes apart.

State
At the time of this blog, the Democrats appear to be retaining control of both the Washington House and Senate. Though no final determinations have been made for a handful of Senate and House seats.

It is also unclear whether or not a recount will be triggered. In Washington a machine recount is automatic when the difference is less than 2,000 votes and 0.5% of total votes cast for both candidates.

A manual recount is triggered when the difference is less than 1,000 votes and 0.25% of total votes cast for both candidates for statewide offices; and 150 votes and 0.25% of total votes cast for both candidates for regional and local offices.

Regardless of the outcome, the majorities in both chamber will be much smaller than in the prior biennium.

Final Election News Will Be Slow; Political Context Taking Shape

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Two-days after the 2010 mid-term election ballots are still being counted. It is expected that it will take weeks before a handful of state legislative races or control of the Legislature is decided.

Here is a quick summary of how races are shaping up across the state, based on election results posted on the Secretary of State’s website today. 

Federal
U.S. Senator Patty Murray(51%) is leading former state senator Dino Rossi (49%).  Most election observers believe it will take some time and a possible recount to determine this race.

In the open 3rd Congressional District, State Rep. Jaime Herrera (53%) leads former state legislator Denny Heck (47%). The 3rd Congressional District represents The Evergreen State College.

In the 2nd Congressional District, U.S. Representative Rick Larsen is in a close race with Snohomish County Council Member John Koster. Larsen leads by just over 500 votes.

Of the remaining congressional races, seven of the nine incumbents are clearly returning to Washington D.C. They include: U.S. Representatives Norm Dicks, Richard “Doc” Hastings, Jay Inslee, Jim McDermott, Cathy McMorris-Rodgers, Dave Reichert, and Adam Smith.

Washington Legislature
This January 25 new legislators will arrive in Olympia. At least 21 new House members and 4 new Senate members will join the Washington Legislature.

A smaller gap between the number of majority and minority members in both chambers is likely to mean changes, such as in committee structure.  Republicans  won several seats this election, closing the prior 13 member gap held by the Senate Democrats to five (27 Democrat; 22 Republican) at the time of this blog.

In the House, the Democrats held a 61-37 advantage. All 98 seats were on the November ballot, with 16 open seats. Since Tuesday, the Democrat advantage has been reduced to half, closing the gap to 12 votes (55 Democrats; 43 Republicans) at the time of this blog.

In addition, the loss of current House Ways & Means Committee Chair Kelli Linville as well as races too close to call for House Capital Budget Chair Hans Dunshee and House Education Appropriations Chair Kathy Haigh means possible change with regard to budget committees.

House Democratic leadership also faces changes with the retirement of Majority Leader Lynn Kessler and a race too close to call for current Democratic Caucus Chair Dawn Morrell. Finally, the chair of the House Higher Education Committee did not run nor did the chair and ranking member of the House Education Committee, leaving holes in both of these policy committees.

Budget
The 2011 legislative session is expected to be another difficult fiscal session for all of Washington.  The state faces an immediate budget gap of least $500 million (gap in the 2009-11 biennium) and an estimated $4.5 billion for the 2011-13 biennium. Tough choices are expected with the 2010 tax increases gone and a return to the two-thirds requirment with the passage of I-1053.

What is Next
On November 15, the next revenue forecast is scheduled. The preliminary forecast showed little change from September, but an increase in caseloads is expected.

Between now and the end of December any unknowns regarding the election will be cleared. In addition, information regarding legislative leadership and committee chairs should emerge.

Finally, towards the end of December Governor Gregoire will release her budget. Followed by the beginning of the 2011 legislative regular session on January 10.

Elections Create Some Change

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Election results in Washington continue to change one-day after the 2010 mid-term election. 

Several races, at the state and federal levels, remain too close to call, including the U.S. Senate race between Murray and Rossi and several state senate and house races.

Reports state that nearly a third of all votes have yet to be counted in Washington. These votes are expected to be counted as they trickle in via snail mail.

What we do know is that the number of Republicans and Democrats in the Washington Legislature is expected to be much closer than in the prior legislative session. In addition, the majority of initiatives on the ballot are failing with two exceptions. Both I-1053 and I-1107 are passing.

Specific to Evergreen we will likely welcome a new U.S. Representative for the 3rd District, Jaime Herrera as well as  a new state representative, Chris Reykdal. In addition, we will continue to be represented by Rep. Sam Hunt and Sen. Karen Fraser.

Stay tuned for updates!

New Federal Regulations for Higher Education Expected

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This week, the Obama Administration is expected to release new finalized regulations for colleges and universities that participate in federal student aid programs.

The regulations amount to a significant expansion of federal oversight of higher education. The regulations range from efforts to reshape how admissions recruiters are paid to how course credits are defined to how career training programs are launched.

A hotly debated fourteenth proposal, known to many as the “gainful employment” regulation is still pending and expected to be resolved in early 2011. The “gainful employment” regulation would force for-profit colleges and others that offer non-degree vocational programs to meet new standards related to student debt to qualify for federal aid.

A list was released Wednesday of forty groups and institutions that had either met or will meet with the U.S. Department of Education in the coming weeks to discuss their comments on the gainful employment metrics.

In the works for over a year, the thirteen regulations were circulated among lawmakers yesterday. The rules will take effect July 1, 2011.

Preliminary Economic Forecast Suggests More of the Same

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This morning the Washington Economic and Revenue Forecast Council issued a preliminary November economic forecast.

The forecast shows no change in the near term from the September forecast. The preliminary report, however, does show a slight weakening for 2012 and 2013, reflecting a weaker national economic tide.

Arun Raha, Washington’s State Economist, pointed again to public sector job cuts. He noted that the 1,000 jobs created in the private sector in September were swallowed up by the 3,500 jobs that were eliminated in the public sector.

The Council is scheduled to adopt a new quarterly economic forecast on Nov. 5. That will help drive the forecast of state tax collections the Council will adopt on Nov. 18. Assumptions provided in that forecast will be used by the governor as a basis for the operating budget proposal she’ll announce in December.

The Legislature will then convene in January to begin work on one last re-write of the budget for the current two-year budget cycle and then draw up a budget for the next cycle that begins July 1.