House Higher Education Holds Work Session

Yesterday the House Higher Education Committee held a work session in Seattle. Transitions and partnerships between multiple sectors of education and industry were the focus of presentations to the Committee.

The Committee heard from two different panels that focused on transitions to higher education and within higher education. The first panel focused on transitions to higher education with an emphasis between key transition points from K-12 to postsecondary education. The second panel concentrated on transitions within higher education focusing on transfer and articulation as well as prior learning.

The work session closed with a discussion on the partnerships between higher education and industry. The panel highlighted technology transfer partnerships at the University of Washington and workforce training partnerships through Washington’s community and technical colleges.

Joint Committee Looks Ahead to Report on Impact Tuition-Setting Authority and Opportunity Scholarships & Expansion Program

The Washington Joint Legislative Audit and Review Committee (JLARC) met yesterday to begin work on a report that will not be finalized until 2018.  The intention of starting now is to ensure that the data needed to complete the analysis is in place over time in order to meet legislative intent.

The focus of the presentation to the Committee was on the proposed scope and objectives of the report which will result in an audit of the impact of tuition-setting authority to public, baccalaureate institutions (HB 1795) and the creation of the Opportunity Scholarships and Opportunity Expansion program (HB 2088). 

Specifically the Committee will look at the impact of institutional tuition-setting authority on student access and affordability as well as on institutional quality.  In addition the report will evaluate institution’s compliance with specific provisions in HB 1795. Among those provisions:

  • Changes in undergraduate enrollment, retention, and graduation by race and ethnicity, gender, state and county of origin, age, and socioeconomic status;
  • Impact on student transferability, particularly from Washington community and technical colleges;
  • Changes in time and credits to degree;
  • Changes in the number and availability of online programs undergraduate enrollments in the programs;
  • Changes in enrollments in the running start and other dual enrollment programs;
  • Impacts on funding levels for state student financial aid programs;
  • Any changes in the percent of students who apply for student financial aid using the FAFSA;
  • Any changes in the percent of students who apply for available tax credits;
  • Information on the sue of building fee revenue by fiscal or academic year; and
  • Undergraduate tuition and fee rates compared to undergraduate tuition and fee rates at similar institutions in the global challenge states.

With regard to the Opportunity Scholarship and Opportunity Expansion program the focus will also be on student access and affordability.

Both of the pieces of legislation require a JLARC study in 2018. The Committee plans to combine the two studies into one report.

Select Committee on Pension Policy Update

The Select Committee on Pension Policy (SCPP) met today, May 15, at the State Capitol to discuss session highlights and other issues. The Select Committee on Pension Policy is a committee comprised of House and Senate members, the directors of the Office of Financial Management (OFM) and the Department of Retirement Systems, active and retired member representatives and employer representatives. A complete list of members can be found here.

The past 2012 legislative session saw 21 pension reform measures, six of which were signed into law by Governor Gregoire. Among the reforms passed, the committee received comprehensive briefings from staff on the following:

Senate Bill 6378 – “Reforming the State Retirement System” – replaces Early Retirement Factors (ERFs) for new hires, specifically, PERS, TRS and SERS employees. The legislation reduces subsidized early retirement benefits for new hires – 5% reduction for each year the member retires before age 65.

SB 6378 also requires the SCPP to study high-risk job classifications in existing retirement systems, PSERS membership and Early Retirement Factors (ERFs) for school employees. This study is due to the Legislature no later than December 15, 2012.

Finally, SB 6378 codifies lower Rate-of-Return (ROR) assumptions. They are as follows:

  • 7.9% s of July 1, 2013
  • 7.8% as of July 1, 2015
  • 7.7% as of July 1. 2017

The committee was also briefed on HB 1552 – Regarding Pension Garnishment. The legislation included, among other provisions, changes to garnishment provisions in pension statutes. Specifically, it exempts pensions from garnishment even when in possession of the retiree, or deposited in a bank account. This decision was the direct result of a recent Supreme Court decision in which the court held that pensions are not exempt from garnishment once the funds have been paid to the retiree. Their decision noted that the legislature could change their decision by adding language to current statute. Following the Supreme Court’s decision and the passage of HB 1552, Governor Gregoire equested that the SCPP study whether additional exceptions should be made to the general rule exempting pensions from garnishment, and if so, to what extent? Next steps include a decision by the Executive Committee of the SCPP to study this issue during the interim.

Along with the two studies above, the SCPP and Office of the State Actuary (OSA) will consult with the Washington State Institute for Public Policy on its pension study and the OSA will provide continued actuarial assistance and consulting to the Guaranteed Education Tuition program, among other ongoing assignments and studies.

As well as briefings on specific policy bills, staff also held a work session on “pension spiking.” Pension Spiking is an often controversial, yet completely legal, practice where final compensation of an employee has been inflated for the purpose of increasing the pension amount. This typically happens within a few years of the employee’s retirement and can result in tens of thousands of additional dollars in retirement benefits. It is a problem because it inflates the pension system resulting in increased plan liabilities, extra costs not fully funded at the time of retirement and a loss of public confidence in the retirement system. At this time the SPCC has no plan to study or take action on the issue.

With a ballooning population set to retire, and continued uncertainty in the economy, expect pensions to continue to be an issue of interest and continued reform.

Updated Revenue Forecast – Little Change

 The Washington Economic and Revenue Forecast Council released updated figures today, May 11. 

Revenue collections for April – May, 2012 were $7.6 million (0.7%) lower. Cumulatively, revenue collections are coming in as predicted, only $9.6 million (0.3%) higher than forecasted.

According to the council, Washington and the Nation’s economies have been sending “mixed signals, with recent weak employment and GDP growth, but also higher disposable personal income, strong auto sales, and signs that the housing market may be stabilizing. Further, Washington’s employment growth has outpaced the modest growth expected in the February forecast, but earlier estimates were revised down, resulting in the current level of employment lower than anticipated. Housing construction was also stronger than expected in the first quarter of the year but prices remain weak. Risks in terms of oil and gasoline prices and the European financial crisis are all contributing to uncertainty in the future.

The council states that revenue collections are coming in as predicted and total collections for the past three months since the February forecast are only $9.6 million (0.3%) higher than forecasted.

For the council’s complete report visit the link below:

http://www.erfc.wa.gov/publications/documents/may12.pdf

Governor Gregoire signs budget and other bills

Governor Christine Gregoire signed the 2012 operating budget and a slew of other bills yesterday, May 2nd.  The higher education sector, specifically Evergreen, received no cuts.

In a statement from State Senator Ed Murray, Chair of the Senate Ways and Means committee, “This is the first budget in four years to avoid cuts to Washington’s schools, colleges and universities. For families and students, that is great news. After the deep cuts of the past few years, I and many of my colleagues are pleased to have protected education and important services for Washingtonians who are sick, hungry or disabled…”

Governor Gregoire did veto several sections of the bill, including Section 601(7) which allowed Bellevue College to begin offering baccalaureate degrees. Currently Bellevue is allowed to offer applied baccalaureate degrees. In her veto message, Gregoire noted that “while expansion of degree programs into the state’s community and technical college system may ultimately prove to be sound public policy, such authorization through a budget proviso is the wrong approach. The Legislature endorsed the System Design Plan in 2010 for the purpose of establishing a process for the expansion of new programs and degrees where there is demand and to ensure financial sustainability. This important planning process cannot succeed if independent authorization is given in a budget proviso.”

Another veto of interest includes Section 919 of the budget bill that deals with across-the board reductions. This section would have protected certain state agencies from across the board reductions if the Governor chose to do so in the event of continued revenue decline. In her veto message, Gregoire explained that the language reduces executive flexibility because all provisoed amounts would now need to be reduced by the same percentage as separate appropriations.

For a full list of her vetoes, click here.

As well as the budget bill, the Governor signed bills relating to roll your own cigarette dispensaries (HB 2565), developing a plan for full funding of basic education (HB 2824) and relating to local sales and use tax account deposits and distributions (HB 2822), among many others.

These were the final bills to be signed from the 2012 supplemental session.

Governor Gregoire to sign budget and other bills

Governor Gregoire is slated to sign the last of the bills from the 2012 Supplemental Legislation Session in the next couple of weeks.

Next week, April 23rd, Gregoire will sign the two supplemental capital budget bills (SB 5127 & SB 6074) at Tacoma Community College.

The following week on May 2nd, Gregoire will sign the operating budget (HB 2127), the K-12 health benefits bill (SB 5940), the balanced state budget bill (SB 6636), pension reform (SB 6378 ) and various other bills passed during the special session.

Governor Gregoire does have the power to veto all or portions of any of the bills before her. After these bills are signed, the 2012 supplemental session will officially come to a close. This ceremony will mark the last signing ceremony for Governor Gregoire who will is not seeking reelection this November.

Washington Legislature Ends 2012 Supplemental Session

The first special session of 2012 ended last night as of midnight. Though close the Washington Legislature did not complete business by this deadline and Governor Gregoire called the Legislature back for a second special session. After nearly eight straight hours of work from midnight to early this morning, the Legislature passed a balanced budget, jobs act, and a handful of policy reform bills.

Operating Budget

 The 2012 supplemental operating budget passed 64-34 in the House and 44-2 in the Senate and was delivered to the Governor for her consideration early this morning. The operating budget makes no reductions to K-12 and higher education.  Some of the highlights of the budget include $238 million to the general fund as a result of the state temporarily claiming control of local sales taxes before they are redistributed back to jurisdictions at their usual time, an increase in taxes raising about $14.5 million by eliminating a tax deduction for some large banks, additional revenue to the state through changing rules on roll-your-own cigarettes, and at the end a reserve fund of $320 million.

Impact to Higher Education

The operating budget as passed by the Legislature does not reduce general fund support for higher education, this includes further eductions to institutions and financial aid. The budget however does include some provisos and policy changes.

  • Bellevue College is authorized to offer baccalaureate degrees. Prior to the passage of this bill the College could only offer applied baccalaureate degrees.
  • The two and four year institutions are required to conduct a comprehensive review of institutional tuition waiver policies.
  • Evergreen is required to reallocate $276,000 for FY2013 for an expansion in enrollments in STEM as defined in HB 1795. This definition includes bachelor and advanced degree programs in the sciences, which includes agriculture and natural resources, biology and biomedical sciences, computer and information sciences, engineering and engineering technologies, health professions and clinical sciences, mathematics and statistics, and physical sciences and science technologies, including participation and degree completion rates for students from traditionally underrepresented populations.
  • The Washington State Institute for Public Policy is required to conduct a longitudinal study of the state need grant program ($100,000).
  • The two and four year institutions are not permitted to use state appropriated funds to support intercollegiate athletic programs
  • Changes state payments for public employee health benefits from $850 to $800 per month

Capital Budget and Jobs Act

The 2012  capital budget made no changes to Evergreen’s biennial capital budget. The Jobs Acts  which includes a new bonds bill and the traditional capital budget  are estimated to have an economic impact of $1.1 billion in construction work over the next 14 months.  

Reform Bills

As critical to the process as balancing the budget were efforts to pass reform bills to provide for greater long-term sustainability in the state budget. Among the policy bills passed by the Legislature three were critical to finally ending the 2012 supplemental session.

Pension

SB 6378 addresses early retirement benefits for future state employees.. Under law changes in 2000 and 2007, an employee with 30 years’ service could retire at age 62 with no reduction in benefits, and at age 55 with only a 20 percent reduction. Under the new law, retirement at age 62 will lower the benefit by 15 percent and age 55 by 50 percent. The savings will go to the state’s general fund.

 K-12 Healthcare

SB 5940 attempts to equalize health-insurance benefits for full-time and part-time school district employees and their families. The bill requires school districts to meet certain requirements, including making all employees pay a share of premiums, offering a high-deductible health plan and tying the price of individual and family benefits.

Balanced Budget

SB 6636 requires the state’s two-year budget to be in line with anticipated revenue over a four-year period or 4.5% growth per year, whichever is greater.   Growth has met or exceeded 4.5 percent in half of the past 16 years.

Last Day of Special Session

It is day 30 of the special legislative session, which means lawmakers have until midnight tonight to come to agreement on a budget deal to get of town by the deadline. Speculation has begun on whether this is possible with such a short time-frame.

Yesterday the House Ways & Means Committee and Senate floor action were scheduled to take up reform bills and the budget needed to get done by tonight, however, they never happened because budget leaders met in closed-door meetings throughout the day with Governor Gregoire attempting to hash out a deal. By late last night it was clear they still had a ways to go.

This morning the Tacoma News Tribune (TNT) is reporting that a third special session looks likely due to the limited amount of time left. Even if they reach an agreement today, the amount of paperwork involved in formalizing a deal is too great.

“Negotiators left for the night shortly before midnight and Governor Gregoire told reporters they had made progress. They had also slid backward from a point earlier in the evening when a deal looked closer at hand, she acknowledged. ‘That’s typical in negotiations.'”

The TNT is reporting that Gregoire is refusing to talk about calling another special session. “That’s the problem with special sessions and a reason lawmakers are still here on Day 30,” she said. “As soon as they learn they have a fresh 30 days on the clock, there isn’t the pressure to make things happen. Nobody will convince me to talk about a special session until we absolutely have to.”

Senate Ways & Means has scheduled a meeting for this afternoon at 1:30 and House Ways & Means which was supposed to take up reform bills yesterday was relieved of those bills this morning and they placed on the 2nd Reading Calendar in Rules Committee. The 2nd Reading Calendar enables lawmakers to pull bills from the Rules Committee to the floor for a vote.

These actions show there is movement, however, as the TNT reported, there may not be enough time due to the amount of paperwork that is required to be processed before a budget deal is finalized.

Stay tuned…

One Day to Go in Special Session

It is day 29 of the 30 day special legislative session and lawmakers are back in Olympia after a one day break for the Easter holiday.

Late last week on Friday lawmakers inched closer to a deal after tense debate in the Senate Ways and Means committee and on the Senate floor. Ways & Means moved two “reform” bills (SB 5940 and SB 6636) thought to be the key issues determining whether the legislature will end on time.  A third reform bill (SB 6378) was moved from the Rules committee to the Senate floor for possible action.

The three big reform bills are:

  1. SB 5940: Legislation aimed at equalizing health insurance premiums for teachers and school district employees
  2. SB 6636: An amendment to the state constitution requiring a balanced budget
  3. SB 6378: Ending special early retirement incentives for state employees.

After moving out of Ways & Means the bills went to the Senate floor. There they both passed and were sent to the House Ways & Means Committee. SB 6378 did not have the votes to get off of the Senate floor Saturday but is scheduled for a vote today, Monday.

The House Ways & Means committee is scheduled to meet at 3pm today to consider their versions of the first two bills above. They are:

  1. HB 2827– Improving state budgeting and planning by requiring a balanced state operating budget for the current biennium and developing a process for balancing the budget over a two-biennium period.
  2. HB 2829 – Addressing public school employees’ insurance benefits.

In terms of the state budget, it looks like the Democrats and Republicans are inching closer to an agreement. According to The Washington State Wire, “Senate Republican budget-writer Joe Zarelli, R-Ridgefield, and House Ways and Means Chairman Ed Murray, said legislative players are only $22 million apart – really nothing in a $31 billion budget.

However, on Saturday the Olympian questioned whether there are the votes to pass a budget. “There still are questions about whether Senate Republicans, who are demanding passage of reform bills before they vote on the budget, have votes for their ideas in the House. “I’m a farmer and I’m a Republican; I’ve got to be an optimist,” said Sen. Mark Schoesler, the GOP’s floor leader, as he headed out the door for Ritzville for the Easter holiday. “We certainly have structurally gotten ourselves pretty close – as far as mechanically moving stuff through” the process, Senate Ways and Means chairman Ed Murray, D-Seattle, said of the prospect of finishing by Tuesday night. “We have some agreements that have to be struck. Hopefully we can get there.”

Lawmakers have until midnight tomorrow, Tuesday, April 10 to pass a budget. If they cannot come to agreement Governor Gregoire has two options. She can call them back into another special session, or implement across the board cuts.

House Democrats Release New Budget

In what is now week 4 of the special legislative session, House Democrats released a new operating and capital budget Wednesday morning, April 4. House Majority Leader Representative Pat Sullivan stressed that the operating budget proposal does not represent an agreement between the House and Senate, but it does include elements and changes that were requested specifically by Senate Republicans.

“If we are to have any chance at all of getting a budget finished on time, we have to get something moving,” he said. “We will continue to meet, continue to talk, and continue to negotiate, but we also have to get a budget in motion.”

What the budget means to Evergreen

Like several of the previous budgets released this year, this new budget does not cut higher education or financial aid.

This afternoon the House Ways & Means committee will meet to hold a public hearing on several bills considered “necessary to implement the budget” (NTIB). The budget bill was pulled to the House floor yesterday and now it is a waiting game on whether they will bring it up for a vote. If the budget does pass in the House it will move to the Senate for the same process.

Special session is due to end Tuesday, April 10. With Easter this Sunday, there are very few days to get a budget proposed and passed, but it is still possible.