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Week 4 Update – Small movements on the hill

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We are now in week 4 of the 2012 1st special legislative session and finally it looks like there is movement on the hill. Tomorrow, Wednesday, April 4, House members are scheduled to return to the capitol for public hearings in the Ways & Means, Capital Budget and the General Government Appropriations & Oversight committees.

Up for public hearing are several reform bills members are insisting pass before they will vote for a budget. Among them are:

  1. HB 2824– Addressing comprehensive funding for education by developing a plan for full funding and by freeing certain existing revenues for support of the basic education program.
  2. HB 2825– Addressing the benefits and contributions for new members of the public employees’ retirement system, the teachers’ retirement system, and the school employees’ retirement system.
  3. 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.
  4. HB 2829– Addressing public school employees’ insurance benefits.

The passage of these reforms is the first step in the right direction, but a budget also needs to surface that has the votes to seal the deal. The House meeting is good first step, but negotiations are  rumored to still be shaky. At this point the Senate is not scheduled to meet and a quote from Senate Majority Leader Lisa Brown responding to Gubernatorial Candidate Rob McKenna’s latest opinion on budget negotiations paints a more tenuous situation.  Brown said, “… The truth is this: the last offer on the table was one we made on Friday at 8pm.  There’s been no counter offer.  That’s the real hold up and we’re sorely disappointed.” 

With only 7 days left until the end of the 30 day special legislative session, and the Easter holiday this weekend, lawmakers will need to move quickly in order to finish on time.

Evergreen Lends its Support to the Signing of House Bill’s 2259 and 2585

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On Friday, March 30, Governor Gregoire signed two pieces of legislation the public baccalaureate institutions worked on together throughout the legislative session. Check out the news release here or read it below:

The Evergreen State College supports the passage of two “efficiency” bills – House Bill 2259 and House Bill 2585. These bills provide for regulatory relief in Evergreen’s campus operations, and are welcome developments in support of our college’s efforts to operate more efficiently.

House Bill 2259 specifically eliminates a duplicative crime statistics report our institution has been required to report at both the state and federal levels. This one change will ease increased workload on staff, allowing them to focus on the day-to-day duties required to ensure Evergreen is running as efficiently as possible.

House Bill 2585 provides for increased flexibility and reduction in procedural steps in purchasing and competitive bidding for purchases of $100,000 or less, advanced payments for equipment maintenance, travel arrangements, and more direct negotiation authority on purchasing. 

“Our support for these bills is entirely consistent with our continuing efforts at increasing efficiency and providing value in higher education for Washington,” says Evergreen President, Dr. Thomas L. Purce. “We applaud the efforts of the legislature to provide our institution with greater flexibility in difficult economic times and look forward to moving forward.”

 

Governor signs a slew of higher education bills

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Governor Gregoire signed a slew of higher education bills today, Friday, March 30th. Bill sponsors Representative Larry Seaquist, Representative Larry Springer, Representative Hans Zeiger and Senator David Frockt joined Governor Gregoire and representatives of the higher education institutions for the bill signing ceremony. 

In total, Governor Gregoire signed 4 pieces of legislation that affect Evergreen. They are:

Substitute House Bill No. 2259 – Relating to higher education reporting requirements.

  • House Bill 2259 was sponsored by Representative Hans Zeiger in the House. It specifically eliminates a duplicative crime statistics report our institution has been required to report at both the state and federal levels. This one change will ease increased workload on staff, allowing them to focus on the day-to-day duties required to ensure Evergreen is running as efficiently as possible.

Substitute House Bill No. 2313 – Relating to meeting procedures of the boards of trustees and boards of regents of institutions of higher education.

  • House Bill 2313 was sponsored by Representative Hans Zeiger in the House. It requires governing boards of higher education institutions to provide time for public comment at meetings and requires governing boards of four-year institutions of higher education to make public their proposals for tuition and fee increases 21 days before considering adoption, and also to allow opportunity for public comment.

Engrossed Second Substitute House Bill No. 2483 – Relating to higher education coordination.

  • House Bill 2483 was sponsored by Representative Larry Seaquist in the House and Senator’s Derek Kilmer and Randi Becker in the Senate. It creates the Student Achievement Council (SAC) which will replace the Higher Education Coordinating Board on July 1. Among its various functions, SAC will make recommendations to the Governor and Legislature related to educational attainment and work with various education stakeholders, including, the Office of Superintendant of Public Instruction, the State Board of Community and Technical Colleges, the Workforce Board, the public baccalaureate institutions and the independent schools and colleges to further higher education in Washington. The SAC will be required to produce a 10-year strategic plan for higher education, submit recommendations on budget priorities that support the 10-year plan and oversee the Office of Student Financial Assistance.  

Third Substitute House Bill No. 2585 – Relating to creating efficiencies for institutions of higher education.

  •  House Bill 2585 was sponsored by Representative Larry Springer in the House and Senator Rodney Tom in the Senate. It provides for increased flexibility and reduction in procedural steps in purchasing and competitive bidding for purchases of $100,000 or less, advanced payments for equipment maintenance, travel arrangements, and more direct negotiation authority on purchasing. 

House Bill’s 2259 and 2585 are two pieces of legislation the public baccalaureate’s worked specifically hard on during the regular legislative session. A part of a package of “efficiencies’ legislation,” these two bills were an effort to streamline business practices within our institutions. According to Evergreen President Les Purce, “Our support for these bills is entirely consistent with our continuing efforts at increasing efficiency and providing value in higher education for Washington, we applaud the efforts of the legislature to provide our institution with greater flexibility in difficult economic times and look forward to moving forward.”

 

Changes at the Council of Presidents

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The Council of President’s, the voluntary Washington association comprised of the Presidents for the six public baccalaureate degree granting college and universities, announced yesterday that Michael Reilly is stepping down as Executive Director to become Executive Director of the American Association of Collegiate Registrars and Admissions Officers (AACRAO) headquartered in Washington D.C.

Reilly has been with the Council of Presidents (COP) since August 2008. In July 2010 he assumed the role of Executive Director. While with COP, Reilly worked with the six public baccalaureate institutions  navigating difficult legislative session after difficult legislative session. He has worked particularly close with the legislative officers of the institutions, bringing them together as one voice in front of the legislature.  “Mike has done a stellar job as Executive Director, leading COP through some of Washington’s toughest legislative sessions in recent memory,” said Western Washington University President Bruce Shepard. “Though higher ed has been particularly hard-hit in the two sessions, we’ve been increasingly successful in getting legislators and others to recognize the vital role we play in creating brighter futures for all. Mike has been an integral part of that turnaround, and we thank him for his service and leadership.”

Succeeding Reilly in an interim capacity will be Jane Sherman. Sherman, Vice Provost for Academic Policy and Evaluation at Washington State University, will be on leave from her position to serve. As Vice Provost at Washington State Sherman directs the institutional planning for internal and external accountability and accreditations initiatives and academic program planning and approval. She also oversees several academic areas including transfer policy and community college relationships. Sherman has worked extensively with the legislative officers of the Council of President’s in policy analysis and implementation.

“The Council of Presidents is delighted that Jane has agreed to serve as Interim Executive Director and we look forward to the continuity and leadership that she will provide during the national search for a permanent replacement,” said current COP Chair, University of Washington President Michael Young.

Sherman will begin as interim on April 2. A national search will begin immediately, with a goal of hiring a permanent Director this fall.

Congressional Republicans Release Budget Proposal

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Late this week the Republicans in the U.S. House of Representatives released a budget proposal for fiscal year 2013.

According to the author of the budget proposal. U.S. Representative Paul Ryan, the proposal would reduce next year’s deficit to $797 billion, a lower figure than the $977 billion deficit the Congressional Budget Office estimates would result from the president’s budget. Ryan also estimates it would reduce deficits over the next decade by $3.3 trillion more than the Obama budget.

The proposed budget would impact multiple frederal programs and services. The proposal cuts discretionary spending beyond the required reduction levels  in the debt ceiling agreement established last year. The budget would set discretionary spending for 2013 at $1.03 trillion, which is $20 billion less than the discretionary cap agreed when Congress increased the debt limit in August. The proposed budget also instructs six committees to find $261 billion in replacement savings over 10 years, and $18 billion in savings in the next year alone.

The limits to discretionary spending will impact all non-military and non-entitlement programs, including several higher education programs. The one exception in the budget is basic research which is funded at current maintenance levels. Beyond the decrease in discretionary funding, the budget proposes a handful of key changes specific to higher education.

Within the framework of the proposed budget, changes to higher education are noted under the heading “Repairing the Social Safety Net”. According to the budget proposal:

The safey-net system created in the last century is in dire need of a new round of reform. Government programs that aim to support the safety net are failing the citizens who rely on them and the taxapyers who fund them. A system designed for mid-20th century demographics and economics is ill equipped to deal with the unique pressures of the 21st century.  From a budgetary perspective, these programs are growing at an unsustainable rate…From a moral perspective, which well-intentioned, the paternalistic structures of these programs fail the very people they are intended to help.

Specific to higher education the budget proposal notes that:

Globalization and technological advances have made the modern economy more complex and dynamic. The new reality is workers at all levels must be ready to update or learn new, more specialized skills to match the changing needs of employees competing in the global economy. Federal higher eduation and job-training programs must be reformed to help workers adapt to this new challenge. Current federal aid structures are exacerbating a crisis in tuition inflation, plunging students and their families into unaffordable levels of debt or foreclosing the possibility of any higher education at all…these young adults are graduating with enormuous loan repayments and having difficulty finding jobs in our low-growth economic environment….But, instead of helping more students achieve their dreams, studies have shown that increased federal financial aid is simply being absorbed by tuition increases…when it comes to job training and continuing education, the current policy landscape is dotted with failed, unaccountable and duplicative programs.

The higher education context laid out in the budget proposal drives three major recommendations for change to current higher education policy.

Pell Grant

The proposal calls for placing the Pell Grant on a “sustainable path by limiting the growth of financial aid and focusing it on low-income students who need it the most”. The goal, according to the proposal, is to force institutions to reform and adapt and to ensure that Pell spending goes to students who truly need it.

In addition the proposal makes the argument that federal intervention in higher education should be focused on financial aid as well as policies that maximize innovation and ensure a robust menu of intitutional options from which students and their families can choose. To achieve this goal the suggestion is made to re-examine the data made available to students to make certain students and familes are prepared with information that will assist them in making their postsecondary decsions.  Finally the proposal recommends removing regulatory barriers in higher education that act to restrict flexibility and innovative teaching, particularly as it relates to online coursework.

The proposal does not state specific spending levels for the program.

Change How Student Loans are Viewed on the Federal Government Balance Sheet

The budget proposal would authorize the use of “fair-value” accounting principles for any legislation dealing with federal loan and federal loan guarantee programs. The budget would make this change by altering the Credit Reform Act (1990).

The Act allows Congress to treat loans differtently from other types of spending in the federal budget. Before the Act was passed, loans were measured in the cash flow of expenditures and repayments in a given year. After the Act, the cost to the government of loan programs was measured using the total value of the loans.

This change would allow for market risk to be taken into consideration rather than relying on the Treasury borrowing rate. As a result student loans would appear to be a slight loss on the government’s balance sheet, because it would take into account the difference between what the govenrment would earn and what a private leander would earn on the loans. As a result the change would make the federal deficit appear slightly larger.

This, however, does not mean that changes to loan programs are inevitable.  But, the impact, critics share, is that this accounting change would change how loan program costs are scored by the Congressional Budget Office. Some argue that this change would create a more difficult enviornment for new loan programs. Additional loans would appear to lose the govenrment money in the long term, not break even which makes for a harder sell.

Consolidate Overlappyting Job-Training Programs into Accountable Career Scholarships

The proposal calls for consolidating several job-training programs into scholarships to “improve access to career development assistance and strengthen the first rung on the ladder out of poverty”. The budget would establish, from the consolidation of these programs, a streamlined workforce development system with fewer funding streams that provide accountable, targeted career scholarship programs.  In addition the proposal would improve oversight and accountability for job-training programs by tracking the type of training provided, the cost per student, employment after training, and whether or not trainees are working in the field for which they were trained.

Other Budget Proposals

The congressional Democrats have not released a budget proposal. However earlier this year President Obama did release a budget proposal. An overall comparison of President Obama’s budget and the Republican proposal shows very different philosophies for moving forward.

Under the President’s proposal, funding for the National Science Foundation would increase by 5 percent, to $7.4 billion and the National Endowment for the Humanities  would get a slight increase, from $146 million to $154. The American Opportunity Tax credit is also made permanent – providing up to $2,000 per year for tuition.

With a goal for the US to “lead the world in college graduates by 2012,” specifics include:

  • Sustaining the maximum Pell Grant award of $5,635 through the 2014-2015 award year.
  • A one-year measure to prevent student loan interest rates from doubling this summer and doubles the number of work-study jobs over the next five years.
  • New reforms that shift federal aid away from colleges that do not keep tuition low.
  • Making permanent the American Opportunity Tax Credit.

Next Steps

Beginning with a committee markup Wednesday morning, the U.S. House of Representatives hopes to move the proposal through the House by the end of this week. And as most lawmakers  leave for spring recess, six House committees would be left with an April 27  deadline to report back legislation that would become a down payment of $261  billion in deficit reduction — to be brought to the floor in May.

Week 3 Update

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It’s week three of the 1st special session of the 2012 legislature and only small developments have taken place to date. Last Friday, March 23, The Olympian reported both the House Democratic and Senate Republican budget “gimmicks” are no longer being considered in budget negotiations.

During the regular legislative session House Democrats proposed a budget that delayed paymnet to K-12 schools  by one day freeing up around $300 million. Senate Republicans responded with a budget that skips a pension. Both proposals were dubbed as budget “felony gimmicks” by State Treasurer Jim McIntire.

These “gimmicks,” along with the differing budget proposals, have created a stalemate between lawmakers and pushed the 2012 legislature into special session. At the beginning of week 3 little progress seems to have been made. As a result, Governor Gregoire says she isn’t doing more bill signings until she sees more progress. “So I will sign no bills on Monday. I had planned to and I will not,” Gregoire said. Her office is not saying which specific bills are put in limbo. Governor Gregoire has until March 31 to sign bills before they automatically become law.

Late last week a “third” budget option was proposed that seems to be the most viable to date.  It would let the state spend $238 million in sales-tax money in the 2011-13 budget cycle that otherwise would sit idle before being shipped out to local governments. Governor Gregoire is quoted in The Olympian as saying, “I can characterize that by saying no one has said no” to the new idea, Gregoire said. “But you need to understand that in budget language that means no one is prepared to say yes till the final deal is over. So the fact that no one has said no is important at this point.” Lawmakers are thought to have stayed in Olympia throughout the past weekend continuing budget negotiations and may be meeting with Governor Gregoire early this week (March 26) to report on whether progress has been made.

As of Monday morning no announcements have been made on whether rank and file members have been asked to return to the capitol. If that happens, it may indicate lawmakers have reached a compromise.

Small developments at the legislature

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Yesterday, Thursday, March 22, Governor Gregoire put forth a new option to balance the budget and end the special legislative session. Earlier this month House Democrats proposed a budget that would delay a payment to schools by one day, pushing it into the next budget period. Senate Republicans disagreed and wrote a budget that would skip a payment into the state’s pension system. Both parties have heavily criticized one another calling their colleagues’ moves budget “trickery” and “gimmicks.”

According to the Olympian, this new “third option” would keep sales-tax revenue collected on behalf of local governments in the state’s general fund longer. This could free up $238 million for spending elsewhere. “It’s a permanent process change, not a one-time change,” said Wolfgang Opitz, the assistant state treasurer. He goes on to state that local governments would still get their money at the same time, and thus far, local governments have said they are ok with the idea.

Currently the day after sales tax collections are deposited into the general fund local governments’ share of that revenue is transferred to a special account. However, it is not distributed until the end of each month. This proposal would keep the money in the general fund until the end of the month, transferring it into the other account just before it needs to be sent out to local governments. That would provide about $238 million more cash on the state’s balance sheet at the end of the month. At this point Democrats and Republicans have not publicly embraced the idea, but according to Senate Democratic Ways & Means Chair, Ed Murray, “no one is rejecting it either.”

Students Without Diploma or GED No Longer Eligible for Pell Grant

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As of July 1, when the new federal budget goes into effect, newly enrolled students are required to have a high school diploam or a GED in order to receive federal financial aid.

Prior to the passage of the latest federal budget, students who wanted to attend college but lacked a high school diploma or a GED were able to have access to federal financial aid by completing a basic skills test to prove their “ability to benefit” from a college education or successfully completing six credits.

As of July 1 these options will no longer meet federal eligibility requirements and students will have to earn a diploma or a GED to be eligible for aid.

Special Session Moves to Week 2

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This week marks the second week of the first special session of 2012 and follows on the heels of a relatively uneventful first week.

First Week of Special Session – Recap

For the majority of the first week little was happening on The Hill. Governor Gregoire met with legislative leaders including buget negotiators, but little progress was made. Towards the end of the week things got a little more interesting.

On Thursday morning, following a budget meeting with House and Senate members, a group of Senators (Republicans and Democrats) released a new budget proposal (SB 6612). That afternoon, disappointed with the lack of progress on the budget and the release of a new proposal by a Senate coalition, the Governor pulled back on several bill signings and declared that delays and potential vetoes may take place if  no progress on the budget was made.

Second Week of Special Session Kicks-Off

Yesterday, as the second week of the special session began, budget negotiators met with the Governor’s Director of the Office of Financial Management to talk about the fundamental fiscal disagreement that separates the two camps.

The largest impasse appears to be how the House and Senate proposals suggest balancing the supplemental budget. The House passed proposal would shift approximately $330 million in current expenses to the next budget period by delaying payments to school-districts. The most recent Senate coalition proposal would delay a pension payment and balance it with pension reforms and retirement-policy changes.

Budget negotiations among legislators and the Governor’s office continued today.

Governor Suggests New Idea

In comments to reporters on Monday, the Governor hinted that she has presented a new plan to budget negotiators in an effort to break the impasse. However she did not reveal any aspects of the proposal.

It was reported that she did indicate to reporters what the plan “was not” which included  securitizing state revenues, privatizing the state lottery system, allowing slot machines in non-Indian casinos or a general increase in cigarette taxes.

House Republicans

This session each of the four caucuses issued supplemental operating budget proposals. Often the public only gets to see two proposals, one from the Senate and one from the House.

Of the four proposals released over the last month, three of the four make no cuts to K-12 or higher education. The exception being the House Republican proposal. News came forward this week that the House Republicans have announced a new supplemental plan that would make no cuts to K-12 or higher education. However, details have yet to be released.

Senate Coalition Introduces New Budget

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Last Friday Washington Senate Republicans and three Senate Democrats released a new budget proposal (SB 6612). The proposed budget is a move closer to the latest budget passed by the Washington House.

The Senate coalition announced the new proposal at a press conference after the end of the first week of special session during which negotiations were essentially non-existent.

The last proposal from the Senate coalition does include the proposal to skip a pension payment that was part of the Senate-passed budget during the regular session.  However the proposal does give some on the ending fund balance dropping the balance from $600 million to $440 million.

The new proposal restores approximately $140 million in services/programs that were reduced in the prior Senate-passed budget. The savings in large part go to buy back reductions in the original version of the proposal for higher education and K-12. As a result no cuts are made to K-12 or higher education nor does the proposal shift the school-district payment to the next biennium.

Although there was not any restoration of prior cuts enacted by the Legislature to higher education, the Senate coalition budget would make no further reductions to institutional budgets this biennium. In addition, the budget propsoal would:

  • Establish a joint legislative task force on the higher education funding formula,
  • Restore funds to student attending for-profit institutions to 100% of award levels (in the 2011-13 biennial budget the awards were reduced to 50%),
  • Allow Bellevue College and the Seattle Community College District to offer baccalaurate degrees (this proposal is also included in the House passed budget), and
  • Change state payments for public employee health benefits from $850 to $800 per month (this is included in the House passed budget).

Beyond higher education the proposal also included several reforms. The reforms include a four-year balanced budget, a constitutional amendment to lower the state’s debt limit, changes to the state’s pension system for state and education employees and retirees, consolidating the K-12 health benefits system, and repealing the voeter-approved initiatives to reduce class size and COLAs.

No further action has been scheduled to date on the new proposal.