Category Archives: Uncategorized

Washington House Ways and Means Committee Meets to Discuss Current Budget Issues and Potential Reform Ideas

Posted on by

Yesterday afternoon the Washington House Committee on Ways & Means met to receive several updates on the current budget and discuss potential areas of reform as the 2011 legislative session approaches.

The Committee began the hearing with an update on the June Revenue Forecast released last week.  The forecast showed an economy that is recovering at a slow and uneven rate. This was perhaps best exemplified in the news that the June forecast was down over $200 million from the February forecast.

The Committee then received an update with regard to the anticipated federal Medicaid funds that have been up in the air.  At this time, the U.S. Senate is considering H.R. 4213 which includes the six-month extension for Medicaid funds to states. The Senate has voted twice to close debate and move the legislation, but both votes have failed.

The latest information shared with the committee suggests that policymakers in Congress may consider an extension with a phase out. What this means for Washington is that instead of receiving the full $480 million anticipated in the 2010 supplemental budget, the amount provided to the state would be tapered over the six months resulting in fewer dollars.

Though many things remain up in the air, for example policymakers may extend the Medicaid funding in other legislation or provide for another option for distribution of these funds to states, it was shared that the tapering of funds could provide as much as $410 million to Washington or it could be much less.

Finally, though the Committee agenda publicized a discussion of possible budget reform ideas, including the fiscal note process, standard approaches to reviewing the budget and agency budget requests, and adding performance measures to the budget, the committee chose to continue to discuss these issues among themselves via email and continue this discussion at the next meeting of the Committee.

U.S. Senate Rejects Certification on Private Education Loans

Posted on by

Yesterday, the U.S. Senate rejected a House-sponsored amendment in a bicameral conference committee on the Restoring American Financial Stability Act of 2010 (S.3217) that would have mandated institutional certification on all private student loans.

This is a blow to many stakeholders in the private education loan world, of which most supported full school certification.

As shared in this blog in mid-May, the House-sponsored amendment would require providers of non-federal student loans to get colleges’ approval before they make such loans to students. The intention being to assure that borrowers turn to more-expensive private loans only after they have exhausted federal, state, and institutional grants or at least less costly federal student loans.

The Chairman, Senator Chris Dodd (D-CT), of the U.S. Senate Banking Committee stated, “the Senate cannot accept this provision..the Senate cannot agree to mandatory certification. I authored self-certification with Senator (Richard) Shelby (R-AL)…and it’s far too early in our view to make a judgment if we need something more.”

Dodd did note that the bill includes other “strong protections” for private student loan borrowers, including new Consumer Financial Protection Bureau (CFPB) oversight of private education loans and a new private student loan ombudsman to assist students who need help with their private loans.

Conferees are expected to continue to meet this week in hopes of finalizing negotiations so that the bill can be passed by Congress prior to the July 4 recess.

On This Date Over Six Decades Ago the G.I. Bill Became Law

Posted on by

Sixty-six years ago, on June 22, 1944 President Franklin D. Roosevelt singed into law the Servicemen’s Readjustment Act (a.k.a. G.I. Bill of Rights).

The impact of this single piece of legislation has been monumental over the years.

  • Before WWII fewer than 15 percent of high school graduates earned college degrees. By 1950 nearly 500,000 Americans had graduated from college compared to 160,000 in 1939 as a result of the educational benefits provided under this legislation.
  • Under this program, approximately 2.4 million ex-service personnel took out home loans provided by the Department of Veterans Affairs, which were low-interest and zero-down- payment loans.
  • Under the 52-20 clause, all former service personnel were entitled to receive $20 a week for 52 weeks a year, while they looked for work.

U.S. House Committee Holds Hearing on Credit Hours

Posted on by

Yesterday, the U.S. House of Representatives’ Education and Labor Committee held a hearing to examine how regional accrediting agencies assess the quality of higher education programs.

At issue was the definition of a credit hour and the perception that agencies are setting too lax a standard on the amount of time students spend on course work to earn academic credit. The Committee discussed whether requiring a minimum definition of a credit hour and/or program length would help prevent institutions from inflating credit hours to reap more tuition and state aid dollars.

The issue of “credit hour” definition initially emerged in audits conducted by the U.S. Department of Education’s Office of Inspector General of three accrediting agencies. In a May report, the Inspector General argued that a regional accrediting agency was not being strict enough when assessing the amount of credit awarded in a course offered by one institution.

The Chairman of the Committee, Rep. George Miller (D-CA) stated, “I am particularly concerned about institutions inflating credit hours in order to garner more student aid than is justified.”

The ranking Republican on the Committee, Rep. Brett Guthrie (R-KY), agreed with Miller with regard to the need to ensure institutions are fulfilling their missions, but expressed concerns about the federal government dictating what constitutes a quality institution of higher education.

The proposed rules being considered by the U.S. Department of Education would define a credit hour as “one hour of classroom or direct faculty instruction and a minimum of two hours of out of class student work each week for approximately 15 weeks for one semester or trimester hour of credit”.

The proposed rules also includes an exception to the definition of a credit hour. The exception defines credit hour as “institutionally established reasonable equivalencies for the amount of work required in [the previous definition] for the credit hours awarded, including as represented in intended learning outcomes and verified by evidence of student achievement.”

If the proposed rules regarding credit hour are put in place,  the U.S. Department of Education publicly stated it would closely watch the implementation of the rule and evaluate whether the definition of a credit hour is effective in protecting students and taxpayers.

State Revenue Forecast Shows Fewer State Dollars

Posted on by

This morning the Washington Economic and Revenue Forecast Council released the June state revenue and economic forecast. The forecast estimates that Washington will receive $203 million less through June 11 than was forecasted in February.

Washington State Economist Arun Raha stated that the decline in expected state revenue is a result of disappointing employment reports in May and housing data that shows a significant pullback in activity following the expiration of the home buyer’s tax credit.  In the end it appears that the recovery for the state will be slow and uneven.

U.S. House Committee Schedules Hearing on Accreditation Related Issue

Posted on by

Next week (June 17) the U.S. House of Representatives’ Education and Labor Committee will hold a hearing to examine how regional accrediting agencies define the “credit hour” as the agencies judge the academic quality and rigor of the institutions they accredit.

The issue of “credit hour” definition emerged in audits conducted by the U.S. Department of Education’s Office of Inspector General of three accrediting agencies. The concern focused on the perception that agencies are setting too lax a standard on the amount of time students spend on course work to earn academic credit.

Potential Action on Federal Supplemental Legislation

Posted on by

The U.S. House of Representatives may take up the U.S. Senate recently passed version of a supplemental appropriations bill soon. The move to take up the bill would bypass the more common practice of sending the bill through the committee process to be amended and changed by members.

The Senate’s version of the bill does not include $23 billion in education money intended to avert thousands of teacher layoffs at elementary and secondary schools.  Senator Tom Harkin noted that the Senate dropped this language because the 60 votes necessary to pass the provision were not there.

Another difference in the Senate version compared to the House version is the Senate bill does not include the $5.7 billion for Pell Grants in the House bill.

When asked about the differences between the bills, U.S. House Majority Leader Steny Hoyer said, “we’re going to work on it.”

Vice Chair of Washington House Ways & Means Nominated for Federal Position

Posted on by

Today, State Representative Mark Ericks (D-North King County/South Snohomish County) announced that he has been nominated by President Obama to be the U.S. Marshal for Western Washington.

Ericks has nearly 30 years of experience with police departments in Bellevue and Bothell. He has served in the Washington House of Representatives since 2005 and was Vice Chair for the House Ways & Means Committee during the 2009-11 biennium.

Ericks’ is one of six U.S. Marshal choices announced by the White House this week. His nomination will require confirmation by the U.S. Senate.

State budget deficit for 2011-13 Biennium -$3 billion

Posted on by

The Washington Office of Financial Managment (OFM) expects that the gap between state revenues and “basic spending pressures” will be approximately $3 billion next biennium.

In a report that provides state agencies, including higher education, with operating budget instructions for the next biennial budget, OFM suggests to provide funding to move current state programs forward, state funds will need to replace nearly $2 billion in federal funds that were made available to Washington during the recession. Part of these funds were used to offset cuts to higher education during the 2009-11 biennium.

In addition, funding requirements for pending funding obligations, statutory requirements to support important reforms in basic education, and restoration of voter approved commitments to reduce class size (I-728) and provide cost of living adjusts for teachers (I-732) add another $2 billion in spending pressures.

Though this adds up to a shortfall of $4 billion, OFM project that new revenues will provide $1 billion to close the gap, leaving $3 billion to be settled by the state.

So one may ask is there any good news.

In the report issued by OFM, indications show that Washington is experiencing much stronger revenue growth of 8.8% for FY 2011. Though this growth is relative to a new, much lower revenue base, it is definitely a positive note when compared to the drop in revenue in the last two years.

As Washington nears the 2011 legislative session more details will come into focus to provide a much clearer picture of the state budget.  The next big step in the process will be in mid-June when both the state caseload forecast and economic and revenue forecast are released.