Tag Archives: Budget

Senate Hears Governor’s Proposed Supplemental Budget for Education

Posted on by

Today the Senate Ways & Means Committee held a public hearing on the Governor’s supplemental budget for education.

The Committee heard an overview from the Office of the Governor on the proposed supplemental. The Governor’s proposed supplemental budget would reduce funding for Washington’s public baccalaureate institutions by double-digit percentages and suspend state work study.

Higher education representatives from the six public baccaluareate institutions in Washington, including The Evergreen State College, testified with concerns about further reductions to higher education and the impact on students.

House Holds Public Hearing on Governor’s Supplemental Budget

Posted on by

Yesterday the House Ways & Means Committee held a public hearing on the Governor’s supplemental budget.

The Governor’s proposed supplemental budget would reduce funding for Washington’s public baccalaureate institutions by double-digit percentages and suspend state work study.

Higher education representatives from the six public baccaluareate institutions in Washington, including The Evergreen State College, testified with concerns about further reductions to higher education and the impact on students.

Lack of Agreement of Debt Committee Triggers Cuts to Education

Posted on by

Yesterday the deadline to reach an agreement on deficit reduction passed. The Congressional Deficit Committee announced that they were unable to reach an agreement. As a result, this set into motion $1.2 trillion in automatic spending cuts over the next decade if Congress does not act by 2013 on the deficit.  

The impact to education is likely to be hard. The U.S. Department of Education’s budget would be reduced by $3.54 billion in 2013. In addition $134 million for non-Pell Grant financial aid programs will likely be lost.

While the Pell Grant is exempt from cuts in the current fiscal year they remain at risk. The overall spending caps that will be enacted by Congress will place constraints on the federal budget and make it difficult to maintain support for current funding levels.

The 12-member Joint Select Committee on Deficit Reduction, formed in the July compromise that increased the nation’s debt limit, was charged with cutting $1.2 trillion from the deficit before Thanksgiving.

Congress still has a year to decide how to apply the $1.2 trillion in cuts – to be split evenly between defense and nondefense spending.  In the meantime it is possible that Congress could reach a long-term agreement on deficit reduction or change how the mandated cuts are enacted. Though President Obama has vowed to veto any legislation that would eliminate the automatic cuts.

The budget conversation will now shift back to the congressional appropriation committees to decide on several budget bills and enact 2013 spending caps.

Governor Releases Supplemental Budget and Proposes Revenue Package

Posted on by

This morning Governor Gregoire released her proposed 2012 supplemental budget and a revenue proposal.

2012 Supplemental Budget
The proposed supplemental budget reduces public services and programs by $1.7 billion and leaves an ending balance of $601.5 million for the remainder of the current biennium.

Higher Education
The Governor’s proposed supplemental budget reduces state support for higher education by $168.2 million. This includes a $160.1 million reduction to the two- and four-year public institutions. This represents a reduction of 17% in state funding for UW, WSU, and WWU; 16% for EWU, CWU, and Evergreen; and 13% for the community and technical colleges. For Evergreen this is an additional reduction of $2.95 million in state support. In addition, the Governor proposes suspension of the state work study program ($8.1 million) beginning fall 2012.

The Governor’s supplemental budget does make an investment in graduating more engineers ($7.6 million). These funds are directed towards the UW and WSU to enroll additional engineering students.

Governor’s Revenue Proposal

The Governor’s revenue proposal would raise more than $830 million in revenue. Gregoire recommended revenue options that support or have limited negative effects on the state’s economic recovery, promote fairness among taxpayers, simplify the state’s tax structure, and provide immediate benefits to address the budget shortfall.

The majority of funds would come from a 0.5% temporary increase in the sales tax (est. $494.1 million). The revenue generated from an increase in the sales tax would go to education ($411 million), long-term care and developmental disability services ($42 million), and public safety ($41 million). Of the new revenue for education $160 million would go to offset the proposed reduction to the two- and four-year public institutions in the Governor’s proposed 2012 supplemental budget.

The Governor recommends the remaining revenue come from an array of options such as imposing a $10 fee per invoice issued to a taxpayer for unpaid taxes and imposing a 1.5% gross receipts tax on gambling and lottery winnings. Her proposal divides additional revenue to be approved by the Legislature into two groupings: (1) revenue increases that would require a simple majority vote of the Legislature ($59 million) and (2) increases that would require a two-thirds vote of the Legislature ($282 million).

The Governor’s proposal does include recommended priorities if the Legislature does arrive at additional revenues beyond the increase in the sales tax. Among these priorities is support for the state work study program ($8.1 million).

The Legislature returns to Olympia next Monday (November 28) to consider the Governor’s proposed budget and develop their own proposals.

Revenue Forecast Down But Does Not Deeply Impact $2 Billion Budget Shortfall

Posted on by

This morning the November state economic and revenue forecast was released.  The forecast shows projected General Fund revenues for the current biennium down by $122 million compared to the prior quarterly forecast in September.

Washington’s Chief Economist, Dr. Arun Raha stated, “the economic environment is much as we anticipated in the September forecast. Our November adjustments reflect uncertainty in various markets, but not another downshift in expectations.”

Governor Gregoire is expected to propose a supplemental operating budget on Monday, November 21 to address the shortfall and leave a reserve (the estimated target is $2 billion). Washington legislators will return on the following Monday (November 28) for a special session to address the budget shortfall.

Governor Lays Out Budget Reduction Ideas for Legislature

Posted on by

At a press conference Thursday, October 27, Gov. Chris Gregoire presented a list of approximatlely $4 billion in “budget reduction alternatives,” including her “preliminary choices” to bridge a projected $1.4 billion shortfall in the current biennium and provide for a reserve of $600 million for the remainder of the biennium.

In announcing her choices for $2 billion in reductions, transfers and eliminations, the governor noted that the upcoming November 17 revenue forecast was likely to bring more bad news so it was important to meet the projected gap as well as plan for the future.

For higher education, her preliminary choices list represents $174 million in cuts and eliminations, including a 15% reduction to institutions (both two-year and four-year) and the elimination of the State Work Study Program.

In addition the Governor identified other potential areas for reduction or elimination including elimination of the State Need Grant and reductions to institutions of up to 20%.

Staff to the governor and the state budget office indicated the governor believed it was important to lay out all the possible cuts to programs in the “unprotected” part of the state operating budget.  The governor’s press conference on TVW can be viewed here.

In a letter to the Washington Legislature the Governor identified the principles that guided the development of the budget alternatives.

  • Washington state’s economic recovery must be a top priority;
  • Washington’s children deserve the best public education we can provide to ensure their future success and that of our state;
  • Washington’s vulnerable citizens continue to need protection despite -and perhaps in part due to – these tough times;
  • Our citizens must be safe in their homes and communities;
  • Service delivery is a more important investment of declining tax dollars than is advocacy; and
  • These principles must evolve when funding is tight. Our citizens should be served to the best of  our ability with limited available funds.

She closed her letter to legislators by stating “I look forward to receiving your input in the next few weeks as we work together in the special session on behalf of the people of Washington”.

The Washington Legislature will return to Olympia to consider Governor Gregoire’s supplemental budget on November 28.

Governor Releases Budget Alternatives

Posted on by

This morning Governor Gregoire released a list of budget reduction alternatives. The list of alternatives is designed to jump start budget conversations for the upcoming special session on November 28 which will focus on solving the state’s projected $2 billion shortfall.

The list is not the Governor’s 2012 supplemental budget, though it does provide some insight into where potential budget reductions will take place and where future reductions may occur if revenues continue to decline over the biennium.

The total budget reduction alternatives includes reductions beyond the $2 billion shortfall to provide legislators and stakeholders with a full array of potential budget reduction options.  However, the Governor does identify specific reductions from the list that may be included in her 2012 supplemental budget proposal to be released in late November (estimated date is November 28). 

The budget reduction alternatives make several reductions that will impact higher education, though not all of these are identified as potential items to be included in her 2012 supplemental budget. The items identified as tentative for inclusion in the Governor’s supplemental budget are in bold.

Financial Aid

  • $303 million – Eliminate the State Need Grant
  • $68.4 million – Alternative to Elimination: Reduce maximum State Need Grant award by 25% 
  • $30.6 million – Alternative to Elimination: Limit State Need Grant eligibility to public institutions
  • $25.5 million – Alternative to Elimination: Reduce State Need Grant eligibility to 55% of Median Family Income
  • $8 million – Suspend State Work Study program

Institutions

  • $222 million – Reduce state support to college and universities (two- and four-year) by 20%
  • $166 million- Reduce state support to colleges and universities (two- and four-year) by 15%
  • $111 million – Reduce state support to colleges and universities (two- and four-year) by 10%

 Other

  • $40 million- Eliminate National Board certification bonuses for teachers
  • $8.4 million – Alternative to Elimination: Reduce National Board certification bonuses for teachers
  • $38 million – Impose 10 furlough days
  • $37 million – Impose additional 1% salary reduction or K-12 employees (one year)
  • $32.7 million – Impose additional 1% salary reduction for state employees (one year)
  • $28 million – Impose health contributions for general government employees (one year)
  • $16 million – Alternative to Imposing health contributions: Reduce employer (state) monthly per-employee contribution from $850 to $825
  • $20 million – Reduce monthly state allocation for K-12 employee health benefits
  • $15 million – Reduce LEOFF Plan 2 employer contribution to actuarially necessary rates
  • $11.4 million – Suspend step increases (one year)
  • $9.7 million – Alternative to suspending step increases: Exclude employees who earn less than $2,500 per month
  • $4 million – Adjust contributions to Judicial Retirement System to payout rate
  • $476,000 – End sick leave cash-outs for employees who are not retiring

Responses to Governor Gregoire’s list of budget alternatives continue to emerge from legislative leadership including the House Democrats, Senate Democrats and Senate Republicans.

Further details regarding the 2012 supplemental budget will emerge over the next two months. Important dates along the way include the November 17 revenue forecast, the release of the Governor’s supplemental budget in late November, and the call by the Governor for legislators to return to Olympia at Noon on November 28 for a thirty-day special session, during which we will see additional budget proposals.  Finally conversations regarding revenues continue at the state level as the Governor and legislators engage in discussions about potential options to consider during the special session.

U.S. House Releases Education Appropriations Bill

Posted on by

Today the U.S. House Appropriations Committee their  draft fiscal year 2012 Labor, Health and Human Services (LHHS) funding bill. The legislation includes funding for programs within the Department of Labor, the Department of Health and Human Services, the Department of Education, and other related agencies.

In total, the draft bill includes $153.4 billion in discretionary funding, which is $4 billion (-2.5%) below the fiscal year 2011 enacted level and $27.5 billion (-15.2%) below the President’s budget request. The funding levels reflect the overall change in fiscal year 2012 discretionary spending to $1.043 trillion – the amount to which the House, Senate, and White House agreed in the recent debt ceiling legislation.

The Department of Education is funded at $69 billion in the legislation, which is $2.4 billion (-3%) below last year’s level and $11.5 billion (-14%) below the budget request. The bill eliminates more than 30 programs that are duplicative, inefficient, or unauthorized, including the Administration’s “Race to the Top” program.

  • Title I Program – These basic grants to local school districts that help all children become proficient in reading and math are funded at $15.5 billion, which is $1 billion above last year’s level.
  • Pell Grants– The maximum Pell Grant award is continued at $5,550. In addition, the bill includes reforms to the program to reduce costs by $3.6 billion in the next year alone. These reforms include: limiting the lifetime eligibility for Pell Grants to 6 years (down from 9 years); rolling back recent and unnecessary changes to the qualification formula; eliminating eligibility for students who attend school less than half time or students who do not have a high school diploma or GED; and better targeting the funding to the neediest students.
  • Special Education – Special Education grants to states are funded at $12.7 billion in the legislation – an increase of $1.2 billion above last year’s level. This will raise the federal percentage of special education funding from 16.1% to 17.3%, allowing states and communities to better fund required special education services.

A subcommittee mark up of the draft LHHS bill released today has not yet been rescheduled.

U.S. Senate Panel Approves Funding Bill for Higher Education

Posted on by

Last week the U.S. Senate’s Subcommittee on Labor, Health and Human Services, Education & Related Agencies approved a spending bill for higher education and research.

The bill makes several reductions to higher education and research. Among the reductions is $190 million in FY12 to the National Institutes of Health and the elimination of the National Center for Research Resources.

The bill does provide sufficient funding to maintain the maximum Pell Grant award of $5,550. To fund the Pell Grant the Senate proposes ending the interest subsidy on undergraduate student loans during the six-month grace period after a student graduates. The end of the interest subsidy is another impact to student borrower  benefits. In July Congress voted to end the in-school interest subsidy on federal loans to graduate students and eliminate the interest-rate reduction for on-time loan repayment for all borrowers as part of an effort to close the shortfall in the Pell program.

In addition to the Pell funding the Senate would provide same level support for Federal Work Study and the Supplemental Educational Opportunity Grant as in 2011. Finally the Senate provides $20 million for a new program to speed the translation of basic reserach into treatments and cures.

The full Senate Appropriations Committee is expected to consider the bill this week. It is unclear as to the fate of the bill beyond this step. The U.S. House has indicated that they will not take up the Senate’s version of the bill and word on the street is that it is unlikely Congres will pass a stand-alone spending measure for education and research. Instead Congress is expected to pass one or more continuing resolutions financing programs at the 2011 levels and eventually consolidating the bills into a single omnibus spending bill later this year.

Gregoire Calls Special Session; Agencies Submit Where Reductions Would Come From

Posted on by

Late last week Governor Gregoire announced that she would call the Washington Legislature back to Olympia on November 28 for a special session that could last up to thirty days by law.

The Legislature is charged with finding $2 billion in state funding reductions to fill the $1.4 billion gap expected between state revenues and projected state expenses, expected further erosion in revenues in the November 17 forecast, and calls for the state to have some money left in the general fund on July 1, 2013, when it starts the next fiscal biennium.

Legislative leaders and the top budget writers will go over plans with the governor’s staff in the next two months to prepare for the session. Word on the street is that the Governor will release her proposed budget reductions the week of October 24.

Some of the ideas that are likely to emerge in the Governor’s work may be found in state agency submissions to reduce public services and programs in response to the Governor’s request for proposals to reduce budgets by first 5% and then 10%.