Tag Archives: Budget

Federal Budget for Education Takes Some Shape

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Last week, the U.S. House Appropriations Committee Chairman, Hal Rogers (R-KY), announced both the FY12 allocations for each of the 12 appropriations subcommittees, also known as the 302(b) allocations, and provided a tentative timeline for completing each bill. 
The allocations released would provide $139.218 billion to the Labor, HHS, and Education Subcommittee.  The allocation for the Labor, HHS, and Education Subcommittee is over $18 billion less than the recently agreed to FY11 level and more than $40 billion below the President’s FY12 budget request. 
The reductions in funding from the prior fiscal year and also from the President’s proposed FY12 budget are raising some concerns in higher education.  Advocates are concerned that the the funding level raises significant concerns regarding the ability to adequately fund NIH and the Pell Grant Program. 
Chairman Rogers stated that completion of work on the 12 fiscal year 2012 Appropriations bills should be finished by the end of the fiscal year on September 30th. This plan includes marking up and approving each bill at both the Subcommittee and Full Committee levels in the next few months before the August recess.
 

New Revenue Emerges

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Yesterday the Legislature received a gift. Washington’s three-month tax amnesty for businesses delivered $321 million in back taxes.

Under the proposal businesses were provided with a short amnesty period for penalties and interest on back taxes owed. From February to April the Washington Department of Revenue worked with more than 10,000 businesses to collect taxes.

The tax amnesty generated nearly $182 million more than was expected. While most of the $321 million will go to the state general fund ($263 million), some of it will be used to assist local governments ($57 local taxes).

While it is expected that these dollars will be key in reaching a solution for both the current fiscal year shortfall and the 2011-13 biennial budget shortfall, what the impact will be remains unclear.
The House Democrats had tentatively counted on getting $300 million from privatizing the system. But now they say they’ve moved away from that idea. So the new revenue may be helpful in bridging this gap.
However, policymakers in both chambers are also interested in using some of the funds to take back some of the budget cuts initially proposed.
While the Governor has suggested the funds be used to shrink the $240 million owed to public schools by June 30 that otherwise would be delayed to July 1 under House and Senate budget proposals.

Revenue staffers estimated there were 428 taxpayers flying off the taxman’s radar that now are on the state’s registry, where they can be monitored for compliance. Those non-payers averaged $50,342 in back taxes totaling $21.5 million for state and local governments.

Legislation to Alter Higher Education Structure at the State Level Moves Forward

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This morning the Senate passed legislation to eliminate the Higher Education Coordinating Board (HECB) and restructure higher education with a vote of 34-9.

Senate Bill 5182 would eliminate the HECB and establish the Council of Higher Education and the Office of Student Financial Assistance. 

The  Council membership would include the six four-year institution presidents, one private nonprofit president, the Executive Director of the SBCTC, and a representative from the Office of the Superintendent of Public Instruction, or their designees. The purpose of the Council would be to develop performance-based measures and goals for each four-year institution and a strategic plan for the institutions of higher education benchmarks.

In addition the Council would perform essential state governance functions previously assigned to the HECB, including approving new programs, mission changes, new colleges, recognizing accreditation, and provides the interface to meet federal requirements.

The Office of Student Financial Assistance would administer all state and federal financial aid and the advanced college tuition payment program. The Office is created as a separate agency of the state.

Senate Bill 5182 is scheduled for a public hearing by the House Ways & Means Committee on Thursday. In addition, the Committee is also scheduled to take executive action on legislation that would not eliminate the HECB but would narrow the scope of their work.

House Bill 2074 retains the administration of the state’s financial aid programs, some functions for collecting and collating data from institutions, and other functions, such as some transfer and articulation provisions and strategic planning.

Special Session Enters Second Week

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Next week marks the second week of the first special session of 2011.  Scheduled for a maximum of thirty days, the Legislature has until May 25 to act on a biennial operating and capital budget as well as several policy bills (approximately 48)  necessary to implement the budget. 

This past week the House met in caucus most of Tuesday. While most of the members returned to their districts for the week, House leadership remained in Olympia to continue budget negotiations with the Senate. The House is expected to return for a morning caucus on Monday and then floor session in the afternoon to consider legislation.

The Senate convened on Tuesday afternoon and continued floor sessions intermixed with Ways & Means Committee hearings and executive sessions through Thursday. The Senate is expected to return on Tuesday and continue a similar pattern of floor sessions and committee hearings this coming week.

Throughout the past week and into the next couple of weeks the House and Senate will continue to work towards a compromise budget. Yesterday House leadership delivered a compromise offer to the Senate. The Senate is now working to send back a response.

Overall the Senate budget cuts $4.8 billion compared to $4.4 billion in the House. The two budgets are reasonably close with only about $330 million separating the two budgets.  However the chambers face strong differences with regard to a handful of policy proposals including salary reductions for K-12 employees, leasing of state liquor operations to a private company, sending the State Motor Pool and real-estate contracts management to the private sector, and furloughs for state employees making more than $50,000.

 

Special Session Kicks Off

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The first special session of 2011 began this morning. Over the next thirty days lawmakers are expected to pass a biennial operating and capital budget plus an estimated sixty policy bills necessary to implement the budgets. Many bills from the regular session will need to be reintroduced during the special session. In special sessions, all bills lawmakers had advanced to the opposite chamber go back to their House of origin.

The House will convene primarily leadership and top budget leaders during the next couple of weeks in Olympia, while the majority of members  remain in district until budget negotiations are nearly completed.

The Senate will convene on the floor at 1:00 p.m.  The entire Senate is expected to be in Olympia today and at least through the next two weeks moving legislation forward to implement the budget. This work will begin this afternoon when the Senate Ways & Means Committee meets at 2:30 to hear the following four bills.

  • SB 5912 – Expanding family planning services to two hundred fifty percent of the federal poverty level.
  • SB 5935 – Addressing adoption support payments for hard to place children.
  • SB 5941 – Concerning judicial branch funding.
  • SB 5472 – Changing the apportionment schedule to educational service districts and school districts for the 2010-11 school year

    • The Special Session Takes Shape

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    Yesterday the Legislature adjourned – sine die- around 4:00 p.m. without resolving either the operating or the capital budgets.

    Both the House and Senate will return for the first special session of 2011 on Tuesday. The special session could run up to thirty days.

    The House and Senate may approach the special session in a different way. The Senate plans to work next week already scheduling the first of many Ways & Means Committee hearings on Tuesday at 2:30.

    The House is still considering a rolling recess which would bring some members back for a pro forma session but does not require all House members to be present for the session. Neither body can be out of session for more than three days without mutual agreement.

    Gregoire said her intention was to limit the topics to the budget and the policy bills that are necessary to implement the budget. However, the governor can’t limit what the legislature discusses, so anything could be on the table.

    It appears, thought, that  legislative leaders have agreed to narrow their special-session work to the budget, related bills and issues such as workers’ compensation reform, consolidation of agencies, changes to the Guaranteed Education Tuition program and higher-education bills.

    Finding a compromise with regard to the budget will be a big task.  The House and Senate are within $250 million of each other on a $32 billion spending plan.  However, there are  major differences to overcome with regard to the budget.

    Among the large issues separating the two chambers is  a Senate proposal to reduce K-12 salaries by 3%, tuition in the colleges and universities, the disability lifeline, and whether to adopt new revenues to bridge the shortfall.

    In addition, the Senate’s proposal to send a constitutional amendment to the voters to lower the debt limit from 9% to 7% is a big sticking point. The Senate has said it won’t move the capital budget without the constitutional amendment; the House has said it won’t do the capital budget until the bond bill passes.

    Washington Senate Passes Operating Budget

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    The Senate passed the biennial operating budget this afternoon.

    With only one week left in the regular 2011 legislative session, the action taken by the Senate moves the state closer toward closing the budget gap.

    The operating budget now goes to the House for agreement. Since the proposals are different a conference committee will be established. Budget conferees are expected to include Senators Murray, Kilmer, Zarelli and Representatives Hunter, Sullivan,  and Alexander.

    Washington Senate Moves Operating Budget Bill Out of Committee

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    This afternoon the House Ways & Means Committee took action on the proposed biennial operating budget.  The Committee passed the budget to the floor.

    The Senate’s proposed budget reduces state funding to higher education by $617.5 million. Of the total reduction to higher education, state funding for community and technical colleges is $200.3 million (14.4 percent) below the maintenance level and state funding for the four-year, public institutions is $417.3 million (29.8%) lower.

    Under this proposed budget state funding for Evergreen is reduced by $14.28 million over the biennium. The reductions to Evergreen’s state funding were offset in part by tuition increases for the 2011-13 biennium as stated in the budget. As a result, the net cut to state funding for Evergreen is $5.78 million (-5.5%).

    The budget now goes to the Senate floor – as soon as Monday – for further consideration.

    U.S. House Passes FY12 Budget Resolution

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    Today the U.S. House of Representatives passed a proposed FY2012 resolution with a vote of 235-193.

    The budget would  impact higher education in several ways.

    • Rolls back  the 2012-13 maximum Pell Grant to FY2008 levels, resulting in a maximum Pell Grant of $2,090 for the 2012-13 academic year.
    • Calls for the repeal and defunding of the Healthcare and Education Reconciliation Act (HCERA), which includes mandatory funding for the Pell Grant program. This could further lower the maximum grant by $690. 
    • Changes to limit the lifetime limits of the Pell Grant program
    • Rescinds recent expansions to the Need Analysis formula
    • Eliminates administrative cost allowances to schools
    • Repeals the expansion of income-based repayment provisions in the Student Aid and Fiscal Responsibility Act (SAFRA), and 
    • Eliminates interest subsidies on all Stafford Loans.

    The budget resolution is a nonbinding resolution that sets broad spending levels that appropriations’ committees use to set specific spending levels for federal programs. In addition, it is unlikely that the Democratic-controlled Senate will approve the measure.

    The U.S. House Democrats offered a substitute FY2012 budget resolution that was defeated by the House. The Democrats’ substitute proposed using mandatory spending to maintain the maximum Pell Grant at $5,550 and to pay for this by reducing spending on other programs. The substitute resolution also established a deficit neutral reserve fund for college affordability’ to allow the House Budget Committee Chairman to revise the allocations, aggregates, and other appropriate levels in the resolution for legislation that makes college more affordable, including efforts to maintain the maximum Pell grant award, as long as it does not increase the deficit.

    Senate Holds Public Hearing on Proposed Biennial Budget

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    This afternoon the Senate Ways & Means Committee held a public hearing on the Senate’s proposed operating biennial operating budget.

    The Senate’s proposed budget reduces state funding to higher education by $617.5 million. Of the total reduction to higher education, state funding for community and technical colleges is $200.3 million (14.4 percent) below the maintenance level and state funding for the four-year, public institutions is $417.3 million (29.8%) lower.

    Under this proposed budget state funding for Evergreen is reduced by $14.28 million over the biennium. The reductions to Evergreen’s state funding were offset in part by tuition increases for the 2011-13 biennium as stated in the budget. As a result, the net cut to state funding for Evergreen is $5.78 million (-5.5%).

    Representatives from key higher education stakeholder groups – including the Geoduck Student Union representative to the legislature, the Evergreen Council of Faculty representative, and the Director of Government Relations from Evergreen – testified to the impact of the proposed budget on students, faculty, and institutions.

    Overall testimony acknowledged the dramatic reduction to higher education and the impact of this to Washington. Several stakeholders advocated for continual support of the budget’s funding for the State Need Grant program and the State Work Study program.  In addition, testimony showed appreciation for the open dialogue between senators and key stakeholders regarding the budget throughout its development and clarity within the budget.  Finally, stakeholders asked to continue to work with policymakers around personnel related reductions in the budget and some technical aspects of the bill.