Tag Archives: Budget

Another Short-Term Gap Spending Bill Considered in D.C.

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This week Congress is expected to approve a three-week, stop-gap spending bill that reduces federal spending by $6 billion, but does not cut student aid or funding for the U.S. Department of Education. 

The federal government is currently being funded by a two-week, stop-gap measure  that is set to expire on March 18. The three-week CR would prevent a government shutdown after March 18 and give Republicans and Democrats time to negotiate a long-term CR for the remainder of fiscal year (FY) 2011, which ends on Sept. 30.
 
The bill faces opposition from some conservatives in the House who are concerned that the bill does not included enough cuts, but Republican leaders in the House and Democratic leaders in the Senate have expressed confidence that they will be able  to pass the measure. The bill could be difficult for Democrats to oppose because the cuts are the same as those proposed by the Obama administration in its 2012 budget request.

Caseload Forecast Shows Some Optimism; Not Expected in the Revenue Forecast Out this Week

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On Friday the Washington Caseload Forecast Council released the March caseload forecast report but did not adopt the report due to a lack of a quorum. The forecast shows a reduction of $287 million in the cost of government through June 2013.

The forecast in effect  shows a reduction of $78 million to the state from costs for public schools, Medicaid, prisons and other programs through June and an additional $207 million for the next two-year budget cycle.

The reason for the reduction in costs is primarily federal health care reform. Reduced use of state-paid medical services by those on the case rolls is driving down the costs, accounting for $70 million of the avoided costs in the short term and about $117 million in the next cycle. 

In other news, the Economic and Revenue Forecast Council released its monthly tax collections report Friday, saying they are down by a cumulative $85 million through early March, compared with the November forecast.

The collections for the state general fund fell $39.9 million below the previous forecast over the past month alone. But the state’s economy is growing, and tax collections overall still are higher than in the previous year.

The revenue council makes its next quarterly report Thursday. Dr. Arun Raha will offer the latest revenue forecast on March 17 at noon in Olympia to legislative members of the Economic and Revenue Forecast Council. The announcement is expected to be carried live on TVW. 

Some legislators fear revenue could fall as much as $2 billion from November’s predictions. “Optimistic” projections pegged the revenue shortfall at $500 million more than originally projected. Lawmakers are expressing concerns that it will be even larger, which will make closing the current projected gap of $4.6 billion for the 2011-13 biennium even greater.

State revenue is tied in a major way to sales and business activity, and sales are linked to consumers’ sense of job security or job prospects. But the quarterly economic forecast issued a week ago said the state still is 180,000 jobs below the pre-recession peak, and full job recovery won’t occur until after the next biennium ends June 30, 2013.

About all that legislative leaders have agreed on at this point is to first try writing a budget without tax increases.

2011 Legislative Session: Week 10

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Next week will be filled with a mix of work sessions and committee hearings primarily on bills from the opposite chamber and on a handful of bills that are deemed necessary to implement the budget.

Several bills that may impact higher education are scheduled for a public hearing next week including legislation that would provide regulatory relief for higher education institutions and alter the current retire/rehire practice for higher education employees.

In addition a public hearing is scheduled on SB 5717 which would implement the Governor’s Higher Education Task Force Recommendations and an executive session is scheduled on SB 5182, which would restructure higher education in Washington. In addition, a work session on higher education funding in House Ways & Meansis also scheduled. Please see the links below for a list of all the hearings that might be of interest.

Also next week the State revenue forecast will be released on March 17. It is expected that the forecast will soon be followed by the release of the first biennial budget. The House writes a budget first this year and the earliest we may catch a glimpse of it is March 21. 

However this may change if the revenue forecast is significantly large and increases the $4.6 billion gap for the 2011-13 operating budget. Originally lawmakers were hearing an additional shortfall of $500 million; estimates are now creeping up to the $2 billion mark. In that case proposed budgets may not be released until a week later (Week of March 28).

U.S. Senate Does Not Pass Either Budget Bill

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Yesterday, the U.S. Senate voted 44 to 56  against H.R. 1, a seven-month fiscal year (FY) 2011 spending bill passed by the House on Feb. 19. 

H.R. 1 would have cut 2011-12 Pell Grant awards by $845 — more than 15 percent — and would have eliminated funding for the Federal Supplemental Educational Opportunity Grant (FSEOG).

The Senate also voted 42 to 58 to defeat a Democratic alternative FY2011 spending bill that would have trimmed an additional $6.5 billion from current spending levels, but would not have cut funding for Pell or FSEOG. Sixty votes were needed to pass either measure.

The Senate’s inability to pass either spending bill means lawmakers will have to yet again restart negotiations to craft a FY2011 spending package that will garner sufficient support in the House and Senate.

The federal government is currently being funded by a two-week continuing resolution (CR) that will expire on March 18. Because it is unlikely that Republicans and Democrats will be able to agree on a spending package before the current CR expires, Republican leaders in the House began planning another short-term CR to give more time to debate a long-term CR. Early reports indicate that House Republicans will propose $2 billion in cuts for every week the short-term CR covers.

Washington Policy Committees Hear Impact of Potential Budget Reductions in Higher Education

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The Washington House and Senate policy committees on higher education heard from institutions and students about the consequences that lie ahead if state funding is reduced.

In December the Governor released a proposed operating budget for the four-year, public baccalaureate institutions that if implemented will have reduced state funding by 50% for these institutions in the last three years.

In February the four-year, public baccalaureate institutions were asked to provide potential impacts if state funding was reduced beyond the Governor’s proposed budget by an additional 15% and 30%.  It is the potential consequences of the loss of state funding at these levels that prompted the work sessions this morning in the House and this afternoon in the Senate.

Mike Reilly – Executive Director, Council of Presidents – presented an overview of the impact of the proposed budget models on the four-year, public baccalaureate sector.

According to the Council of Presidents,  the loss of state funding under consideration would drastically alter higher education in Washington sector-wide.

  • Reduced access for resident undergraduates (up to 3,000 slots under the Governor’s cut level alone and up to 10,000 at the higher reduction levels)
  • Fewer slots in STEM and other high-demand degree programs
  • Increased time to degree (each additional term costs students $6,000-$8,000)
  • Large increases in tuition
  • Loss of thousands of jobs, less student support

The Evergreen State College was represented by Ken Tabbutt, Interim Provost and Julie Garver, Director of Government Relations. Tabbutt expressed what is at stake not only for the state but for Evergreen students and for the College’s local and regional economies.

President Signs Stopgap Bill; Negotiations Begin Again

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Yesterday President Obama signed a two-week continuing resolution that reduces current federal spending by $4 billion and effectively eliminates the Leveraging Educational Assistance Partnership (LEAP) program.

The bill does not impact the current maximum Pell Grant.

With this  final hurdle for a short-term, stopgap bill completed, Congress now will begin to negotiate another continuing resolution to provide funding for the remainder of the c urrrent fiscal year. 

Last week the U.S. House passed H.R. 1 which would reduce federal spending by $61 billion, including reductions to higher education.  The U.S. Senate however has indicated that it will not pass a budget bill containing such deep reductions.

The Senate is currently drafting its own budget bill that is likely to include approximately $25 billion in reductions mosttly from President Obama’s FY12 budget request.  It is unclear at this time whether or not the Senate version will include similar cuts to higher education, in particular reductions to the maximum Pell Grant and the elimination of funding for the Federal Supplemental Education Opportunity (FSEOG) program.

House Higher Education Committee Holds Work Session and Hearing

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This morning members of the Washington House Higher Education Committee took a break from the floor.  The Committee held a work session on innovations in higher education and a public hearing.

The Committee heard two bills – HB 1816 and HB 1551.

House Bill 1816 is another bill that would look to restructure the current relationship between state funding, tuition, and financial aid for higher education in Washington. The bill suggests restructuring funding for higher education in the following ways:

 

  • Establishes a state funding/tuition balance for resident undergraduate and graduate students based on the cost of attendance and prohibits over-enrollment.
  • Eliminates Global Challenge States as a comparison model for funding.
  • Eliminates the role of the Higher Education Coordinating Board with respect to financial aid, eliminates state financial aid programs, and transfers responsibility for financial aid to the individual institutions.
  • Creates an internship program for which businesses may get a Business and Occupation tax credit based upon the salaries and benefits paid to interns.
  • Establishes a new loan program for upper division undergraduates and graduate students.
  • Requires students pursuing a bachelor’s degree to take a Rising Juniors test.
  • Directs adoption of articulation and transfer policies and establishes financial penalties for failure to meet the statutory implementation deadline.
  • Allows school districts to be charged for the cost of remedial education required by their students.
  • Abolishes the Workforce Training and Education Coordinating Board, and transfers responsibilities to the State Board for Community and Technical Colleges.

The Council of Presidents testified in support of continuing discussions about the relationship between state funding, financial aid, and tuition but with concerns regarding specifics in the bill such as the proposed distribution of financial aid in the bill and transfer policy.

The Committee also heard House Bill 1551 which would add regional universities and community and technical college Centers of Excellence to the membership of the Washington Technology Center and eliminates the Spokane Intercollegiate Research and Technology Institute and transfers its functions to the Washington Technology Center.

U.S. Senate Budget Committee Hears the Obama Administration’s Proposed FY12 Budget

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Yesterday U.S. Education Secretary Arne Duncan  presented President Obama’s FY 12 budget to members of the U.S. Senate Budget Committee.

The president’s budget would boost FY2012 discretionary spending for Pell Grants by $5.4 billion above spending levels in the FY2011 continuing resolution (CR) that is set to expire on March 4.  The increased funding would bring the total FY2012 discretionary funding for Pell to $28.6 billion.

The administration proposes reining in the cost of the Pell Grant program in FY2012 by eliminating the newly enacted “year-round” Pell Grant program that is designed to accelerate a student’s time to completion. The president’s budget would also eliminate interest subsidies for graduate student loans and direct those savings to the Pell grant program. The administration projects that its proposal — known as the Pell Grant Protection Act — would reduce the discretionary need for the Pell Grant program by $100 billion over the next 10 years. Legislative text for the Pell Grant Protection Act has yet to be released.

Senate Budget Committee Chairman Kent Conrad (D-ND) highlighted the challenge that growth of the Pell Grant program presents to Congress.

“The rising cost of college has outpaced the increases in the Pell award,” he said. “At the same time, due to the recession and increased demand for Pell grants, as well as changes that we made as to who qualifies, the cost of the program has increased. So, we’re paying a smaller share of the cost of college, but the overall cost of the Pell program has increased.”

Republicans argued that the administration’s proposal does not go far enough to rein in Pell spending.

“In 2008, we provided Pell Grants for 6 million, now we’re providing Pell Grants, under your proposal, for 9.6 million, doubling the entire budget and we don’t have the money,” said the committee’s Ranking Republican Sen. Jeff Sessions (R-AL). “You haven’t cut Pell Grants. Pell Grants are increasing dramatically.”

U.S. Senate Passes Stopgap Legislation

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This morning the Senate voted – 91 to 9 – to keep the federal government operating another two weeks through March 18 and cut $4 billion from the federal budget.    

The U.S. House of Representatives passed the two-week continuing resolution (CR) yesterday.

Education programs received a disproportionate 22 percent of the cuts, but the maximum Pell Grant would remain at $5,550 under the bill.

The only student aid cut in the bill was the elimination of funding for the Leveraging Educational Assistance Partnership (LEAP) program. This cut would provide $64 million in savings.   The bill would also make cuts several cuts to unfunded earmarks proposed by President Obama in his FY 2012 budget.

 The measure now goes to President Obama, who is expected to sign it.

U.S. House Passes Short-Term Stopgap Legislation

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Today the U.S. House of Representatives passed emergency short-term legislation  to reduce  federal spending by $4 billion.

The bill that cleared the House on a bipartisan vote of 335-91 eliminates the threat of a shutdown on March 4, when existing funding authority expires. At the same time, it creates a compressed two-week timeframe for the White House and lawmakers to engage in negotiations on a follow-up bill to set spending levels through the end of the fiscal year.

The Senate is set to vote on the short-term measure tomorrow morning, the final step before it goes to President Barack Obama for his signature.

The White House, which earlier in the day called publicly for an interim measure of up to five weeks, stopped short of saying the president would sign the legislation.