Tag Archives: Budget

Action on Supplemental Budget to Begin Next Week

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Next week the House Ways & Means Committee is scheduled to take action on the supplemental budget for the current fiscal year.

In December the Legislature convened a special session to remedy a portion of the budget gap in the current biennium.  The actions taken by policymakers reduced the estimated $1.2 billion shortfall by approximately $700 million. This left a remaining budget gap of approximately $502 million.

The actions next week will focus on closing the remaining budget gap in the current fiscal year.  This is part of an effort by both House and Senate leadership to expedite an early action supplemental budget reduction bill.

In comments earlier today, Senate Majority Leader Brown stated that though the goal is to attempt to close the revenue gap in this fiscal year, both chambers are also focused on ensuring that actions taken in the supplemental budget dovetail with the biennial budget the Legislature must have in place by June 30, 2011.

The hope is to finalize the supplemental buget by early February.

House Higher Education Focuses on Budget

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This morning the House Higher Education Committee held a work session on higher education funding and budget priorities.

The Committee heard several overviews regarding the recent history of higher education funding in Washington and the impact of the Governor’s proposed 2011-13 biennial budget. Presentations were provided by Legislative staff, the Governor’s Office, and the Council of Presidents.

Following this overview, each four-year, public institution of higher education provided a brief presentation regarding the impacts of the Governor’s proposed budget and the impact of state funding reductions over the last few years.  Due to time constraints, Evergreen will provide their presentation on Monday, January 17.

The Committee wrapped-up their discussion with a student panel of representatives from the Washington Student Association to share their perspectives.

Note: All committee presentations can be found on the House Higher Education Committee’s website by clicking on Committee Meeting Documents, selecting the date and work session, and then selecting the presentation

Federal Bill Introduced to Reduce Spending on Programs and Services

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This week, U.S. Representative Kevin Brady (R-TX) introduced the Cut Unsustainable and Top-heavy Spending (CUTS) Act to reduce federal spending by $153 billion over the next five years. The bill includes several provisions that would affect student aid, including:

  • Elimination of the administrative cost allowance (ACA) paid to schools for student aid administration to save $200 million over the next five years
  • Elimination of the Leveraging Educational Assistance Partnership (LEAP) Program to save $1 million over five years
  • Elimination of the Robert C. Byrd Honors Scholarship Program to save $42 million over the next five years
  • Elimination of the Department of Education’s Legal Assistance Loan Repayment Program to save $5 million over the next five years.  

The Act is among several that have already been introduced in the U.S. House. Further action on this bill has yet to be scheduled.

Governor Releases Revised Budget for Current Fiscal Year

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This morning Governor Gregoire released a supplemental FY11 operating and capital budget to meet the estimated $400 million shortfall that remains in the current fiscal biennium after Saturday’s special session.

The reductions proposed by the Governor in the current fiscal biennium are similar to many of the reductions proposed for the 2011-13 biennium, but will take effect sooner.

Some of the changes proposed in the Governor’s FY11 supplemental budger include:

  • Elimination of additional state funds for kindergarten through 4th grade class size reduction efforts for the entire 2010–11 school year
  • Reduction of levy equalization payments to eligible districts by 6.287 percent for Fiscal Year 2011.
  • A shift of part of the June 2011 apportionment payment to school districts from the last business day of June 2011 to the first business day of July 2011.
  • Elimination of the Basic Health Plan beginning March 1, 2011. All insurance subsidized through the Basic Health Plan will be eliminated, which affects 66,000 individuals
  • Elimination of the Disability Lifeline Grant and Medical programs, saving $43.5 million in GF-S and $22.6 million in federal funds.

In addition, her proposed supplemental budget would make the following changes to the higher education sector:

  • Continue support for K-12, higher education, and early learning programs funed by the Washington Opportunity Pathways Account and Education Legacy Trust Fund.
  • Suspension of the implementation of definitions for college readiness in science and English.
  • Elimination of funding for a consultant to assist the HECB in monitoring and reporting activities and for work associated with an additional Health Sciences and Services Authority (HSSA) designation.  RCW 24.104 requires the HECB to monitor and report to the Legislature biennially on the performance of the HSSA program in Spokane County.
  • Reduction in student financial aid administration costs.
  • Reduction in funds for the Technology Transformation Task Force. In the 2009 legislative session the HECB was directed to convene a higher education technology transformation task force.

No further reductions were made to higher education institutions beyond those implemented during the Saturday special session. In addition, no reductions were made to the State Need Grant program.

Still No Federal Funding Bill; Continuing Resolution Seems to be the Answer

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With the end of the lame duck session nearing, Congress has yet to pass a final budget bill for FY2011. 

Currently, the federal government is being funded through a Continuing Resolution that is set to expire at midnight tomorrow (December 18).

Last week the U.S. House passed a new Continuing Resolution that would begin when the current resolution expires and extend funding for the federal government through the entire 2011 fiscal year and provide $5.7 billion to pay off the pending shortfall in the Pell Grant Program.

The U.S. Senate had hoped to take a different approach and pass an omnibus spending bill, which would have combined all twelve appropriations bills and included funding for the Pell Grant shortfall, but efforts to move this approach forward failed.

It is expected that the U.S. Senate will move forward, instead, with a short-term (i.e. 45-day) continuing resolution this weekend. The resolution would then have to go back to the U.S. House for passage.

Governor’s Proposed 2011-13 Budgets: Higher Education

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On Wednesday, the Governor released her proposed 2011-13 Operating Budget. The budget proposed by the Governor includes reductions and fund shifts to balance an anticipated $4.6 billion shortfall in the next biennium.

The budget proposed by the Governor is mixed with regard to its impact on higher education. The proposed budget does make an investment in financial aid by maintaining funds for the State Need Grant and provides capital funds to higher education institutions. However, the budget also includes significant reductions to higher education institutions and our employees.

 State Funding and Tuition

  • The Governor’s proposal formalizes the reduction to higher education institutions taken during last Saturday’s special session. As a result, this $777,000 reduction becomes permanent and is carried into each year of the 2011-13) biennium.

    Additional reductions for the current fiscal year are possible in January. The Governor will release her 2009-11 revised budget early next week, which will be the first opportunity higher education will have to view potential additional cuts to the current biennium to balance the remaining $400 million shortfall.

  • In addition to the cuts above, the Governor’s budget reduction proposal for the 2011-13 biennium attempts to replace most of state funding cuts (i.e. General Fund support) with tuition increases. The proposal reduced each higher education institution’s state funding at a level nearly equal to the amount of tuition revenue generated by the Governor’s suggested tuition rate increases.  The Governor established differential tuition rate increases for resident undergraduates at all higher education institutions and the community and technical colleges.
  • The Governor’s proposal would also remove higher education institutions from receiving any Education Legacy Trust Funds and replaces these funds with General Funds. Revenue from the cigarette taxes, which funded this account, would then be diverted to the General Fund and the remaining revenue in the Trust Fund would be appropriated to K-12.

Financial Aid

  • The Governor’s proposal increases funding for the State Need Grant by $91.6 million to account for proposed student tuition rate increases in 2011-2013. Despite the investment in the State Need Grant, it is anticipated that not all eligible students will be served. In the current academic year 22,000 eligible Washington students did not receive a State Need Grant because of funding limitations.
  • The Governor’s proposal maintains some support for State Work Study, but trims the program by nearly 30%, reducing the number of students that will be supported by the program to 5,000 students sector-wide compared to approximately 8,000 students that are currently benefiting from the program.
  • The Governor’s proposal further suspends several smaller state financial aid programs – Washington Scholars, Future Teachers Scholarship and Conditional Loan, Health Professions Conditional Scholarship, Passport to College Program, and WICHE Professional Student Exchange Program. No new awards will be provided in the coming biennium. However, students currently enrolled in these programs will continue to be supported.

Impacts to Employees

  • The proposal assumes that, beginning in 2012, state employees will pay 25% more of their health insurance premiums based on the agreement to permanently increase the employee share from 12% to 15%. 
  • The Governor’s proposed budget assumes a temporary reduction in classified employee salaries of 3% in 2011-13. This represents a cut to Evergreen’s budget by $1.92 million over the biennium. In return, classified employees would be allowed to take a comparable reduction in their work hours.  The reduction will expire at the end of the biennium.
  • The Governor’s proposal would cut Evergreen’s budget by $1.024 million over the biennium through a new policy that would cap the state match for employee retirement plan contributions at a maximum of 6% for those employees on the college’s retirement plan (e.g. TIAA/CREF).  Note: this would not apply to the state PERS, TRS and LEOFF plans.
  • The Governor would end the higher education “retire/re-hire” exemption.  Currently, retirees who are rehired in higher education, and their employers, are not subject to the retire/rehire limitations in place for other public employees.

Other Initiatives

  • The Governor’s proposed budget requires higher education institutions to provide coordinated, “uniform” personnel data for state planning purposes.
  • The proposal provides an additional $5 million for the Higher Education Coordinating Board to establish a Baccalaureate Incentive System to provide additional funds for institutions meeting certain degree, STEM (Science, Technology, Engineering and Math)   and retention benchmarks.

Capital

  • The Governor’s proposed 2011-13 Capital budget limits projects that are considered in either the pre-design or design phase.
  • The Governor’s proposal would appropriate funds to Evergreen for the Communications Building and Science Center Lab I Second Floor. In addition, the college would receive minor works funds.

The Governor’s budget is the first of many budgets that will be released to address the 2011-13 biennium. While the Governor’s budget is a critical first step in the budget development process, there will be many more budgets to review as the legislative session progresses. The Washington Legislature will convene on January 10 and many suspect that a final operating budget will not be sent to the Governor until the end of April.

Governor Releases 2011-13 Biennial Budget

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This morning Governor Gregoire released her 2011-13 budget.  In her message on the 2011-13 budget she stated “the budget I am proposing for the 2011-13 biennium is not a budget I ever expected to see in the State of Washington, and the choices in it are the most difficult ones I’ve ever faced.”

The Governor’s proposed biennial budget addresses the assumed budget shortfall in 2011-13 by reducing state programs and services by $3 billion and allowing for $1.1 billion in savings by suspending Initiatives 728 and 732. The balance of the solution is achieved through pension reforms, fund transfers and use of the state’s rainy day fund.

The Governor’s proposed biennial budget proposal for higher education includes:

  • Reductions in funding for higher education by $344.7 million.
  • Differential tuition increases for colleges and universities
    UW/WSU/WWU – 11%
    Evergreen/CWU/EWU – 9%
    Community and Technical Colleges – 10%
  • Maintenance funding for the State Need Grant
  • Reductions in funding for State Work Study by over 30%
  • Suspension of all other state financial aid programs are suspended for new recipients. Current student recipients of these grants are held harmless in the proposal
  • The creation of the Baccalaureate Incentive Program for the public, four-year institutions to boost performance and provides $5 million to fund this program.

Other areas of state government were also dramatically impacted by the Governor’s proposed biennial budget.

  • The Basic Health Plan is eliminated.
  • The Disability Lifeline grant is eliminated.
  • The Student Achievement Program under Initiative 728 that provides smaller class sizes, extended learning time for students and professional development for teachers is suspended.
  • Employee salary increases under Initiative 732 for K-12 and higher education teachers and other employees are suspended.
  • K-4 class-size reduction funds are eliminated.
  • Compensation for state employees is reduced by 3%.
  • All state general funds are eliminated for state parks.
  • McNeil Island Corrections Center is closed.

Finally, other key aspects of the governor’s proposal include:

  • The requirement that government services that benefit a relatively small number of people and businesses, such as processing permit applications, be paid for by the beneficiary and not the general public.
  • The requirement state agencies to deliver important state services at a lower cost. This may necessitate charging higher fees to visit state parks, obtain fishing and hunting licenses, process water rights applications and license adult family homes.

The Washington Legislature will convene on January 10, 2011 to begin the next step in the development of the 2011-13 biennial budget.

Governor Releases Health Care and Pension Policy Initiatives

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On Monday Governor Gregoire announced policy initiatives to further reduce the State’s fiscal footprint.  She announced changes in two signficant areas: (1) Health Care and (2) Pension Plans for the 2011-13 biennium.

Health Care

Governor Gregoire’s policy initiative focuses on further changing Washington’s health care delivery system in order to allow for higher quality, more affordable care. To facilitate this, and consistent with her intent to reorganize state government to operate more effectively and efficiently, she proposed the following.

  • Consolidate a majority of the state’s health care purchasing into a single agency
  • Take advantage of opportunities provided under federal health care reform – the Affordable Care Act
  • Move forward with work launched with the federal Center for Innovation to have Washington serve as a pilot in testing models that ramp up quality and tamp down costs.

Pensions

Governor Gregoire proposed the following actions to reduce future costs to employers and taxpayers while maintaining reasonable benefits for valued public employees and retirees.

 

  • Reverse a 1995 law granting an annual cost of living increase in benefits regardless of inflation.   The Legislature could still consider increases to these benefits, like they did pre-1995, but they would no longer happen automatically.
  • Change the current system which allows workers to retire early without a corresponding reduction in their benefits for all new hires.  
  • Align state support for higher education retirement plans more closely with that provided for other state employers by capping the state’s contribution at 6%. Currently higher education retirement plans provide both a defined contribution amount and a supplemental guaranteed minimum benefit. The alternative would be to allow new higher education employees the option to participate in one of the state’s hybrid pension plans.
  • End retire-rehire benefits in the higher education sector

Governor Announces Plans to Make State Government More Efficient and Smaller

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This morning Governor Gregoire announced her policy initiative to consolidate public services.  She announced the consolidation of public services in five areas.

Consolidating Natural Resource Agendas

  • This initiative consolidates the state’s current eleven agencies to five.
  • Proposes the consolidation of the Department of Fish & Wildlife, the State Parks & Recreation Commission, the Recreation and Conservation Office and the law enforcement unit of the Department of Natural Resources into a new Department of Conservation and Recreation.
  • Proposes the consolidation of the work of the Columbia River Gorge Commission, the Pollution Liability Insurance Agency, and the Department of Health’s reclaimed water program into the Department of Ecology.
  • Proposes the consolidation of the State Conservation Commission into the Department of Agriculture and the Department of Archaeology and Historic Preservation into the Department of Natural Resources.

Consolidating Central Services

  • Eliminate duplicate functions at state agencies
  • Proposes the consolidation of the Department of General Administration, Personnel, Printing and portions of the Department of Information Services and the Office of Financial Management into a new Department of Enterprise Services. 
  • The Department of Enterprise Services will provide the “back office” services and the Office of Financial Management will continue to address policy, budget, forecasting and labor relations.

Creating the Office of Civil Rights

  • Proposes the consolidation of the state’s Human Rights Commission, Office of Minority and Women’s Business Enterprise, Commission on African Affairs, Commission on Hispanic Affairs, and Commission on Asian Pacific American Affairs into the Office of Civil Rights.

Eliminating Boards and Commissions

  • Proposes the introduction of legislation to eliminate 36 boards and commissions and move appointment authority for 16 boards from the Office of the Governor to state agencies.
  • A list of the boards and commissions that will be impacted has yet to be released.

Integrating Correctional Services

  • Proposes potential changes from ongoing discussions between the Department of Corrections and the Washington Assocation of Sheriffs and Police Chiefs regarding short-  and long-term strategies to maximize each correctional system’s strengths and integrate certain services.

Governor’s Budget Will Roll Out This Week

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Governor Gregorie will roll out her 2011-13 biennial budget this week.

The 2011-13 biennial budget will be released on Wednesday, December 15. Prior to the release of the budget, the Governor will announce proposed policy changes to healthcare and pension plans sometime today (December 13) and efforts to streamline government and/or fund current services and programs differently in the future on Tuesday (December 14).

The Governor will not likely release her revised 2009-11 budget until Monday December 20.  In addition, it is expected that she will announce additional policy initiative in January.