State revenues fell again for the second month in a row.
The latest revenue collections released earlier this week showed revenue collections were $124.5 million less than was predicted in June.
Additional details regarding revenue will emerge over the next month. In September the Economic and Revenue F’orecast Council is expected to release an economic report (Sept. 3), a follow-up on tax collections (Sept. 10), and the quarterly revenue forecast (Sept. 16).
Today, the U.S. Senate took the necessary final vote to provide $26 billion to states for Medicaid and education.
The bill extends programs enacted in last year’s stimulus law to help preserve the jobs of teachers and other public employees and provides an extension of federal Medicaid funds to states.
The U.S. House will return from their August recess to take a vote on the bill next Tuesday.
Once the House passes the bill and the legislation is signed by the President, Washington is expected to receive $530 million. The state will receive $320 million for Medicaid and $208 million to pay salaries for 3,000 teachers who were in line to lose their jobs.
The influx of federal dollars does stave off a special session for now. However, Washington policymakers are now focused on the latest revenue forecasts, expected August 10, to gauge the health of the state budget.
It is unlikely that Washington will experience another special session this year. Early this week, Democratic leaders in the Washington Senate and House ruled out holding a sepcial legislative session to fill budget gaps related to a lack of federal aid and declining state revenues.
Governor Gregoire had set a noon deadline on Monday for Democratic leaders to determine whether or not they could bring their caucuses for a short special session to remedy the looming budget gap.
Though the spokeswoman for the Governor did not announce how the budget gap will be bridged, the alternative is to require across-the-board cuts of up to 4 percent to solve the budget gap.
The question of whether to hold a special session or implement across-the-board cuts would be eliminated if Congress acts. The U.S. Senate is considering an extension of $16.1 billion in federal medical assistance funding and $10 billion in aid for schools to avert teacher layoffs for states.
Action on the added funding was delayed from Monday to tomorrow (Wednesday). Even if the Senate approves the funding it is required to go to the U.S. House for final approval.
Last night the Governor and members of the recently formed Committee on Transforming Washington’s Budget held the last of four public hearings in Spokane.
The hearings mimicked many of the same messages that the Governor and committee members have heard over the last month in Tacoma, Everett, and Vancouver– spare services and reduce taxes.
Among the requests from the 43 people who testified: Don’t cut money that pays to educate our youth; Don’t cut jobs of parole officers who keep an eye on violent offenders; and Don’t cut money that keeps the elderly in their own homes.
Though the statewide hearings are over, the Governor and the Committee are still collecting input through the website launched to gather thoughts regarding what government should and should not fund.
Yesterday the full U.S. Senate Appropriations Committee approved a $169.6 billion appropriations bill for FY11 funding for the Department of Labor, Health and Human Services, and Education.
The bill as passed by the Senate Committee maintains a level discretionary funding base for the Federal Pell Grant program of $4,860. This amount combined with a mandatory add-on from the Healthcare and Education Reconciliation Act provides a maximum award of $5,550 in the 2011-12 year.
The bill passed out of Committee, however, did not include the $5.7 billion to fill an estimated Pell Grant shortfall in the 2011-12 year. Senate Democrats on the committee stated that addressing the shortfall will have to wait until the bill is either considered by the full Senate or during conference committee with the House.
In addition, the bill maintains level funding for the majority of other student aid programs. This includes Federal Supplemental Educational Opportunity Grants, Federal Work-Study, and Leveraging Educational Assistance Partnerships.
Finally, funding for TRIO would increase by $15 million and Perkins cancellations would receive no funding.
The bill now goes to the full Senate for consideration.
Over the last two weeks the Governor and members of the Committee on Transforming Washington’s Budget have held three public hearings on the 2011-13 biennial budget with a fourth and final hearing to be completed this evening in Spokane.
In early July, the Governor and the Task Force traveled to Tacoma to listen to concerns and ideas regarding the 2011-13 biennial budget.
Last week the Governor held the second of four public hearings in Everett. Approximately 400 people showed up at Everett Community College to listen to the fiscal context facing Washington and share their ideas for reducing the state budget.
Nearly 50 people shared their views with the Governor and committee members. Ideas included reducing state employee salaries, selling off the state ferry system, and privatizing port districts. Others argued for funding for a variety of public services and the impact of failing to do so.
Advocacy for public services and programs dominated the third of four public hearings in Vancouver. Approximately 400 people arrived at the WSU-Vancouver campus to hear about the budget and share their ideas.
Today Governor Gregoire announced she will decide whether or not to call a special session or make across-the-board cuts in early August.
A special session or across-the-board cuts would be required to reduce the $300 million budget shortfall if federal aid for Medicaid dollars falls through.
Not a fan of the across-the-board cuts, Governor Gregoire estimates that the cuts would reduce all state-funded programs by an additional 3.5-4.0 percent. The only exceptions to the reduction would be basic education, debt payments, and pensions.
Today, Governor Gregoire announced the formation of a Higher Education Task Force. Evergreen’s President, Les Purce, will serve as a representative for the four-year Council of Presidents.
The goal of the Task Force is to create a sustainable funding model and develop strategies that increase accountability to ensure taxpayers get the best value for the state’s and student’s investment at our four-year universities.
Gregoire asked the task force to focus on three tasks:
The task force will be chaired by Brad Smith, general counsel and senior vice president of Legal and Corporate Affairs at Microsoft.
Members of the governor’s Higher Education Funding Task Force are:
Brad Smith, Chair, Senior VP and General Counsel, Microsoft Corporation
Judith Runstad, Foster Pepper LLC
Charlie Earl, Director, State Board for Community and Technical Colleges
Jesus Hernandez, Chair, Higher Education Coordinating Board
Thomas L. “Les” Purce, President, Evergreen State College
Pat Shanahan, Vice President & General Manager, Airplane Programs, Boeing Company
David Tang, Managing Partner, K&L Gates LLP
Paula Reynolds, CEO, Preferwest LLC
Dean Allen, CEO, McKinstry Company
Bill Ayer, Chair and CEO, Alaska Air
Michael Kluse, Senior VP, Battelle
Maud Daudon, President & CEO, Seattle Northwest Securities
Chris Rivera, President, Washington Biotechnology and Biomedical Association
Ray Stephanson, Mayor of Everett
Paul Rosier, Executive Director, Washington Association of School Administrators
Alex McGregor, President & CEO, The McGregor Company
The Higher Education Funding Task Force will meet several times this summer and make recommendations to Gregoire in the fall, with proposals to eventually be incorporated into her 2011 legislative agenda.
Yesterday, the U.S. Senate Appropriations Subcommittee on Labor, Health and Humans Services, Education, and Related Agencies approved a $169.6 billion FY11 appropriations bill.
The bill would seek to maintain a level appropriated base for the Federal Pell Grant program of $4,860. That amount, combined with a mandatory add-on from the Healthcare and Education Reconciliation Act (HCERA), would provide a maximum Pell Grant of $5,550 in the 2011-12 year. However, the Senate appropriation markup did not include $5.7 billion to plug an estimated Pell Grant shortfall in the 2011-12 year. The House version did include the $5.7 billion.
In addition to Pell appropriations, the spending bill would maintain level funding for the majority of the other student aid programs. The Federal Supplemental Educational Opportunity Grants (FSEOG) program, the Federal Work-Study (FWS), program, and the Leveraging Educational Assistance Partnerships (LEAP) program in fiscal year (FY) 2011 would all be level funded under the appropriations bill. TRIO would be increased by $15 million under the bill and Perkins cancellations would receive no funding.
The full appropriations committee is expected to take up the bill this Thursday.
Late this week Governor Gregoire suggested that she would consider a special session if the federal Medicaid matching dollars do not come to the state by August 9.
Speaking to KOMO radio she shared that she would consider a special session and will consult with legislative leaders to limit a session to a day or two.
This comes at a time when Washington faces a projected shortfall of $3 billion in the 2011-13 budget cycle and a slow economic recovery that is forcing fundamental changes in state operations.
Speculation suggests that a special session could take place as soon as September.