Tag Archives: Capital Budget

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.

    Special Session Expected

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    Yesterday Governor Gregoire announced that a special session is expected. 

    After discussions with House and Senate leadership it is unlikely that they will be able to complete their work by April 24 the last day of the regular session. 

    Though the budget process continues to move forward, the Senate passed out the biennial operating budget from Committee to floor last night, the Legislature must still find agreement on the operating and capital budgets and enact over 75 bills necessary to implement the budget.

    The real question is when will the special session begin. Senate and House leadership have indicated that they would like to take a short weekend break and then resume work. But Gregoire said she wasn’t certain if she’d call them back immediately. The governor also said any special session needed to be limited in scope.

    Senate Holds Public Hearing on Proposed Capital Budget

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    The Senate Ways & Means Committee held a public hearing on the proposed biennial capital budget this afternoon.

    The Senate’s proposed capital budget provides for $1.23 billion in bond-supported capital budget capacity for the state. The proposed capital budget is 21% smaller than the current 2009-11 biennim in total funds and a third smaller in bond funded projects.

    The Senate’s proposed capital budget provides $590 million for higher education facilities. Over half of the funds go to the four-year institutions. This includes partial funding for Evergreen’s Communications Building and full funding for the science lab renovation.

    The Evergreen State College testified with concerns about the proposed capital budget. While Evergreen supports the commitment to funding for infrastructure needs at Washington’s higher education institutions (including Evergreen’s Science Lab I 2nd Floor Renovation), the College expressed concern with regard to the lower funding level proposed for the Communication Building renovation. The College requested $10.77 million and the budget provides for $9.16 million. The College asked the Senate to fully fund this project.

    WA Senate Release Biennial Budgets

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    This evening the Washington Senate released its proposed biennial operating and capital budgets along with a supplemental budget for the current fiscal year.

    2011-2103 Operating Budget
    The proposed biennial budget makes approximately $4.8 billion in total reductions. The budget reduces funding for higher education by $617.5 million. Of this amount, 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. The Evergreen State College is reduced by $12.152 million and authorized to increase tuition by 14% per year for the biennium.

    In addition to the reductions to higher education the proposed budget makes the following reductions to achieve a total savings of $4.8 billion.

    • $861 million – Elimination of Initiative 728
    • $212 million – Elimination of K-4 class enhancement
    • $95 million – Implementation of average daily attendance in K-12 public schools
    • $361 million – End automatic COLAs for PERS Plan 1 and TERS Plan 1
    • $428 million – 3% salary reduction to state, higher education, and K-12 employees
    • $184 millin – Reform to the Disability Lifeline cash program
    • $122 million – Reduction to Basic Health Plan
    • $110 million – Reduction in Hospital payments
    • $98 million – Reduction of 10% to Medicaid personal care hours
    • $51 million – Reduction to Disability Lifeline-Medical program

    The Senate’s proposed budget also makes $455 milion in transfers from various accounts to maximize the General Fund state resources. In addition the budget assumes a net increase of $32 million in new revenues through a combination of legislation reducing revenue and legislative/budget actions increasing revenue.

    2011-13 Capital Budget
    The Senate’s proposed capital budget provides for $1.23 billion in bond-supported capital budget capacity for the state. The proposed capital budget is 21% smaller than the current 2009-11 biennim in total funds and a third smaller in bond funded projects.

    The Senate’s proposed capital budget provides $590 million for higher education facilities. Over half of the funds go to the four-year institutions. This includes funding for Evergreen’s Communications Building and science lab renovation.

    House Capital Budget Moves to the Floor

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    This morning the  House Capital Budget Committee moved the proposed biennial capital budget out of committee and to the House floor. The committee adopted several amendments of which none impact Evergreen.
    The capital budget proposes $629.1million in total funds for higher education, including $430.5 million in state bonds.  The four-year public baccalaureate institutions received $167.3 million in state-bonds.  This includes funding for Evergreen’s Communications Building, science lab renovation, and a predesign for the Lecture Hall.

    House Releases Budgets…Nearly A Half Billion Reduction to Higher Education

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    Yesterday the Washington House released its proposed biennial operating and capital budgets along with a supplemental budget for the current fiscal year.

    2011-13 Operating Budget
    The proposed budget (HB 1087) makes approximately $4.4 billion in total reductions. The budget reduces funding for higher education by $482 million.  The Evergreen State College is reduced by an additional $13.9 million and authorized to increase tuition by 11.5% per year for the biennium.

    Reductions greater than $50 million include:

    • $1.2 billion for I-728 and I-732
    • $482 million in a general reduction to higher education institutions (in part, offset with tuition)
    • $362 million from making changes to how certain future pension benefits are calculated for Plan 1 retirees
    • $216 million from elimination of the K-4 class size enhancement
    • $176 million from a 3 percent reduction in state employee salaries
    • $141 million from hospital rates and related changes
    • $108 million from changes to the Basic Health Plan
    • $104 million from biennializing the ESHB 1086 across-the-board reduction for higher education institutions
    • $100 million in reduced Disability Lifeline cash grants
    • $97 million for reduced personal care hours for long-term care and developmentally disabled clients
    • $89 million from a change in the Federally Qualified and Rural Health Centers payment methodology
    • $61 million from changes to the K-12 National Board Bonus program
    • $57 million from limiting state contributions to certain higher education pension costs to 6 percent
    • $56 million from freezing K-12 steps
    • $53 million from a K-12 alternative learning program funding adjustment
    • $53 million in reduced nursing home rates and quality incentive payments

    The budget bill also adds approximately $500 million in policy additions, some of which are expected to achieve additional savings. Policy additions include the following items:

    • $240 million (net) repayment of the K-12 apportionment delay in the 2011 supplemental budget.
    • $103 million for the higher education State Need Grant to accommodate authorization to increase tuition.
    • $72 million in K-12 related items (mostly related to converting to a new funding formula).
    • $30 million for increased debt service.
    • $23 million related to the Special Commitment Center trials/hearings.
    • $11 million for repayment to the State Efficiency and Reorganization Account.

    In addition the budget also makes the following changes, transfers, and consolidations.

    • Assumes a net receipt of $300 million to the General Fund-State from the privatization (lease) of the state liquor distribution center.
    • Assumes that higher education institutions are authorized to implement tuition increases totaling $379 million for the biennium 
    • Assumes net fund transfers into the General Fund-State of $214 million, and another $124 million by permanently consolidating certain revenue sources into the state general fund.
    • Medical Purchasing Administration: The DSHS Medical Assistance Administration becomes part of the Health Care Authority.
    • Consolidates the following into the Department of Enterprise Services: The Department of General Administration, the State Printer, and parts of the Department of Information Services, the Department of Personnel, and the Office of Financial Management are merged into the new Department of Enterprise Services. Remaining portions of the Department of Personnel and the Department of Information Services are consolidated into other agencies, including the newly created Consolidated Technology Services Agency.
    • Consolidates the Department of Heritage, Arts, and Culture: The Arts Commission, the Washington State Historical Society, the Eastern Washington Historical Society, and the Department of Archaeology and Historical Preservation are merged into the new Department of Heritage, Arts, and Culture.
    • Consolidates the Indeterminate Sentence Review Board and the Sentencing Guidelines Commission are merged into the Department of Corrections.

    2009-2011 Supplemental Budget

    This proposal addresses the remainder of the shortfall and leaves a projected near general fund ending balance of approximately $36 million. There are two main elements to this proposal: 

    • Incorporating the latest projection of federal rates used to match Medicaid expenditure costs, $128 million; and
    • Delaying a portion of the apportionment payments that would otherwise be made to school districts in June 2011 until July 2011.  This saves a net of $240 million in the 2009-11 biennium and increases net 2011-13 costs by an equal amount.

    2011-13 Capital Budget
    The proposed capital budget (HB 1497) provides for approximately $1.43 billion in bond-supported capital budget capacity for the state. Of this $801 million in bond capacity is available in FY 2012 with the balance available in FY 2013.

    Approximately a quarter of the capital budget is appropriated for projects that preserve the state’s public assets through renovation, preservation, and minor works projects. Higher education received $453.2 million for major renovations, preservation, and preventative facility maintenance.

    In addition the capital budget creates a $10.5 million pool of emergency funds under the Office of Financial Management to address unforseen emergency repairs at state-owned facilities statewide.

    The capital buget proposes $626.7 million in total funds for higher education, including $407.6 million in state bonds.  The four-year public baccalaureate institutions receive $167.3 million in state-bonds.  This includes funding for Evergreen’s Communications Building, science lab renovation, and a predesign for the Lecture Hall.

    Next Steps
    The House Ways & Means Committee and the House Capital Budget Committee have scheduled actions to move both budgets from committee tomorrow. The House Ways & Means Committee will convene at 3:30 tomorrow (April 6) and the House Capital Budget Committee will convene at 1:30.

    Budget Committees Busy as Deadline Looms but No Budget

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    This week the budget committees in the Washington Senate and House are busy.  On Friday (April 1) lawmakers must have moved bills from fiscal committees to the floor to keep the bills alive. The exception is any legislation that is necessary to implement the budget.

    Both the Senate and House have held public hearings and executive sessions on bills that would impact higher education. Among these bills is legislation that would provide the option to four-year institutions of higher education to develop accelerated baccalaureate programs, a bill that expands academic flexibility to men and women in the National Guard, and legislation to include the Washington College Bound Program in the caseload forecast.

    The Legislature will quickly turn to floor action in preparation for the next deadline on April 12. This marks the last day to take floor action on a bill that started in the opposite chamber. Most bills, with the exception of those necessary to implement the budget, will require some floor action prior to April 12.

    As bills move forward, some of the most important bills – the budget bills – remain absent from the conversation. It has been nearly two weeks since the March revenue forecast which was nearly $700 million lower for the 2011-13 biennium and approximately $85 million lower in this current fiscal year.

    New rumors on The Hill suggest that the House may release their operating budget on Monday (April 4) . While the Democrats and Republicans are trying to identify areas of agreement,  there is talk that the House Republicans may roll out an alternative to the House Democrat’s budget when it is released.

    In the Senate the Democrats and Republicans are working together to write a budget. Both have indicated that the Senate will wait for the House to release its proposal before they release the Senate budgets.

    On the capital budget funds will be tight. There is great competition for fewer dollars.  To boost capacity in the capital budget legislators are considering moving dedicated account funds into the general fund and there is some discussion of including property taxes in the base for capacity-counting purposes with other trade-offs to maintain the state’s bond rating.

    A big issue with regard to the capital budget will be the fate of the bond bill. Democrats will need Republican votes to pass a bond bill which is required to authorize legislation to finance most of the capital budget through bond sales. A 60% vote is needed to pass the bill.

    The capital budget is expected to follow the release of the operating budget in both chambers.