Tag Archives: Capital Budget

Senate Appropriations Committee Hears Higher Education Related Legislation

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This afternoon Senate Ways & Means heard a series of bills that would impact higher education.

Senate Bill 5758  streamlines the management of tuition and trust funds dedicated to maintenance and small capital projects at Central Washington, Eastern Washington, and Western Washington Universities, and The Evergreen State College.

Steve Trotter, Executive Director for Operational Planning and Budget for The Evergreen State College, testified in support of SB 5758 along with a representative for CWU, EWU, and WWU.  The Office of Financial Management testified with concerns.

In addition, the Committee heard SB 5304 and SB 5576.  Senate Bill 5304 would require the Caseload Forecast Council to  forecast the anticipated number of students eligible for the State Need Grant Program and the College Bound Scholarship Program who are also expected to attend an institution of higher education and to submit these forecasts to the Governor and the members of the legislative fiscal committees; and Senate Bill 5576 streamlines the management of tuition and trust funds dedicated to maintenance and small capital projects at the University of Washington and Washington State University.

The Evergreen State College signed-in, in support of both SB 5576 and SB 5304.

Finally, the Committee heard Senate Bill 5518 which would mandate that employees of state agencies or political subdivisions may only be paid by electronic transfer to an employee’s account at the employee’s designated financial institution. Each employee must designate such an account in order to receive payment. The Evergreen State College took no position on this bill.

Budget Committees Focus on Issues that Impact Higher Education

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On Thursday the Budget Committees took up a range of issues that impact higher education.

Capital Budget
The House Capital Budget Committee held a public hearing on the Governor’s proposed capital budget for 2011-13. 

 The Governor’s proposed budget woud provide $17.2 million in new state funding for the Communications Laboratory Building Renovation, the Science Center Lab I Second Floor Renovation and Life Safety Code Compliance. Additionally, the Governor appropriates $8.2 million of Evergreen’s building account funds in the capital budget for a variety preventative maintence and building repairs.

John Hurley, Vice President for Finance and Administration testified for The Evergreen State College.

House Ways & Means
The House Ways & Means Committee held a work session on the Governor’s proposed biennial budget for higher education.

The Governor’s proposed biennial budget reduces state funding for Evergreen by 26.3% for the 2011-13 biennium. In addition, the proposed tuition revenue generated leaves Evergreen’s General Operating Fund budget in deficit. The Governor’s budget does not take into account costs associated with over-enrollments and assumes greater  tuition revenue raising capacity. Under this proposal tuition revenue represents 63% Evergreen’s budget compared to 57% last biennium.

Senate Ways & Means
The Senate Ways & Means Committee held a public hearing on Senate Bill 5162 which would alter the current retire/rehire practices at higher education institutions in Washington.

House Education Appropriations Continues Budget Discussion

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This afternoon the House Education Appropriations Committee completed a work session on education funding and held a public hearing.

The Governor’s Office completed its presentation of the proposed supplemental budget for the current biennium and the 2011-13 biennial budget.

Following the presentation organizations, institutions, teachers/faculty, students, parents, and other concerned citizens testified before the Committee with recommendations and requests to minimize the impacts proposed under the Governor’s budget.

Higher education’s public baccalaureate sector was represented by students, faculty, and institutions. Each institutions testified to the major impacts of the Governor’s proposed 211-13 proposed biennial budget.

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.

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 Signs Energy Jobs Bill

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This afternoon the Governor signed into law House Bill 2561.  

House Bill 2561 requires a ballot measure be sent to voters to authorize the issuance of $505 million in bonds to finance an array of energy efficiency improvements to public schools and buildings on public college and university campuses.

The bonds for the improvements would be funded by making permanent the proposed tax on bottled water after three years.

Governor Partially Vetoes 2010 Supplemental Budgets

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This afternoon Governor Gregoire partially vetoed the 2010 supplemental operating and capital budgets passed by the Legislature in April.

Operating Budget

The Governor vetoed several sections of the 2010 supplemental operating budget passed by the Legislature in April. In total she vetoed all or parts of thirty two sections of Senate Bill 6444.

Only a handful of the sections vetoed impact Evergreen in some way. None of the areas vetoed that impact Evergreen changed the state funding reduction to Evergreen’s institutional budget.

  • Vetoe Section 501(1)(f)(iv) – Office of the Superintendent of Public Instruction, Exempting the Professional Educator Standards Board (PESB) from Expenditure Restrictions.
    This section exempted PESB from the restrictions on travel allowances and meeting costs that apply to other boards and commissions under Chapter 7, Laws of 2010 (Engrossed House Bill 2617). This law allows agencies to seek exceptions to the travel and meeting restrictions for critically necessary work. To maintain consistency in the application of these restrictions among state boards and commissions this section was vetoed.
  • Veto Section 708, pp.270-271, Washington Management Service and Exempt Management Services Reductions.
    This section ties to Section 2 of Senate Bill 6503 which was vetoed. The budget proviso assumes additional compensation reductions of $10 million in General Fund-State funding from the Washington Management Service and exempt managers, who comprise less than 5% of the state employees. This cut would require that specified staff take nearly two weeks of temporary layoff time beyond the ten days included in ESB 6503. This inequity is likely to create problems in recruiting/retaining qualified and experienced workers, as well as be disruptive to normal state operations. Managers will be subject to temporary layoffs in the same proportion as all affected state employees.
  • Veto Section 902, pp. 289-290, Agency Staffing Report
    The agency staffing report required by Section 902 adds another layer of complexity to the data already required to be reported through allotment and accounting systems. The addition of monthly job class information adds immensely to agency workloads with seemingly minimal benefit. The Governor directed the Office of Financial Management to work with legislative fiscal staff to identify alternative reporting formats that can be useful without creating an unacceptable workload burden.
  • Veto Section 920, pages 301-302, Washington State Quality Awards
    Section 920 accelerates the date by which agencies must apply to the Washington State Quality Awards program. It also limits that requirement for agencies that have more than 300 full-time equivalent employees. A great deal of time and effort is required for a well-executed Washington State Quality Award application. The new date of June 30, 2010 is too short a timeframe especially for large agencies that may have to submit multiple applications.

Capital Budget

The Governor vetoed only three sections of the 2010 supplemental capital budget passed by the Legislature in April. Of the three sections vetoed, two impact Evergreen.

  • Section 6003, p.111, Office of Financial Management Budget Instructions
    With this proviso the Office of Financial Management must require that preliminary energy audits be conducted on project requests that involved significant renovations or improvements in owned or leased facilities. Reducing energy consumption is a high priority, but requiring energy audits before funding decisions are made will be burdensome and costly. The Governor has directed the Office of Financial Management to develop instructions to state agencies that will serve the goal of reducing energy costs without requiring formal audits for every project.
  • Section 6012, pp. 121-122, Project Tranfer Authority
    This proviso eliminates existing authorization for the Office of Financial Management to approve the transfer of funds from one capital project to another within the same state agency. It also places limitations on approving spending plans for construction contingencies, bid alternates, and equipment costs for capital budget projects already approved by the Legislature. These limitations are too stringent for state agenices and may cause unintended cost increases and schedule delays. The Governor has directed the Office of Financial Management to continue to scrutinize capital project spending plans to identify additional savings that can be directed to new projects in the 2011-13 biennium.

Senate Passes 2010 Supplemental Capital Budget, Bill Goes to the Governor’s Desk

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In the early hours of the 30th and final day of the first special session of 2010, the House concurred on the Senate’s amended version of the 2010 supplemental capital budget (HB 2836) with a vote of 61 to 36.

House Bill 2836 now goes to the Governor for her signature.

House Concurs on Alternative Public Works Bill…Now Heads to the Governor

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In the late hours of the final day of special session the House concurred on the Senate’s amended version of  House Bill 1690 .

House Bill 1690 clarifies that, unless otherwise specifically provided for in law, public bodies that want to use an alternative public works contracting procedure may use only those procedures specifically authorized in chapter 39.10 RCW.

House Bill 1690 now goes to the Governor for her signature.