Tag Archives: Governor Gregoire

Governor to Sign Budget Bills into Law Next Week

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A bill signing ceremony has been scheduled – Wednesday, June 15- to act on the operating and capital budget bills and all remaining policy bills that have not been signed to date.

Among the bills to be signed by the Governor is the 2011-13 operating budget (HB 1087), and the two bills that comprised the capital budget (HB 1497- capital budget and HB 2020 – bond authorization bill).  In addition the Governor will consider action on the compensation reduction bill (SB 5860), legislation to create the Department of Enterprise Services (SB 5931), and a  bill that makes several changes to Higher Education Retirement Plans and retire-rehire practices at higher education institutions (HB 1981).

New Revenue Emerges

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Yesterday the Legislature received a gift. Washington’s three-month tax amnesty for businesses delivered $321 million in back taxes.

Under the proposal businesses were provided with a short amnesty period for penalties and interest on back taxes owed. From February to April the Washington Department of Revenue worked with more than 10,000 businesses to collect taxes.

The tax amnesty generated nearly $182 million more than was expected. While most of the $321 million will go to the state general fund ($263 million), some of it will be used to assist local governments ($57 local taxes).

While it is expected that these dollars will be key in reaching a solution for both the current fiscal year shortfall and the 2011-13 biennial budget shortfall, what the impact will be remains unclear.
The House Democrats had tentatively counted on getting $300 million from privatizing the system. But now they say they’ve moved away from that idea. So the new revenue may be helpful in bridging this gap.
However, policymakers in both chambers are also interested in using some of the funds to take back some of the budget cuts initially proposed.
While the Governor has suggested the funds be used to shrink the $240 million owed to public schools by June 30 that otherwise would be delayed to July 1 under House and Senate budget proposals.

Revenue staffers estimated there were 428 taxpayers flying off the taxman’s radar that now are on the state’s registry, where they can be monitored for compliance. Those non-payers averaged $50,342 in back taxes totaling $21.5 million for state and local governments.

Governor Signs Supplemental Budget with Some Vetoes

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On Friday the Governor signed legislation that would reduce state funding and decrease the current shortfall in this fiscal year.  

Though the majority of the funding reductions sent to the Governor by the Legislature were approved, the Governor did veto a handful of items, worth about $6 million in cuts. 

In her veto letter, Governor Gregoire stated:

  • Percent Pay Reductions: The legisatively passed budget would reduce the pay of many non-represented state employees by 3 percent beginning April 1 for a savings of $3.4million in the state General Fund.  While the Governor’s 11-13 budget proposal includes an employee pay reduction for all state employees, the early implementation date in this bill is not achievable and would have unintended consequences.
  • Depart of Information Services, Prohibition on Expenditures to Equip the State Data Center: Budget language prohibits DIS from spending any funds for the purchase or installation of equipment for the new State Data Center. This prohibition will not save any money and will significantly delay Data Center operation and budget savings made possible by the consolidaiton of existing data centers.
  • Communications Staff Savings: The budget requires agencies to achieve $10 million of savings through reduction in communications functions in the executive branch. Given the importance of the work performed by these employees, ranging from providing information on real-time traffic to public health concerns to unemployment insuranced and licensed child care facilities and the budget, it is difficult to see how the public would be served through the sudden and dramatic elimination of these staff.
  • Management Efficiencies in the Department of Social and Health Services: The budget requires DSHS to achieve state General Fund savings of $1.7 million by reducting management staff and administration in addition to achieving other efficiencies. The proposed reductions would jeopardize the department’s ability to implement the program changes required in the budget.

Despite the passage of the supplemental budget the state remains in the red. In total, the budget slashes the estimated deficit by about $370 million, with about $242 million in cuts and $125 million in transfers.

The Office of Financial Management estimates that the remaining projected deficit for this current fiscal year is $226 million, adding in the money not saved from the vetoes. The fiscal year ends in June.

“The March forecast will provide remaining information to complete the final supplemental,” Gregoire said in a statement. “The Legislature now must turn its attention to the immediate challenge of addressing the 2011-13 budget. This will not get easier with time.”

Among some of the ideas to finish patching up the deficit to the current fiscal year is delaying state payments to school districts by one day, essentially kick up the payment to the next two-year budget.

Lawmakers have spent more than a month of the 105-day legislative session trying to come up with this agreement, and now, Gregoire and legislators will have to tackle an estimated $5 billion deficit in the next two-year budget, which is roughly $37 billion.

The Senate voted 37-10 and the House voted 55-41 to approve the package.

House and Senate Committees hear Governor’s Bill Implementing Task Force Recommendations

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The House Higher Education Committee and the Senate Higher Education and Workforce Committee held public hearings today on House Bill 1666. The legislation has yet to be assigned a bill number in the Senate.

As Gov. Chris Gregoire and the Task Force announced in December, the proposal would alter the policies that currently structure funding, transfer, and accountability for higher education in Washington.

The bill would set degree production targets to increase 27 percent over 2010 levels by 2018. In addition, the legislation establishes a state funding baseline, tuition flexibility and funding levels for four-year public baccalaureate institutions comparable to institutions in other states; creates an endowment for low and middle income students who wish to obtain a baccalaureate degree and a tax credit for businesses that contribute; adopts new performance measures for four-year public baccalaureate institutions and creates a program to incentivize progress; and requires the creation of a one year transferrable certificate and other measures to ease student transfer and increase recognition of prior learning.

Both committees heard from business, including the big ones (i.e. Microsoft and Boeing), members of the Task Force, faculty, and the institutions of higher education, including The Evergreen State College.  The testimony was clearly in favor of the work of the Task Force and the elevation of higher educatin in the minds of those in Olympia but was accompanied with the need to continue to work on the bill.

No further action is scheduled for the bill at this time.

Governor’s Task Force Recommendations Focus of Hearing

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This afternoon the House Higher Education Committee held the first work session on the recommendations put forth by the Governor’s Task Force on Higher Education.

In December, the Governor’s Task Force on Higher Education announced recommendations to improve accountability and performance of the state’s colleges and universities, and consider whether changes should be made in the way the state governs its higher education system

The Committee heard from several panels that included a mix of task force members, staff to the Governor, and representatives from industry. Members of the Committee engaged the panels in a dialogue regarding process, outcomes, and the committment of business to ensure the recommendations are successful.

Governor Announces Creation of New Department of Education

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This morning Governor Gregoire announced her plans to create a new Department of Education.

The creation of this Department will allow for the construction of a cohesive system that will provide a seamless, state-level education system for early learning through career training.

The plan would create a Cabinet-level Department of Education to:

  • Focus on students and student learning
  • Promote coordinated, innovative, flexible student-centered services
  • Eliminate duplication and provide more efficient administration
  • Provide clear lines of authority and responsibility to increase accountability
  • Provide a “one-stop education shop” for the public

Led by a Secretary of Education, the Department will have the authority to run the entire Washington state education system.

The plan would also abolish the Office of the Superintendnet of Public Instruction, Department of Early Learning, and the Higher Education Coordinating Board.

Governor’s Higher Education Task Force Announces Recommendations

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On Monday, Governor Gregoire’s Higher Education Task Force released its recommendations.

The Governor asked sixteen business, government and education leaders this past summer to come up with ideas to increase college degree production by 30 percent over the next decade, while dealing with budget deficits.

In addition, she asked the Task Force to sugget long-range budget plans, recommend ways to improve accountability and performance of the state’s colleges and universities, and consider whether changes should be made in the way the state governs its higher education system.

The task force proposed a set of interdependent recommendations.   The recommendations include the following:

  •  The State adopt a new financial formula for the public four-year universities that better combines state budget support with increased flexibility for the universities to set their own tuition rates. 
  • The State take a new, innovative, and sustainable step to provide financial aid for low- and middle income Washington students who want to attend college by creating the Washington Pledge Scholarship Program.
  • The State put in place concrete steps to continue to promote accountability and performance by the State’s public universities. 

 To achieve these objectives, the Task Force recommends:

  • Increasing the number of Washington residents graduating with bachelor’s degrees from Washington’s colleges and universities, especially in high demand fields — science, technology, engineering, and math.
  • Providing the universities with increased flexibility to set tuition — linked to the level of state support and to the tuition charged by each institution’s peer colleges.
  • Expanding financial assistance to low- and middle- income students through a combination of private and public strategies, including a $1 billion endowment fund and tax incentives.
  • Holding each public university accountable for graduating more students with bachelor’s degrees, giving incoming students credit for high school coursework, community college studies and prior learning experiences, and revamping some academic programs.

The Task Force’s recommendations now go to the Washington Legislature via legislation sponsored by the Governor for further consideration.

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.