Tag Archives: Governor

Executive Branch Projects Billion Dollar Deficit Next Year

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This week the Washington Office of Financial Management (OFM) released a new state budget outlook that puts the state in the red by June 2015.

According to OFM, the Washington state budget would experience a $1 billion shortfall for 2013-15. This doesn’t include the estimated $1.1 billion increase for the McCleary K-12 decision (HB 2776) or leaving any reserves other than the constitutional budget stabilization fund.

OFM identifies the major budget costs that would drive a budget shortfall as:

  • $366 million for actuarially recommended pension payment changes
  • $292 million for K-12 pay increases based on I-732
  • $242 million for increased debt service
  • $171 million to restore the 3% temporary salary cut for state workers
  • $166 million to restore K-12 salary reduction
  • $30 million for federal health care reform
  • $14 million for the “new” paid family leave benefit

The Outlook assumes state tax revenues will grow by $1.5 billion in the next biennium, from $31.2 billion to $32.7 billion.  This expected revenue increase is based on the state’s June Revenue forecast which was adopted with the caution that there is a 40% chance that this increase could be wiped-out depending on economic developments in Europe and actions (or lack thereof) in Congress. It also incorporates the spending-cut decisions made by lawmakers this year and assumes restoration of temporary measures included in the current budget

While OFM has consistently conducted budget outlooks for the state, this year the Office is required to show how the state’s future budgets could be balanced with available resources as a result of legislation passed in the 2012 supplemental budget requiring a balanced four-year budget outlook instead of a two-year forecast.

Governor Names Members to Washington Student Achievement Council

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This week Governor Gregoire named the citizen members to the Washington Student Achievement Council.

On July 1 the Washington Student Achievement Council (WASAC) was established to replace the Washington Higher Education Coordinating Board.  The Council, established in House Bill 2483 during the 2012 session,  will focus on raising educational attainment in Washington state.

Under the legislation, the council is charged with the following duties:

  • Proposing goals for increasing educational attainment, securing resources to support those goals and monitoring progress;
  • Developing a two-year strategic action plan and 10-year roadmap; and
  • Facilitating the development and expansion of innovative practices, developing policy recommendations based upon data and collaborating with other organizations to set minimum college admission standards.

Additionally, the council has been tasked with helping students prepare for and access postsecondary education and training, improving transitions, administering financial aid programs and approving private degree institutions.

The council will be composed of nine members. Four members are selected by four educational entities. The governor’s five appointees are:

  • Brian Baird, former U.S. representative for Washington’s 3rd Congressional District;
  • José Gaitán, managing member of The Gaitán Group, PLLC, and past president of the Hispanic National Bar Association;
  • Jay Reich, attorney at Pacifica Law Group and former deputy chief of staff to former Commerce Secretary Gary Locke;
  • Dr. Constance Rice, managing director for Knowledge Management for Casey Family Programs; and
  • Student trustee Lindsey Jahn, a student at Washington State University earning a bachelor of arts degree in business administration.

Other members of the council are:

  • Jane Sherman, interim executive director of the Council of Presidents, selected by the presidents of the public baccalaureate institutions;
  • Charlie Earl, director of the State Board for Community and Technical Colleges, selected by the SBCTC;
  • Ray Lawton, director and chairman of Lawton Printing in Spokane, selected by the Independent Colleges of Washington; and
  • Scott Brittain, former principal in the Puyallup School District now working in the assessment office at the Office of Superintendent of Public Instruction, selected by OSPI in consultation with the Department of Early Learning and the State Board of Education.

Washington Gubernatorial Candidates Debate

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On Tuesday the Association of Washington Businesses hosted the first gubernatorial debate in Washington.

The debate provided insight into how both candidates would address a range of issues facing Washington. Among the issues highlighted included charter schools, Initiative 1053 repeal, and jobs and the economy.

In addition both candidates spoke to their approach to fund higher education. Inslee spoke to his goal to cap the interset rate for state-backed student loans, expand online courses, and increase partnerships with the state’s premier private colleges.

McKenna focused on the need to stop the erosion of state support for higher education and restore funding levels to their historical average, enroll more in-state students in our universities, and emphasize degree programs that align with our future job needs, such as science, technology, engineering, math, math education, business management, accounting, and health science.

No additional debates between the two candidates have been scheduled to date.

Washington Legislature Ends 2012 Supplemental Session

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The first special session of 2012 ended last night as of midnight. Though close the Washington Legislature did not complete business by this deadline and Governor Gregoire called the Legislature back for a second special session. After nearly eight straight hours of work from midnight to early this morning, the Legislature passed a balanced budget, jobs act, and a handful of policy reform bills.

Operating Budget

 The 2012 supplemental operating budget passed 64-34 in the House and 44-2 in the Senate and was delivered to the Governor for her consideration early this morning. The operating budget makes no reductions to K-12 and higher education.  Some of the highlights of the budget include $238 million to the general fund as a result of the state temporarily claiming control of local sales taxes before they are redistributed back to jurisdictions at their usual time, an increase in taxes raising about $14.5 million by eliminating a tax deduction for some large banks, additional revenue to the state through changing rules on roll-your-own cigarettes, and at the end a reserve fund of $320 million.

Impact to Higher Education

The operating budget as passed by the Legislature does not reduce general fund support for higher education, this includes further eductions to institutions and financial aid. The budget however does include some provisos and policy changes.

  • Bellevue College is authorized to offer baccalaureate degrees. Prior to the passage of this bill the College could only offer applied baccalaureate degrees.
  • The two and four year institutions are required to conduct a comprehensive review of institutional tuition waiver policies.
  • Evergreen is required to reallocate $276,000 for FY2013 for an expansion in enrollments in STEM as defined in HB 1795. This definition includes bachelor and advanced degree programs in the sciences, which includes agriculture and natural resources, biology and biomedical sciences, computer and information sciences, engineering and engineering technologies, health professions and clinical sciences, mathematics and statistics, and physical sciences and science technologies, including participation and degree completion rates for students from traditionally underrepresented populations.
  • The Washington State Institute for Public Policy is required to conduct a longitudinal study of the state need grant program ($100,000).
  • The two and four year institutions are not permitted to use state appropriated funds to support intercollegiate athletic programs
  • Changes state payments for public employee health benefits from $850 to $800 per month

Capital Budget and Jobs Act

The 2012  capital budget made no changes to Evergreen’s biennial capital budget. The Jobs Acts  which includes a new bonds bill and the traditional capital budget  are estimated to have an economic impact of $1.1 billion in construction work over the next 14 months.  

Reform Bills

As critical to the process as balancing the budget were efforts to pass reform bills to provide for greater long-term sustainability in the state budget. Among the policy bills passed by the Legislature three were critical to finally ending the 2012 supplemental session.

Pension

SB 6378 addresses early retirement benefits for future state employees.. Under law changes in 2000 and 2007, an employee with 30 years’ service could retire at age 62 with no reduction in benefits, and at age 55 with only a 20 percent reduction. Under the new law, retirement at age 62 will lower the benefit by 15 percent and age 55 by 50 percent. The savings will go to the state’s general fund.

 K-12 Healthcare

SB 5940 attempts to equalize health-insurance benefits for full-time and part-time school district employees and their families. The bill requires school districts to meet certain requirements, including making all employees pay a share of premiums, offering a high-deductible health plan and tying the price of individual and family benefits.

Balanced Budget

SB 6636 requires the state’s two-year budget to be in line with anticipated revenue over a four-year period or 4.5% growth per year, whichever is greater.   Growth has met or exceeded 4.5 percent in half of the past 16 years.

Special Session Moves to Week 2

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This week marks the second week of the first special session of 2012 and follows on the heels of a relatively uneventful first week.

First Week of Special Session – Recap

For the majority of the first week little was happening on The Hill. Governor Gregoire met with legislative leaders including buget negotiators, but little progress was made. Towards the end of the week things got a little more interesting.

On Thursday morning, following a budget meeting with House and Senate members, a group of Senators (Republicans and Democrats) released a new budget proposal (SB 6612). That afternoon, disappointed with the lack of progress on the budget and the release of a new proposal by a Senate coalition, the Governor pulled back on several bill signings and declared that delays and potential vetoes may take place if  no progress on the budget was made.

Second Week of Special Session Kicks-Off

Yesterday, as the second week of the special session began, budget negotiators met with the Governor’s Director of the Office of Financial Management to talk about the fundamental fiscal disagreement that separates the two camps.

The largest impasse appears to be how the House and Senate proposals suggest balancing the supplemental budget. The House passed proposal would shift approximately $330 million in current expenses to the next budget period by delaying payments to school-districts. The most recent Senate coalition proposal would delay a pension payment and balance it with pension reforms and retirement-policy changes.

Budget negotiations among legislators and the Governor’s office continued today.

Governor Suggests New Idea

In comments to reporters on Monday, the Governor hinted that she has presented a new plan to budget negotiators in an effort to break the impasse. However she did not reveal any aspects of the proposal.

It was reported that she did indicate to reporters what the plan “was not” which included  securitizing state revenues, privatizing the state lottery system, allowing slot machines in non-Indian casinos or a general increase in cigarette taxes.

House Republicans

This session each of the four caucuses issued supplemental operating budget proposals. Often the public only gets to see two proposals, one from the Senate and one from the House.

Of the four proposals released over the last month, three of the four make no cuts to K-12 or higher education. The exception being the House Republican proposal. News came forward this week that the House Republicans have announced a new supplemental plan that would make no cuts to K-12 or higher education. However, details have yet to be released.

Obama Addresses National Governors Association and Talks Higher Education

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At the end of February President Obama addressed the National Governors Association (NGA) with an eye to education.

President Obama challenged the nation’s governors to ensure all students in their schools get the education they need to compete for the jobs of tomorrow.  “Nothing more clearly signals what you value as a state as the decisions you make about where to invest,” he asserted.  “Budgets are about choices.  So, today, I’m calling on you to choose to invest more in teachers; invest more in education; invest more in our children and their future.  That doesn’t mean you’ve got to invest in things that aren’t working.  That doesn’t mean it doesn’t make sense to break some china and move aggressively on reform.  But, the fact of the matter is we don’t have to choose between resources and reform.  We need resources and reform.” 

President Obama focused on the blueprint he has laid out, to work with Congress, to  establish a set of policies focused on increasing post-secondary education opportunities in the U.S.

The proposal put forth by the President would include several components.

  • Reform student aid to promote affordability and value: To keep tuition from spiraling too high and drive greater value, the President will propose reforms to federal campus-based air programs to shift aid away from colleges that fail to keep net tuition down, and toward those colleges and universities that do their fair share to keep tuition affordable, provide good value, and serve needy students well. These changes in federal aid to campuses will leverage $10 billion annually to keep tuition down. The President’s plan calls for shared responsibility between the federal government, states, and institutions of higher education to tackle rising college costs by  improving the distribution of federal financial aid and increase campus-based aid. This reform will reward colleges that are succeeding in meeting the following principles:
      • Setting responsible tuition policy, offering relatively lower net tuition prices and/or restraining tuition growth.
      • Providing good value to students and families, offering quality education and training that prepares graduates to obtain employment and repay their loans.
      • Serving low-income students, enrolling and graduating relatively higher numbers of Pell-eligible students.

In his proposal the President is proposing to change how funds for the Supplemental Educational Opportunity Grants (SEOGs), Perkins Loans, and Work Study are distributed by implementing an improved formula that shifts aid from schools with rising tuition to those acting responsibly, focused on setting responsible tuition policy, providing good value in education, and ensuring that higher numbers of low-income students complete their education. He is also proposing to increase the amount of campus-based aid to $10 billion annually. The increase is primarily driven by an expansion of loans in the federal Perkins program – which comes at no additional taxpayer cost.

Under his plan colleges that can show that they are providing students with good long-term value will be rewarded with additional dollars to help students attend. Those that show poor value, or who don’t act responsibly in setting tuition, will receive less federal campus-based aid.  Students will receive the greatest government grant and loan support at colleges where they are likely to be best served, and little or no campus aid will flow to colleges that fail to meet affordability and value standards.

 

  • Create a Race to the Top for college affordability and completion: The president will create incentives for states and colleges to keep costs under control through a $1billion investment in a new challenge to states to spur higher education reform focused on affordability and improved outcomes across state colleges and universities. The Race to the Top: College Affordability and Completion will reward states who are willing to drive systemic change in their higher education policies and practices, while doing more to contain their tuition and make it easier for students to earn a college degree.The President is proposing a program that would spur systemic state reforms to reduce costs for students and promote success in our higher education system at public colleges. This $1 billion investment would incentivize states to: (1) Revamp the structure of state financing for higher education; (2) Align entry and exit standards with K-12 education and colleges to facilitate on-time completion; and (3) Maintain adequate levels of funding for higher education in order to address important long-term causes of cost growth at the public institutions that serve two-thirds of four-year college students. The intention is that the Race to the Top for College Affordability and Completion would incentivize governors and state legislatures around the nation to act on spurring this innovative reform. Through cost-saving measures like redesigning courses and making better use of education technology, institutions can keep costs down to provide greater affordability for students.

 

  • A first in the World competition to model innovation and quality on college campuses: The president will invest $55 million in a new First in the World competition, to support the public and private colleges and non-profit organizations as they work to develop and test the next breakthrough strategy that will boost higher education attainment and student outcomes. The new program will also help scale-up those innovative and effective practices that have been proven to boost productivity and enhance teaching and learning on college campuses.  This initiative would provide modest start-up funding for individual colleges, including private colleges, for projects that could lead to longer-term and larger productivity improvements among colleges and universities – such as course redesign through the improved use of technology, early college preparation activities to lessen the need for remediation, competency-based approaches to gaining college credit, and other ideas aimed at spurring changes in the culture of higher education.

 

  • Better data for families choose the right college for them: The president will call for a College Scorecard for all degree-granting institutions, designed to provide the essential information about college costs, graduation rates, and potential earnings, all in an easy-to-read format that will help students and families choose a college that is well suited to their needs, priced affordably and consistent with their career and educational goals. The Administration will create a College Scorecard for all degree-granting institutions making it easier for students and families to choose a college that is best suited to their needs, priced affordably, and consistent with their career and educational goals.  The administration will also make an updated version of the ‘Financial Aid Shopping Sheet,’ announced in October, a required template for all colleges, rather than a voluntary tool, to make it easier for families to compare college financial aid packages. Finally, the President is also proposing to begin collecting earnings and employment information for colleges, so that students can have an even better sense of the post post-graduation outcomes they can expect.

 

  • Federal Support to Tackle College Costs In his State of the Union, President Obama called on Congress to: (1) Keep student loan interest rates low. This summer, the interest rates on subsidized Stafford student loans are set to double from 3.4% to 6.8% – a significant burden at a time when the economy is still fragile and students are taking on increasing amounts of debt to earn a degree. The President is asking Congress to prevent that hike from taking place for a year to keep student debt down, a proposal that will keep interest rates low for 7.4 million student loan borrowers and save the average student over a thousand dollars; (2) Double the number of work-study jobs available:  The President also proposes to double the number of career-related work-study opportunities so that students are able to gain valuable work-related experience while in school; and (3) Maintain our commitment to college affordability: Over 9 million students and families per year take advantage of the Obama Administration’s American Opportunity Tax Credit – supporting up to $10,000 over four years of college.  In his State of the Union address, the President called on Congress to make this tax credit permanent and prevent it from expiring in 2012.

2012 Special Session Begins

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Today the Washington Legislature convened the 2012 special session. On Friday Governor Gregoire called legislators back to Olympia at noon today to finish work on a supplemental operating and capital budget as well as the necessary policy bills needed to implement the budgets.

The special session is likely to be focused but it remains uncertain if it will go the entire thirty days. Governor Gregoire announced that she reached agreement with lawmakers to remain focused on a limited agenda, including the budgets and potentially a jobs plan that could inject $1.2 billion in state money into school construction, community projects, and environmental cleanups across the state. 

In addition a handful of other policy items may be considered, especially as vote counts are realized. Among these issues include the repeal of Initiative 728, various revenue-raising ideas, and reforms focused on a new way of budgeting and the creation of a new health-insurance pool for K-12 public school employees.

However the time it will take to reach agreement even on this limited agenda is uncertain.

Legislators left late Thursday night after failing to reach agreement on a supplemental operating budget to close the remaining $1 billion budget gap. A primary barrier to resolution during the regular session was the different approaches taken to close the budget gap. The Republicans – with support of three Senate Democrats- support skipping a penion payment and the Democrats support delaying a payment to K-12 schools.  Solving this hurdle along with a multitude of reductions and other policy changes will be the primary order of business this special session and will take time.

Progress is likely to be slow. This week it appears the House is not scheduled to convene and the Senate is scheduled only for pro forma sessions until Wednesday when a possible session is scheduled. In the meantime the Governor has indicated her desire to begin to set up negotiations between the “five corners” – meaning the Governor’s Office and the leaders of the Democratic and Republican caucuses in the House and Senate.

Sine Die Followed By Special Session

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At midnight last night the Washington Legislature ended the 2012 supplemental legislative session. The  session ended without the passage of an operating or a capital budget or several policy bills that would be necessary to implement any of the budgets proposed this session.

As a result, soon after the supplemental session was called Governor Gregoire announced the beginning of a special session. The Legislature will return to Olympia on Monday at noon to work on a budget compromise.

Governor Gregoire Addresses the State

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This morning Governor Gregoire delivered her annual State of the State address before the 63rd meeting of the Washington State Legislature.

“Each time Washington survived an economic crisis and rebuilt its future, it has not been about political party,” Gregoire said. “It has been about the future of Washington state. And now it’s time for us. This is our time, our time to build a better future for our children and grandchildren.”

In addition to addressing the state’s budget shortfall, Gregoire called on the Legislature to ask voters to approve a temporary, half-cent sales tax increase, enact a series of reforms to improve Washington’s education system, move forward with a major jobs and transportation package and pass legislation to ensure marriage equality.

Governor Signs Early Action Budget and Other Legislation Passed During Special Session

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Yesterday Governor Gregoire signed into law the early action budget passed by the Legislature last week. She vetoed a single proviso that directed the Department of Social and Health Services to maintain the physical plant and protect state assets at the closed Maple Lane School.

The budget implements a variety of state funding reductions, transfers and delayed payments to reach roughly $480 million in savings.  The early budget action by the Legislature reduces the state’s budget shortfall to approximately $900 million with plans to also set aside approximately $600 million in a reserve for the remainder of the biennium. This leaves nearly $1.5 billion for the Legislature to solve when they return in January.

Upon signing the budget bill the Governor asked lawmakers to give her a timeline on when they expect to resolve the remainder of the budget shortfall. She is asking lawmakers to find a solution early in the new year. Budget writers in Olympia have shared that work continues on the budget with consensus building on other areas to cut and several work groups forming around smaller projects within the budget.

In addition to the budget legislation, Governor Gregoire signed into law several policy bills that were passed by the Legislature during the special session. Among the bills signed into law three were  education related and together would do the following:

  • Establish grant programs for high schools to prepare students for jobs as entry-level aerospace assemblers; for skills centers to enhance manufacturing-skills programs; and for high schools to create specialized courses in science, technology, engineering and math.
  • Require the Professional Educator Standards Board to revise certification and certificate-renewal standards for elementary teachers and secondary science and math teachers to include knowledge and skills in science, technology, engineering, and math.
  • Allow Project-Lead-the-Way examinations to be included in the list of college-level proficiency exams that are recognized as a method for fulfilling postsecondary courses. Project-Lead-the-Way is a national organization that provides curriculum in science, technology, engineering, and math for middle and high schools.