Tag Archives: Operating Budget

Conference Operating Budget Announced and Moved

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This morning the Washington House and Senate announced a conference operating budget for the 2011-13 biennium. By this afternoon the House had voted 54-42 to move the budget to the Senate.  The Senate is expected to take up the budget tomorrow.

2011-2103 Operating Budget
The conference biennial budget addresses a $4.9  billion shortfall, making approximately $4.5 billion in policy level reductions. The budget reduces funding for higher education institutions by $535 million.  The Evergreen State College is reduced by $12.152 million and authorized to increase tuition by 14% per year for the biennium.

In addition the budget maintains the state need grant to offset budgeted tuition increases to students and reduces, but does not eliminate , state work study.

In addition to the reductions to higher education the proposed budget makes the following reductions.

  • $1.2 billion – Elimination of Initiative 728 and Initiative 732
  • $344 million -Change in how certain future pension benefits are calculated for Plan 1 retirees
  • $215 million – Elimination of K-4 class enhancement
  • $179 million – K-12 employee salary reduction
  • $177 million – 3% salary reduction in state employee salaries
  • $150 million – Hospital rates and related changes
  • $129 million – Reduction to Basic Health Plan
  • $116 million – Reform to the Disability Lifeline cash program
  • $97 million – Reduction of personal care hours for long term care and developmentally disabled clients
  • $61 million – Change to K-12 National Board Bonus program
  • $57 million – Student assessment system changes

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.

Legislation to Alter Higher Education Structure at the State Level Moves Forward

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This morning the Senate passed legislation to eliminate the Higher Education Coordinating Board (HECB) and restructure higher education with a vote of 34-9.

Senate Bill 5182 would eliminate the HECB and establish the Council of Higher Education and the Office of Student Financial Assistance. 

The  Council membership would include the six four-year institution presidents, one private nonprofit president, the Executive Director of the SBCTC, and a representative from the Office of the Superintendent of Public Instruction, or their designees. The purpose of the Council would be to develop performance-based measures and goals for each four-year institution and a strategic plan for the institutions of higher education benchmarks.

In addition the Council would perform essential state governance functions previously assigned to the HECB, including approving new programs, mission changes, new colleges, recognizing accreditation, and provides the interface to meet federal requirements.

The Office of Student Financial Assistance would administer all state and federal financial aid and the advanced college tuition payment program. The Office is created as a separate agency of the state.

Senate Bill 5182 is scheduled for a public hearing by the House Ways & Means Committee on Thursday. In addition, the Committee is also scheduled to take executive action on legislation that would not eliminate the HECB but would narrow the scope of their work.

House Bill 2074 retains the administration of the state’s financial aid programs, some functions for collecting and collating data from institutions, and other functions, such as some transfer and articulation provisions and strategic planning.

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

    • 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.

    Washington Senate Moves Operating Budget Bill Out of Committee

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    This afternoon the House Ways & Means Committee took action on the proposed biennial operating budget.  The Committee passed the budget to the floor.

    The Senate’s proposed budget reduces state funding to higher education by $617.5 million. Of the total reduction to higher education, 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.

    Under this proposed budget state funding for Evergreen is reduced by $14.28 million over the biennium. The reductions to Evergreen’s state funding were offset in part by tuition increases for the 2011-13 biennium as stated in the budget. As a result, the net cut to state funding for Evergreen is $5.78 million (-5.5%).

    The budget now goes to the Senate floor – as soon as Monday – for further consideration.

    Senate Holds Public Hearing on Proposed Biennial Budget

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    This afternoon the Senate Ways & Means Committee held a public hearing on the Senate’s proposed operating biennial operating budget.

    The Senate’s proposed budget reduces state funding to higher education by $617.5 million. Of the total reduction to higher education, 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.

    Under this proposed budget state funding for Evergreen is reduced by $14.28 million over the biennium. The reductions to Evergreen’s state funding were offset in part by tuition increases for the 2011-13 biennium as stated in the budget. As a result, the net cut to state funding for Evergreen is $5.78 million (-5.5%).

    Representatives from key higher education stakeholder groups – including the Geoduck Student Union representative to the legislature, the Evergreen Council of Faculty representative, and the Director of Government Relations from Evergreen – testified to the impact of the proposed budget on students, faculty, and institutions.

    Overall testimony acknowledged the dramatic reduction to higher education and the impact of this to Washington. Several stakeholders advocated for continual support of the budget’s funding for the State Need Grant program and the State Work Study program.  In addition, testimony showed appreciation for the open dialogue between senators and key stakeholders regarding the budget throughout its development and clarity within the budget.  Finally, stakeholders asked to continue to work with policymakers around personnel related reductions in the budget and some technical aspects of the bill.

    A Closer Look at Higher Education in the Senate’s Proposed Biennial Budget

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    The Senate Ways & Means Committee will hold a public hearing on the Senate’s proposed operating buget today (April 13) at 2:30.

    The budget reduces funding for higher education by $617.5 million. This is 22.1% below the amount needed to continue the current level of programs and activities at Washington’s public higher education institutions.

    In addition to these reductions the budget also eliminates the Higher Education Coordinating Board and replaces it with the Council for Higher Education and the Office of Student Financial Assistance. Finally the budget makes several changes to financial aid in Washington.

    The Higher Education Sector
    Of the total reduction to higher education, 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 $14.278 million and authorized to increase tuition by 14% per year for the biennium.

    In addition,  each institution’s tuition waiver authority was maintained at the level established by institution for Fiscal Year 2010.

    These reductions were offset in part by tuition increases at all public higher education institutions. The proposed budget authorizes tuition increases of 16% per year for the University of Washington, Washington State University, and Western Washington University; 14% for Central Washington University and The Evergreen State College; 12% for the community and technical colleges; and 11% for Eastern Washington University.

    Additionally, the Senate proposes to provide greater tuition flexibility to four-year institutions of higher education by granting full-tuition setting authority beginning in 2013-15 through 2017-19. Under this proposal institutions would be required to negotiate a performance contract with the Office of Financial Management and the Higher Education Coordinating Board if they plan to raise tuition beyond 11% at WWU, UW, and WSU or 9% at Evergreen, CWU, and EWU. In addition institutions would be required to eliminate any tuition increase beyond this threshold for those students with incomes below 125% of median family income.

    The Evergreen State College
    Under this proposed budget state funding for Evergreen is reduced by $14.28 million over the biennium.

    • -$12.152 million in reduced state funding which  includes the following: (1) $10.598 in reduced state funding, and (2) $1.554 million in biennialized across-the-board reductions from the December supplemental.
    • -$1.92 million to reflect a 3% salary reduction
    • -$426,000 to reflect temporary furloughs
    • $220,000 for various studies for the Washington State Institute for Public Policy

    The reductions to Evergreen’s state funding were offset in part by tuition increases for the 2011-13 biennium as stated in the budget. As a result, the net cut to state funding for Evergreen is $5.78 million (-5.5%)

    Higher Education Coordinating Board and Financial Aid
    The Senate’s proposed budget eliminates funding for the Higher Education Coordinating Board. All funds associated with non-financial aid programs are transferred to a new state agency the Council of Higher Education (SB 5182). In addition, all funds associated with financial aid programs are transferred to a new state agency, the Office of State Financial Assistance, also established in SB 5182.

    The Senate’s proposed budget provides funds to the State Need Grant and the State Work Study program to offset the cost to recipients of resident undergraduate tuition increases at each institution of higher education. Though funds are provided to offset costs to the State Work Study program, overall funding is reduced for this program.

    The reductions to the State Work Study program are the result of making permanent changes made during FY 2011 including increasing the required employer share of wages and discounting non-resident student eligibility for the program.

    In addition awards to students at private institutions are reduced to align with the average annual tuition increase experienced by private institutions (3.5%).

    Despite the financial support for the State Need Grant and State Work Study programs, several other state financial aid programs were suspended. These programs include:

    • Health Professionals Conditional Scholarship program
    • Small grant programs including the Community Matching Grant program, WICHE student exchange, and Foster Care Endowed Scholarship
    • Future Teachers program
    • WAVE and Washington Scholars

    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.