Office of Governmental Relations

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.

While much of Olympia was quiet and covered in snow, the Capitol was busy hearing and moving bills through the process. Both the Senate and House Ways & Means Committees held marathon public hearings and executive sessions as Friday’s deadline looms.

Senate Ways & Means

The Senate Ways & Means Committee held a public hearing on two bills of particular interest to higher education – Senate Bill 5136 and Senate Bill 5182.

Senate Bill 5136 provides provisions of the state’s intent to partner with the Washington Governors University (WGU)  to establish Western Governors University-Washington and provide enhanced access to postsecondary education for all Washington students.  The Evergreen State College testified, on behalf of the Council of Presidents, with concerns with regard to the potential impact to state financial aid programs but took no position on the bill.

Senate Bill 5182 eliminates the Higher Education Coordinating Board and creates the Council forPerformance and Accountability in Higher Education. The purpose of the Council is to develop performance-based measures and goals for each state university, regional university, and the state college, linked to the role, mission, and strategic plan of the institution of higher education including (a) indicators and goals that measure outcomes concerning cost, quality, and timeliness of student progress toward degrees and certifications; (b) benchmarks and goals for long-term degree production, including discrete benchmarks and goals in particular fields of study; (c) the level of resources necessary to meet the performance outcomes, benchmarks, and goals, subject to legislative appropriation; (d) indicators and goals that measure outcomes concerning recruitment, retention, and success of students from diverse, underrepresented communities; and (e) a system of consequences for exceeding or for failing to achieve the goals or benchmarks.

The Evergreen State College testified in support of the bill and on behalf of the Council of Presidents. Evergreen stated that state government reform, including reform of higher education, is an important issue this session and SB 5182 offers an effective and efficient structure for higher education that is worth further consideration. 

House Ways & Means

The House Ways & Means Committee held a public hearing on three bills of interest to higher education.

House Bill 1666 would implement the recommendations from the Governor’s Higher Education Task Force. The legislation heard by the Committee this afternoon introduced substitute language to change the bill passed out of House Higher Education last week.

The second substitute would make the following changes and remove all other sections:

• Add intent language that recognized the work of the Governor’s HigherEducation Task Force, the need to build on those recommendations, andthe need for the state’s citizens to achieve much higher levels of educational attainment
• Require the Higher Education Coordinating Board in collaboration with a broad range of higher education stakeholders to review state achievement goals and capacity to meet those goals, including a consideration of socioeconomic status, and provide a preliminary assessment to the Legislature by August 15, 2011.
• Make technical changes to the existing language regarding the Washington pledge endowment fund to accrue its own interest
• Retain  degree targets and higher education institution action plans to achieve those targets

House Bill 1795 would establish the Higher Education Opportunity Act. The legislation heard by the Committee this afternoon introduced substitute language to change the bill passed out of House Higher Education last week.

The second substitute would make the following changes and remove all other sections:

• Adds a requirement that beginning in the 2015-16 academic year, reductions or  
• Clarifies that tuition setting authority is for four years, beginning in the 2011 academic year through the end of the 2014 academic year
• Adds a requirement that beginning in the 2015-16 academic year, reductions or increases in tuition must be provided in the appropriations act when responsibility for setting tuition setting reverts to the Legislature.
• Adds transfer provisions in addition to requiring higher education institutions to publish transferrable courses on their websites: 1) requiring that students who have earned direct transfer agreements associate degrees have junior standing at the receiving four-year higher education institution; and 2) requiring that institutions of higher education develop a one year certificate of general education requirements that is transferrable to any other public higher education institution.  

House Bill 1981 would alter existing retire/rehire policies for higher education institutions. In particular the bill would eliminate Public Employees’ Retirement System (PERS) and Teachers’ Retirement System (TRS) Plan 1 provisions permitting retirees to receive benefits while employed in retirement system-covered positions for up to 1,500 hours per year.

In addition the bill would add positions covered by a Higher Education Retirement Plan (HERP) to those included in the postretirement employment pension restrictions for PERS, TRS, the School Employees’ Retirement System, and the Public Safety Employees’ Retirement System.

Finally the bill would imit the employees to which state institutions of higher education may offer the HERP, instead of PERS Plans 2 or 3, to faculty and senior academic administrator employees; eliminate the HERP Supplemental Benefit for employees that enter the plan July 1, 2011, and provides the new employees the option of joining the TRS Plan 3 or PERS Plan 3;  require higher education institutions responsible for payment of HERP Supplemental Benefits to contract with and provide data to the Office of the State Actuary for periodic actuarial valuations and experience studies of the HERP plans; and limit state funding for the HERP plans to 6 percent of salary.

The appropriation committees in the Washington House and Senate were alive with activity this afternoon.  Both the House and Senate Ways & Means Committees heard numerous bills in preparation for the looming fiscal deadline this Friday.

House Ways & Means

The House Ways & Means Committee took up three bills that would impact higher education – House Bill 1663, 1792, and 1841.

• House Bill 1663 removes higher education institutions from the requirement to seek an exemption from the Office of Financial Management with regards to purchasing from the Department of Corrections.
• House Bill 1792 directs Washington State University to complete a strategic plan to establish a branch campus at Everett with the collaboration of the University Center at Everett Community College and the baccalaureate institutions that provide programs at the University Center at Everett Community College.
• House Bill 1841 creates the Office of the Chief Information Officer (Office of the CIO) within the Office of Financial Management and an Information Technology Advisory Board to advise the Office of the CIO on information technology issues. Eliminates the Information Services Board.

Senate Ways & Means

The Senate Ways & Means Committee considered Senate Bill 5795. Senate Bill 5795 would use $250,000 of unclaimed prize money for FY11-12 and FY12-13 for the four-year Student Child Care in Higher Education Account.

This Friday marks the second major deadline of the session. All bills referred to fiscal committees in both chambers must have moved to the floor by end of day on February 25.

In preparation for this looming deadline all of the appropriation committees in the Senate and the House were busy today hearing and moving bills forward in the process.

House Higher Education Appropriations

The House Higher Education Appropriations Committee took action on two bills that would impact higher education.

House Bill 1849 creates the Washington State Education Council (Council). The overall mission of th Council is to: provide strategic oversight and advocacy of public education, including early learning, K-12 education in the common schools, and postsecondary education; and recommend policies and strategies to make the public education system student-focused and able to provide seamless service delivery across all sectors.

The substitute bill passed by the Committee revises the mission of the Council to focus on recommending policies, strategies and a governance structure for the public education system and makes the Council temporary, expiring the provision on  June 30, 2013. 

 In addition, the substitute revises the Legislative intent that guides the Council’s Transition Plan: to establish a primary strategic oversight and advocacy board for the public education system and consolidate supervision over matters pertaining to the public education system within a primary state agency.

House Bill 1808 requires all public high schools in the state to work toward the goal of offering a sufficient number of high school courses to give students the opportunity to earn the equivalent of one year’s worth of postsecondary credit and must inform students and their families about these opportunities. In addition, the bill requires institutions of higher education to develop a master list of postsecondary courses that can be fulfilled, for lower division general education requirements, by achieving an agreed-upon score on Advanced Placement, International Baccalaureate, or other recognized college-level proficiency exams or by meeting demonstrated competencies.

The substitute bill passed by the Committee clarifies language to include career and technical education and provides language to ensure institutions of higher education who provide an alternative approach to teaching and learning are encompassed.

Senate Ways & Means

The Senate Ways & Means Committee took action on two bills that would provide for regulatory relief for institutions of higher education.

Senate Bill 5268 would remove the exisiting requirement for approval by the Director of the Office of Financial Management with regard to meetings of members in any of the five classification groups associated with part-time boards and commissions affiliated with institutions of higher education. In addition, the bill would exempt institutions of higher education from the restrictions on personal service contracts, equipment acquisition, travel, and employment.

Senate Bill 5519 modifies public contracting limits and procedures.

Both Senate Bill 5519 and 5268 now move to Senate Rules.

Today Senator Derek Kilmer, the Vice Chair – Capital Budget of the  Senate Ways & Means Committee explained the Washington capital budget.

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.

Higher education advocates, inlcuding the Higher Education Coordinating Board (HECB) and the Council of Presidents (COP), spoke to the critical links between state funding, tuition, and financial aid and the role of accountability/performance metrics at the January 18 Senate Higher Education & Workforce Development Committee’s work session.

Chair Rodney Tom focused the two-hour work session on the relationship between tuition, state funding, and accountability and the impact on student access. The work session provided the opportunity for higher education institutions to provide testimony and answer questions from policymakers.

Following informative presentations by the HECB , legislative staff, and COP institutions were provided the opportunity to share their thoughts.  The comments provided by representatives of the public, four-year higher education sector included the impacts of reductions to date, the importance of flexibility, and ideas about accountability and performance metrics.

In the afternoon, the presidents of all six public, baccalaureate institutions engaged the Senate Ways & Means Committee regarding state funding and the impacts of the Governor’s proposed 2011-13 biennial budget.

Chair Ed Murray focused the work session on higher education, including both two- and four-year institutions. 

Kicking off the discussion with an overview, the Council of Presidents highlighted the recent impacts to state funding for higher education and the potential impact of the Governor’s proposed budget. 

The presidents then spoke to the challenges they share with policymakers in funding services and programs for their constituents in a difficult fiscal climate.  The presidents acknowledged the difficult fiscal climate in their comments and asked for the flexibility and the opportunity to work with members to make strategic decisions that will allow institutions to steer through the storm.

The Senate Ways & Means Committee met early this Saturday morning to hear a variety of bills and take action on several more.

The deadline for the Committee to consider House bills with a fiscal impact is end of day Monday, March 1.

As  a part of the public hearing process this morning , Evergreen testified in support of House Bill 2481. HB 2481 is a bill discussed often on this blog, but is worth further discussion because it looks different at this stage in the legislative process than it did earlier on. The bill would:

• Allow Department of Natural Resources (DNR) to enter into contract terms up to 15 years when an entity plans and commits to a capital investment of at least $50 million prior to the contract and completes that investment before removal of biomass under the contract;

• Allow DNR to include provisions in the agreement that are periodically adjusted for market conditions;
• Require the contract to include provisions that allow DNR, when it is in the best interest of the trust beneficiaries, to maintain access to existing users of biomass;
• Ensure that biomass volume conveyed under this act will not be counted toward DNR’s sustainable harvest target, except that appraised timber sold in a conventional timber sale will count toward the target whether individual trees are ultimately used by that purchaser for timber or biomass energy;
• Remove wood from old growth forests from the definition of what is not included in forest biomass; and
• Require DNR to conduct a survey of scientific literature regarding the carbon neutrality of forest biomass and report to the Legislature by December 15, 2010.

Evergreen believes that the passage of House Bill 2481 would provide the Washington Department of Natural Resources with the tools necessary to be a viable player in the emerging biomass industry and a potential partner with Evergreen as we move forward to construct our Biomass Gasification Project.

The Committee took no further action on the bill.

This afternoon the Senate Ways & Means Committee held public hearings on twenty-seven different bills with plans to move out of committee nearly nineteen bills.

The stars of this afternoon’s hearing were two education related bills. 

Senate Bill 6562 a.k.a. the tuition policy bill. SB 6562 authorizes the University of Washington, Washington State University, and the Western Washington University governing boards to set tuition rates. The average annual compounded rate of change of undergraduate tuition fees may not exceed 9 percent based on the previous 15 years, or 14 percent in any one year.

The Committee on Higher Education Performance is created and authorized to approve performance agreements. The performance agreement must be six years in duration. Annual adequate performance as determined by the committee is required to maintain tuition setting authority. The committee is composed of the chairs and ranking members of the Senate Higher Education and Workforce Development Committee, Senate Ways and Means Committee, House Higher Education Committee, and House Education Appropriations.

The UW, WSU, and WWU must waive full-time tuition fees for resident undergraduate students based on family and state median family incomes. Waivers of full time tuition fees for resident undergraduate students are provided on a graduated scale in 4.5 percent increments based on state median family income and the institution’s tuition fee rate. The waivers must be reduced by the amount of any state need grant, federal, state, and institutional scholarships, grants, and waivers. Such waivers are exempt from tuition waiver limitations.

Tuition fee setting authority remains the same as current law for Central Washington University, Eastern Washington University, the Evergreen State College, and the community and technical colleges.

The State Actuary presented to the committee the potential impact on the Guaranteed Education Tuition (GET) Program.  The State Actuary, given the assumptions in the bill, concluded there is virtually no risk of the GET Program running out of assets over the next 50 years if the program remains open and all other current policies and provisions remain unchanged. The one cautionary note shared by the State Actuary was that the impact may differ if purchaser behavior changes.

President Emmert (UW), President Floyd (WSU), and Trustee Phil Sharpe (WWU) testified in support of the bill. Each one stated that the bill provided the balance needed between a quality education and an accessible education for Washingtonians. 

Members of the Senate Ways & Means Committee asked several questions, including the current percentage of state funds that make up the budget of those institutions in the bill and how under these policy changes policymakers can be assured that  student-debt load would not rise and economic and ethnic diversity would not decline. In addition members asked whether or not the tuition setting authority in the bill allows the state to back away from future state support.  Additional questions posed included the impact on retention and the middle-income student population.

Charlie Earl, Executive Director, Washington State Board for Community and Technical Colleges and the League of Education Voters also testified in support of the bill.  The Washington Student Association and students from WSU, UW, and WWU testified in opposition to the bill. Students raised concerns regarding the increases in tuition identified in the bill and the fiscal pressure that will be placed on funding for state financial aid.

Senate Bill 6696 comprises several policy changes to K-12 to make Washington more competitive for Race to the Top dollars. The House proposed similar legislation, but disaggregated the policy changes among three bills – HB 3059, 3068, 3035.

Senate Bill 6696 seeks policy and structural changes in the areas of school and teacher evaluation, assessment, and preparation.  Of importance to Evergreen are the policy changes to teacher preparation programs. In particular the bill would require Evergreen’s teacher preparation programs to offer an alternate route program, which may negatively impact the College.  If grants and Race to the Top dollars are not received, Evergreen would be left to shoulder the costs of developing and implementing this program with no additional funds. Evergreen proposed a change to the language that would make offering alternate route programs permissive. The change in language was not included in the final bill approved by the committee and passed to the floor.

Evergreen also kept an eye on several other bills.

• SSB 6702 makes available educational programs for juveniles confined in adult jails. Each school district, within which there exists an adult jail, must provide a program of education for juveniles confined therein. Districts may contract with educational service districts, community and technical colleges, four-year institutions or other qualified entities to provide all or part of these services.
  
• SSB 6761 implements the recommendations put forward by the Quality Education Council during the interim.
• SSB 6362 requires the Legislature to identify ten government priorities to verify that state agencies and activities are performing at their highest efficiency. The ten priorities include improving: student achievement in K-12; quality and respect for the public workforce; value of state college or university education; health of state citizens; security of the state’s vulnerable children and adults; the economic vitality of businesses and individuals; statewide mobility of people, goods, information, and energy; safety of people and property; quality of the state’s natural resources; and cultural and recreational opportunities throughout the state. The State Auditor is required to select the highest priorities to audit and the lowest priorities to assess. In addition, the State Auditor is required to present its work plan at an open public meeting for evaluation and recommendations prior to commencing audits.
  
• SB 6374 requires the Office of Financial Management (OFM) to include economic modeling or other procedures that take into account increased economic activity which may result from economic development contemplated in legislation  in fiscal note instructions.
  
• SSB 5543 requires producers of mercury-containing lights (lamps, bulbs, tubes, or other devices containing mercury and providing illumination) sold in or into Washington to participate in product stewardship programs that are fully implemented by 2013.
  
• SB 6843  temporarily suspends the two-thirds vote requirement for tax increases and permanently modifying provisions of Initiative Measure No. 960 for improved efficiency and consistency with state budgeting.
  
• SB 6833 allows the Office of the State Treasurer to enter agreements with state agencies for investment by the Treasurer of funds not currently deposited with the Treasurer.  At this time higher education is exempt from the bill. Evergreen supports the bill in its current form.
  
•  SB 6845 requires the collection and use of additional information regarding information technology projects, including  the requirement that OFM obtain specific information about IT projects, including current and future costs by category, estimated operating savings and other benefits, and estimated start and end dates.

Senate Ways & Means Capital Budget Coordinator Brian Sims presented an overview of the current state of Washington’s Capital Budget during Wednesdays’ committee hearing.

The Capital Budget is comprised of $3.3 billion dollars, half of which is money borrowed from investors in the form of bonds and other debt. The budget itself is the smallest of the three state budgets, which also include the large Operating Budget ($58.7 billion) and the Transportation Budget ($6.6 billion).

Sims pointed out during his presentation that the majority of funds disbursed from the Capital Budget go to parties other than state interests. This means that state funds are being used as grants for construction and maintenance of institutions other than the state’s own. Among the funds used to build and maintain state institutions’ interests, funding for public schools has grown the fastest. Most of these funds are not cash, however, and come in the form of bonding authority. Higher Education’s bond funds from the Capital Budget have grown, too, while other funds – including cash – have remained flat for a decade.

As the state deals with a budget crisis, another issue the legislature has to confront is the constitutionally-mandated debt limit. The debt limit, monitored by the State Treasurer, cannot exceed 9% of the average annual general revenue for the preceding three fiscal years. In addition, because the Capital Budget, unlike the Operating Budget, does not have an “ending fund balance,” a margin of 0.25% is set aside as an ending balance. According to Governor’s proposed Capital Budget, that 0.25% ending balance is maintained by cutting $375 million from the budget. The Governor’s budget also proposes an increase in bond spending of $86 million and a transfer of $147 million from the Capital to the Operating Budget, a short-term maneuver to create more liquidity in the Operating Budget.

What does this mean for Evergreen? The college has identified a need for an allocation of $125,000 from the Capital Budget to complete funding for a Biomass Gasification plant. TESC students and the college itself have each generated $125,000 to put toward a feasibility study for the project. As the Capital Budget writing process plays out, the college will be asking legislators to support the sustainable vision for a biomass plant, which would help the college realize its 2020 goal of carbon neutrality while providing synthetic gas to heat and potentially power the institution’s facilities.