Yesterday morning the Washington House released a proposed 2015-17 biennial operating budget. The budget provides $2.4 billion in policy increases, responds to the $2.4 billion maintenance level shortfall and provides a $341 million ending funding balance.
The budget includes policy increases for increased costs of K-12 health benefits and a COLA ($356 million), enhancements to basic education ($661 million), funding for mental health, ($103 million), and funding for early learning and child care programs ($222 million).
For higher education the budget provides $257 million for financial aid and a tuition freeze and $253 million for state and higher education employee compensation and benefits.
To offset the $5.1 billion in policy increases, maintenance level funding costs, and the ending fund balance, the House proposes $2.6 billion in policy level reductions – the largest of which is modification of I-1351 ($2 billion) – revenue increases of $1.5 billion and additional moneys through fund transfers and reversions.
Higher Education
The House’s proposed budget freezes tuition at current rates over the next biennium. The budget provides dollars to offset the tuition freeze, providing funds to increase compensation and inflationary costs at institutions.
In addition the House increases funding for the State Need Grant by $53 million. The funds are
expected to serve approximately 24 percent of the currently 34,500 unserved students as well as increase private award amounts by 3.5% per year beginning in FY 2017. The budget also provides $60 million to provide the state’s match for the Washington Opportunity Scholarship Program. The budget also suspends the Washington Scholars Program, Washington Award for Vocational Excellence, Community Match Program, Foster Care Endowment, and Future Teachers Loan Repayment and Conditional Scholarship Program.
Finally the budget makes investments in other key areas:
- Funding is provided to the Washington State University to establish a medical school in Spokane. Two and half million are appropriated to support the accreditation process. The remaining amount will support the education of medical students in the WSU medical school ($8 million). In addition, $9.4 million is transferred from the Washington State University to the University of Washington to support the continued education of medical students enrolled in the Washington, Wyoming, Alaska, Montana, and Idaho (WWAMI) program located in Spokane. Finally an additional $3 million is provided to the Family Medicine Residency Network located at the University of Washington to expand the number of residency slots in Washington.
- Funding is provided to computer science. Eight million is provided to the University of Washington to expand computer science and engineering degrees, $2.2 million is provided to Washington State University to establish software engineering and data analytics programs at the University Center in Everett and an electrical engineering program in Bremerton, $910,000 is provided to Western Washington University to establish a computer and information systems security program at Olympic and Peninsula Colleges and $1 million is provided to Bellevue College to create a bachelors of science degree in computer science.
- Funding is provided to Western Washington University ($1.2 million), Eastern Washington University ($996,000), The Evergreen State College ($750,000) and Central Washington University ($715,000) to expand student advising and support services that lead to increased degree completion.
- Funding is provided to support the collective bargaining agreements and arbitration awards reached between state employees and the Governor or Institutions of Higher Education and to state agencies and institutions of higher education for a general salary increase for employees not represented by a collective bargaining unit.
Evergreen
The House’s budget freezes tuition for undergraduate, resident students for the biennium at Evergreen. The budget provides $2.954 million to offset the tuition freeze, providing funding funds for increased compensation and inflationary costs that institutions.
In addition the budget provides The Evergreen College $750,000 in the second year of the biennium to expand student advising and support services that lead to increased degree completion.
Finally, the budget does not provide funds to eliminate the student backlog in computer science at Evergreen. Currently 50-75 students.
Revenue
The House budget is supported by $1.5 billion in proposed revenue. The proposed revenue package includes a 5% excise tax on capital gains profits. Revenues from this tax would be placed into a new “Student Investment Fund” to be used for K-12 and higher education investments.
For higher education the fund would support the House’s proposed investments for the State Need Grant, funding to support the tuition freeze, investments in computer science and engineering, funding for the WSU medical school and residencies, and investments in innovation including the student services support for the comprehensive institutions and Evergreen.
The package also reinstates the increase on the B&O service tax rate by 0.3% and increases the Small Business B&O Tax Credit for services businesses by nearly double. Finally the package taxes transactions from out-of-state online retailers and repeals and narrows seven tax exemptions.
Next Steps
The House Appropriations Committee will hold a public hearing on the proposed operating budget on Monday, March 30 with action scheduled to move the budget to the House floor on Tuesday afternoon. The House Finance Committee is scheduled to hold a public hearing on the revenue proposal (HB 2224) on Tuesday morning.
