Word on the Street is May 25 is the Target to Get Out of Olympia

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This week, the fourth and last full week prior to the May 25 sine die, started out no different than the prior weeks of this thirty day special session.  However that has appeared to change as of last night.

The House, previously scheduled to return to Olympia on Monday, is now scheduled to come back to town on Saturday and work every day through May 25.  Tomorrow the House Ways & Means Committee is set to hold a marathon session of public hearings and executive actions on a series of bills ranging from reorganizing and streamlining central service functions, powers, and duties of state government to requiring extraordinary revenue growth to be transferred to the budget stabilization account.

In the meantime, the Senate is on the floor all day today moving several bills through the process.

Word on the street is that the higher level of activity on The Hill is being pushed by movement on several key policy issues that have separated the two chambers during the regular session and for most of the first special session, such as the state debt limit where a compromise may split the difference between the House and Senate positions. In addition policymakers are rumored to be close to a budget deal.

The one issue that may continue to cause havoc is workers’ compensation. Reports suggest that the Governor has shared a compromise that would be a hybrid between settlements and pensions.

Senate Committee Holds Public Hearing on Endowment

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This afternoon the Senate Ways & Means Committee held a public hearing on legislation that would establish an endowment for students studying in high-demand fields.

HB 2088 creates the Opportunity Scholarship Program and the Opportunity Expansion Program to mitigate the impact of tuition increases, increase the number of baccalaureate degrees in high employer demand and other programs, and invest in programs and students to meet market demand fields of study while filling middleincome jobs with a sufficient supply of skilled workers.

Senators asked several questions ranging from how this endowment will interact with existing state financial aid programs, the state matching requirement, and the potential size of the endowment.

Washington House Passes Endowment Legislation

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This afternoon the Washington House passed – with a vote of 84-8-  legislation that would establish an endowment for students studying in high-demand fields.

HB 2088 creates the Opportunity Scholarship Program and the Opportunity Expansion Program to mitigate the impact of tuition increases, increase the number of baccalaureate degrees in high employer demand and other programs, and invest in programs and students to meet market demand fields of study while filling middleincome jobs with a sufficient supply of skilled workers.

The House passed a single technical amendment to the bill to: (1) Provide that the Opportunity Scholarship Board’s oversight and guidance must be consistent with legislative priorities, (2) Ensure that references are consistent and refer to “eligible education programs”, (3) Clarify a reference to the state need grant in light of an earlier amendment that struck provisions that would have renamed the state need grant the opportunity award program, and (4) Make clear that all annual reports from the Opportunity Scholarship Board and the program administrator are due no later than December 1st. 

House Bill 2088 now goes to the Senate for further consideration.

House Capital Budget Moves Debt Limit Legislation

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This afternoon the House Capital Budget Committee took action and passed legislation that would direct the Secretary of State to submit a constitutional amendment – that would reduce the state’s debt limit from 9% to 7%  by FY 2022 – to the voters for approval and ratification, or rejection, in the next general election to be held in the state.

This policy proposal has been a point of contention between the Senate and the House, with the Senate in support and the House opposed. 

The key points both supporters and opponents have made about the bill were echoed by committee members this afternoon during deliberations. Those in support shared their belief that it is critical to reduce the state’s debt levels. While those in opposition raised concerns about the impact the reduction in the debt limit would have on state capital projects and workers.

The bill that passed the House Committee – with a vote of 6 to 5- was designed to reflect many of these concerns, especially the need to reduce the debt limit, while minimizing the impact to state projects and workers. The House amended version does the following: 

  • Reduces the debt limit from 9% to 8.5% beginning in FY 2018 and thereafter. The Senate version reduced the limt from 9% to 7% in half-percent increments every two years beginning in FY 2016 and ending in FY 2022. Current law sets the debt limit at 9%.
  • Directs the Legislature to establish an advisory debt limit that is one-half of one percent lower than the constitutional debt limit; and allows the advisory debt limit to be adjusted to reflect changes in economic trends and conditions. The Senate version would allow the Governor and the Legislature to adopt a working debt limit and assumes a working limit of one-quarter of one percent lower than the constitutional limit. In recent years the Governor and Legislature have adopted a working debt limit since 2003. From 2003-2009 it was 8.5% and from 2009-2013 it was 8.75%
  • Bases the limit on a prior 3-year average of General State Revenues (GSR) until July 1, 2015 and on prior 10-year average of GSR on and after July 1, 2015. The Senate version contains the same language. Current law basis the limit on a prior 3-year avarage of GSR.
  • Includes the State Property Tax in GSR beginning in FY 2016, based on a 10-year average from FY 2006 through FY 2015. The Senate version contains the same language. Current law excludes the State Property Tax from GSR.

Senate Joint Resolution now goes to the House Floor for further consideration.

House Committee Moves Legislation Forward to Create Endowment

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This morning the House Ways & Means Committee took action on legislation that would establish an endowment for students studying in high-demand fields.

HB 2088 creates the Opportunity Scholarship Program and the Opportunity Expansion Program to mitigate the impact of tuition increases, increase the number of baccalaureate degrees in high employer demand and other programs, and invest in programs and students to meet market demand fields of study while filling middleincome jobs with a sufficient supply of skilled workers.

The Committee amended the bill as follows:

  • Retained the name of the State Need Grant. The original bill would have changed the name to the Opportunity Award.
  • Prohibited institutions that are selected to receive an Opportunity Expansion Award – an Award to an institution that proposes programs designed to increase the number of baccalaureate degrees produced in highemployer demand and other programs of study – by the Opportunity Scholarship Board from including the award in the institution’s base budget. In the original bill institution’s were allowed to include these awards in their base budget.
  • Clarified that eligible prorams are education programs. The original bill also including training programs.
  • Expanded eligibility requirements for the Opportunity Scholarships to require that students must have received their high school diploma or GED in Washington. The original bill did not include this requirement.
  • Removed language that would provide the program administrator with the discretion to set the scholarship amount at either $1,000 or the dollar difference between tuition and fees regardless of which amount is greater. The original bill would have provided for this discretion.
  • Replaced existing reporting language with more detailed language that requires the Opportunity Scholarship Board together with the program administrator to report to the Legislature and others with respect to both the Opportunity Scholarship and Opportunity Expansion programs and further requires legislative review and consideration of the annual reports. Includes requirements that the reports include data regarding the race, ethnicity, gender, county of origin, age, and median family income of applicatns and recipients of an Opportunity Scholarship.

House Bill 2088 now goes to the floor for further consideration.

Washington Economist Provides Preview Into Revenue Forecast

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Last week, Washington’s State Economist – Dr. Arun Raha – provided revenue figures that show March actual revenues dipping below expectations.

In his report released on May 11, Dr. Raha stated that, “The job market is improving, but the unemployment rate remains stubbornly high and housing is extremely weak.” The sentiment of this statement is echoed in the observations he puts forth in the May 11 report.

  • The economy recovery has appeared to have hit a road bump. High energy prices have caused growth to moderate, and uncertainty lies ahead.
  • The Washington economic recovery slowed in February and March after fairly strong growth at the end of 2010 and the beginning of 2011.
  • Major General Fund-State (GF-S) revenue collections for the April 11 – May 10, 2011 collection period were $157.7 million (13.3%) higher than the March forecast. The healthy collections mask a weakening economy. The entire positive variance was due to higher than anticipated one-time revenues from the recently concluded amnesty program and other one-time payments. Excluding them, revenue collections are slightly below forecast. 

In othe words, while the tax amnesty windfall makes the balance sheet look better, revenues were $32.5 million less than projected.

Dollars continue to trickle in from the amnesty program for businesses that originally was banked for $24 million and has climbed to nearly $350 million. It’s one-time money, however, and was used partially to shore up the June to July apportionment shift that helps bridge the gap in the fiscal year that ends June 30.

The next revenue forecast will be on or before June 20, and the news isn’t expected to be better – and may continue the downward trend due to high gas prices and a state economy that has remained flat.

Federal Budget for Education Takes Some Shape

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Last week, the U.S. House Appropriations Committee Chairman, Hal Rogers (R-KY), announced both the FY12 allocations for each of the 12 appropriations subcommittees, also known as the 302(b) allocations, and provided a tentative timeline for completing each bill. 
The allocations released would provide $139.218 billion to the Labor, HHS, and Education Subcommittee.  The allocation for the Labor, HHS, and Education Subcommittee is over $18 billion less than the recently agreed to FY11 level and more than $40 billion below the President’s FY12 budget request. 
The reductions in funding from the prior fiscal year and also from the President’s proposed FY12 budget are raising some concerns in higher education.  Advocates are concerned that the the funding level raises significant concerns regarding the ability to adequately fund NIH and the Pell Grant Program. 
Chairman Rogers stated that completion of work on the 12 fiscal year 2012 Appropriations bills should be finished by the end of the fiscal year on September 30th. This plan includes marking up and approving each bill at both the Subcommittee and Full Committee levels in the next few months before the August recess.
 

Week Four of the First Special Session

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Next week is the fourth week of the 2011 first special session – the last full week before sine die on May 25.

The lack of movement on either the operating or the capital budget or several significant policy issues is leading many on The Hill to suggest that a second special session will be needed to finish up. The Governor has indicated she would only call a second special session when policymakers were set to pass budgets.

Negotiations and proposals continue to move back and forth between the chambers and the Governor’s Office. In addition some details are being revealed as commitees work through NTIB bills. 

Next week’s schedule appears to be similar to the schedules of prior weeks. The Senate will return to Olympia on Monday at 10 a.m., followed by a budget committee meeting at 2:30 p.m.

The House wil return on Tuesday at 1:00 p.m. Earlier in the day the House Ways & Means Committee will meet followed by the House Capital Budget Committee.

The House Ways & Means Committee is scheduled to take action on HB 2088 which would set up an endowment for students studying in the STEM fields. HB 2088 creates the Opportunity Scholarship Program and the Opportunity Expansion Program to mitigate the impact of tuition increases, increase the number of baccalaureate degrees in high employer demand and other programs, and invest in programs and students to meet market demand fields of study while filling middleincome jobs with a sufficient supply of skilled workers.

The House Capital Budget Committee is scheduled to take action on SJR 8215– which would send a constitutional amendment to voters asking them to reduce the debt limit from 9% to 7%.  This policy proposal has been a point of contention between the Senate and the House, with the Senate in support and the House opposed. The scheduling of the bill in committee may suggest that a compromise has been reached or is near.

House Committee Moves Forward Bill to Restructure Higher Education at the State-Level

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This afternoon the House Ways & Means Committee passed legislation that would eliminate the Higher Education Coordinating Board (HECB) and restructure higher education at the state level.

Senate Bill 5182, as amended in committee, would eliminate the HECB and establish the Council of Higher Education and the Office of Student Financial Assistance.

The Office of Student Financial Assistance will be created as of July 1, 2011. The current fnancial aid program management under the Higher Education Coordinating Board (HECB) will be transferred to the Office.

The Higher Education Council will be established on July 1, 2012. Between now and the July 2012 date the HECB will continue and bridge the one-year delay before the new Council is in place.

The membership of the Council includes the president of the UW or her/his designee, the president of WSU or her/his designee, a president from the comprehensive institutions or Evergreen, the director of the state board for community and technical colleges, the superintendent of public instruction or her/his designee, one president from a non-profit, private institution, and five representatives of the public, of which one will be a current student.

The role and scope of the Council will be determined by a Joint Legislative Task Force on Higher Education.  The Joint Legislative Task Force will include eight legislators – four from each chamber, of which two will be Democratic legislators and two will be Republican legislators.

The Task Force is charged with reviewing coordination, planning, and communication for higher education in the state and establishing the purpose and functions of the new Council. The Task Force will report its findings and recommendaitons to the governor and the appropriate legislative committees by December 1, 2011.

Among the options to be considered include:

  • Creating an effective and efficient higher education system and coordinating key sectors including K-12
  • Improving the coordination of higher education institutions and sectors with specific attention to strategic planning, system design, and transfer and articulation
  • Improving structures and functions related to administration and regulation of the state’s higher education institutions and programs, including but not limited to financial aid, the GET program, federal grant administration, new degree program approval, authorization to offer degrees in the state, reporting performance data, and minimum admission standards.

The Task Force is required to consider input from all higher education stakeholders (i.e. institutions, Governor, HECB, K-12, Workforce Board, students, faculty, business, labor organizaitons, and the public).

The bill that passed out of the House committee is very close to the bill the Senate passed last week. The differences between SB 5182 as passed by the committee and the Senate are primarily with regard to the membership of the Council, the scope of the Council’s work, and the implementation date.

The bill now goes to the House floor for further consideration.