Week Three of the Special Session

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This week marks the third week of the first special session of 2011. 

The House met in caucus this morning and then headed to the floor to consider a handful of bills. Among the bills considered and passed this afternoon was HB 1795 which will alter higher education tuition, financial aid, and accountability for the next four biennia.

The Senate convened today and moved a handful of bills forward in the process. The Senate is schedule to return to the floor tomorrow (May 10) at 10:00. No committee meetings are scheduled at this time.

The House and Senate continue to meet daily to find a compromise on the budget. Essentially the two budgets are approx. $330 million apart. However key policy issues continue to divide the two caucuses, most prominently teacher salaries and workers compensation.

Though new revenues have been received from the tax amnesty effort – approximately $270 million to the general fund- there is mixed ideas with regard how to apply these new dollars. The Governor proposes eliminating the 25th month for K-12 and others would like to buy back some programs cut in the budget.

House Passes Key Higher Education Legislation

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This afternoon the Washington House passed legislation that would alter current policies focused on tuition, accountability, and financial aid.  House Bill 1795 passed with a vote of 79-17.

The bill is a comprehensive piece of legislation that leaves little alone with regard to higher education policy. The key provision in the bill for many is the ability for four-year public baccalaureate institutions to set tuition for all students through 2014-2015 and modifies this authority based on a state funding baseline and funding for higher education institutions in the Global Challenge States through 2018-2019.

The ability for the four-year public baccalaureate institutions to set their own tuition levels is mitigated by strengthening current institutional financial aid requirements and funding the State Need Grant at the proposed increased tuition rates in the budget.  All institutions are required to remit at least 4% of operating fees back to students in the form of financial aid. This is an increase from 3.5%.

Institutions that exceed the tuition levels appropriated in the budget are required to remit 5% of operating fees back to students in the form of financial aid and provide financial assistance to students up to 125% of the Median Family Income (MFI) via a specific formula that is based on tuition price as a percentage of MFI in various income brackets up to 125% of MFI.  Finally all instititutions are required to make every effort to encourage eligible students to take advantage of federal tax credits.

The bill also requires higehr education institutions to report by December 1 on performance data that aligns with the National Governor’s Association Complete to Compete metrics with additions that include graduate and professional degrees;Science, Technology, Engineering, and Math (STEM) participation; student debt load; and disaggregation of measures based on various student demographics, including socio-economic status and income levels. In addition institutions must develop a performance plan which must include a set of expected outcomes (i.e. time to degree, baccalureate degree production).

Finally the bills makes changes to dual enrollment policies, transfer and prior credit policies, and provides regulatory relief for institutions of higher education.

The bill now goes to the Senate for further consideration.

Legislative Committees Focus on Higher Education Bills

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This morning the House Ways & Means Committee and the Senate Ways & Means Committee each focused on legislation that would impact higher education.

House Ways & Means
The House Ways & Means Committee held a public hearing on Senate Bill 5182 which 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 Ways & Means Committee
The Senate Ways & Means Committee took action on HB 1981 (Higher Education Pension Legislation) passed unanimously with amendments.

The bill would:

  • The HERP Supplemental Benefit for employees that enter the plan after July 1, 2011 is eliminated
  • Employees offered participation in HERP on or after July 1, 2011, have the option of joining the TRS Plan 3 or PERS Plan 3.
  • The PERS and TRS Plan 1 provisions permitting retirees to receive benefits while employed in retirement system-covered positions for up to 1500 hours per year are limited to members who retire before September 1, 2011. (Members of PERS and TERS Plans 1 who retire on or after September 1, 2011, may continue to work up to 867 hours per year without a reduction in pension benefits.) Positions covered by the HERP are added to those included in the postretirement employment pension restrictions for the PERS, TRS, School Employees’ Retirement System (SERS), and PSERS.
  • Higher education institutions responsible for payment of HERP Supplemental Benefits are required to contract with and provide data to the Office of the State Actuary for actuarial valuations every two years beginning June 30, 2013, and experience studies of the HERPs at least once in every six-year period, with the first being due by June 30, 2013. A 0.5 percent of pay employer contribution rate is initiated for HERP-covered employees beginning January 1, 2014, to a new supplemental benefit fund. This fund is invested by the State Investment Board. Upon completion of the first actuarial valuation by the State Actuary (no later than June 30, 2013), the Pension Funding Council (PFC) may make changes to the 0.5 percent contribution rate, including the adoption of separate rates appropriate to the liabilities of each institution. The PFC is authorized to recommend legislation, upon accumulation of sufficient funding in the Supplemental Benefit Fund, to transfer responsibility for benefit payments to the new fund and adjust contribution rates to reflect the transfer of responsibility.

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

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.

The Second Week of Special Session Moves Legislature Closer to Goal

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The eighth day of a potential thirty day special session began early this morning in the House.

The House caucused for much of the morning and then moved a handful of critical bills this afternoon. Among the bills was legislation to eliminate several boards and commissions and a bill that would make several policy changes to higher eduction retirement plans.

The House will return to Olympia on Thursday for a “pro forma” session and to convene the Ways & Means Committee. Several bills necessary to implement the budget are scheduled for public hearings and executive sessions. Among the bills that will be considered on Thursday is a bill that would narrow the scope of work of the Higher Education Coordinating Board.

The Senate will convene on the floor at 10:00 tomorrow to be followed by a Ways &  Means hearing in the afternoon. This pattern of floor action in the morning and committee work in the afternoon is expected to dominate most of the Senate’s work this week.

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

    • The Special Session Takes Shape

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    Yesterday the Legislature adjourned – sine die- around 4:00 p.m. without resolving either the operating or the capital budgets.

    Both the House and Senate will return for the first special session of 2011 on Tuesday. The special session could run up to thirty days.

    The House and Senate may approach the special session in a different way. The Senate plans to work next week already scheduling the first of many Ways & Means Committee hearings on Tuesday at 2:30.

    The House is still considering a rolling recess which would bring some members back for a pro forma session but does not require all House members to be present for the session. Neither body can be out of session for more than three days without mutual agreement.

    Gregoire said her intention was to limit the topics to the budget and the policy bills that are necessary to implement the budget. However, the governor can’t limit what the legislature discusses, so anything could be on the table.

    It appears, thought, that  legislative leaders have agreed to narrow their special-session work to the budget, related bills and issues such as workers’ compensation reform, consolidation of agencies, changes to the Guaranteed Education Tuition program and higher-education bills.

    Finding a compromise with regard to the budget will be a big task.  The House and Senate are within $250 million of each other on a $32 billion spending plan.  However, there are  major differences to overcome with regard to the budget.

    Among the large issues separating the two chambers is  a Senate proposal to reduce K-12 salaries by 3%, tuition in the colleges and universities, the disability lifeline, and whether to adopt new revenues to bridge the shortfall.

    In addition, the Senate’s proposal to send a constitutional amendment to the voters to lower the debt limit from 9% to 7% is a big sticking point. The Senate has said it won’t move the capital budget without the constitutional amendment; the House has said it won’t do the capital budget until the bond bill passes.