This morning Governor Gregoire released her 2011-13 budget.  In her message on the 2011-13 budget she stated “the budget I am proposing for the 2011-13 biennium is not a budget I ever expected to see in the State of Washington, and the choices in it are the most difficult ones I’ve ever faced.”

The Governor’s proposed biennial budget addresses the assumed budget shortfall in 2011-13 by reducing state programs and services by $3 billion and allowing for $1.1 billion in savings by suspending Initiatives 728 and 732. The balance of the solution is achieved through pension reforms, fund transfers and use of the state’s rainy day fund.

The Governor’s proposed biennial budget proposal for higher education includes:

• Reductions in funding for higher education by $344.7 million.
• Differential tuition increases for colleges and universities
  UW/WSU/WWU – 11%
  Evergreen/CWU/EWU – 9%
  Community and Technical Colleges – 10%
• Maintenance funding for the State Need Grant
• Reductions in funding for State Work Study by over 30%
• Suspension of all other state financial aid programs are suspended for new recipients. Current student recipients of these grants are held harmless in the proposal
• The creation of the Baccalaureate Incentive Program for the public, four-year institutions to boost performance and provides $5 million to fund this program.

Other areas of state government were also dramatically impacted by the Governor’s proposed biennial budget.

• The Basic Health Plan is eliminated.
• The Disability Lifeline grant is eliminated.
• The Student Achievement Program under Initiative 728 that provides smaller class sizes, extended learning time for students and professional development for teachers is suspended.
• Employee salary increases under Initiative 732 for K-12 and higher education teachers and other employees are suspended.
• K-4 class-size reduction funds are eliminated.
• Compensation for state employees is reduced by 3%.
• All state general funds are eliminated for state parks.
• McNeil Island Corrections Center is closed.

Finally, other key aspects of the governor’s proposal include:

• The requirement that government services that benefit a relatively small number of people and businesses, such as processing permit applications, be paid for by the beneficiary and not the general public.
• The requirement state agencies to deliver important state services at a lower cost. This may necessitate charging higher fees to visit state parks, obtain fishing and hunting licenses, process water rights applications and license adult family homes.

The Washington Legislature will convene on January 10, 2011 to begin the next step in the development of the 2011-13 biennial budget.

On Monday Governor Gregoire announced policy initiatives to further reduce the State’s fiscal footprint.  She announced changes in two signficant areas: (1) Health Care and (2) Pension Plans for the 2011-13 biennium.

Health Care

Governor Gregoire’s policy initiative focuses on further changing Washington’s health care delivery system in order to allow for higher quality, more affordable care. To facilitate this, and consistent with her intent to reorganize state government to operate more effectively and efficiently, she proposed the following.

• Consolidate a majority of the state’s health care purchasing into a single agency
• Take advantage of opportunities provided under federal health care reform – the Affordable Care Act
• Move forward with work launched with the federal Center for Innovation to have Washington serve as a pilot in testing models that ramp up quality and tamp down costs.

Pensions

Governor Gregoire proposed the following actions to reduce future costs to employers and taxpayers while maintaining reasonable benefits for valued public employees and retirees.

This morning Governor Gregoire announced her policy initiative to consolidate public services.  She announced the consolidation of public services in five areas.

Consolidating Natural Resource Agendas

• This initiative consolidates the state’s current eleven agencies to five.
• Proposes the consolidation of the Department of Fish & Wildlife, the State Parks & Recreation Commission, the Recreation and Conservation Office and the law enforcement unit of the Department of Natural Resources into a new Department of Conservation and Recreation.
• Proposes the consolidation of the work of the Columbia River Gorge Commission, the Pollution Liability Insurance Agency, and the Department of Health’s reclaimed water program into the Department of Ecology.
• Proposes the consolidation of the State Conservation Commission into the Department of Agriculture and the Department of Archaeology and Historic Preservation into the Department of Natural Resources.

Consolidating Central Services

• Eliminate duplicate functions at state agencies
• Proposes the consolidation of the Department of General Administration, Personnel, Printing and portions of the Department of Information Services and the Office of Financial Management into a new Department of Enterprise Services. 
• The Department of Enterprise Services will provide the “back office” services and the Office of Financial Management will continue to address policy, budget, forecasting and labor relations.

Creating the Office of Civil Rights

• Proposes the consolidation of the state’s Human Rights Commission, Office of Minority and Women’s Business Enterprise, Commission on African Affairs, Commission on Hispanic Affairs, and Commission on Asian Pacific American Affairs into the Office of Civil Rights.

Eliminating Boards and Commissions

• Proposes the introduction of legislation to eliminate 36 boards and commissions and move appointment authority for 16 boards from the Office of the Governor to state agencies.
• A list of the boards and commissions that will be impacted has yet to be released.

Integrating Correctional Services

• Proposes potential changes from ongoing discussions between the Department of Corrections and the Washington Assocation of Sheriffs and Police Chiefs regarding short-  and long-term strategies to maximize each correctional system’s strengths and integrate certain services.

Governor Gregorie will roll out her 2011-13 biennial budget this week.

The 2011-13 biennial budget will be released on Wednesday, December 15. Prior to the release of the budget, the Governor will announce proposed policy changes to healthcare and pension plans sometime today (December 13) and efforts to streamline government and/or fund current services and programs differently in the future on Tuesday (December 14).

The Governor will not likely release her revised 2009-11 budget until Monday December 20.  In addition, it is expected that she will announce additional policy initiative in January.