State budget deficit for 2011-13 Biennium -$3 billion

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The Washington Office of Financial Managment (OFM) expects that the gap between state revenues and “basic spending pressures” will be approximately $3 billion next biennium.

In a report that provides state agencies, including higher education, with operating budget instructions for the next biennial budget, OFM suggests to provide funding to move current state programs forward, state funds will need to replace nearly $2 billion in federal funds that were made available to Washington during the recession. Part of these funds were used to offset cuts to higher education during the 2009-11 biennium.

In addition, funding requirements for pending funding obligations, statutory requirements to support important reforms in basic education, and restoration of voter approved commitments to reduce class size (I-728) and provide cost of living adjusts for teachers (I-732) add another $2 billion in spending pressures.

Though this adds up to a shortfall of $4 billion, OFM project that new revenues will provide $1 billion to close the gap, leaving $3 billion to be settled by the state.

So one may ask is there any good news.

In the report issued by OFM, indications show that Washington is experiencing much stronger revenue growth of 8.8% for FY 2011. Though this growth is relative to a new, much lower revenue base, it is definitely a positive note when compared to the drop in revenue in the last two years.

As Washington nears the 2011 legislative session more details will come into focus to provide a much clearer picture of the state budget.  The next big step in the process will be in mid-June when both the state caseload forecast and economic and revenue forecast are released.

National Center for Education Statistics Releases 2010 Condition of Education Report

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An annual report from the National Center for Education Statistics (NCES) released in May signals growing trends in higher education. Highlights of the report imply a drastically different enrollment mix from previous generations. Undergraduate enrollment among women grew by 26% during 2008, compared to a 22% increase among men. The 2008 enrollment mix among genders was 57% female and 43% male. Overall enrollment grew by 43%, and the center predicts that enrollments will continue to grow, from 16.4 million undergraduates in 2008 to 19.0 million in 2019.

Persistence and progress in undergraduate education is difficult to track, according to the report, since students may transfer from 2- to 4-year institutions or among 4-year institutions. However, among those institutions reporting 6-year graduation rates, 57% of students completed degrees within 6 years of first enrolling. Degree attainment and transfer rates were different among public and private baccalaureate institutions, with far fewer (50%) students attaining a degree from the public institution where they started than students at private institutions (65%). However, in both public and private institutions, students who began their studies at doctorate-granting institutions were more likely to earn a degree either from their first institution or overall.

Overall completion rates for 2009 indicated that 31% of 25- to 29-year-olds had completed at least a bachelor’s degree.

Funding for Federal Higher Education Programs May be Reduced or Eliminated

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Today, the White House asked federal agencies to provide plans to reduce their budgets by 5 percent by eliminating the worst-performing programs. This request is part of the White House’s pledge to freeze spending unrelated to national security over the next three years.

Among the programs to be considered for reductions include several higher education related programs. 

At a news conference today, Peter Orsazg, President Obama’s budget director, singled out mathematics and science education, youth mentoring, and job training as potential higher education programs that may be reduced.  He noted that the federal government offers more than 110 programs focused on science, technology, and math education (STEM), 100 mentoring programs, and 40 employment programs.

According to Orszag, “this redundancy wastes resources and makes it harder to act on each of these worthy goals.”

Federal Dollars for Washington’s State Budget Still Alive

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Late last week concerns arose about the likelihood that states would receive federal Medicaid match dollars.  However, it appears that these federal dollars may still be alive in the Senate.

The Office of U.S. Senator Patty Murray reported today that a federal Medicaid match worth $480 million to Washington state has been included in the American Jobs and Closing Tax-Loopholes Act now before the Senate.

This is in stark comparison to the U.S. House of Representatives  which passed legislation without language to extend federal Medicaid dollars for six-months, a $23 billion investment.

Washington, along with 30 other states, incorporated federal dollars to assist in offsetting state budget shortfalls. Washington’s 2010 supplemental operating budget anticipated $480 million in additional resources based on the Federal Medical Assistance Percentage (FMAP) enhancement being extended by an additional six months through June  2011.

Without these funds ($480 million) the dollars in reserves ($450 million) planned as a cushion would be eliminated, leaving the state vulnerable to changes in tax revenues.

If the American Jobs and Closing Tax-Loopholes Act passes with the federal funds intact, the bill will have to return to the House for approval.

Additional Disclosures May Be Required for Student Loan Borrowers

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U.S. Representative John Adler (D-NJ) recently introduction legislation that would require higher education institutions to provide information to student loan borrowers about the benefit of creating a power of attorney or living will for financial, legal, and medical decision making in the event of the death, incapacitation, or disability of the signer or cosigner.

The new legislation (H.R. 5458) would cover both private and federal loans. In addition the bill would require any private education lender to clearly define the borrowers’ obligation, including the effect the death, incapacitation or disability of the signer or cosigner would have on any such obligation.  Finally if there is a cosigner the private educational lender would have to discuss the benefit of credit insurance that would protect the signer and any cosigner in the event of death, incapacitation or disability.

The bill has been referred to the U.S. House Financial Services and Education and Labor Committees.

The Race for “Race to the Top” Funds is On

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Thirty-five states, plus the District of Columbia, have submitted proposals for Race to the Top dollars in hopes of capturing some of the remaining $3.4 billion in funds leftover from the first round. Only two states, Delaware and Tennessee, were awarded grants in the first round out of 40 applicants.  

After the first round of funds, many states re-examined submitted proposals. While other states, such as Washington, tried to learn from the first round in order to strengthen their application in the second round of funding.

As a result many states changed laws to revamp teacher evaluations, increased efforts to gain support from districts and teachers’ unions, and intensified efforts to turn around low-performing schools. Washington drafted and passed new legislation in the 2010 supplemental session (SB 6696) that included several education reform measures (i.e. alternate routes to teacher education).

The results for the second round of Race to the Top dollars will be announced in September 2010.

Revenue Collections for Washington Down 1.1% for the Quarter

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On Friday,  the State Economic & Revenue Forecast Council released it economic review for the quarter.

The official revenue forecast is scheduled for June 17, but the economic review hints at what can be expected in the coming weeks:

Arun Raha, Washington’s chief economic forecaster, reported that estimated revenue collections through the June 10 collection period are down by 1.1% or $48 million below what was expected over this period of time.

Overall, Raha stated the events that have unfolded since the last forecast (February 2010) have done so along predictable lines.

According to Raha, “the current U.S. forecast is, therefore, similar to the forecast adopted in February. Major state economic variables are also coming in very close to what we had expected. As a result, the revisions to the Washington state economic forecast are minimal.”

Candidate Pool for Washington’s U.S. Senate Seat Narrows

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The Republican candidate pool for the office of one of Washington’s U.S. Senate seats narrowed this week.

State Senator Don Benton announced that he would end his campaign for the U.S. Senate seat currently held by Senator Patty Murray.  Senator Benton went further by endorsing Republican candidate Dino Rossi.

Senator Murray is the only Democratic candidate running for this seat.  Given the recent decision by Sen. Benton, nine Republican candidates still remain active in the race for this seat. They include Dino Rossi, Arthur Coday Jr, Clint Didier, Wayne Glover, Scott Johnson, Rod Rieger, Sean Salazar, Chris Widener, and Craig Williams. Richard Curtis has filed as an independent in this race.

Review of Released Common Core Standards Expected Soon in Washington

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Today State Superintendent Randy Dorn announced that the Office of the Superintendent of Public Instruction (OSPI) would begin review of the recently released Common Core State Standards during the next month before provisionally adopting the standards.

The Common Core State Standards were released earlier this week by the National Governors Association Center for Best Practices and the Council of Chief State School Offices.

Washington is one of 48 states along with two territories and the District of Columbia that agreed to consider adopting the English language arts and math common core standards. The adoption of the standards are also a part of Washington’s Race to the Top application.

OSPI is required to deliver a detailed report in January 2011 to the Washington State Legislature including a comparison of Common Core and the current State Learning Standards for reading, writing, and math, and an estimated time-line and costs to the state and districts to implement the standards.

OSPI cannot officially adopt the changes to the state’s learning standards until after the 2011 legislative session. With this in mind, the roll-out plan for the Common Core State Standards will not be implemented in public school classrooms until the 2012-13 school year and will not be fully tested in schools until spring 2015.

Chair of U.S. Senate Veterans’ Affairs Committee Introduced Legislation to Improve Vet Benefits Program

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This week Senator Daniel Akaka (D-HI), Chairman of the U.S. Senate Veterans’ Affairs Committee, introduced the Post-9/11 Veterans Educational Assistance Improvements Act of 2010 (S. 3447)  as a starting point for discussion among Congress, veterans service organizations, and concerned Americans who want to improve the program.

The Act is intended to improve the Post-9/11 GI Bill benefits program by improving educational assistance for veterans who served in the Armed Forces after September 11, 2001 and for other purposes.