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The economic outlook for state budgets remains bleak and additional steep cuts to public higher education inevitable, making it imperative to re-imagine how institutions can become more efficient and self-sufficient while remaining effective and accountable to the public. For many institutions greater autonomy from the practices and requirements of state government seems attractive, and this topic is explored in OPB’s latest brief on variations in institutional autonomy among the UW and its peers.
The Regents expressed many concerns throughout the presentation, but a few points proved especially troubling:
If the Governor’s budget is adopted, higher education institutions’ funding would be cut by half, or $500 million since FY 2008.
State funding for higher education institutions on a per student full time equivalent (FTE) basis has deteriorated. While the state covered 70% of funding per student FTE in 1991, the Governor’s budget would only cover 30% of needed funding per student FTE.
The Governor’s budget proposes 11% tuition rate increases for resident undergraduates, but even with tuition increases factored in from all student categories, the UW would still face a net $91 million reduction in state funding.
As usual, Planning & Budgeting will continue to post budget updates throughout the 2011 Legislative Session on this blog. As we’ve stressed before, the Governor’s budget is the first budget proposal for the upcoming biennium; we have a long session before us and no budget is final at this point.
You may have read a widely circulated New York Times article today concerning the possibility of the federal government creating a pathway for states to seek protection in federal bankruptcy court if their debt burdens spiral out of control. Some policymakers think that the severe economic strain created by the Great Recession has revealed deep structural problems in state budgets that may be unfixable without intervention.
However, in Misunderstandings Regarding State Debt, Pensions, and Retiree Health Costs Created Unnecessary Alarm, the Center on Budget and Policy Priorities puts current state budget woes in historical perspective, and emphasizes that, while the near-term future for state budgets across the country remains grim, we must exercise caution in conflating the short term problems caused by the recent recession with the very long term structural issues associated with revenue systems and pension plans.
In A New Funding Paradigm for Higher Education, the National Association of State Budget Officers (NASBO) puts the Great Recession into context and discusses the cyclical nature of state funding for higher education, which has historically followed a pattern of major cuts in poor economic periods followed by generous reinvestment in good times.
Considering the generally bleak assessment of the speed of economic recovery for state budgets, NASBO asserts that this boom and bust funding pattern may finally be broken. Many do not expect state funding for public higher education to return to previous levels, and this has states, institutions, and other stakeholders wondering what a ‘new normal’ may look like.
Many institutions think that at least part of the answer lies in seeking greater autonomy from state processes and requirements, and more flexibility in managing institutional resources. Whatever the outcomes, many are hoping that achieving a more stable and predictable funding model might keep public higher education on solid ground as we move toward an uncertain future.
Welcome to two new topics on OPBlog: Campus Planning and Capital Resources as they relate to a unified approach to capital planning. We will begin posting on topics related to capital resources, capital budgets, campus planning, and national trends in those areas. This first post looks at planning efforts in Portland and the role Universities play in urban planning.
A 2009 report by the Lincoln Institute of Land Policy titled “Town-Gown Collaboration in Land Use and Development” reinforces ongoing research that suggests over the past 20 years universities play a much broader role in the economic, social, and physical development in their neighborhoods. As universities continue to lead the urban planning process with their surrounding communities, the concept of EcoDistricts – planning for sustainability at a district level – may play an important role in the overall discussion of how a community develops. In fact, in Portland, one of the pilot EcoDistricts is in partnership with Portland State University (PSU).
What are EcoDistricts? EcoDistricts are a comprehensive strategy developed by the Portland Sustainability Institute to accelerate sustainable neighborhood development. Through partnerships with the region, institutions, and businesses, Portland created the Portland Sustainability Institute (PoSI). The institute “…brings together business, higher education, nonprofit and municipal leaders to drive a set of next generation urban sustainability initiatives for the Portland metro region.” In essence, it is a not-for-profit that supports the coordination of multiple sustainability efforts to maximize outcomes. It supports the planning of community initiatives at a district level rather than individual initiatives in hope that the district level planning will have a more significant impact. According to Making EcoDistricts, a publication published by PoSI, sustainability is achieved over time. “It’s not the product of a program, project, or initiative, though all these things are important and help.” Portland, Oregon, has embarked on a path of sustainability through district-level planning not unlike campus planning. Although urban sustainability is not new, the approach Portland is taking is being explored as a model for other cities and universities.
As reported by Inside Higher Ed and many others, the Supreme Court decided this week that medical residents do not qualify for student payroll tax exemptions and must pay into social security and medicare as other employees do.
This ruling upholds U.S. Department of Treasury regulations issued in 2004, which the UW has been in compliance with since. Had the ruling gone the other way, medical residents across the country would have been reimbursed for taxes collected since 2005, and their institutions would have been able to cease collection in the future.
Today, newly elected California Governor Jerry Brown released his first proposed state budget. The 2011-12 budget proposes over $12.5 billion in spending cuts and over $12 billion in new revenue generation to close an existing deficit of over $25 billion.
Cuts include 10 percent pay reductions for state workers, cuts to Medi-Cal and Welfare, and, notably, deep cuts to higher education only months after the Legislature approved a 2010-11 budget that restored some previously cut funding for public institutions.
Specifically, the budget proposes cutting the UC system by $500 million (17%), the CSU system by $500 million (18%), and community colleges by $400 million (6.5%).
UC President Mark Yudof notes that, if enacted, this budget would mean the state’s annual contribution per student would be less than the portion paid by students and their families for the first time in California’s history. We crossed this same threshold in Washington State for the first time in 2009.
Today, the Office of State Relations and the Office of Planning and Budgeting held a legislative session overview for folks across campus who are frequently called upon to respond to requests for information during session, including providing feedback on proposed bills, completing fiscal note responses, or working with state relations to testify or answer questions in Olympia.
Please visit our State Budget Process webpage to view or print all four presentations that were made this afternoon, to access the UW BillTracker, and other documents and presentations relating to the State budget process.