Office of Planning and Budgeting

On Monday, leadership in the House Appropriations Committee released their initial operating budget proposal. This proposal follows last week’s release of the Senate operating proposal and December’s release of the Governor’s operating and capital proposals.

See the new OPB brief here for information regarding the House proposal, as well as a full comparison between current budget proposals.

Some noteworthy items in the House Appropriations operating budget proposal include:

  • Compensation: Partially funds a 2 percent increase in FY18 and two 2 percent increases in FY19 for non-represented employees, and partially funds collective bargaining agreements for represented employees.
  • Tuition Policy: Like the Governor’s proposal, the House would freeze resident undergraduate tuition across all public higher education institutions for two years, and would provide funding to cover the difference between the tuition freeze and incremental revenue expected under current policy.
  • Undergraduate Enrollment: Adds $6 million to the UW over the biennium to increase degree production in the Department of Computer Science and Engineering.
  • Financial Aid: Appropriates $49.2 million to the State Need Grant to reduce the number of unserved, eligible students, by 25 percent (around 6000 students).
  • Provisos: Adds new funding for several targeted efforts, including funding for the Regional Initiatives in Dental Education (RIDE Program)

In addition, the Senate Ways & Means committee released its proposed capital budget on Tuesday, and the OPB brief on the Senate’s proposals has been updated. Some highlights include:

  • Funding to complete the Burke Museum ($24.2 million)
  • Minor Works and Preventative Maintenance ($70.8 million from the UW Building Account)
  • Major Infrastructure – Seismic Upgrades ($10 million)
  • Population Health Sciences Building ($15 million)
  • Health Sciences Education – T-wing Renovation ($10 million)
  • Center for Advanced Materials and Clean Energy ($10 million)
  • Evans School – Parrington Hall Renovation ($10 million)

The House has not released a capital budget as of the time of this posting, but that brief will be updated once that information is available.

 

Stay tuned to the OPBlog for updates on proposed budgets.

On Tuesday, leadership in the Senate Ways & Means Committee released their initial 2017-19 operating budget proposal. This proposal is the first from a legislative body following the release of Governor Inslee’s operating and capital budget proposals from December. See OPB’s brief here for a full comparison. Unlike the Governor’s budget proposal, the Senate does not propose significant new revenue, and therefore would provide far fewer new investments in new and existing programs.

Some noteworthy items in the Senate budget proposal include:

  • Tuition Policy: Maintains current tuition policy allowing a 2.2 percent increase in resident undergraduate tuition in FY18 and a 2.0 percent increase in FY19. The Governor proposed freezing tuition for two years, and provided funds to backfill that freeze.
  • Undergraduate Enrollment: Adds $10.5 million to the UW over the biennium to increase resident undergraduate enrollments in STEM and other fields.
  • Financial Aid: Reduces the UW’s state appropriation by $5.2 million over the biennium and assume that the University would offset the reduction by reducing tuition waivers provided to students.
  • Compensation: Partially funds $500 wage increases per year for faculty, staff, and represented employees. The budget would also reject tentative collective bargaining agreements between the UW and represented employees.
  • New “Central Service”: Reinstates a charge for central services provided by the Governor’s Office of Financial Management, which would divert $7.5 million in tuition revenue over the biennium.

The Senate did not release a capital budget as of the time of this posting, but the brief will be updated once that information is available. We expect to review proposals from the House Appropriations Committee early next week, and will post additional information at that time.

Stay tuned to the OPBlog for updates on proposed budgets.

Yesterday, the Economic and Revenue Forecast Council (ERFC) released its September revenue forecast, which increased projected General Fund-State (GF-S) collections by $334 million for the current 2015-17 biennium and by $125 million for the upcoming 2017-19 biennium. As a reminder, there will be one more revenue forecast in November before Governor Inslee releases his proposed 2017-19 biennial budget in anticipation of the 2017 legislative session.

Here is a quick summary of the total projected GF-S revenue for each biennium:

  • $37.765 billion for the 2015-17 biennium, 12.2 percent more than 2013-15
  • $40.377 billion for the 2017-19 biennium, 6.9 percent more than 2015-17
  • $43.630 billion for the 2019-21 biennium, 8.1 percent more than 2017-19

Behind the numbers:

  • Revenue collections from June to September were $225 million higher than forecasted in June, but over half of that increase was attributed to several large (and one-time) audit-related payments of past-due taxes.
  • This forecast noted slightly stronger personal income and employment compared to the June forecast.
  • Strong retail sales, housing construction, and real estate excise tax (REET) collections continue to create positive revenue trends.
  • Risks to the revenue forecast include weak labor productivity and slow economic growth (both in the U.S. and globally).

Any excess revenue collected in the 2015-17 biennium will contribute to reserves (est. $1.8 Billion) that will be available to spend in the 2017-19 biennium, however, the state continues to face significant budgetary challenges in complying with the State Supreme Court’s orders to fully fund K-12 education.

Stay tuned to the OPBlog for updates on revenue forecasts and the upcoming 2017 legislative session.

A new brief from the Office of Planning & Budgeting provides an overview of Activity Based Budgeting (ABB) distribution principles and trends at the UW in Seattle. This brief updates last year’s overview of ABB trends, adding the most recent year’s data. It compares the ABB budgets of Seattle academic units to those of Seattle administrative units over the last six years (FY12-FY17).

Last week, the Economic and Revenue Forecast Council (ERFC) released its June revenue forecast, which increased projected General Fund-State (GF-S) collections by $294 million for the current 2015-17 biennium and by $126 million for the upcoming 2017-19 biennium. This is an improvement over the February forecast, which had predicted slower revenue growth in both biennia (see our blog post here). As a reminder, there will be at least three more revenue forecasts between now and when the legislature sets the 2017-19 budget.

Here is a quick summary of the total projected GF-S revenue for each biennia:

  • $37.431 billion for the 2015-17 biennium, 11.2 percent more than 2013-15.
  • $40.252 billion for the 2017-19 biennium, 7.5 percent more than 2015-17.
  • $43.575 billion for the 2019-21 biennium, 8.3 percent more than 2017-19.

Behind the numbers:

  • The forecast attributed the increase to strong sales of large commercial properties and rising home prices.
  • Other positives included growth in housing permits and increases in inflation, which typically result in greater retail sales, business taxes, and property taxes.
  • Slight decreases in U.S. and Washington state personal income forecasts continue to have a negative effect on the revenue forecast.

According to a press release from the Governor’s Office of Financial Management, “With the latest forecast, the state is now projected to have nearly $1.5 billion in total reserves at the end of the current biennium and more than $1.4 billion at the end of the 2017–19 biennium. Those reserve figures, however, do not take into account the multibillion obligation the state faces in the next biennium to meet its constitutional obligation to fully fund basic education.”

As a result, state agencies, including the UW, have received instructions to severely limit requests for new programs or policy initiatives in their requests for state funding in the 2017-19 biennium.

Stay tuned to the OPBlog for updates on revenue forecasts.

On April 18, Governor Inslee signed the final compromise operating budget after vetoing several sections. One of the Governor’s vetoes reversed a plan to convert activities conducted by the Office of Financial Management (OFM) into a “central service.” As a result of the veto, the UW will no longer be billed approximately $2.03 million from tuition operating fee revenue to cover those services.

Our updated brief is here. Please contact Jed Bradley or Becka Johnson Poppe if you have any questions.

The 2016 Legislature concluded its business having passed supplemental operating and capital budgets before the scheduled close of the 30-day special session. Please see the OPB brief for a detailed overview of the final compromise budgets.

While the compromise operating budget includes $3.513 million in additional biennial funding to “true up” the tuition backfill associated with 2ESB 5954, the increase is partially offset by more than $2 million in new, ongoing, biennial charges for services provided by the Office of Financial Management.

The compromise capital budget does not include any changes for the UW.

Please contact Jed Bradley or Becka Johnson Poppe if you have any questions.

The House and Senate did not come to an agreement on a 2016 supplemental budget by the end of the 60-day regular session, which was slated to end March 10. Several news outlets reported the tense ending, which featured Governor Inslee vetoing 27 bills (see examples here, here, and here). The Governor convened a 30-day special session, which began immediately.

On Friday, leadership in the Senate Ways & Means Committee released a new proposal for a 2016 supplemental operating budget (PSSB 6667). Last month, OPB released a brief comparing the Governor’s proposal, House proposal, and the Senate’s original proposal. That brief outlines the major components of each budget.

Like the Senate’s original proposal, this offer proposes $3.513 million in additional biennial funding to “true up” the tuition backfill associated with 2ESB 5954. However, both Senate proposals would almost entirely negate this additional backfill funding by converting activities conducted by the Office of Financial Management (OFM) into a central service charged to state agencies. Over the biennium, the UW would be charged $1.252 million from its state general fund appropriation and $2.042 million from tuition operating fee revenue for these OFM central services, a total of $3.294 million.

This proposal differs from the original Senate proposal in that it: 

  • Does not cut WWAMI: The original proposal included a cut of $1.2 million
  • Does not fund a proviso for youth suicide prevention at UW’s Forefront: The original proposal allocated $97,000 in FY17 to fund 2SSB 6243, but that bill did not pass the House.
  • Shifts $18 million in cost savings from College Bound (CB) program to State Need Grant (SNG): The original proposal shifted only $14 million, effectively cutting SNG by $4.5 million.

During a press conference responding to this release, leadership in the House emphasized continuing negotiations toward a compromised budget and gave no indication that they would release a public budget offer.

Stay tuned to the OPBlog for updates on proposed budgets.

This week, leadership in the House and Senate released their respective supplemental operating and capital budget proposals for the current biennium (FY16 & FY17), which follow the December release of Governor Jay Inslee’s proposals. As a reminder, the House and Senate proposals will be amended before they pass their respective chambers.

Please see the OPB brief for a detailed comparison of the House, Senate and Governor’s supplemental operating and capital budget proposals.

Some highlights:

  • The budget released by the leadership in the Senate Ways & Means Committee would provide the most funding overall, largely because it includes additional funding for the resident undergraduate tuition reduction backfill associated with 2ESB 5954.
  • None of the three capital budgets provide additional funding for the UW beyond the original 2015-17 capital budget.

Legislators will have until March 10, the last day of session, to complete and pass a compromise budget.

See the table below for a quick comparison of the budget proposals:

BudgetComparison

 

 

Earlier today, the leadership in the House Appropriations Committee released their 2016 supplemental operating budget proposal. Toward the end of this week, the leadership in the Senate Ways & Means Committee will release their budget. Following that release, we will post a brief here outlining the differences between Governor Inslee’s proposed budget and the House and Senate proposals.

As a reminder, supplemental budgets include technical corrections and minor appropriation changes to the current 2015-17 biennial budget (fiscal years 2016 and 2017). Budget proposals in the House and the Senate will be amended in their respective committees, and possibly on each chamber floor, before negotiations begin towards a compromise budget.

Overview of the House budget:

Compared to the Governor’s proposal, the UW would receive an additional $50,000 to fully fund the implementation of HB 1138. In addition, the House budget would not reduce the UW’s allocation for legal services (the Governor proposed a reduction of $151,000).

Under the House proposal, the UW’s share of the settlement in the Moore v. HCA lawsuit would increase to nearly $16.3 million, compared to $15.6 million in the Governor’s budget.

The House Capital Budget Committee will release its 2016 supplemental capital budget proposal on Wednesday. Stay tuned to the OPBlog for updates on proposed budgets as they move through the process.

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