Office of Planning and Budgeting

In a Town Hall Seattle meeting last night, Washington’s six public baccalaureate university presidents and business leaders from REI, Boeing, and Microsoft gathered to discuss  unprecedented cuts to Washington’s public institutions and generate energy for the Seattle Times’ Greater Good Campaign. Organized by the Seattle Times and funded in partnership with local businesses, the campaign intends to expand awareness of the importance of higher education for the vitality and economic security of our communities and advocate for increased funding for public higher education.

Last night, the public baccalaureate presidents expressed their concerns with retaining star faculty, providing access to low and particularly middle-income students who don’t benefit from state-supported financial aid programs, and maintaining affordable tuition rates. Business leaders shared their devotion to the Pacific Northwest, but their worries that our state’s inability to educate enough of its citizens may force their companies to look elsewhere for educated workers.

When moderator and Seattle Times editor Kate Riley asked President Young about his impressions of President Obama’s State of the Union address and blueprint for higher education reform, Young said, “They’ve got the guns aimed at the wrong problem.” In Washington, per student funding has remained flat for twenty years, but resources to support educational funding have completely switched. While the state used to provide 70 percent of the per student funding in the early 1990’s, the state now only provides 30 percent. The total funding remains the same but the primary shareholders of our public universities are now students and parents, not the state.

Footage from the event is available here.

In short order, the House of Representatives introduced, passed out of committee, and passed out of their chamber, an early action savings bill nearly identical to the Senate bill we covered earlier. Note that there are no material changes for higher education (including the UW) in the House version of the bill.

It is largely anticipated that the Senate will take up the House’s bill today and the Legislature will adjourn shortly thereafter.

 

At 3:30 PM today, the Senate Ways & Means Committee will hear an early action bill addressing 25% of the current $2 billion deficit in the form of $323 million in budget cuts and $106 million in fund transfers. Both chambers are expected to move legislation forward quickly in order to sine die at the end of this week.

This bill would cut $248,000 from the UW’s general fund base  to address expected workers compensation rate increases that are charged to all state agencies, based on staffing levels. Otherwise, the bill affects the University and all of higher education very little.

Agencies most affected by the reductions in this bill are Human Services, DSHS, and K12. Human Services reductions (-$127 million) include expenditure savings and reclaiming state appropriations made unnecessary due to unanticipated, higher federal funding. Budget cuts to K12 (-$75 million) include central administrative reductions, school bus depreciation payment shifts, and enrollment funding adjustments. DSHS budget cuts (-$56 million) include delaying payments for programs, capturing savings generated by lower than anticipated costs, and reducing administrative costs.

Regular session begins on January 10, 2012 and reducing expenditures in the current biennium to address the deficit will be the primary focus of session.

The Governor’s budget office released the first supplemental budget proposal today, further reducing state expenditures for the 2011-13 biennium by $1.7 billion. All told, higher education institutions would absorb about nine percent of the total cut.

Under the Governor’s proposal, each of the state’s six baccalaureate institutions  would receive 16-17 percent cuts in state funding for Fiscal Year 2013 (FY13), while community and technical colleges would receive a 13 percent cut.

Funding cuts are once again disproportionately concentrated at four-year institutions even though the Governor discussed making equal across-the-board cuts as recently as October, because, as noted by budget staff, four-year institutions have a greater ability to   generate tuition revenue than community colleges.

Note that the Governor’s budget eliminates funding for the state’s Work Study program next academic year but importantly, preserves funding for the State Need Grant program.

For more information about budget increases for the College of Engineering, aerospace innovation funding, and financial aid impacts, please review our Planning & Budgeting brief.

Released this morning, the November state revenue forecast indicates that the state is short another $122 million below needed revenue for the current biennium. Dr. Arun Raha, Executive Director of the Economic Revenue and Forecast Council, wrote that uncertainty over Southern Europe’s debt crisis and potential political gridlock in Washington, D.C., produced largely expected economic results predicted in September’s dismal forecast. In essence, we still have a $2 billion budget problem and since September, it has grown by $122 million.

The Governor will use this forecast as her benchmark for budget reductions in the 2012 Supplemental budget (first supplemental budget of the 2011-13 biennium). All told, the Governor will need to cut over $2 billion from the current biennial budget in order to produce a balanced budget, which she is required to do before proposing any revenue increases to offset reductions.

This budget will be released this Monday, November 21. We will release a budget brief and blog detailing the impact of the Governor’s budget on the UW as soon as possible. While the Governor’s budget release is a critical first step of the special and regular legislative sessions, we are months away from a final legislative budget.

The Governor released a preliminary list of potential budget reductions for FY13 today. The list includes a set of severe cuts across state government but demarcates which reductions she would include in her formal November budget. For higher education, the Governor would cut colleges and universities 15 percent in FY13 and suspend the State Work Study program. Last year, UW students received $2.3 million in State Work Study funds.

The Governor also included potential general fund state reductions at 10 and 20 percent (click on the chart below to enlarge it).

More information about these potential reductions are included in a Planning & Budgeting brief. Note that the reductions outlined in the Governor’s letter are preliminary and we are many months away from resolution on a 2012 Supplemental Budget.

Make sure to check out the following recent additions to the website:

  • Updated printable UW Fact Cards for your wallets and pockets and new UW Fast Facts! Please let us know if you have any questions.
  • Updated brief on Institutional autonomy among UW peer institutions across the US.
  • Final Decision Summary and Overview report on Activity Based Budgeting.

We are working on a website overhaul that we hope to roll out in the coming months, and our main aim is to make OPB information and resources as easy (and pleasant) to find as possible. Stay tuned!

Governor Gregoire announced that she will call the Legislature back to Olympia for a 30-day special session at the end of November after the next revenue forecast is released. Gregoire will outline her expectations for the special session during a press conference this morning, which will be aired on TVW.

A November 2011 special session is not a complete surprise, as the latest revenue forecast reduced general fund revenue by $1.4 billion for the biennium. Many anticipate that the next revenue forecast will reduce anticipated revenue further. During the special session, the Legislature will likely move to reduce general fund appropriations for both the current fiscal year and FY13.

Please check this blog regularly for information about the upcoming special session, state budget cuts, and impacts on the UW budget.

On Thursday, September 16, the Washington State Economic and Revenue Forecast Council (ERFC) released its quarterly update of State General Fund Revenues. The forecast reduced expected revenue for the upcoming 2011-13 biennium to $30.3 billion, $1.4 billion less than the previous forecast released in June. A deficit of this magnitude is expected to necessitate another round of budget cuts for state agencies, including the UW, in the upcoming legislative session set to commence in January.

Read the latest OPB Brief for more detail.

The American Association of State Colleges and Universities’ (AASCU) July 2011 State Outlook confirms that most states cut higher education spending for fiscal year 2012. For some states, this is the third or even fourth consecutive year of higher education spending cuts.

Also unsurprising, AASCU identifies the 23 percent funding cut for higher education in Washington as the second highest in the country (behind a 24 percent cut for such spending in Arizona, and equal to a 23 percent cut in California). That cut, combined with previous reductions, mean that the University of Washington has lost half of its state funding in just four years.

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