On Thursday, the House passed its operating budget proposal (Engrossed Substitute HB 1106) off the floor, with several amendments.
The original tuition and compensation proposals from the House Chair budget remain unaltered, however there some key changes compared to the original bill:
- Funding for computer science and engineering is reduced by $3.75 million, bringing the biennial total to $4.25 million, rather than $8 million.
- An additional $1.9 million is provided for the Family Medicine Residency Network, bringing the biennial total to $4.9 million.
- New funding of $300,000 is provided for the UW’s Latino Health Center over the biennium.
- New funding of $400,000 is provided for the Climate Impacts Group in the College of the Environment over the biennium.
Please see our OBP brief for more information about the original House proposal.
The Senate is expected to vote on its operating budget on Monday.
On Tuesday, Leadership in the Senate Ways & Means Committee released its operating budget proposal, Proposed Substitute Senate Bill 5077 which makes significant changes to the Governor’s proposal and differs significantly from the House proposal. Under the Senate proposal, the UW would receive $674.39 million of Near General Fund State across the biennium.
Here are some of the key points from the Senate Budget proposal:
- Tuition affordability program – The Senate budget reduces the operating fee portion of resident undergraduate tuition to 18 percent of the state’s average wage in FY16 and 14 percent of the state’s average wage in FY17 onwards. It provides $96 million over the biennium to offset the reduction in operating fees, which we believe falls short by $1.2 million in FY16 and $2.8 million in FY17.
- WWAMI – The Senate budget provides $1.25 million per year for continued operations of the WWAMI program.
- O&M Funding – Like the House budget, the Senate provides $1.762 million over the biennium to cover the operation and maintenance costs of UW Bothell Discovery Hall.
- STEM Investments – The Senate proposal provides $2 million per year to increase bachelor’s degrees in Science, Technology, engineering and Math fields.
- Compensation Increase – The Senate bill rejects state-funded contracts with classified staff. Instead, the Senate Chair budget would fund wage increases at $1,000 per employee and require that the University either renegotiate contracts to match this funding level or locally fund the difference in perpetuity. The Senate budget provides funds for faculty and staff wage increases at $1,000 per employee and allows the UW to deviate from this assumption with local funds.
The Senate capital budget is expected to be released next week . For more information, please see the OPB Brief.
Leadership in the House Appropriations Committee released their 2015-17 operating budget proposal on Friday – Proposed Substitute House Bill 1106 . The proposal provides $3.48 billion of Near General Fund State for higher education which is a slight increase over the total higher education appropriations in the Governor’s budget.
On the operating side, the UW would receive $595.6 million of Near General Fund State across the biennium – $95 million more than we received in 2013-15.
Here are some of the key points from the House operating budget proposal:
- Tuition freeze for resident undergraduate students over the biennium.
- $50 million in biennial funding to offset tuition freeze and fund compensation increases.
- $8 million in FY17 to support Computer Science engineering enrollment.
- $3 million in FY17 for additional medical residencies in Washington State.
- $4.68 million transfer from WSU to the UW in both FY16 and FY17 to support the WWAMI program.
- $1.7 million over the biennium to cover operation and maintenance costs for UW Bothell Discovery Hall.
- $1 million for an ungulate predation study — $600,000 of which would pass through to another state agency.
- No funding for Climates Impacts Group, although the Governor’s funding had provided$1 million provided for this purpose.
Overall, the UW fared well in the House operating budget compared to the Governor budget.
On the capital side, the UW would receive $41.156 million in new funding from the State Building Construction Account. This is significantly less than the Governor’s proposed budget of $86.2 million, with less funding for the CSE Expansion ($6.033 million of the $40 million requested) and no funding to support the completion of the phased renovation of Lewis Hall. It does however propose a greater amount of funding for the Burke Museum ($26 million), but is still less than the Burke’s requested $46 million.
The Senate will release its proposed operating and capital budgets in the coming weeks. For an analysis and summary of the operating and capital budgets, please review the OPB Brief.
General Fund-State (GF-S) revenue forecast has been increased by $107 million for the 2013-2015 biennium and by $129 million for 2015-2017.
- GF-S revenue for the 2013-2015 biennium is now $33.547 billion (9.4% higher than collections in the 2011-13 biennium) and
- The forecasted GF-S revenue for the 2015-2017 biennium is now $36.449 billion (8.7% higher than collections in the 2013-15 biennium)
Revenue collections through February 10th were $69 M (1.5%) higher than forecasted. Of this amount, $52 M came from Revenue Act Sources (retail sales, business and occupation, public utility and tobacco products taxes).
A few additional highlights from the update:
- Oil Prices have declined further since November forecast.
- Sales tax growth is strong and is driven by sales in construction, autos and building materials.
- Real estate excise tax since November forecast came in $11 M higher than forecasted.
- Average monthly increase of 7,000 net new jobs in Washington. Seattle area employment is growing much faster than the rest of the state.
Note: Caseload forecast Council will release their report this afternoon at 1.30PM
The Governor released operating and capital budgets yesterday morning. Though the UW fared well in the capital budget, we believe the operating budget, as currently proposed, presents challenges. Please note that the Governor’s budgets will be taken up by the Legislature in January; we are many months away from a final legislative compromise. As usual, we will be sending out budget briefing documents throughout legislative session to keep you updated.
For an analysis and summary of the operating and capital budgets, please review the OPB brief.
On Thursday, the American Association of State Colleges and Universities (AASCU) released its most State Outlook. According to the report, state operating support for public four-year colleges and universities is 3.6 percent higher for FY 2015 than it was for FY 2014. Of the 49 states that have passed a budget thus far, support for higher education increased in 43 states and decreased in only 6 states. Of those 6 states that reduced funding, all were under 3 percent: Alaska, Delaware, Kentucky, Missouri, Washington (0.8 percent decrease) and West Virginia.
There was a relatively small amount of variation between states in terms of their year-to-year funding changes. For FY 2015, the spread between the state with the largest gain and that with the largest cut was only a 24 percent—this is compared to 57 percent, 25 percent and 46 percent, respectively, in FYs 2012, 2013 and 2014. The report notes that this decreased volatility likely indicates “a continued post-recession stabilization of states’ budgets.”
Charitable contributions to U.S. colleges and universities increased 9 percent in 2013, to $33.8 billion—the highest recorded in the history of the Council for Aid to Education (CAE) Voluntary Support of Education (VSE) survey. In addition, college and university endowments grew by an average of 11.7 percent in FY 2013, according to a January 2014 study released by the National Association of College and University Business Officers and the Commonfund Institute. This represents a significant improvement over the -0.3 percent return in FY 2012.
The report also describes ten highlights/trends from states’ 2014 legislative sessions, those being:
- State initiatives linking student access to economic and workforce development goals.
- Tuition freezes or increase caps in exchange for state reinvestment—this occurred in Washington and another example is discussed in our previous post.
- Performance-based funding systems that attempt to align institutional outcomes with state needs and priorities.
- Governor emphasis on efforts to advance state educational attainment goals.
- Interest in policies related to vocational and technical education, including allowing community colleges to grant certain four-year degrees (as described in our previous post).
- Efforts to develop a common set of expectations for what K-12 students should know in mathematics and language arts.
- STEM-related initiatives, including additional funding for STEM scholarships in Washington.
- Financial support for the renovating and/or constructing of new campus facilities—unfortunately, Washington’s legislature did not pass a capital budget.
- Bills allowing individuals to carry guns on public college and university campuses—as of March 2014, seven states had passed such legislation.
- Legislation that extends in-state tuition or, as occurred in Washington, state financial aid to undocumented students.
Other noteworthy policy topics described in the report include:
- Student financial aid programs—some states broadened their programs while others limited them;
- Online and competency-based education reciprocity agreements;
- “Pay It Forward” Funding Schemes; and
- Consumer protection as it pertains to student recruitment, advertising and financial aid at for-profit colleges.
On Tuesday, Stanford’s Board of Trustees announced it “will not directly invest in approximately 100 publicly traded companies for which coal extraction is the primary business, and will divest of any current direct holdings in such companies.” Furthermore, Stanford stated it would encourage its external investment managers to avoid investments in such companies.
The decision was made at the recommendation of the university’s Advisory Panel on Investment Responsibility and Licensing (APIRL), which had spent several months analyzing a petition by a student group called Fossil Free Stanford. After conducting an extensive research-based review of the issues, APRIL concluded that sufficient coal alternatives exist and that divestment “provides leadership on a critical matter facing our world and is an appropriate application of the university’s investment responsibility policy.”
This issue has arisen several times at the UW, which (like Stanford) is a leader in environmental stewardship and sustainability. Stanford’s decision may set a precedent for other universities, including the UW, that have grappled with this issue.
The Council of Graduate Schools (CGS) released its annual survey of international student applications on Thursday, which revealed that the number of international student applications to U.S. graduate schools increased by 7 percent in 2014 and, for the second year in a row, Chinese applications fell slightly, while those from students in India soared.
Chinese graduate applications (and enrollments) had steadily increased for the better part of a decade. But, in 2013, the number of graduate applications from China dropped by 3 percent and, this year, that number fell by another 1 percent. Meanwhile, Indian applications increased by 22 percent in 2013 and by an even more impressive 32 percent in 2014.
“The distribution of applications by country of origin… remains a concern,” the CGS report states, noting that Chinese applications trends have historically been more stable than Indian applications trends. Past fluctuations in Indian applications appear to have primarily resulted from changing economic circumstances and exchange rates; however CGS’s president, Debra W. Stewart, attributed the recent increase to tightening student-visa rules in the U.K.
The number of new Indian students at English universities dropped by half since 2010-11, which observers partially ascribe to the elimination of post-study work opportunities for international students and, as Inside Higher Ed notes, other U.K. immigration policy changes that have made the U.K. appear less welcoming of international students.
According to an article by The Chronicle, “Stewart said she worries that unless American lawmakers reform the visa system to make it easier for international students to stay and work after graduation, the United States could lose whatever edge it may have.”
The Chinese slowdown is likely a more permanent change resulting (at least partially) from China’s push to improve its own research universities. The report’s other noteworthy findings include that Brazilian graduate applications increased by 33 percent—which could be due in part to the Brazilian government’s massive scholarship program—and that graduate applications from Africa, Europe and the Middle East (the three world regions reported on) all showed increases as well.
Figures for 2014 are preliminary and subject to revision in a CGS report planned for August.
Representative Paul Ryan, the House Budget Chairman, released his FY15 budget proposal on Tuesday. The proposal would remove the in-school interest subsidy for all subsidized undergraduate student loans, eliminate mandatory funding for Pell Grants, and freeze the maximum Pell Grant award at $5,730 for the next 10 years.
As Office of Federal Relations put it in their blog post, “That essentially means that $870 in the maximum grant would have to be funded by increased discretionary funds or the maximum be cut from $5,730 to $4,860.”
Please see the Federal Relations website for more information, and check out articles by Equity Line, Inside Higher Ed, and The Chronicle.
*Although the conference budget cuts state funding by $7.3 million, it also reduces the amount employers can spend on benefits per employee per month to $622, which essentially offsets the cut.
† The $1,200,000 figure is an estimate until OFM sends additional instructions.
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