Office of Planning and Budgeting

On Wednesday, the Washington state Economic and Revenue Forecast Council released its November revenue forecast, which projected a slight increase to General Fund-State (GF-S) collections over the September revenue forecast. The GF-S revenue forecast increased by $215 million for the current 2015-17 biennium and $137 million for the 2017-19 biennium.

  • Final GF-S revenue collections for the 2013-15 biennium were $33.666 billion.
  • Total projected GF-S revenue for the 2015-17 biennium is now $37.980 billion, 12.8 percent more than the 2013-15 biennium.
  • Total projected GF-S revenue for the 2017-19 biennium is now $40.514 billion, 6.7 percent more than the 2015-17 biennium.
  • Total projected GF-S revenue for the 2019-21 biennium is now $43.656 billion, 7.8 percent more than the 2017-19 biennium.

Behind the numbers:

  • The forecast attributes the higher projections due mainly to increases in retail sales tax and Real Estate Excise Tax (REET) collections.
  • The forecast includes slightly stronger personal income and employment but lower housing permits.
  • Concerns cited in the forecast include slow global and U.S. Economic Growth, weak labor productivity growth and uncertainty regarding fiscal and trade policy.
  • Washington state employment is up by 13,500 net new jobs in September and October.

According to an article in the Tacoma News Tribune, this additional tax revenue will contribute to a 2017-19 state budget that is expected to be more than $40 billion. David Schumacher, Director of the Governor’s Office of Financial Management, stated that this increase in revenue “always helps, but it doesn’t solve the huge problems we’re facing.” One of the biggest problems Schumacher referred to is the Washington state Supreme Court’s mandate to increase K-12 education spending (McCleary v. State of Washington). While there is current debate about the estimated cost of complying with McCleary, the most commonly cited estimate is approximately $3.5 billion, and in Schumacher’s opinion “there’s broad agreement that we’re that neighborhood.”

Governor Jay Inslee will use this revenue forecast and estimates for complying with McCleary when crafting his state budget proposal, which will be released in mid-December in advance of the 2017 legislative session. Stay tuned to the OPBlog for updates on the Governor’s budget proposal when it is released.

On September 15, 2016, OPB submitted the UW’s 2017-19 state operating budget request to the Governor’s Office of Financial Management. The UW is mindful of the continuing budget challenges facing the state of Washington and, thus, has limited its budget requests to the 11 most essential and strategic state investments for the 2017-19 biennium. These, along with a variety of mandatory reports and forms that make up a biennial state budget submission, are available on our website at the following location:  2017-19 Operating Budget Request

Here is a brief summary of our requests:

Maintenance Level

  1. Maintenance & Operations: For the Intellectual House, Burke Museum, Computer Science & Engineering expansion and UW Tacoma Urban Solutions facilities.
  2. WWAMI Spokane Continuation: To continue the recent increase of 20 UW medical students in Spokane to years three and four of their education program. The existing biennial budget funds these students for years one and two of the program.
  3. Marijuana Research: For additional marijuana research funding that was authorized in legislation during the 2015-17 biennium.
  4. Occupational Health Internship Management: For one full‐time staff member to help meet accreditation needs in the Dept. of Environmental and Occupational Health Sciences.

Performance Level

  1. Competitive Compensation and Retention: For 4 percent salary and benefit increases in FY18 and FY19 for faculty and professional staff. Separate decision packages will be submitted for employees covered under collective bargaining agreements.
  2. Maintenance & Operations: For the Nano Engineering & Science Building and the Life Sciences Building.
  3. WWAMI Spokane Expansion: To expand the UW’s medical student education program in Spokane by an additional 20 students per cohort, starting in FY 2018.
  4. Tri-Campus Student Success Initiative: To expand programs at all three campuses that improve access, retention, graduation and career preparation, with an emphasis on first generation, low-income, underrepresented minority and transfer students—especially those in STEM fields.
  5. RIDE Expansion Bridge: To permit RIDE students to spend their second year of dental education in Spokane, rather than returning to Seattle. This program is in partnership with Eastern Washington University.
  6. High-Demand Enrollments: To expand instructional capacity and enrollment at all three campuses in high-demand fields, such as engineering, computer science, ocean engineering and cyber operations.
  7. Regenerative Medicine Institute: To support the Institute’s scientific cores, add new faculty, provide pilot grants to leverage federal research grants, support student research training and provide translational bridge awards to convert research breakthroughs into products with commercial potential.
  • Additional Attachment: A request for a transportation budget appropriation for a Washington State Research Vessel to be operated by the UW and used by local, state, federal and tribal agencies.

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

OPB has posted two summaries concerning the 2016 legislative session to the Briefs tab of our website:

The 2016 Bill Summary lists the bills OPB tracked during session that were passed by the legislature. Links to veto messages are provided for bills that were vetoed or partially vetoed by the Governor. Of the nearly 600 bills that OPB tracked in the 2016 legislative session, 54 passed into law.

The 2016 Fiscal Note Summary lists the fiscal notes—evaluations of the fiscal impact of a bill proposal—that OPB completed on behalf of the UW (with the help of subject matter experts across the University) during the 2016 session. All fiscal notes are requested by the Office of Financial Management (OFM) in Olympia to guide legislative decision-making. This session, OPB completed 63 fiscal notes.

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.

Governor Jay Inslee released his supplemental operating and capital budget proposals on Thursday, both of which include technical corrections and minor appropriation changes to the current 2015-17 biennial budgets (fiscal years 2016 and 2017). This budget release marks the first step of the 2016 legislative session – set to begin on Monday, January 11, 2016. As a reminder, the House and the Senate will propose their own supplemental budgets throughout this short 60-day session as they work toward a compromise budget.

As predicted, Governor Inslee’s proposal offers very few changes to ongoing appropriations. In response to the UW’s request, the proposal provides increased expenditure authority for ongoing shellfish biotoxin monitoring work by the UW’s Olympia Regional Harmful Algal Bloom Program, beginning in FY17. If this budget prevailed, the University would also receive $250,000 in additional ongoing funding for the Mathematics, Engineering, and Science Achievement program beginning in FY17. The proposal does not make changes to the compensation and benefits assumptions of the 2015-17 operating budget.

For more information, please see our brief on Governor Inslee’s 2016 Supplemental Operating and Capital Budgets.

Today’s Economic and Revenue forecast was released a month ahead of schedule to help lawmakers reach agreement on the 2015–17 operating, capital and transportation budgets.

General Fund-State (GF-S) revenue forecast has been increased by $106 million for the 2013-2015 biennium and by $309 million for 2015-2017.

  • GF-S revenue for the 2013-2015 biennium is now $33.653 billion (9.8% higher than collections in the 2011-13 biennium), and
  • The forecasted GF-S revenue for the 2015-2017 biennium is now $36.758 billion (9.2% higher than collections in the 2013-15 biennium).

Revenue collections through May 10th were $61 M (1.8%) higher than forecasted. The surplus was entirely due to a $69 M surplus in real estate excise tax collections (large sale of commercial property). The surplus was offset by a $21 M shortfall in property tax collections.

A few additional highlights from the update:

  • Oil Prices are higher, and 2015 and 2016 GDP growth are weaker than in the February forecast.
  • Receipts from Revenue Act sources are $12 M (0.4%) higher than forecasted.
  • 17,200 new jobs have been added in the three months since the February forecast.

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.

2014 Sup Budget Comparison v2

*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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