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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.
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.
Yesterday, the Washington State Economic Revenue and Forecast Council released a troubling update for 2011-13 state general fund revenue. Overall, the over $730 million dollars held in reserve in the recently signed budget is now projected to be only $163 million.
If this trend continues, mid-year and supplemental session cuts may be likely. Please see our OPB brief for a summary of this revenue report.
While the House and Senate have yet to finish sine die today, both capital and operating budgets are close to final.
The UW’s operating budget cut is $207 million over the biennium. UW’s cuts are comprised of “higher education reductions” and a mandatory 3 percent, general fund state compensation reduction ($12 million per year). Compensation reductions, while mandatory, are not imposed on individual salaries at the colleges and universities but rather, are required compensation savings targets that the University must meet over each fiscal year.
The final operating budget includes a 16 percent resident undergraduate tuition rate cap but provisions from E2SHB 1795 (tuition setting authority bill) are included. The UW Regents will meet June 9, 2011 to discuss tuition setting authority.
The capital budget provides $26.3 million in state bonds for projects like Odegaard Undergraduate Learning Center and minor capital repairs. Additionally, a separate capital budget bill appropriates $53.6 million in UW Building Fees for preventative maintenance and building repairs as well as minor capital repairs.
Please review the OPB’s conference budget brief which assumes that the operating and capital budgets are signed by the Speaker of the House and the President of the Senate in their current forms. We will notify campus of any major amendments once the Governor has reviewed the operating and capital budgets.
As of today, House Bill 1795 has passed both the Washington State House and Senate by wide margins and is on its way to the Governor. As outlined in our previous post, this bill gives Washington’s four year public institutions the ability to set resident undergraduate tuition rates, alongside new financial aid and accountability requirements, for a limited time.
Note that due to the ongoing state legislative special session, as well as the need for time to discuss the policy alternatives authorized in HB 1795, the Board of Regents will likely approve the FY 2012 UW operating and capital budgets, including tuition rates for the 2011-12 academic year, at their July 21 meeting instead of in June.
In the meantime, Interim President Phyllis Wise will be holding two community conversations where she will discuss and answer questions about the budget and tuition-setting:
Friday, the Seattle Times published an article about a potential agreement between lawmakers to, given several years of steep funding cuts, allow Washington’s universities to set undergraduate resident tuition rates for a limited number of years and with new financial aid and accountability requirements.
News of this agreement comes as the Legislature is in the middle of a 30 day special session, and while a negotiated budget and resolution on tuition rates for resident undergraduate students is not yet final, a new OPB brief provides some national context for and information about tuition setting policy.
The Washington State Senate passed its budgetlast night after adopting two floor amendments. The budget cuts, compensation reductions, and policy issues we outlinedwere not amended in any substantive way in the engrossed budget passed by the Senate last night. Readers can examine the evolution of the House and Senate versions in detail here and here.
Regular session is scheduled to end this Sunday, but legislators will not be in Olympia over the weekend due to Easter. A special sessionwill likely be called after the holiday and reaching agreement on aconference (negotiated) budget would be at the top of the agenda. For more information, TVW’s Capital Record blog provides an excellent summary of special session details here.
In an effort to give more students the opportunity to earn a bachelor’s degree and enter the workforce early, the legislature passed SB 5442, “Requiring the development of three-year baccalaureate degree programs.” The bill, which was delivered to the Governor for approval on April 12th, requires institutions of higher education to provide degree programs that enable academically qualified students to graduate in three years. The bill does not explicitly define “academically qualified students,” thereby leaving it up to the higher education institutions to make their own rules. According to the bill, qualified students must not be required to enroll in summer school or take a more than full-time credit load in any term in order to graduate early. They must also be able to take classes in their major starting in their first term. The legislature hopes this will have a positive effect on graduation rates, as well as lower the cost of a baccalaureate degree for both the state and the student.
Of course, the idea of three-year degree programs is not new. In fact, students coming into the UW with 45 credits or more can already, with attentive advising and careful planning, earn a bachelor’s degree in three years. However, the degree must still meet the same university requirements as those earned in four years. While legislators want to make it easier to apply existing credits to students’ degrees, those students must still earn at least 180 credits total and meet all distribution requirements. With more and more students coming into the UW with AP and IB credit, this option has become increasingly attractive to students eager to graduate and enter the work force. However, others have actually found that the push to graduate in three (or fewer) years is detrimental to their college experience. This prompted the ASUW Senate to pass a resolution giving students the right to waive excess AP and IB credits if they so choose. Either way, students’ options for shaping their educational experience, be it three years or four, are likely increasing.
1. Giving tuition-setting authority to universities
2. Reforming Financial Aid
3. Strengthening accountability
Legislators hope this will preserve the quality of higher education while protecting affordability for students and their families. The House Higher Education committee passed a substitute version of HB 1795 in February, while SB 5915 just had its first hearing in the Senate Ways & Means committee on April 6th. While HB 1795 has not been altered since its hearing more than a month ago, the issues that it seeks to address are still relevant, and we anticipate both bills to remain in play. Please click on the table below to see a summary of the similarities and differences between the two bills.