House Ways & Means Chair Ross Hunter released the House budget proposal today. Please see the OPB Brief for a complete analysis. Table 1 shows the total funding the UW would receive under the House chair budget, divided into three standard categories: the carry forward level, the maintenance level and the performance level.
The House assumes that the UW will increase undergraduate resident tuition by 5 percent each year, thus making more revenue available. However, the House Chair budget requires that $2 million go toward the College of Engineering, $12 million be used to create a Clean Energy Institute, and a total of $16.5 million of the appropriation be used to support enrollments in Computer Science and Engineering.
As shown in the table below, once recognized additional operational needs are met and once dedicated funds are removed from the equation, the UW is left with almost $10 million less in net new state funding in 2013-15 compared to the previous biennium under the House budget. Once the potential additional tuition revenue is taken into account, however, the UW fares better under the House budget, even with its spending requirements. Moreover, the Senate relies on a draconian 20 percent surcharge on international student tuition to generate this additional funding amount. As mentioned in our previous brief, given that the majority of international students in Washington are enrolled at the UW, this amounts to a tax on UW students. It is expected that the surcharge will lead to a decline in international student enrollments, which could lead to an overall reduction of revenue for the UW.
We are still reviewing the potential impacts of this budget proposal and will provide revisions to the brief as more information becomes available. Once the House chair budget passes the floor (which is expected later this week), leaders of the House and Senate will begin negotiations to reconcile the differences between their respective approaches. It is likely that the UW will not have a clear sense of its actual anticipated state funding level until the end of this month at the earliest.
On Thursday, Governor Inslee released his budget priorities for the 2013-15 biennium. OPB released a comprehensive brief on the plan, but below is a quick summary of the major points in the Governor’s budget.
Governor Inslee’s plan would fund all of higher education, including financial aid, with nearly $3 billion (8.4 percent of the total budget), of which the University of Washington would receive just over $232 million per year. This funding level represents about $3.6 million more per year than the UW would have received under Governor Gregoire’s “New Law” budget. Governor Inslee’s plan also:
- Authorizes tuition increases of up to five percent per year for resident undergraduates at UW and WSU (three percent at other four-year universities). While the UW still has tuition setting authority, it must provide increased financial aid if it raises tuition above five percent.
- Provides the UW with $6 million per FY to create a Clean Energy Institute with the purpose of researching energy storage and solar energy.
- Appropriates$1 million per FY to the UW’s College of Engineering to support increased enrollments.
- Funds the joint Aerospace Initiative and the Center on Ocean Acidification at levels consistent with Governor Gregoire’s budgets.
- Gives additional funding to financial aid to keep pace with tuition increases and to fully fund the College Bound scholarship program.
Governor Inslee’s plan restores the 3 percent salary cut imposed on state agencies in the last biennium, but includes no mention of the current salary freeze for state employees, which is set to expire on June 30, 2013. We assume this means the freeze will be lifted, however the Governor’s plan does not provide explicit funding for wage increases.
Governor Inslee’s capital budget plan is identical to Governor Gregoire’s, and includes money for the UW’s top capital priorities such as minor capital repair, the UW Tower Chilled Water System Replacement, and Magnuson Health Sciences Center Roofing Replacement.
While Governor Inslee’s budget blueprint is an important step in the budget process, we expect the UW will not have a clear picture of its actual FY14 and FY15 funding levels for at least another month. We will post updates to this blog when the Senate and House release their budgets. Please also monitor the State Relations website for information.
On Wednesday, March 20, the Washington State Economic & Revenue Forecast Council (ERFC) released its quarterly update of State General Fund Revenues. Revenue from an anticipated increase in Washington housing permits and real estate excise tax receipts is expected to offset higher federal tax rates and spending cuts than were previously assumed. Overall, revenue projections for both the 2011-13 and 2013-15 biennia remain relatively stable, with a slight net gain of about $40 million across the two biennia. However, this net gain is negated by the roughly $300 million in additional Medicaid caseload costs. The state and its lawmakers now face a $1.3 billion deficit along with court-mandated funding for K-12 education, which could cost another $1 billion. Their upcoming budget proposals will have to reconcile these demands on the state purse.
We anticipate that the Senate Majority Caucus Coalition will release its operating budget proposal sometime next week, while the House will likely release its budget by early next month. Until that time, any specific impact on the UW cannot be assessed. Please see the full OPB brief for more information.
The 2013 Washington State legislative session, scheduled to last 105 days, began today. OPB will be tracking all bills that are relevant to the University and we will do our best to keep you updated on the happenings in Olympia. For the most comprehensive legislative session information, please see the Washington State Legislature’s website.
As always, check the BillTracker for the latest information on bills relevant to the UW, including scheduled hearings, bill summaries, and the official UW position on a bill. This year, we have also integrated our Fiscal Note process into the BillTracker, which will hopefully streamline the data gathering process.
For more information about how to use BillTracker and bill analysis generally, check out this presentation. If you have questions about submitting Fiscal Notes, please review this Fiscal Note presentation.
Please also feel free to check out the Office of State Relations website for up-to-date information on the state of events in Olympia.
We will post updates on the budget situation to the blog, and we will announce any new budget briefs here as well. If you have a pressing budget-related question, please contact Sarah Hall at firstname.lastname@example.org. For any questions related to bill tracking or Fiscal Notes, please email email@example.com.
Last year, SB 5182 officially abolished the Higher Education Coordinating Board (HECB), replacing it with two new agencies. The change was intended to focus state appropriations on financial assistance for students, and direct a smaller appropriation to coordinated policymaking and planning, directed by a new council with different membership than the HECB’s.
This year, the Legislature passed HB 2483, which amends SB 5182 in several ways. The bill creates the Student Achievement Council, comprised of an Executive Director appointed by the Governor, five citizen members (one of whom must be a student), and one representative each from the four-year public institutions, two-year public colleges, K-12, and a non-profit higher education institution. The new Council is tasked with promoting educational attainment and conducting research and analysis on higher education. The bill also creates a Joint Committee on Higher Education to assess the progress of the Council and propose legislation, made up of four members from each legislative chamber. While the Office of Student Financial Assistance remains, the Office now reports to the Council.
Effectively, this bill changes very little—the Student Achievement Council and the Office of Student Financial Assistance, while both are more focused on financial and governance matters, retain many of the basic duties of the HECB, including:
- Administer state and federal financial aid, loan programs, and oversee the GET program;
- Review budget requests of higher education institutions and propose recommendations to the Office of Financial Management and the Legislature;
- Create strategic plans for higher education;
- Increase educational attainment and access, particularly for minorities, and set goals for degree production;
- Engage in higher education policy research, and ensure the quality and accountability of state degree programs;
- Furnish a prioritized list of capital improvement projects to the Legislature; and,
- Administer scholarship endowment funds, Washington Scholars Program.
All employees of the HECB were automatically transferred to the Council to assist with its duties, as per the final bill.
The most significant change is that the Office and the Council are relieved of certain reporting and policymaking duties to which the HECB was formerly assigned, such as analyzing technology programs, approving degree programs, estimating annual state support for students and costs associated with higher education delivery. While the Council is relieved of these duties, the strategic planning, system design, and budget recommendation work is ongoing.
To read the bill, please click here.
Please review our OPB budget brief and post any questions or comments.
On Thursday morning (3/8), around 12:30 AM, yet another version of the budget (making changes to the Senate engrossed budget) was proposed by Representative Hunter (Chair, Ways & Means) on the last scheduled day of legislative session. This proposal was intended as a compromise between the Senate engrossed budget, written by Senate Republicans, and the budgets proposed by Senate and by House Democrats.
This new House budget amends the Senate engrossed budget, and does not contain new state funding cuts for the UW or the other higher education institutions. However, the budget does contain small central agency service reductions and two unfunded provisos that the UW would fund through its current appropriation. Similarly to previous iterations of the budget, these provisos specify that $3.8 million must be redirected to support engineering enrollments in FY13, and that $790,000 be directed to WWAMI/RIDE in FY12. While the Senate engrossed budget provided new funds for these provisos, the House budget does not; thus, it would require a shift of existing UW state funds and constitute a cut that University units would have to accommodate.
This budget was heard, amended, and passed off of the House floor last night but was not heard in the Senate afterward. A special session to continue the process was announced shortly after midnight, and Governor Gregoire called the Legislature back to session next Monday. We anticipate that negotiating a compromise budget between the multiple versions that have been introduced will be the Legislature’s primary focus next week.
At this stage, changes to the UW’s state funding for FY13 remain uncertain. The two current proposed approaches include a House “budget” that would require the UW to shift $5 million of its appropriation to fund the two provisos noted above, but contains no new overall funding cuts. Meanwhile, the Senate engrossed budget bill does include new funding for the engineering proviso ($3.8m), but makes other changes that result in a loss of $12 million in state funding. When special session starts next week, entirely new versions of the budget may emerge. Stay tuned.
In a rare, surprise move (which has not occurred in the state capitol since 1987), Senate Republicans introduced a striking amendment to the Senate Ways & Means budget on the Senate floor yesterday afternoon and eight hours later, passed their version of the supplemental operating budget with only one amendment adopted. Many amendments were introduced to make changes to the Republican striker, and restore funding to specific areas of state spending, but in the end, only one amendment was carried.
Derek Kilmer (D-Gig Harbor) offered an amendment last night to restore most of the cuts that the Senate Republicans would apply to higher education institutions, passionately declaring, “You don’t have to do this,” after asking where Senate Republicans were doing student testimony on the original Senate budget, which spared higher education institutions from additional cuts.
Despite passionate testimony and procedural action to delay a vote, the new engrossed Senate budget passed 25-24 just after midnight.
This budget is described in greater detail in an OPB brief, which compares the new Senate engrossed budget to the House engrossed budget. All told, the Senate budget would require the UW to take a $12 million cut next fiscal year.
Legislative session is scheduled to end this Thursday, March 8, but this recent shake up will no doubt complicate the last few days of scheduled action.
Debate on the Senate floor yesterday evening was highly emotional and it could take several days before legislators are ready to negotiate differences between the two now very different budget spending plans.
In FY09, the UW’s state funding appropriation was $401.7 million and while the upcoming fiscal year’s (FY13) state funding level could be $214.4 million, the Senate budget released this morning would not cut current levels further. For the first time in several years, the UW may experience a flat budget, without new reductions. While funding levels are dramatically lower than they were before the Great Recession, they may not be reduced further.
Like the House budget, finalized by House Ways & Means Saturday, February 25, the Senate budget reduces state expenditures, authorizes fund transfers, and captures fund savings to deal with the current 2011-13 biennium shortfall of $1.05 billion. Reductions are made to important state services, including mental health, foster care support and community supervision of convicted criminals. However, these cuts, in part, allow the Senate to avoid cutting higher education and K12 further in the remainder of the current biennium (FY12 and FY13).
The Senate budget, as introduced, requires that the UW devote $3.8 million of its current appropriation level to converting 425 existing FTEs to student FTEs studying engineering and appropriates new money for the Center for Aerospace Innovation and Technology.
The Senate capital budget was also released today. Under the Senate proposal, the entire construction phase ($62.6 million) of Bothell Phase 3 would be funded, but from a variety of fund sources, with almost $20 million of the total cost supported through state construction bonds. This compares favorably to the House budget, which authorized the UW to bond the entire construction cost through its own building account resources.
While the Legislature is scheduled to adjourn sine die next Thursday, March 8, each chamber has a lot of work ahead before a compromise budget can be reached.
A full briefing on the Senate budget, comparing it to the House budget, is available here. Please let us know if you have questions.
House Ways & Means Chair Ross Hunter released the House supplemental budget proposal today, reducing state expenditures, making fund transfers, delaying payments, and capturing fund savings to deal with the current 2011-13 biennium shortfall of $1.05 billion. The Governor released her budget November 21, 2011, before the February 2012 caseload and revenue forecast improved the outlook for tax collections and caseload requirements.
If this budget ultimately passes, each of the state’s six baccalaureate institutions would reconcile a 2 to 3.5 percent state funding cut over two fiscal years, which compares favorably to the Governor’s budget, which would have cut each of the public baccalaureate universities by 16 to 17 percent. Note that theUW reduction number listed below does not include an offsetting proviso for enrollment support in the College of Engineering ($3.8 million). Please review our budget brief for more information.
Senate Ways & Means Chair Ed Murray will release his budget next and each chamber will work toward a conference (compromise) budget. Please check back regularly for budget updates and to review capital budget proposals as they are released.
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