Office of Planning and Budgeting

We have updated the OPB brief we posted on February 27th, to reflect additional information regarding the employee health insurance related agency reductions. Both the House and Senate budget would decrease agency contributions for employee health benefits. The House budget cuts state funding by $7.6 million and the Senate budget cuts state funding by $4.4 million. However, both of these reductions are offset by lower per employee spending “limits” on benefits. The House budget would reduce monthly employer funding to $658 per eligible employee. The Senate budget would reduce monthly employer funding to $703 per eligible employee.

Leadership in both the House and Senate fiscal committees released supplemental operating and capital budgets this week, proposing technical corrections and appropriation changes to the current 2013-15 biennial budgets (primarily applicable to FY15). Please see the full OPB brief for information on each proposal.

As a reminder, both budgets will be amended in respective committees, and possibly on each chamber floor, before negotiations begin towards a compromise budget.

 

On Saturday, the Senate released a revised budget proposal, which closely resembles the budget they passed in April. For the UW, the two budgets differ in just a few ways:

  • Unlike the original Senate budget, the revised budget does not include a $12.5M transfer away from the UW Hospital Account;
  • The revised budget does not cut the UW by $3.2M for “administrative efficiencies” that were assumed in the original budget; but
  • Compared to the original proposal, the revised budget provides the UW with $3.2M less in new funding.

The latter two changes essentially nullify each other. A few additional changes occurred with regards to state employee health benefits; we are working to interpret the effects and will provide more information as soon as possible.

As mentioned, the revised Senate budget doesn’t stray far from the original. Just like the Senate’s original proposal, its revised budget:

  • Provides the UW with $479.6M (General Fund and Education Legacy Trust funds) for the 2013-15 biennium—$10.2M of which is one-time performance-based funding;
  • Assumes 0% tuition increases for resident undergraduates;
  • Preserves tuition setting authority, but nullifies that authority if either SB 5883 or SB 5941 pass (the bills would require the UW to decrease resident undergraduate tuition rates by 3 percent for the 2013-15 biennium and limit future resident undergrad tuition growth to the rate of inflation); and
  • Generates “new” funding for higher education by imposing a 20 percent tuition surcharge on international students at the state’s public colleges and universities.

For more information about the original Senate proposal, please see the full OPB brief.

House Ways & Means Chair Ross Hunter released a revised House budget proposal today. The proposal represents Democrats’ updated negotiating position as budget discussions intensify in the last few weeks of the current biennium. We expect the revised House chair budget to pass the floor later this week, after which leaders of both parties and chambers will continue their budget negotiations. It is likely that the UW will not have a clear sense of its actual anticipated state funding level until the end of June.

The revised House budget provides approximately $5 million less for the UW than the previous House budget.  In addition, the revised House budget assumes tuition increases of only 3 percent per year for resident undergraduates, compared to 5 percent per year in the House engrossed budget. Thus, even less revenue is available.

Additional differences between the revised House budget and the House engrossed budget:

  • Clean Energy Institute Proviso – Unlike the previous House budget, which allocated $12 million of the UW’s general fund for the creation and staffing of a Clean Energy Institute, the revised budget only directs $9 million to that purpose.
  • Center on Ocean Acidification – Identical to the budgets of Governor Inslee and the Senate, the House now provides $1.82 million for a new Center on Ocean Acidification.
  • Forestry Program – The revised House budget states that the UW shall establish a Forestry Program “within existing resources.”  In the accompanying budget spreadsheet, $450,000 in “tuition resources” is set aside for this purpose.

Some similarities between the two budgets (this list is not exhaustive):

  • Computer Science & Engineering Proviso Both House budgets stipulate that $14.5 million of the $20.8 million in Education Legacy Trust funding appropriated to the UW for the biennium must be reserved for the expansion of computer science and engineering enrollments.
  • College of Engineering Proviso – Like the prior House budget, the revised budget appropriates $2 million in new state funds to expand College of Engineering enrollments.
  • O&M Funding – Both House budgets provide funding to cover operation and maintenance (O&M) costs for the UW’s new Molecular Engineering building and Balmer Hall.
  • Compensation – Both budgets restore the 3 percent salary cut imposed on state agencies in the last biennium.  And, as neither budget explicitly extends the current salary freeze for state employees, which is set to expire on June 30 of this year, we assume the freeze will be lifted under both.

Please see the full OPB brief for more information.

Please review our OPB budget brief and post any questions or comments.