January 27, 2005
State’s economic forecast looking rosier these days
The worst-kept secret in Olympia is that the next revenue forecast by the state’s chief economist is likely to be decidedly better than recent flat projections.
“Chang Mook Sohn has reportedly been more upbeat in his public remarks these days” says Randy Hodgins, UW director of state relations. “Many people believe the March revenue forecast could be up by a couple hundred million dollars.”
While this is good news, it will not simplify resolution of the state’s budget problems, since even the most optimistic revenue forecast will not plug the hole in the state budget, projected at about $1.6 billion for the 2005-07 biennium.
Gov. Gregoire’s budget request will be presented Feb. 23, and UW officials are hard at work on gaining some improvements over former Gov. Locke’s request.
“Governor Locke’s budget made good progress on core funding for the UW,” Hodgins says, “especially in comparison to previous biennia. In general fund and tuition money, it actually moved the UW nearly one-third of the way towards providing the support necessary to putting the UW in the 75th percentile of its peer institutions in per-student funding.
“Unfortunately, there was no recognition in the governor’s budget that this budget proposal was part of any longer-range plan.”
UW discussions with legislators and Gov. Gregoire concerning the performance contract could provide this longer-range context. “We’ve had great conversations with the Governor and in the House Higher Education Committee,” Hodgins says. “There’s renewed interest in the performance contract idea. What legislators have requested is a simpler document that connects the University’s long-range funding goals with current budgetary proposals and performance outcomes.”
One of the other corrections in Gov. Locke’s budget that the UW and other higher education institutions will seek concerns funding of the State Need Grant. The Locke budget would allow universities to increase undergraduate resident tuition from 5 to 9 percent, but the State Need Grant would be funded by the state only up to the 5 percent level — tuition increases beyond that would require institutional funding for the grants. “So far, our discussions with legislators suggest that this provision in Governor Locke’s request will not survive,” Hodgins says.
Some of the most intensive work will go into improving the capital budget. The UW worked with other four-year institutions to establish priorities for capital funding; together, the institutions submitted a request for $504 million, of which $157 million would go to the UW. Gov. Locke’s budget provided just $280 million, of which $72 million would go to the UW. “This budget doesn’t expand capacity for additional students at the UW,” Hodgins says, “and it doesn’t provide planning money for future construction on the UW campus. President Emmert has already met with Gov. Gregoire, and a good portion of the time was spent discussing the shortcomings of Gov. Locke’s capital budget proposal.”
In other legislative matters, bills have been filed in both the House and Senate to provide statutory authority for both UW Bothell and UW Tacoma to offer lower division courses. Hodgins predicts a difficult battle. Not only must the legislature grant statutory authority, but it also would need to provide funds for the additional courses. The Higher Education Coordinating Board has recommended to the legislature that only UW Tacoma be granted lower-division authority. Moreover this provision is opposed by some community colleges. “There is still a good chance that a bill granting some authority will be approved by the legislature,” Hodgins says.
A bill to study financing of education, from early childhood through college, has been filed. The results of the Comprehensive Education Study Steering Committee would be available in 2007. While some people want to delay any discussion of education funding reform until then, others would like to see action now, while both houses of the legislature and the governor’s office are all in the hands of Democrats. Some would like to see any funding package take the form of a referendum to voters, but the resounding defeat of Initiative 884 has made education supporters wary.
Another matter that could receive attention is the role of the State Ethics Law in addressing issues of technology transfer. The UW is working with the Technology Alliance to rework provisions of the law, which many argue are inappropriate for technology transfer. There are many provisions of federal law already governing technology transfer, they say, and state provisions are having a “chilling effect” on the whole area of technology transfer.
For more information about the activities during the legislative session, see http://www.washington.edu/about/staterel/.
