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UW Asked to Model Steep Budget Cuts for 2011-13

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Last week, Senate and House Fiscal and Higher Education Committee leadership asked all public baccalaureate institutions and the community and technical colleges to identify specific budget reductions at three levels for 2011-13. For the UW, those cut intervals were:  The Governor’s proposed $189.8 million cut, a $218 million cut (Governor’s cut + 15%), and a $246 million cut (Governor’s cut + 30%). For scale, the UW received $627 million in state funds for the 2009-11 biennium (Fiscal Years 2010 and 2011).

Potential reductions identified by the UW and submitted by President Wise to the Legislature yesterday were sobering, although President Wise pointed out in correspondence to campus leadership that some of the examples in the letter,  “…may come to pass, but only as a result of the strategic budget process currently underway, not because of reference in the letter.”

Neither the House nor the Senate Fiscal Committee has submitted their budget proposal for the 2011-13 biennium yet and we do not know how each committee will ultimately handle the UW’s state appropriation. While we have the Governor’s proposed budget in hand, the appropriations process is far from being over. We will continue to post state budget updates to this blog as they develop.

Media coverage of our submission to the Legislature is available in the Olympian, the Seattle PI, and The Seattle Times.

State of the States

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We continue to closely follow the fate of Washington State’s budget, but are also keeping our eyes on what is happening in other states. Below are some resources that you might also find of interest:

Education Week provides brief coverage of and links to the State of the State addresses as they are made in each state.

The Center on Budget and Policy Priorities (CBPP) continues to track and report on state budget deficits and policy actions as they unfold.

The National Association of State Budget Officers (NASBO) posts links to reports and stories relating to state budgets, including this letter from Governor Gregoire to the Washington State federal delegation in response to the idea that the Federal Government may be considering legislation allowing for state bankruptcies.

New OPB Brief on Institutional Autonomy

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The economic outlook for state budgets remains bleak and additional steep cuts to public higher education inevitable, making it imperative to re-imagine how institutions can become more efficient and self-sufficient while remaining effective and accountable to the public. For many institutions greater autonomy from the practices and requirements of state government seems attractive, and this topic is explored in OPB’s latest brief on variations in institutional autonomy among the UW and its peers.

Somber State Budget Update Presented to UW Regents

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Paul Jenny, Vice Provost of Planning & Budgeting, presented the Governor’s proposed budget for higher education and the UW to our Board of Regents last Thursday. Paul touched on the upcoming state revenue forecast, the Governor’s cuts to all institutions, and the impact of future state funding cuts on campus.

The Regents expressed many concerns throughout the presentation, but a few points proved especially troubling:

  • If the Governor’s budget is adopted, higher education institutions’ funding would be cut by half, or $500 million since FY 2008.
  • State funding for higher education institutions on a per student full time equivalent (FTE) basis has deteriorated. While the state covered 70% of funding per student FTE in 1991, the Governor’s budget would only cover 30% of needed funding per student FTE.
  • The Governor’s budget proposes 11% tuition rate increases for resident undergraduates, but even with tuition increases factored in from all student categories, the UW would still face a net $91 million reduction in state funding.

As usual, Planning & Budgeting will continue to post budget updates throughout the 2011 Legislative Session on this blog. As we’ve stressed before, the Governor’s budget is the first budget proposal for the upcoming biennium; we have a long session before us and no budget is final at this point.

Another Budget Blow to Public Higher Ed in CA

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Today, newly elected California Governor Jerry Brown released his first proposed state budget. The 2011-12 budget proposes over $12.5 billion in spending cuts and over $12 billion in new revenue generation to close an existing deficit of over $25 billion.

Cuts include 10 percent pay reductions for state workers, cuts to Medi-Cal and Welfare, and, notably, deep cuts to higher education only months after the Legislature approved a 2010-11 budget that restored some previously cut funding for public institutions.

Specifically, the budget proposes cutting the UC system by $500 million (17%), the CSU system by $500 million (18%), and community colleges by $400 million (6.5%).

UC President Mark Yudof notes that, if enacted, this budget would mean the state’s annual contribution per student would be less than the portion paid by students and their families for the first time in California’s history. We crossed this same threshold in Washington State for the first time in 2009.

Gearing up for the 2011 Legislative Session

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Today, the Office of State Relations and the Office of Planning and Budgeting held a legislative session overview for folks across campus who are frequently called upon to respond to requests for information during session, including providing feedback on proposed bills, completing fiscal note responses, or working with state relations to testify or answer questions in Olympia.

Please visit our State Budget Process webpage to view or print all four presentations that were made this afternoon, to access the UW BillTracker, and other documents and presentations relating to the State budget process.

Also make sure to subscribe to OPBlog and to the State Relations Blog for regular updates throughout Session and beyond.

WA Higher Education Task Force Report Released

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Last summer, Governor Gregoire created a Higher Education Task force, comprising both public and private leaders, and charged them with proposing a new funding strategy for public higher education, as well as new ideas for increasing institutional accountability. The Task Force released its report yesterday, January 3rd, recommending three major reforms to higher education policy in Washington State.

First, the group suggested that tuition setting authority be given to the universities to help make up for budget cuts from the legislature. Based on their proposal, the institutions would use a formula to determine appropriate tuition rates, taking into account state appropriations, tuition at peer institutions, and enrollment levels.

Second, the Task Force proposed the creation of a Washington Pledge Scholarship Program, which would be funded by private donors. They hope the fund would reach $ 1 billion by the end of the decade. Corporations would receive a tax credit for donating, although that benefit would not kick in until overall tax revenue returned to 2008 levels.

Third, they recommended that the state give cash incentives to universities that meet certain degree production targets. In addition, they encourage universities to make plans to reach retention goals set forth by the state.

Finally, the Task Force listed other money-saving strategies, such as including more online introductory-level classes, developing three-year degrees, giving more credit for college-level work done in high school and at other institutions, and eliminating underused degree programs.

Make sure to check the State Relations blog for a round-up of some of the local press coverage relating to this report.

Op-Eds Call for Increased Flexibility for Public Higher Ed in WA

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Three op-eds published recently by local newspapers outline the changing relationship between Washington State and its public higher education institutions. All three op-eds call for the state to increase institutional flexibility in the face of large budget cuts.

The Governor will release her initial state budget for the 09-11 biennium this morning. Stay tuned to the Office of State Relations and the Office of Planning and Budgeting for information about how higher education and the UW are affected.

Legislature Passes Second Supplemental Budget in Seven Hours on Saturday

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The Washington State Legislature quickly passed a second supplemental budget for Fiscal Year 2011 on Saturday, which closed $580 million of the FY11 $1.1 billion deficit. More cutting must be done; we anticipate that this action will occur in a final supplemental budget, which would be adopted in January 2011, likely as the first action of the 2011 legislative session set to begin on Monday, January 10th.

This Saturday’s budget included reductions to many areas of government but Basic Education, Human Services, and the Department of Social and Health Services were hardest hit. Meanwhile, Higher Education received a revision of October’s across-the-board cuts in order to maintain a  federally-required maintenance of effort (MOE) funding floor. While this federal requirement spared individual higher education institutions from major cuts this month, the MOE does not apply to state-funded financial aid programs, and the next round of FY11 cuts will likely include reductions to the State Need Grant.

Please review our briefing on Saturday’s budget for more information and contact us directly with any questions.

Loss of Federal Stimulus Funds About to Hit State Budgets Hard

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The National Conference of State Legislatures released their November 2010 State Budget Update today. While the report notes that many states are experiencing some level of stabilization in revenue collections, and beginning to be more optimistic  about the general revenue outlook, they are at the same time facing unprecedented pressures on the demand for services such as healthcare and education, and also facing the withdrawal of the federal stimulus funding that has been critical in mitigating severe budget cuts for the last two years. Referred to as an impending ‘funding cliff’, the ramifications of the loss of federal fiscal support are expected to translate into painful budget cuts in states across the country starting in fiscal year 2012.

Inside Higher Ed provides some additional links to reports that echo these same facts. Meanwhile, the Center on Budget and Policy Priorities continues to update their own report on state budget cuts.