News and Updates

You’ll be able to hear a pin drop at 4:30 Thursday when the State Economic and Revenue Forecast Council meets for a special revenue forecast preview.  Recent data showing weak sales tax collections support the widely held belief that the forecast will be lower — meaning lawmakers will have a larger budget gap to fill than earlier projected.  At the same time, the state’s share of the economic stimulus package should be clearer.  By the end of the week, we should have a much better idea of the overall budget number that lawmakers will need to meet.

There also will be a full slate of hearings. In the House on Tuesday, the Capital Budget Committee will look at the possible use of federal funds for K-12 and Higher Ed construction projects.  Also on Tuesday the Education Appropriations Committee will hear from all of the state’s four-year schools and community colleges on the potential effect of budget reductions.  On Thursday the Capital Budget Committee will take up a bill dealing with higher education project priorities.

In the Senate on Monday, the Ways and Means Committee will be briefed on higher education budget reductions.  On Tuesday, the same committee will hear our request legislation on public works contracting.  Wednesday, the Higher Education and Workforce Development Committee will hear faculty perspectives on higher education budget reductions.  On Thursday the Health and Long Term Care Committee will take up issues surrounding access to UW Medical databases.

We will also be working to ensure that all of our request legislation advances before  the February 25 cutoff.  We also will continue to work with lawmakers urging that proposed spending freeze legislation allows enough flexibility for the University to deal with faculty retention and other issues critical to our core mission.

Add to that list the inevitable five or six surprises that crop up and it shapes up to another very full week.

SB 5460 would freeze state most hiring, purchasing, travel, salaries, and contracting in an effort to address the state’s budget shortfall.  Changes made in the Senate to exempt federal and patient revenues improved the bill, but we continued to have significant concerns, particularly with our ability to retain faculty and exempt staff. The Council of Presidents has spelled out this concern in a letter to legislative leaders.  Here is the text of the letter, which was signed by the Presidents of all of the state’s four-year schools:

We are writing to reiterate our collective concerns about certain aspects of Engrossed Substitute Senate Bill 5460.  We appreciate and understand the underlying premise of the bill that limits expenditure growth during the extreme financial situation we face.  Each of us accepts our institution’s part in finding a solution to this unique problem – one that looks not only at the state’s serious short-term budget challenges, but also at the key role higher education plays in any recovery strategy.

However, we believe that this bill has unintended consequences, that, if not corrected, will have grave impact on our institutions’ ability to be responsive to the state’s educational missions.  Further, this bill, if enacted, would have the very real effect of reducing job opportunities at a time when they are becoming increasingly scarce.

Our concern relates to sections 1-5 of the bill that prohibit us to provide any salary or wage increase to our faculty and other exempt staff.  We understand the need for restraint and prudence in salary decisions during this difficult time.   However, this bill provides us with no ability to be flexible in meeting the real-time challenges we all face when addressing outside offers of employment offered to our highest caliber faculty and staff.  Most simply, we have no recourse to retain faculty that receive outside offers from competing institutions.

The loss of faculty to other institutions has a direct impact on our ability to meet our collective missions.  Members of our community that receive outside recruitment offers are often our top producers in instruction and research.  Their loss has a direct impact on our students and their educational pursuits.

Additionally, when faculty is recruited away, not only do they depart; their entire research portfolio departs with them.  At the University of Washington, for instance, there are several faculty members who manage multi-million dollar research enterprises.  These activities not only fulfill the research mission, but they provide critical jobs for the citizens of the state of Washington.  As a specific example, at the University of Washington there is one research center that provides over 60 full-time positions.  If the professor who leads the center were to be recruited by another institution, we would have no ability to retain that individual, and as a result, the state would see a loss of an additional 60 jobs at a time when we can ill afford any further job losses.

We strongly suggest that you provide an amendment to sections 1-5 of ESB 5460 that provide us with the minimal flexibility to address these situations of retention as they arise across our institutions over the next 12 months.

We are hopeful that lawmakers will add the additional flexibility we need to address the retention problem as the bill moves towards a final vote.

The Technology Alliance,  an organization of leaders from Washington’s preeminent technology and related businesses and research institutions has written state lawmakers urging they lessen the impact of proposed budget cuts on the state’s four-year schools. We appreciate the support of the Technology Alliance and will continue to work with lawmakers to develop budget solutions that protect the educational and research mission of the University. Here is the body of the letter:

The Technology Alliance, an organization of leaders from Washington’s preeminent technology and related businesses and research institutions, respectfully urges our state policy makers to reject the 13% reduction in funding for our public baccalaureate degree-granting institutions contained in the Governor’s budget. We ask you instead to be strategic about any cuts to higher education and give priority to investing in university programs in science and engineering that produce the educated workforce and innovations that drive a significant portion of our present and future economy.

Higher education is an essential service to our citizens during these challenging times; history has shown that when the job market contracts, the number of people seeking higher education significantly increases. Conversely, job market contraction also results in lower state revenues thus creating an urgent need to realign expenses to the reduced revenue forecast. While we recognize these budget reductions are a necessity, we believe the Governor’s budget reduction disproportionately targets our four year institutions. Aggressive funding cuts to our four year institutions will undercut Washington’s ability to emerge from the downturn poised to compete in the 21st century economy. We appreciate the magnitude of the challenge you face in a severe economic downturn; however, we are also compelled to remind you that a significant portion of jobs resulting from near-term, “shovel-ready” projects will be transitory; the longer term viability of many of our state’s industries, such as construction, real estate  and various services, will depend on the vibrancy of our innovative industries.

Washington’s economy is fueled by innovation: innovative industries directly account for nearly 12% of employment and support a total of more than 1.1 million jobs in our state. The products and services that drive our economy have shifted from physical goods – e.g., fish and timber – to goods whose content is primarily intellectual, such as software, telecommunications, biotechnology, and professional services. Eighty percent of the products and services our innovative industries produce are exported out of state, bringing needed new dollars into the state economy.

The 2008 Washington State Labor Market and Economic Report finds that four of the five fastest- growing occupations in Washington State (ranked by average annual growth rate and total number of job openings) are in computer-related fields; these fields require a bachelors-level education or higher, and are far more highly compensated than other fast-growing fields. The average annual compensation for computer-related jobs is $85,500, compared to $29,000 for the remainder of the 10 fastest-growing occupations in the state. This workforce and the goods it produces generate jobs for others – the reason 40% of total Washington employment depends on our innovative sectors.

Our state’s higher education capacity is already unbalanced; we can not afford to erode our bachelor’s and higher degree capacity and, in fact, need to significantly expand it to meet future workforce needs. We submit to you that the only way to ensure the long-term prosperity of our state and its citizens is to focus precious state resources on the programs that underpin our knowledge-based economy. A failure to do so will hinder, rather than help, Washington’s economic recovery and have significant, adverse consequences on our ability to move our state forward.

An investment in our baccalaureate and graduate degree programs and associated research is an investment in our economic recovery and future prosperity. Now, more than ever, it is imperative that we equip our citizens with the knowledge and skills that enable them to be full participants in this economy.

The only way Washington can sustain the growth of desirable, high-wage jobs and maintain our position as a world leader in innovation is to invest in the degree programs and research that fuel our technology and related industries. We implore you to consider the devastating and long-term impact of the proposed 13% reduction in funding to our four-year colleges and universities, and respectfully request that the Legislature instead make strategic investments in science, engineering, and other high-demand, high-impact programs that are and will continue to fuel Washington’s economy and quality of life for our citizens.

Best regards,

Rob Arnold                  
President, Geospiza, Inc.

Susannah Malarkey                                                                       Executive Director, Technology Alliance

Today lawmakers took time to present longtime UW supporter and long-serving regent Bill Gates, Sr. the state’s Medal of Merit.  The annual awards are presented to persons who have “been distinguished by exceptionally meritorious conduct in performing outstanding services to the people and state of Washington.”  It would be hard to think of a more fitting way to describe the work that he has done over his life.

Our congratulations to Mr. Gates upon this much deserved award and our thanks for his continued service to the University (as well as the broader community).

Of course, Washington is not the only state to be facing major budget problems that will affect higher education.  A reminder of that fact can be found in Arizona, where Arizona State University has announced dramatic program cuts.  According to today’s Arizona Republic:

Arizona State University President Michael Crow on Tuesday announced sweeping cuts that will cap enrollment, shut down four dozen academic programs, scale back operations at its Polytechnic and West campuses, and close applications to next year’s freshman class five months earlier than planned.

In addition, the university may seek a tuition increase for next fall – on top of an increase approved in December – in response to reductions in state funding.

And that’s just for 2009. Crow said that for 2010, it’s possible that the Polytechnic and West campuses could be closed entirely.

Crow was alternately angry, resigned, defiant and hopeful as he spoke of how “we’ve worked with administrators, professors, staff and students to find ways to make these cuts.”

He said that with 550 positions already eliminated and about 200 faculty-associate contracts not being renewed, “probably several hundred” more employees will lose their jobs as a result of the cuts he announced Tuesday.

As the news of the cuts and changes spread to the four ASU campuses, the gravity of the move sank in. . .

You can read the entire story here.

President Emmert appeared before the Senate Higher Education and Workforce Development Committee today to discuss the effect of proposed budget cuts on the University.  The Committee asked all of the state four-year schools to model the likely impact of the Governor’s proposed budget, as well as a cut level fifty percent higher than that.

In his testimony, President Emmert noted that specific cuts will await a collaborative process at the University, but that clearly reductions will be significant and affect all parts of the institution.  Administrative costs will bear a disproportionate share of the cuts, but at the levels proposed it will be impossible to avoid major reductions in academics and research.

In response to questions, President Emmert reaffirmed the UW’s commitment to the Husky Promise program, which provides free tuition and fees to state residents who are eligible for Pell Grants and state need grants.   He also noted that a balance must be struck between access, quality, and the speed at which students are able to graduate.  He also urged lawmakers to work with Universities to ensure that cuts are not “false economies” that look good in the short-run, but end up costing more later or causing unintended consequences.

We’ve posted a link to a presentation made by Senate Ways and Means Committee staff about the proposed budget reductions on the State Relations home page.
The Committee also heard from WSU today, and will be hearing from the state’s other four-year schools tomorrow at 3:30.

The pace continues to quicken (at least it feels like it!)  Next week promises to be the busiest yet of the 2009 session.  The first cutoff for bills to clear committees is just over two weeks away — that means plenty of bill-related hearings along with some key briefings.

Next Tuesday and Wednesday the Senate Higher Education and Workforce Development Committee will be briefed by all of the state four-year schools on budget cutback plans — the UW is slated to present during Tuesday’s 10 am hearing.  The committee also will hear an important bill (SB 5734) which would make the tuition policy for graduate and non-resident students permanent.  One of our UW request bills (SB 5526) will be heard on Wednesday at 3:30 — that bill would make changes to disclosure requirements for private investment information received by our endowment fund.

In the House, the Higher Education Committee will hold a 10 am Tuesday hearing on proposals for a UW branch campus in Snohomish County, and the proposal by Bellevue Community College to begin offering four-year degrees in a number of fields.

UW request bills on private investment information (HB 1640) and public works contracting (HB 1916) will be heard before the House State Government and Tribal Affairs Committee on Tuesday at 1:30, along with a differing approach to public works contracts (HB 1690).

We will be appearing at all of these hearings, and posting updates here as they develop.  While none of these hearings are set to be on TVW live, they will be available as webcasts at TVW.org.

We’ve noted before that demand for college education is on the rise – and that a weak economy tends to increase that demand.  It is not surprising that lawmakers are again looking at how to expand the state’s college and university system.

In the Senate Higher Education and Workforce Development Committee, hearings yesterday and tomorrow are focusing on proposals for a new four-year school in Snohomish County.  A proposal to develop a UW branch campus stalled last year when there was no consensus on whether to locate the branch in Everett or a site near Marysville.  A mediation effort over the interim failed to produce an agreement and without one, further steps are unlikely.  The Senate will also consider two proposals for a standalone state university in Snohomish County, including one that would provide for a local funding and governance option.

Bellevue Community College also has a proposal to offer a range of four-year degrees.  While the UW supports expanded access to higher education statewide, we have raised concerns about authorizing a new program in a time of tight resources, and when the current branch campus model has not been fully developed.

Whatever the outcome of the current proposals, expect the need to create and fund more college slots to continue to be a major topic in Olympia.

This year “BYOB” means build your own budget, at least at the Governor’s website.  To give the public a flavor for the tradeoffs needed to reach a balanced budget, the Governor’s office has put up an online calculator. Enter your cuts (or additions) in major budget categories and the totals are instantly adjusted.

Also, the White House has released a state-by-state list of what is in the President’s stimulus proposal for each state.  Of note is a college tax credit that would assist an estimated 67,000 state families.  The entire stimulus plan is still being negotiated, but the document is worth a look (you will have to scroll far down to reach Washington state).

Veterans of Olympia budget sessions know that the heaviest lifting doesn’t begin until the spring revenue forecast — usually issued in March.  That forecast lets lawmakers know the how the results of the recent holiday shopping season and the most recent economic data will affect the amount they have to spend (or this year, cut).  Showing the seriousness of the budget situation, the spring forecast has been moved up one month to February 19 at 4:30 pm.  It is widely expected that the budget gap will increase from the $5.7 billion reflected in the Governor’s budget proposal.  At the same time, the state’s portion of a federal stimulus package should be clearer.  One thing is certain, ratings for TVW — which carries forecast council meetings live — will never be better.