News & Updates

During today’s Economic and Revenue Forecast Council meeting, chief forecaster Dr. Arun Raha twice referred to the good news of Ken Griffey, Jr. coming back to the Mariners.

That was all the good news Dr. Raha provided, as he updated state revenue numbers.  For the remainder of the current biennium (which ends June 30) lawmakers must find another 700 million dollars in savings.  For the next biennium, the budget shortfall has ballooned to over 8 billion dollars.  Some help will come from the federal stimulus plan, and lawmakers may tap the state rainy day fund sooner than expected, but it is clear that additional cuts are on the way.

Lawmakers will still receive a full, updated forecast in March, but the economic trends (lower consumer spending, reduced sales tax revenues) make a happy surprise unlikely.

Did we mention that Ken Griffey, Jr. is returning to the Mariners?

UPDATE:  You can see a PDF copy of the presentation made by Dr. Raha here.

Lawmakers today gave final approval to two measures designed to address budget shortfalls in the current biennium.  Shortly after passage, Governor Gregoire signed both measures into law.  One of the bills (SB 5460) would freeze most state hiring, salaries, travel, contracts, and purchasing for the remainder of the biennium.  Amendments adopted in the Senate and agreed to by the House improved the bill by exempting federal and patient revenues from the freeze.  The bill still raises substantial concerns, however, in areas where flexibility is needed, such as faculty retention.  We will be working with lawmakers on alternatives that could provide such flexibility as work on the overall state budget continues.

Also, a reminder that tomorrow at 4:30 the Economic and Revenue Forecast Council will convene for a special “preview” meeting that will provide the latest numbers for budgeteers.

With the first legislative cutoff approaching on February 25, all of the UW’s request legislation either have cleared policy committees, or are scheduled for votes before the end of the week.

Legislation making permanent tuition setting authority for graduate programs (SB 5734, HB 1235) has cleared both policy committees.  Bills simplifying public works contracting processes (SB 5760, HB 1916) and allowing protection for private investment information submitted to our endowment (SB 5526, HB 1640) have been heard in committee and are scheduled for executive action before the end of the week.  We appreciate the support of lawmakers for these improvments.  Following the policy committee cutoff, the focus will shift to floor action.  We will update the progress of the legislation as it moves through the process.

When it comes to issues affecting the UW this blog isn’t the only game in town — our Office of Federal Relations has an excellent blog covering events affecting higher education in the nation’s capitol.  Recent posts highlight how the economic stimulus package will affect the economy generally and higher education in particular.  We appreciate the hard work of our Federal Relations staff staying on top of an incredibly fluid situation.

Perhaps it is fitting that on Higher Education Day in Olympia the Seattle Times had a featured story on challenges facing the Guaranteed Education Tuition program (GET).

Unlike many states, Washington’s plan guarantees a payout tied to the tuition levels at the UW and WSU.  As a result the onus is on the state to achieve adequate investment returns (in many states college savings plans are more like IRAs, where the individual investor is responsible for returns). The economic downturn has taken a whack out of the GET reserves.  Higher prices for GET units is a certainty; other changes will surely be discussed.

How to ensure the financial health of the GET program will be a key part of the mix as lawmakers work to close the budget gap.  This story gives a good picture of the numbers they are facing.

Tomorrow is Higher Education Day in Olympia.  Faculty, administrators, students, regents, alumni, and other supporters of higher education — from all of the state’s universities — will come to Olympia to meet with lawmakers and discuss issues of concern.  Also on the schedule is a little entertainment with University bands and mascots slated to perform in the Capitol Rotunda at noon.

Even with school spirit on display at noon, the primary focus of the day will be serious conversations about the state of higher education and how the effects of proposed budget cuts can be reduced.  Higher education is critical to the state’s long-term economic health, as well as the individual futures of thousands of students (and their families).  Higher Education Day provides a unique annual opportunity to show the broad support public universities have across the state.

A highlight of the day will be the presentation of the Robert G. Waldo Award for “outstanding service to public higher education in Washington state”  to former State Rep. Helen Sommers.  Rep. Sommers retired last year after a long and distinguished career as a legislator, including many years as the Chair of the House Appropriations Committee.  Congratulations to Rep. Sommers on this much deserved honor.

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).