News & Updates

The House of Representatives is debating the 2008 supplemental operating budget as I post this entry.  Unfortunately for the UW and WSU Star Researchers program, an amendment sponsored by Rep. Larry Haler (R-Richland) which would have restored the $1.5 million cut out in the House budget proposal failed on a voice vote less than a half hour ago.  It appears the cut will remain and our efforts will shift to retaining the funding in the Senate budget so that the program has a chance to be fully restored in conference negotiations.

Speaking of the Senate, they are delaying the release of their 2008 operating and capital budget proposals by a day since the House budgets are being acted on this afternoon.  The Senate did release its supplemental transportation budget at noon today and we expect the Senate to unveil it’s remaining spending plans tomorrow at noon.

Governor Gregoire’s statement last week on the House budget did mention an interest in seeing the House doing more on campus safety (their budget removed virtually all of her operating and capital campus safety items) and to maintain a larger budget reserve.

My bad.  I testified yesterday in House Appropriations and praised committee members for at least protecting the base level of funding for the UW and other four year institutions.  Well, turns out I was wrong, at least for the state’s research universities.

Staff from the Higher Education Coordinating Board brought to our attention this morning a proposed reduction in budget for the Department of Community, Trade and Economic Development (CTED) that will have a direct impact on funding for both the UW and WSU.  It’s a $1.5 million cut to the STAR Researcher program that was implemented in the underlying 2007-09 budget based upon legislation pushed by Sen. Jim Kastama (D-Puyallup).

A total of $2.4 million was provided in the budget last year for the state Economic Development Commission to work with the UW, WSU and the HECB on a plan to recruit entrepreneurial researchers to the state lead innovation research teams and help promote commercialization within the states’ research universities.  The UW and WSU worked on this plan during the fall and are actively recruiting the first STAR researchers for each campus.

What makes this budget cut so devastating is that the UW and WSU star researcher recruitments are actively underway.  The UW is targeting Dr. Michael Hochberg from the California Institute of Technology who is an international expert in the field of Nanophotonics.  WSU is recruiting Birgitte Kiaer Ahring, a microbiologist from the Technical University of Denmark and a renowned expert in clean technology solutions.  I am told Ms. Ahring recently was in Olympia for a meeting with Governor Gregoire.

The UW and WSU are working hard to get these funds restored to the budget, for without them, a tremendous opportunity to bring two internationally respected researchers to Washington State will be missed.

The House of Representatives released its versions of the operating, capital and transportation budgets today in Olympia.  As expected, they were pretty lean and mostly devoid of new spending initiatives for the UW and the other four year institutions.  Briefly, here is a summary of how the University fared.

OPERATING BUDGET

The House budget provides a total of $582,000 of new operating resources for the UW.  Most all of these items were not requested by the University.  They are:

• $88,000 for one new mental health counselor position.
• $100,000 to continue academic planning activities related to a UW North Sound campus.
• $125,000 for a land use study to be conducted by the Ruckelshaus Center.
• $119,000 for a patient safety study to be conducted by the Ruckelshaus Center.
• $150,000 for the Institute for the Study of the Brain (ILABS).

CAPITAL BUDGET

The House capital budget includes a total of $3.3 million in new funding for the UW for two items.  They are:

A total of $3 million for land acquisition ($2 million) and soils remediation ($1 million) for the UW Tacoma.  The University had requested a total of $7.4 million, $5.5 for land acquisition and $1.9 million for soils remediation.

• $300,000 to conduct a pre-design study for a future expansion of the Burke Museum.

A public hearing on the House operating budget was held this afternoon and the House Capital Budget committee will take public testimony tomorrow morning.  The Senate budgets are expected to be released early next week.

With a strong 95-2 vote in the House of Representatives, it seems that Rep. Fred Jarrett’s (D-Mercer Island) long-time goal of using performance agreements to link higher education funding with clearly understood accountability measures may actually be on the brink of becoming state law.

EHB 2641 would establish six-year pilot performance agreements with all of the state’s four year institutions beginning with the next biennial budget cycle.  The idea, however, is not new.  Rep. Jarrett and Rep. Skip Priest (R-Federal Way) have been championing this idea ever since the state’s last economic downturn in 2002 when they watched the state slash spending for higher education, increase tuition significantly, but not adjust any expectations for what could be reasonably be accomplished by the institutions.

Today’s Seattle Times published an editorial in favor of the legislation as it heads to the Senate and a public hearing tomorrow in the Higher Education Committee.  For those of you interested in how the performance agreement process would work, here’s a link to the current version of the bill.

Well, there are two days left for floor action on both House and Senate bills and I’m still getting plenty of inquiries on the status of the UW North Sound campus.  Last Tuesday, the Senate Ways and Means committee failed to advance ANY of the measures related to the new school that would have favored, Everett, Marysville and Lake Stevens.  HB 2548 (Dunshee) remains on the second reading calendar in the House and must be acted on by tomorrow unless it is deemed necessary to implement the budget.

Here are a couple of new viewpoints on this issue.  The first is a column written by Tacoma News Tribune columnist Dan Voepel which worries about the impact of the new college on UW Tacoma, particularly their technology institute.

The second is from Everett Herald political reporter Jerry Cornfield with his handicapping of Rep. Dunshee’s bills chances over the next 48 hours.

The much anticipated quarterly revenue forecast was released this afternoon in Olympia and as predicted for the past several weeks, it dropped.  Dr. Chang Mook Sohn, in his final meeting as chief revenue forecaster, estimates that the state will take in $423 million less for the remainder of the current biennium than predicted last November.  More than half of the expected decline is related to lower real estate excise tax collections resulting from the slowing housing market.  The remainder of the forecast adjustment is related to declining consumer confidence related to the worsening national outlook.

Dr. Sohn went to great lengths in his remarks this afternoon to stress that while a mild national recession is now expected for the first two quarters of 2008, the Washington state economy is significantly brighter than the U.S. picture and that a recession is not expected here.

As for the impact on the state budget picture, today’s drop in revenue reduces the expected size of the budget reserve from $1.4 billion to just under $1 billion, before any 2008 supplemental budget adjustments are made.  While legislative and executive fiscal experts expect the forecast to result in a significant curtailment of new general fund spending or new tax reductions, so far, no one has suggested making major changes to the underlying 2007-09 biennial spending plan.

The proposed 2008 supplemental operating budget is expected to be released one week from today on February 20th by committee chair Rep. Helen Sommers (D-Seattle).  A public hearing on that budget is now scheduled for 3:30 p.m. that afternoon in House Hearing Room A.  The 2008 House capital budget is also expected to be released next week and a public hearing on Rep. Bill Fromhold’s proposal is scheduled for next Thursday at 8:00 a.m.

Although a schedule has not been announced, it is widely speculated that the Senate operating and capital budgets will be released the following week.

Today is the official midpoint of the 2008 legislative session.  Considering the collective dread that everyone in town is viewing this Friday’s general fund revenue forecast update, in hindsight, this might also be the highpoint of the 2008 legislative session.  But more on that at a later time.

This afternoon, the UW’s request legislation (SB 6848) that would provide for public financing of half of the cost of renovating Husky Stadium passed the Senate Ways and Means committee.  The measure, sponsored by committee chair Sen. Margarita Prentice (D-Renton) was heard in public hearing on February 5.  It now goes to the Senate Rules committee where it would be eligible for potential action on the Senate floor.

Yesterday, Rep. Hans Dunshee’s bill (HB 2548) to establish a UW branch campus in Everett passed the House Appropriations committee and has now been sent to the House Rules committee.  The fate of the Senate companion measure (SB 6391) sponsored by Sen. Paull Shin is unclear.  Today, the Senate Ways and Means committee took public testimony on this bill and two others (SB 6352 and SB 6490) which favor locations in Marysville/Smokey Point and Lake Stevens respectively.  As of 5:00 p.m. this evening, the committee had not taken action on any of the bills.

House and Senate bills (HB 3329 and SB 6903) which would abolish the existing Council of Presidents four year capital prioritization process and replace it with a new process managed by the Office of Financial Management cleared the House Capital Budget and Senate Ways and Means committees this afternoon.  The Senate passed a substitute version of the bill that addresses the concerns raised by the Council of Presidents relating to separate submittals for research university branch campuses and participation in the capital financing study.  The House also passed a substitute version but a copy is not yet available on on-line for review.

More on these and other bills of interest and plenty of discussion about UW budget items and possible budget release dates at the next campus legislative briefing this coming Friday.

Time to check in on the joy or misery being experienced by our fellow higher education colleagues in other states around the nation.

California

A few weeks ago, I wrote a short piece about Proposition 92, a ballot measure in California which would would have established a funding guarantee for the state’s community colleges as well as capping student fees and making other governance changes.  The measure was opposed by the University of California and California State University systems because they feared that Proposition 92 could endanger their own budgets because the measure would have required an increase of $300 million in funding for the state’s two year colleges.

On Tuesday, California voters rejected Proposition 92 by a margin of 57 percent to 43 percent.  The powerful California Teachers Association also opposed the measure and helped finance the campaign against it.

Kentucky

All is not well in the “Bluegrass State.”  Faced with an almost $600 million budget shortfall, Governor Steve Beshear has proposed a 12 percent cut for state universities and community colleges.  Michael McCall, president of the Kentucky Community and Technical College system was recently quoted as saying “I think the bomb’s been dropped on higher education.”

The proposed 12 percent cut would come on top of a 3 percent reduction the Governor has ordered already for the current academic year.  Higher education officials have said that the cuts would jeopardize the state’s ability to achieve its ambitious “2020 reform goals” which were established in 1997.  Among other things, those goals call for the University of Kentucky (UK) to become a top 20 research university.  Kentucky president Lee T. Todd Jr. has already suspended 90 individual faculty searches pending the outcome of the budget reduction discussions.

Some Kentucky state legislators are urging university and college presidents to support an increase in cigarette taxes and legalization of casino gambling if they want the Governor’s proposed cuts to be restored.  “It’s a three-letter word and it starts with a T,” said Rep. Mary Lou Marzian (D-Louisville) according to a story in today’s Louisville Courier-Journal.

Michigan

Governor Jennifer Granholm has taken an interesting approach to how she proposes funding Michigan colleges and universities in her budget which was unveiled this week in Lansing.  While higher education in general receives an average annual budget increase of 3 percent, the amounts provided to individual institutions varies based on how well they are performing on a number of performance metrics.

For example, Lake Superior State University gets an increase of 6.2 percent, in part, because it has a fairly large proportion of low income students and graduates a substantial number of students in high demand fields such as technology.  Wayne State University and the University of Michigan (UM) would each get funding increases of 3.2 percent, but Michigan State University would only get an increase of 2.7 percent because it has commercialized a smaller proportion of its research than Wayne State or UM.

Overall, higher education funding would rise by $51 million above last year’s budget, a big improvement from prior years.  The Governor’s funding proposals, however, are meant to reward those schools which are making progress on achieving her priorities of graduating more students in high demand fields and commercializing university research.

Arizona

Like Kentucky, Arizona is facing a significant budget shortfall but unlike Governor David Beshear, Arizona Governor Janet Napolitano has pledged to spare K-12 and higher education from budget reductions in both the current and future fiscal years.  The shortfall for fiscal year 2008 is almost $1 billion and the projected gap for fiscal year 2009 could be as much as $1.7 billion.  Napolitano’s budget would make cuts to other state agencies, use monies from the state’s Rainy Day Fund and use lease purchase mechanisms for K-12 school facilities.

The Arizona Legislature, however, might have different ideas.  The chairman of the House and Senate appropriations committees have developed proposals that would reduce higher education funding.  For the University of Arizona, for example, the cut to state support would be 10 percent or $44 million.  Budget deliberations will continue for the next several weeks.

Policy committee cut-off is today so I thought I’d take a moment to provide an update on a number of bills we are keeping a particularly close eye on this session.

HB 2825/SB 6637 — Allowing certain permit holders to obtain alcohol in nonbeverage form directly from suppliers

This is the UW’s bill that would permit us to buy industrial alcohol directly from suppliers instead of going through the state liquor board.  The House version passed the full chamber yesterday by a vote of 95-0 and will be sent to the Senate.  The Senate version is in their Rules committee awaiting a pull to the floor.

SB 6848 — Financing for Husky Stadium

This bill had a public hearing in the Senate Ways and Means Committee last Tuesday February 5.  We are awaiting executive session in the committee.

SB 6328/HB 2648 — Enhancing campus safety

The Senate version of the Governor’s campus safety bill is in Senate Rules awaiting a pull to the floor. The House version is in House Appropriations Committee.  We are supporting both measures since the substitute versions have corrected most of our concerns.

HB 2646/SB 6639 — Requiring bereavement leave for employees of higher education institutions

The UW along with all other four-year schools had opposed this legislation because it is something which should be discussed as part of collective bargaining and because it creates an unfunded mandate.  The bills were heard in both the House and Senate policy committees but did not pass.

HB 2548/SB 6391 — Establishing a UW branch campus in Everett

The House version of the UW North Sound bill was heard this morning in the House Appropriations committee.  The Senate version is expected to be heard next Tuesday in the Senate Ways and Means Committee.

HB 2641 — Creating a pilot program to test performance agreements at institutions of higher education

This bill has been sponsored for several years by Rep. Fred Jarrett (D-Mercer Island) and Rep. Skip Priest (R-Federal Way) and the UW has been supportive of the idea of establishing such contracts for many years as well.  This bill would establish a performance agreement pilot program with the UW and Western Washington University and creates a process for developing and negotiating the contracts during the upcoming 2008 interim.  The UW is supporting the bill and other four year schools are seeking to be added to the pilot program.

HB 3329/SB 6903 — Prioritization of public four year institution capital project requests

This is a relatively new bill which was just introduced last week.  It would abolish the existing Council of Presidents joint capital budget prioritization process established in 2003 with a new prioritization process managed by the Office of Financial Management.  The measure also calls for a capital facility financing study that would assess capital financing systems in other states and examine potential new revenue sources for higher education capital projects.  The UW has been working with the Council of Presidents to analyze the legislation as introduced and is requesting two major changes.  The first would be to eliminate a requirement that the research universities submit separate capital project requests for branch campuses and all other campus projects and the second is to add four year institutional participating in the upcoming financing study.  A substitute to the Senate version of the measure was released today with addresses these two concerns and will be heard next Monday.  The original House version was heard earlier this week and executive session is scheduled for next Tuesday.