News & Updates

It’s Friday again and time for the next review of an upcoming statewide ballot measure which will appear on the November 2007 election ballot.

Today, we will review Engrossed Senate Joint Resolution 8206 — the so-called “Rainy Day Fund” ballot measure.  The state constitution currently does not require the state to maintain a budget reserve account although state stautues have established an emergency reserve fund which is based on the voter approved spending limit enacted in 1993.  For various reasons, the emergency reserve fund has proven to be a somewhat unreliable savings account for the state.  The spending limit has been amended several times over the years and tapping into the account has been accomodated with a simple majority vote.  Proponents of strong “rainy day funds” have often argued that a constitutional savings account would insure the savings fund could not be so easily accessed allowing the fund to grow enough to be available in the event of a serious emergency or economic downturn.  The idea of establishing such a fund was most recently recommended as part of the Gates Tax Commission report.

SJR 8206 would amend the state constitution to require the establishment of a budget stabilization account in the state treasury.  The account would receive 1% of general state revenues each fiscal year and any additional amounts the legislature chose to appropriate into the account.  Withdrawing money from the account could only be done under four circumstances:

• If the Governor declares a state of emergency by a majority vote just for costs associated only with the emergency
• If the official forecast for job growth in the state is estimated to be less than 1% in any fiscal year by a majority vote
• If 60% of the members in both chambers vote to use funds from the account (interestingly, Democrats enjoy more than 60% majorities in both the House and Senate).
• If the balance in the account exceeds 10% of estimated general fund state revenues, the amount above 10% could be deposited into the education construction account by majority vote

Supporters of the constitutional amendment include State Senator Lisa Brown (D-Spokane), Rep. Ross Hunter (D-Bellevue), Senator Joe Zarelli (R-Ridgefield) and Rep. Gary Alexander (R-Olympia).  They argue passage of SJR 8206 would give the state the discipline to set aside funds during good times to avoid painful budget cuts or tax increases during economic downturns.  The measure also has the support of Governor Gregoire.

Opponents of the amendment include Rep. Helen Sommers (D-Seattle), Senator Jeanne Kohl-Welles (D-Seattle), Sen. Ken Jacobsen (D-Seattle), Rep. Sam Hunt (D-Olympia) and others.  They argue that the proposal restricts the legislature’s ability to make critical decisions by requiring a “super majority” to make appropriations from the budget stabilization account.  This would empower a small minority of legislators to block decisions favored by a majority of the legislature.

• Barbara Baker has been tapped by House Speaker Frank Chopp to be the next Chief Clerk of the state House of Representatives.  Baker replaces Rich Nafiziger who left to become the staff director for the Senate Democratic Caucus.  Baker has worked for the House Democratic Caucus since 1996, serving a policy director for the past seven years.
• Bill Wegeleben, Deputy Chief Clerk for the House of Representatives will rejoin his former boss and new Governor’s Chief of Staff Cindy Zehnder as Director of Government Operations.  Wegeleben has been in the House for eight and one half years, originally recruited to the position by Zehnder who served as Chief Clerk prior to becoming president of TVW in 2003.  Wegeleben’s duties will include overseeing the Governor’s appointments to Boards and Commissions, constituent casework and working with the small agency cabinet directors.
• Jennifer Thornton and Sarah Ream, House Higher Education Committee analyst and counsel respectively, are leaving for new positions.  Jennifer is taking a position with the Department of Employment Security and Sarah is relocating to Sacramento, California where she will work for the Department of Managed Care.

Rep. David Buri, a Republican from Colfax who represents the 9th legislative district in southeastern Washington will resign his post on November 1st to become the government relations director for Eastern Washington University.  Buri replaces another former House of Representatives member Jeff Gombosky, who had served in the government relations post until leaving last year to become a full-time contract lobbyist.

Buri, who served as House Republican Floor Leader, was serving his second term in the state House of Representatives after having been an aide to former state Senator Larry Sheahan who also represented the 9th legislative district.

The 2007 November general election is about one month away so I thought it might be a good idea to provide some focus on each of the statewide ballot measures that will be considered over the next several weeks.  We have already posted quite a bit about Initiative 960 which is sponsored by Tim Eyman and would enact new restrictions on tax and fee increases.  Check some of my previous postings for a refresher on the so-called “Taxpayer Protection Initiative.”

Today, I’d like to focus on the only statewide measure that directly impacts the University of Washington which is Substitute House Joint Resolution 4215.  This proposed amendment to the state constitution would authorize the investment of higher education permanent trust fund monies in equities.  Under current law, investments from these funds are limited to lower-yield government bonds.

There are four higher education trust land funds managed by the state Department of Natural Resources — two are established for the benefit of Washington State University, one for the UW and one for the four comprehensive institutions (Western, Eastern, Central and Evergreen).  The state constitution currently prohibits these university permanent funds from being invested in the stock of any company, association or corporation which means that the proceeds of the sale of the timber from these higher education trust lands are invested primarily in government bonds instead of stocks.

The state constitution has been amended in the past by voters to permit other state education and pension trusts (common schools permanent fund, pension funds, Labor and Industry funds and disability trust funds) to be invested in equities.  Proponents of the ballot measure argue that the constitutional change will result in signficiantly higher rates of return on the higher education trust funds providing additional financial resources for all six public baccalaureate institutions.

Supporters of the measure include Rep. Phyllis Gutierrez Kenney (D-Seattle) who was the prime sponsor of the measure in the legislature as well as State Senator Mark Schoesler (R-Ritzville), former Governor and UW Regent Dan Evans, and Ken Alhadeff, chairman and member of the WSU Board of Regents.

Opponents to the measure are Rep. Bob Hasegawa (D-Seattle) and Rep. Glenn Anderson (R-Fall City) who were the only legislators to vote against the measure during the 2007 session.  They argue that the proposed constitutional amendment would put the earnings of the trust funds at high risk and could result in lower revenues available for higher education.

Secretary of State’s information page on this issue: Go >

As I was sitting last night in the Everett Events Center for a town hall meeting on the new UW North Puget Sound campus, I was struck by the steady parade of representatives from local businesses who came up to the microphone to describe their dire need for more college graduates in science, technology, engineering and math fields.  As the evening progressed, I realized that at midnight, we would reach the 50th anniversary of the launching of the Russian satellite Sputnik — a defining moment in the 20th century, at least for American education.

Although I was too young at the time to even fathom the significance of the event, the Sputnik phenomenon is certainly credited with inspiring and motivating millions of baby-bommers to embark on educational and professional careers in science and technology.  President John Kennedy’s call to place a man on the moon by the end of the 1960’s also played a strong part as well.  Our current position as a world leader in innovation and research owes much to these historical events.

But we all know that our global leadership position is in serious jeopardy.  Many other nations are investing much more in their research universities than the U.S. and are producing unprecedented numbers of baccalaureate and graduate students in science and technology fields.  Local and national businesses continue to report their inability to find sufficient qualified workers to fill a growing number of jobs that require academic background in these areas, and competition for foreign engineers and scientists has also grown increasingly difficult.

There are many ways to try and address this problem and clearly the Governor and the state legislature are working on many of them.  I can’t help thinking though that what we really need is a Sputnik-like event to shock this state and the nation out of its technological complacency.  I’m certainly not arguing for a return of the Cold War and the mistrust and fear of the Soviet Union which most certainly heightened the impact of Sputnik.  However, it also seems clear that reports, conferences and speeches have not yet proven sufficient to tackle this major 21st century educational challenge.

One of the worst kept secrets in Olympia over the past couple of months is the persistent rumor that Dr. Chang Mook Sohn, the long-time head of the state’s Economic and Revenue Forecast Council (which determines official general fund revenue projections) would run for state treasurer in 2008 when incumbant Mike Murphy steps down.

Today, Seattle Times chief political correspondent David Postman broke the story in his blog.  While there has been no official announcement, Postman references another story from Northwest Asian Weekly two weeks ago that Sohn was exploring running for the treasurer post and that he would run as a Democrat.

State Rep. Jim McIntire who currently represents the 46th legislative district in Seattle has already announced his intention to run for state treasurer as a Democrat.  Current deputy treasurer Allan Martin has announced his intention to run as a Republican.

For more than two decades, Sohn has been known more for his non-partisanship and resistence to partisan pressure either from the Governor’s office or the state legislature.  He has earned the nickname “Dr. Doom” more for his tendency to get ahead of economic downturns and his perceived unwillingness to more quickly recognize the economic upswings.

Stay tuned as we’ll see if his explorations lead to the “discovery” of another candidate for this state office.

You may recall that this summer, the Office of State Relations began publishing a quarterly report called Global Challenge State Update.  The purpose of the report is to provide interested parties with information on higher education fiscal and policy matters in those states which the UW is now being benchmarked against for both funding and accountability measures.

A couple of weeks ago, we posted the September 2007 update and I’d like to share some of the highlights if you haven’t had time to download the full report off the state relations website.

California finally passed its state budget in late August and the University of California schools fared very well.  General fund appropriations increased by over 6 percent with student fees increasing by 7 percent (identical to Washington State).  Enrollments will grow by over 5,000 systemwide and an additional $20 million in new state funding was included for research initiatives.

Virginia is one of several states on the eastern seaboard that are experiencing budget shortfalls.  Despite the passage of the much-publicized “Chartered University Initiative” just two years ago, Governor Timothy Kaine has asked the University of Virginia to reduce expenditures by 7.5 percent because they are currently funded at a level that is at or above the level needed to meet “base funding adequacy.”

Massachusetts finished their new state budget this past July with higher education receiving a 4 percent annual increase in state funding.  The budget also creates a new Commonwealth Covenant Fund to make loan repayments for graduates who are employed in the areas of science, technology, engineering and mathematics.

Connecticut provided for a rather modest 2.5 percent funding increase for public higher education in their recently enacted budget.  However, significant budget investments were made in financial aid programs which will permit more than 10,000 new students to receive grants in 2008 — an increase of more than 45 percent.

New Jersey provided for a 4 percent budget increase for Rutgers University over the prior year state budget.  In addition, the legislature approved a $450 million stem cell research bond that will go before the voters this November.

Maryland is another eastern state with budget troubles and the Governor has asked the University of Maryland system to reduce spending by 1 percent or $12 million.  Maryland has also established a Legislative Commission to Develop the Maryland Model for Funding Higher Education.  The group continues to meet as it attempts to better integrate state policies on tuition, state appropriations and financial aid.

Sorry to have neglected the blog this past week, but I’ve been on the road a lot and today and tomorrow are legislative assembly meetings in Olympia (more on that later).

First, the bad news.  Spent last weekend in Los Angeles with an old friend from Sacramento days who is a big UCLA fan.  We went to the game in Pasadena and as you must know by now, the Dawgs lost and I ended up buying a very late (and expensive) dinner.  Oh well.  There’s always next year.

Earlier this week, I had a chance to attend the biennial Technology Institute in Leavenworth sponsored by the Technology Alliance who are strong supporters of higher education and the research universities in particular.  Lots of interesting presentations many of which focused on the tremendous challenges facing the state and all higher education institutions as they try and produce more science, technology, engineering and math students, commonly referred to at “STEM” degrees.  UW engineering dean Matt O’Donnell certainly got the group’s attention during the Tuesday morning presentation when he remarked that the UW engineering school could triple or quadruple its current size (at a significant cost I might add) and still not make a major dent in the number of engineering graduates needed in both the private and public sectors.  Clearly, this is an issue that will require a lot of effort from both the K-12 and higher education systems and it will certainly require more financial resources from the state.

Providing more STEM degrees is one of the goals of the new UW North Puget Sound campus.  You may have read in the paper that the number of potential sites has been narrowed even further, and that only four sites in Snohomish county remaining in the running.  Two of these sites are in Everett, one in Marysville and one in Lake Stevens.  I have been also busy this week attending various outreach meetings in the north Puget Sound region updating communities on both the site selection and evaluation process and on the progress of the UW’s academic planning group.  Much work remains as the November 15th deadline for a report to the Governor and legislature looms on the horizon.

The new UW north Puget Sound campus has also been the subject of legislative hearings in Olympia today and tomorrow.  Both the Senate and House higher education committees have asked for Debora Merle from the Governor’s office and yours truly to provide updates on the site selection and academic planning process and I just finished a similar presentation for the House capital budget committee which met this afternoon.  Predictably, most of the questions focused on the sites themselves and the criteria chosen to narrow the field.

The legislature will end their two day assembly tomorrow as political attention will start to focus on the November election and speculation about which well-known Republican might announce their candidacy for Governor in the next several weeks.

Governor Gregoire announced this morning that current TVW President (and former UW Regent) Cindy Zehnder, will replace current chief of staff Tom Fitzsimmons who announced his resignation earlier this week.  Zehnder is a very familiar face in Olympia, having previously served as Chief Clerk in the House of Representatives and a deputy commissioner at the Department of Employment Security.

Zehnder has two degrees from the University of Washington and has served as head of TVW since 2003.  She will assume her new duties on October 1.

The Governor’s office announced this afternoon that Tom Fitzsimmons, her chief of staff since taking office in January 2005 will step down.  Fitzsimmons has decided to resign his position after serving in the position for the past two and a half years.

Fitzsimmons also served as Governor Gary Locke’s chief of staff for the last 18 months of his administration.  He previously served as Director of the Department of Ecology.  No word from the Governor’s office on a replacement for Fitzsimmons though they did announce that he will stay on through the transition of the new appointee.