News & Updates

Since it has been more than 10 years since Olympia has seen a real operating budget conference committee, there is very little that can be visually observed during the waning days of session to give outsiders much sense of how things are really progressing.  All of the negotiations are done behind closed doors and in an age of email and spreadsheets, there are few face-to-face neogiations.  Offers are sent, received and responded to without legislators having to actually meet much and discuss much.  Quick, painless but a little antiseptic. 

Intelligence on budget matters is gathered by popping in to visit with staffers, pigeon-holing members as they pass in and out of their chambers and of course, the ever popular lobbyist rumor mill which too often has all the credibility of the latest Wikipedia entry.

David Postman, the Seattle Times chief political reporter noted in his blog today that the Governor this week informed House and Senate budget negotiators of her most important priorities and not surprisingly, the constitutional Rainy Day Fund has emerged as the biggest roadblock to a timely budget resolution.  As Postman reports, both the Governor, the Senate and a majority of members in the House favor passage of a constitutional amendment to establish a Rainy Day Fund reserve which would annually set aside 1% of general state revenues.

Rep. Helen Sommers (D-Seattle), chair of the powerful House Appropriations Committee, however, remains opposed to the measure and did not include the proposal in her budget which was released several weeks ago.  House Majority Leader Lynn Kessler (D-Hoquiam) has all but promised the House will deliver a Rainy Day Fund bill, but so far, there has been no official annoucement that an agreement has been reached with the House Appropriations Committee chair.

Sources on both sides have indicated that until the logjam is broken on the Rainy Day Fund, negotiations will continue to proceed at their current slow and deliberate pace.

The long-awaited floor action on the Governor’s Washington Learns bill for higher education came to a successful conclusion this morning with the overwhelming passage of SB 5806.  Since the bill was not amended in the House, it can be delivered directly to the Governor for her signature.

The bill contains several provisions of importance to the University including:

• A cap on tuition increases for resident undergraduates of no more than 7% per year.
• Establishment of the Global Challenge States as the official benchmark for comparing per student funding for higher education institutions in the state.
• Setting a goal of bringing per student funding for all higher education institutions to at least the 60th percentile of peer schools in the Global Challenge States.
• A requirement that tuition statements for public colleges clearly display the state taxpayer subsidy along with other relevant costs.

Rep. Maralyn Chase was the lone House member to vote against the measure.

The Governor’s Washington Learns higher education legislation (SB 5806) was pulled from the House Rules Committee last evening for possible consideration on the House Floor today.  The bill, sponsored by Sen. Mark Schoesler (R-Ritzville) caps resident undergradaute tuition rates at no more than 7 percent, but also establishes the Global Challenge States (GCS) and the peer institution funding comparisons for higher education institutions and requires funding of higher education schools in the state at the 60th percentile of GCS schools within at least 10 years.

In other Olympia news, capital budget negotiators met briefly yesterday at noon to talk about their respective spending differences.  Operating budget negotiations are beginning more slowly but sources indicate that conversations are beginning, initially focused on the size of the ending reserve and whether the House will accept the Governor and Senate proposals for a constitutional rainy day fund.

The University’s primary request legislation for the 2007 session was permission to issue bonds or other forms of debt for any university purpose, to be paid from all locally controlled fees and revenues.  Such legislation would provide the UW with the capability to act with speed and certainty when issuing debt and to fund construction or acquire real estate.  In addition, broader local borrowing authority would permit us to streamline our borrowing process, reducing our overall cost of funds.

Two measures were introduced this session (HB 1398 and SB 5384) which expanded local borrowing authority for both the UW and WSU.  On Monday of this week, the State Senate unanimously passed HB 1398 and the bill will shortly be delivered to the Governor for her signature.

Passage of this bill will permit the University to finance the long-term costs of the recently purchased UW Tower at a lower cost than other options currently available.

Last week, I wrote about the saga of the Governor’s Washington Learns bill for higher education.  House Bill 1882 actually managed to pass the House Appropriations Committee early last week, but then ran into a buzzsaw of problems in the House Democratic Caucus.

The provision included in the bill by Rep. Jim McIntire (D-Seattle) which would have granted “limited” tuition setting authority to governing boards in the event the legislature failed to provide sufficient state funds to achieve the global challenge state funding benchmarks was the cause of the confusion.  Sources indicated that there simply weren’t enough votes in the caucus to pass the bill with this proviso included, but that there also were enough votes to take the provision out.  By the middle of last week, we were worried that the bill was in enough trouble that it might not pass this year.

The Governor’s office made it clear to legislative leadership, however, that the measure was important and she wanted it to pass.  Higher education representatives reinforced this message with a number of House members.  As HB 1882 sat motionless in the House, all eyes seemed to turn back to SB 5806 — the Senate companion measure sponsored by Republican Senator Mark Schoesler (R-Ritzville).  Last Friday during a hastily called noon meeting of the House Higher Education Committee, SB 5806 was passed unanimously and sent to the House Appropriations Committee.

This afternoon (in what seemed to have all the familiarity of Groundhog Day), the Governor’s Washington Learns higher education bill (SB 5806) passed the House Appropriations Committee one week to the day they passed HB 1882.  Because this bill has not been amended in the House, if and when the full House of Representatives passes the bill, it can be delivered directly to the Governor.

The “floor watch” on SB 5806 begins tomorrow.  Stay tuned.

In a relatively rare Saturday morning session, the Senate passed their versions of the operating, capital and transportation budgets.  There were no changes in any of the budgets affecting appropriations for the University.

During debate on the Senate transportation budget, Senator Rosemary McAuliffe (D-Bothell) offered an amendment to provide an additional $6.2 million in funding for the Bothell/Cascadia CC offramp project which has experienced an increased construction inflation estimate.  Unfortunately, the amendment was defeated.

House and Senate fiscal committee leaders should begin to work out the differences in their respective spending proposals this week.  The 2007 legislative session is scheduled to adjourn on April 22.

Last night the Senate Ways and Means Committee passed both their operating and capital budgets in preparation for floor action on Saturday March 31.  Of the more than 70 amendments considered by the committee, one change sponsored by Senator Craig Pridemore (D-Vancouver) increased the appropriation for the UW Department of Global Health from $2.5 million to $6.3 million which is identical to the amount included in the Governor and House proposed budgets.  The change was made by shifting $3 million in funding for advanced technology initiatives and adding another $800,000 in state funding.

This level of funding for the Department of Global Health is significant because the University is in the process of recruiting key researchers from Harvard University who will help establish a “health metrics institute” with considerable financial support from the Bill and Melinda Gates Foundation.  The institute would specialize in measuring and evaluating the health of people in the world’s poorest countries.

OVERVIEW

Eight days after House Democrats unveiled their 2007-09 spending proposal, Senate Democrats today released the details of their operating and capital budgets to the public.  While the Senate operating budget does allow the University to make real progress on addressing its per student funding goals, the overall amount of funding provided is less than both the House and Governor’s budget proposals.  In addition, funding for compensation and global health are major concerns as detailed below.  The Senate capital budget is virtually identical to the Governor and House proposals which were very strong for the University.  One significant problem is lack of design funding for the UW Bothell Phase 3 project.

SENATE OPERATING BUDGET

New general fund appropriations of $66.7 million combined with $32.6 million from the Education Legacy Trust Account and an estimated $88.8 million in total net tuition revenue (assumes 7% for all students) provides a total of $188 million in new operating budget resources for the UW in the 2007-09 biennium.  This is about $10 million less than provided in the Governor’s budget and $13 million less than included in the House budget.

With this level of funding, we estimate the Senate 2007-09 budget is “on-track” to close the UW’s per student funding gap to the 60th percentile of Global Challenge State institutions within 10 years as prescribed in SSB 5806.  This is somewhat slower progress towards closing the gap than is achieved in both the House and Governor budgets.

Compensation:  $36.5 million is provided for compensation funding.  This amount is $17.3 million less than what was included for overall compensation items in both the Governor and House budgets.  The Senate does include $6.5 million in state funding for faculty recruitment and retention.  However, even with this additional funding, the Senate budget results in a net reduction of $10.8 million overall for compensation increases compared to the Governor and the House.  To cover this shortfall, the Senate budget would shift this cost to UW tuition revenues.  This means that the University will have less tuition revenue available to address other important campus priorities.

One significant difference between the Senate budget and both the Governor and House budgets is the start date for the 2007-09 salary increases.  The Senate budget salary increases would be effective July 1 of each fiscal year for both represented and non-represented staff.  Both the Governor and House budgets provided for July 1 starting date for represented staff and a September 1 starting date for non-represented staff.

Enrollments:  $22.7 million is provided for 1,750 new enrollments during the next two academic years.  This includes 500 new undergraduate enrollments (250 per year) for math, science, engineering and other high demand fields; 330 new graduate enrollments (165 per year); 920 new general undergraduate enrollments (460 per year).  The UW may allocate the enrollments at either the Seattle, Bothell or Tacoma campuses.

Research:  $5.5 million is provided in new funding for research initiatives.  This includes $2.5 million for the Department of Global Health which is $3.8 million less than included in the Governor and House budgets, and $3.0 million for interdisciplinary research support (advanced technology initiatives).  No funding is included for operations and maintenance funding for the Research and Technology Building or for the Research to Products initiative.

UW Tower:  The Senate budget provides $3.9 million for partial funding of the UW’s request for operations and maintenance support for the newly acquired UW Tower.  There is no funding in the Governor or House budgets for this item.

International Programs and Opportunities:  The Senate budget fully funds the University’s $1.5 million request to expand international programs and opportunities for students.  There is no funding in the Governor or House budgets for this item.

WWAMI/RIDE: $3.8 million is provided in the Senate’s UW operating budget for the medical and dental school expansion in Spokane.  This is $676,000 less than requested by the University and included in the Governor’s Budget.  

William Ruckelshaus Center:  $225,000 is included in the UW budget (and an additional $225,000 in the WSU budget) to provide permanent funding for the Ruckelshaus Center (policy consensus center).  In addition, $500,000 is included in the budget for the Office of Financial Management to contract with the Ruckelshaus center for an Agricultural Pilot Project and $50,000 is provided in the 2007 supplemental budget proposal ($25,000 in UW and $25,000 in WSU) for a project related to land use and property rights.

Other Budget Items:  Other items included in the Senate proposal for the UW include $500,000 to improve retention rates for low income and first generation students; $170,000 to support the Washington Academy of Sciences which is only one half the amount provided in the Governor and House budgets; $168,000 for support of the UW State Climatologist; $125,000 to improve autism training and parental support; and $50,000 for the Olympic Natural Resources Center.

Expand State Need Grant:  The Senate budget significant expands eligibility for the state need grant.  Specifically, $19 million is provided to increase eligibility from 65 percent to 75 percent of state median income.  For a family of four, 75 percent of the state median income is about $54,000 per year.

SENATE CAPITAL BUDGET

The 2007-09 Senate capital budget generally follows the Governor and House proposed capital budget recommendations for the University of Washington.  With this level of state capital funding, the Senate budget dramatically reverses a multi-year trend of reduced state support for the University’s building program.
 
The proposed capital spending plan includes $143 million in new state funding for UW construction projects. This is almost twice the total amount of state capital support the University received in the current biennial capital budget and represents the highest level of support for UW capital in ten years.

Restore the Core: The UW’s “Restore the Core” package of requests to renovate historic capital buildings on the Seattle campus is funded with $94 million in new state capital appropriations. This includes full funding of construction for Savery Hall, Clark Hall, Playhouse Theater and Magnuson H-Wing (also received $3.0 million from local funds). In addition, full funding for planning and design is provided for the next phase of restoration projects including Balmer Hall, Lewis Hall and Denny Hall.
 
Data Center: The budget provides $25.0 million to construct a new primary Data Center in the UW Tower and to provide ongoing campus computing and communications infrastructure and connectivity.

Interdisciplinary Academic Building: $5.0 million is provided for pre-design and design for a new facility that will enable significant advances in the UW’s molecular engineering program.

UW Tacoma Phase 3: $6.2 million is provided for pre-design and design for major renovation of the Joy Building, including the addition of a fourth floor. This will provide nearly 70,000 square feet of additional classroom and faculty office space.

UW Bothell Phase 3: One significant concern in the Senate capital budget proposal is the decision to fund only $150,000 for pre-design for the UW Bothell Phase 3 expansion for a multi-purpose academic building to accommodate a capacity increase of at least 600 student FTE’s.  Design funding of $4.85 million was eliminated and would instead be funded in the 2009-11 biennium.

Intermediate Student Service and Classroom Improvements: The Senate capital budget provides $13.3 million to continue renovation of general assignment classrooms on the Seattle campus, consolidate and modernize space for Student Services programs and provide classroom space for the WWAMI/RIDE medical and dental expansion.  This is $1.7 million less than the UW request and the amount provided in the House budget, but $5 million more than provided for in the Governor’s budget.

Minor Works Threshold:  The Senate Capital Budget increases the threshold for higher education minor works projects from $1 million to $2 million.  Higher education institutions had sought an increase in the threshold to $3 million but the proposed language in the Senate budget is an improvement over the current limit.

Space Utilization Study:  The Senate capital budget calls for a new study of higher education space utilization that should provide a more balanced way of measuring the efficiency of space use across the many different kinds of higher education institutions in the state.

Cost Allocation Pools:  A total of $5 million is provided to the Office of Financial Management to assist colleges and universities with unanticipated cost escalation on construction projects during the 2007-09 biennium.  Funds must be matched from non-state resources up to $750,000.

The House version of the Governor’s Washington Learns bill finally passed the House Approprations Committee today on a unanimous voice vote.  The version which moved is identical to the bill that passed out of the House Higher Education Committee several weeks ago minus three provisions related to new financial aid programs which have already passed the House in separate pieces of legislation.

Included in the version passed is the controversial provision originally included by Rep. Jim McIntire (D-Seattle) which would grant the governing boards of higher education institutions limited ability to raise tuition rates if the state failed to appropriate sufficient monies in the state budget for schools achieve their per student funding goals.

Floor action on the measure could be scheduled as early as this Friday.

At the beginning of the 2007 legislative session, the Governor’s office introduced her Washington Learns bill for higher education in both the Senate and the House.  SB 5806 and HB 1882 were intended to be the vehicles for establishing both a state tuition policy for resident undergraduates and a policy of benchmarking per student funding for institutions of higher education at the 60th percentile of global challenge state peer schools.  Passage of one of these measures is one of the University’s major priorities for the 2007 session.

Majority Democrats in the Senate took the somewhat unorthodoxed approach of having Republican Senator Mark Schoesler (D-Ritzville) be the prime sponsor of SB 5806.  Generally, members of the majority party sponsor Governor request legislation and more than a few eyebrows were raised when Schoesler’s name appeared as prime sponsor.  However, SB 5806 virtually sailed through the Senate with relatively minor amendments and is now sitting in the House Higher Education Committee having passed the full Senate unanimously.

In the House of Representatives, however, the Governor’s Washington Learns higher education legislation has faced a much bumpier ride.  First, the original Governor request bill ended up being quickly replaced by a separate number (1882) and title introduced by House Higher Education Committee chair Rep. Deb Wallace (D-Vancouver).  Then, before executive action was taken in committee on February 26, much of the Governor’s policy related to the global challenge states was removed in a substitute bill drafted by the chair because of her interest in conducting a cost study of higher education before establishing per student funding goals and peer groups.

During the committee hearing, however, a separate amendment offered by Rep. Jim McIntire (D-Seattle) ended up passing with both Democrat and Republican support that reinstated all of the Governor’s tuition and global challenge state policy.  In addition, Rep. McIntire’s amendment also permitted the governing boards of higher education institutions to go above the bill’s 7 percent tuition cap IF the legislature failed to provide sufficient state appropriations to keep the universitities on target to achieve the 60th percentile per student funding goals within the 10 year timeframe.

HB 1882 was sent to the House Appropriations Committee in this form and a public hearing was held a week ago last Monday at which President Mark Emmert testified in strong support on behalf of all six public baccalaureate institutions.  Yesterday afternoon, the committee attempted to take executive action on the proposal.  Before the members was an even newer version of the bill which removed the controversial McIntire tuition-setting provision as well as a number of additional amendments by Rep. Glenn Anderson (R-Issaquah) that would have added new requirements to the higher education cost studies, removed reference to the global challenge state institutions, and reduced the per student funding goals from the 60th to the 50th percentile of “similar” institutions.

After more than an hour of behind closed door committee caucus meetings, the members returned at 5:00 p.m. and chairwoman Helen Sommers (D-Seattle) announced the committee would not take action on HB 1882 during that meeting.

Today, the House Appropriations Committee will try again to take action on HB 1882 at their 3:30 p.m. meeting.  We’ll post the results of today’s committee meeting in the next blog entry.