We have updated the听听we posted on February 27th, to reflect additional information regarding the employee health insurance related agency reductions. Both the House and Senate budget would decrease agency contributions for employee health benefits. The House budget cuts state funding by $7.6 million and the Senate budget cuts state funding by $4.4 million.听However, both of these reductions are offset by lower per employee spending 鈥渓imits鈥� on benefits. The House budget听would reduce monthly employer funding to $658 per eligible employee. The Senate budget would reduce monthly听employer funding to $703 per eligible employee.
Tag: budget
House and Senate Release Supplemental Operating and Capital Budgets
Leadership in both the House and Senate fiscal committees released supplemental operating and capital budgets this week, proposing technical corrections and appropriation changes to the current 2013-15 biennial budgets (primarily applicable to FY15). Please see the full for information on each proposal.
As a reminder, both budgets will be amended in respective committees, and possibly on each chamber floor, before negotiations begin towards a compromise budget.
Governor Releases 2014 Supplemental Budgets
Governor Jay Inslee released 2014 supplemental budgets, making changes to the current 2013-15 (FY14 & FY15) biennial operating and capital budgets. As a reminder, both chambers of the Legislature will propose their own supplemental budgets throughout this short 60-day session as they听work towards compromise budgets.
The supplemental operating budget would provide an additional $1 million for the 91探花鈥檚 Institute for Protein Design and $500,000 for an Advanced Materials Manufacturing Facility plan, associated with the ongoing attempt to keep Boeing鈥檚 production of the 777x and its carbon fiber wing in Washington.
Additionally, the Governor鈥檚 supplemental operating budget appropriated new funds for the College Bound program and the Entrepreneurs-In-Residence program.
The budget also contains some changes to the UW鈥檚 state appropriation related to unanticipated positive claim activity for health insurance. The change appears to be a reduction in funding available to the 91探花during FY15. More information will follow as details are available.
The Governor did not provide additional capital funding for the 91探花in his supplemental capital budget.
A is available on OPB鈥檚 website. As usual, please post any comments or questions you may have.
This Week in Higher Ed News
Student Exchanges Hit Record High.听 According to the on International Educational Exchange, the number of international students at U.S. colleges and universities and the number of American students studying abroad are at record highs. In 2012-13, 820,000 foreign students attended American higher ed institutions, a 55,000 increase (7.2 percent) from the previous year. Chinese undergraduates exhibited the biggest increase, 26 percent, bringing the total number of Chinese students studying in the U.S. (undergraduates and graduates) to 235,000. In 2011-12 (the most recent year for which data are available) 283,000 American students went abroad for credit university courses, up 3.4 percent from the prior year. 听For institutions hosting the most international students, the 91探花ranked 14th in the country.
New Studies Cast Doubt on Effectivenessof State Performance-based Funding.听 Now that economies are recovering from the Great Recession, state legislators across the country have been hurrying to adopt systems that link state funding for higher education to student outcomes like degree production and completion rates. However, several presented at the annual meeting of the Association for the Study of Higher Education question the effectiveness of these 鈥減erformance-based funding鈥� systems. See for a summary of the findings.
College Completion Rates See Little Improvement.听 College-completion rates remained largely unchanged this year, according to the . Of the first-time students who entered college in fall 2007, 54.2 percent earned a degree or certificate within six years鈥攗p 0.1 percentage points from the 2006 cohort. In the public sector, completion rates rose by 1.3 percentage points for students who started at public four-years and by 1.1 percentage points for those who began at public two-years. Unlike the federal government鈥檚 college-completion measure, the center tracks part-time students and students who transfer to a different college, sector, or state. Only 22 percent of part-time students earned credentials within six years, compared with 76 percent of those enrolled full time. The research center will issue its full report next month.
University of Michigan鈥檚 Shared Services Strategy Faces Opposition.听 The University of Michigan is the latest campus to implement 鈥渟hared services,鈥� a cost-saving strategy that has academic departments rely on centralized staff, rather than department-level staffers. Theoretically, employees in the central pool could become more specialized, and thus more efficient, than departments鈥� jack-of-all-trades staff. Administrators at Michigan hoped to save $17 million by moving 275 staffers from their campus offices to a single building on the edge of town. However, not only are faculty and students speaking out in opposition, the plan is no longer expected to save nearly as much as once hoped and may barely break even in the short term.听 at Inside Higher Ed.
Slight Decline in State Revenue Forecast
Today’s of the November general fund state revenue indicates that current biennial revenue is slightly down from September’s projection. The decline is largely due to a听technical adjustment which resulted in a $41 million decrease of available funding this biennium, though collections for the current biennium are $16 million over听prior projections. The net decrease in November’s revenue forecast听is $24 million less than the September revenue .
In other words,听new revenue and听an offsetting听technical adjustment give Governor Inslee a $32.98 million general fund target for his supplemental operating budget, expected in December.
This forecast, once again, does not contemplate any tax revenue associated with the impending sale of cannabis.
Washington’s June Revenue Forecast Shows Small Improvements
On Tuesday, June 18, the Washington State Economic & Revenue Forecast Council (ERFC) released its quarterly update of General Fund-State (GFS) revenues. Compared听with the , expected GFS revenues are up $110 million for the current biennium (2011-13) and $121 million for the next biennium (2013-15), meaning legislators have an additional $231 million to factor into their budget negotiations.
While these changes are positive, they represent very minor adjustments. Under the updated forecast, the state is expected to take in $30.65 billion in the current biennium and $32.66 billion in the next, thus the increases represent adjustments of less than 0.5 percent each.
Most of the positive variance came from increases in forecasted housing construction, taxable real estate activity, and Revenue Act taxes. Real estate excise taxes came in $34 million (34 percent) higher than forecasted and Revenue Act taxes came in $54 million (2 percent) higher鈥攅xceeding the January 2008 pre-recession peak.听Lower than expected inflation and employment worked against these gains, but weren鈥檛 enough to negate them.听 Although Washington employment has been slowly increasing in most sectors (especially construction), aerospace and government employment are in decline.
It is important to note that much uncertainty surrounds the council鈥檚 2013-15 baseline forecast due to the Federal sequester, Europe鈥檚 recession, and China鈥檚 slowing economic growth. The ERFC gives its baseline a 50 percent probability and its optimistic and pessimistic alternative forecasts 20 percent and 30 percent respectively.听The optimistic forecast is $2.5 billion above the baseline and the pessimistic forecast is $2.5 billion below.
In addition, it should be noted that, like the March forecast, the June update did not assume any revenue from taxable marijuana sales as the Federal Government鈥檚 response to Initiative 502 is still unclear.
Some state lawmakers are optimistic that the new forecast will expedite their budget negotiations; however, the two sides鈥� have a ways to go before the end of the fiscal year on June 30th (12 days from now). 鈥淲e鈥檒l get closer as a result of this,鈥� said Representative Ross Hunter during a press conference Tuesday morning.
Senate Releases Revised Budget Proposal
On Saturday, the Senate released a , which closely resembles the budget they passed in April.听For the UW, the two budgets differ in just a few ways:
- Unlike the original Senate budget, the revised budget does not include a $12.5M transfer away听from the 91探花Hospital Account;
- The revised budget does not cut the 91探花by $3.2M for 鈥渁dministrative efficiencies鈥� that were assumed in the original budget; but
- Compared to the original proposal, the revised budget provides the 91探花with $3.2M less in new funding.
The latter two changes essentially nullify each other.听A few additional changes occurred with regards to state employee health benefits; we are working to interpret the effects and will provide more information as soon as possible.
As mentioned, the revised Senate budget doesn鈥檛 stray far from the original. Just like the Senate鈥檚 original proposal, its revised budget:
- Provides the 91探花with $479.6M (General Fund and Education Legacy Trust funds) for听the 2013-15 biennium鈥�$10.2M of which is one-time performance-based funding;
- Assumes 0% tuition increases for resident undergraduates;
- Preserves tuition setting authority, but nullifies that authority if either SB 5883 or SB 5941 pass (the bills would require the 91探花to decrease resident undergraduate tuition rates by 3 percent for the 2013-15 biennium and limit future resident undergrad tuition growth to the rate of inflation); and
- Generates 鈥渘ew鈥� funding for higher education by imposing a 20 percent tuition surcharge on international students at the state鈥檚 public colleges and universities.
For more information about the original Senate proposal, please see the .
House Chair Releases Revised Budget Proposal
House Ways & Means Chair Ross Hunter released a revised today. The proposal represents Democrats鈥� updated negotiating position as budget discussions intensify in the last few weeks of the current biennium. We expect the revised House chair budget to pass the floor later this week, after which leaders of both parties and chambers will continue their budget negotiations. It is likely that the 91探花will not have a clear sense of its actual anticipated state funding level until the end of June.
The revised House budget provides approximately $5 million less for the 91探花than the previous House budget.听 In addition, the revised House budget assumes tuition increases of only 3 percent per year for resident undergraduates, compared to 5 percent per year in the House engrossed budget. Thus, even less revenue is available.
Additional differences between the revised House budget and the House engrossed budget:
- Clean Energy Institute Proviso 鈥� Unlike the previous House budget, which allocated $12 million of the UW鈥檚 general fund for the creation and staffing of a Clean Energy Institute, the revised budget only directs $9 million to that purpose.
- Center on Ocean Acidification 鈥� Identical to the budgets of Governor Inslee and the Senate, the House now provides $1.82 million for a new Center on Ocean Acidification.
- Forestry Program 鈥� The revised House budget states that the 91探花shall establish a Forestry Program 鈥渨ithin existing resources.鈥澨� In the accompanying budget spreadsheet, $450,000 in “tuition resources” is set aside for this purpose.
Some similarities between the two budgets (this list is not exhaustive):
- Computer Science & Engineering Proviso 鈥� Both House budgets stipulate that $14.5 million of the $20.8 million in Education Legacy Trust funding appropriated to the 91探花for the biennium must be reserved for the expansion of computer science and engineering enrollments.
- College of Engineering Proviso 鈥� Like the prior House budget, the revised budget appropriates $2 million in new state funds to expand College of Engineering enrollments.
- O&M Funding 鈥� Both House budgets provide funding to cover operation and maintenance (O&M) costs for the UW鈥檚 new Molecular Engineering building and Balmer Hall.
- Compensation 鈥� Both budgets restore the 3 percent salary cut imposed on state agencies in the last biennium.听 And, as neither budget explicitly extends the current salary freeze for state employees, which is set to expire on June 30 of this year, we assume the freeze will be lifted under both.
Please see the full for more information.
Washington Roundtable Urges Legislators to Prioritize Higher Education
A recent update on our state鈥檚 progress toward meeting the Washington Roundtable鈥檚听 emphasizes the need for legislative action on education, including protecting funding for our public universities, as well as transportation and business costs.听 The Roundtable 鈥� a nonprofit, public policy organization comprised of major, local business executives 鈥� created the Benchmarks in 2011 as a means to measure and track Washington鈥檚 economic vitality and quality of life. The organization publishes annual updates that examine state-by-state comparative data (primarily from federal sources like the U.S. Dept. of Education); assess Washington鈥檚 position in key categories; and highlight opportunities for improvement.
The showed that:
- Washington trails most states in high school graduation rates (ranking 32nd nationally) and bachelor鈥檚 degrees awarded per capita (39th nationally).
- Washington鈥檚 road condition rankings have dropped from 16th (2012 ranking based on 2008 data) to 29th (2013 ranking based on 2011 data) and our state continues to rank poorly on bridge conditions (41st).
- Washington ranks in the bottom third of states for business tax burden (36th), unemployment insurance tax rates (40th) and workers鈥� compensation benefits paid (50th).
- However, Washington has held onto its lead in patent generation (5th) and in low commercial and industrial electricity rates (3rd).
The authors argue that Washington must move quickly to improve its education pipeline and align with workforce needs. As 70 percent of Washington jobs will require postsecondary training by 2020, they assert, 鈥�It is imperative that Washington prioritizes higher education and does a better job of preparing its citizens to succeed.鈥�
In Monday鈥檚 edition of , Roundtable President, Steve Mullin, urged lawmakers to focus on two key topics during the remaining weeks of session:听 education and transportation. He specifically called for legislators to ensure our colleges and universities have the funding they need to develop necessary talent. 鈥淒ecision time is here,鈥� he wrote, 鈥�Education is the driver of prosperity and individual quality of life. Transportation is the backbone of commerce. Both need attention before the 2013 Legislature adjourns.鈥�
91探花Ranks 1st among Public Schools and 2nd Overall for Federal R&D Funding
Of the nearly 900 schools that received federal money for research and development (R&D) in FY 2011, the 91探花ranks first among public institutions and second overall in terms of federal research funding. According to a study by the National Science Foundation (NSF), approximately 20 percent of all federal R&D support went to just 10 universities. reviewed those universities, Table 1 summarizes their findings.
Johns Hopkins University, a private institution, topped the list with nearly $1.9 billion鈥攎ore than doubling what any other university received that year. The majority of Johns Hopkins鈥� federal funding came from the Dept. of Defense and NASA. The university also听brought in billions via fundraising efforts.
The 91探花came in second with almost $950 million in federal R&D funding鈥攖he most of any public school. The majority of the UW鈥檚 money came from the Dept. of Health and Human Services; however, the University was the top beneficiary of NSF funding, receiving more than $145 million in 2011.
Year after year, the same schools consistently receive the most money, said Ronda Britt, a survey statistician with the NSF. 24/7 Wall St. quotes her as saying, these universities 鈥渉ave big research programs that receive a lot of support year after year, and have a lot of infrastructure that helps them keep the money stable.鈥� This holds true for the UW, which has ranked first among public schools since 1974. Having large endowments was another commonality of the top 10 schools, yet federal funding covered the bulk of R&D expenditures in all cases.
As these universities rely heavily on the federal government to support their research, many are concerned about the sweeping cuts of sequestration. The 91探花and other universities are preparing for a range of possible impacts. As described in our , the sequester could reduce the UW鈥檚 federal grant and contract support by an estimated $75M to $100M during FY13. The 91探花community is encouraged to remain cautious and conservative in spending federal awards and in planning for future federal funding.
