Legislature cuts WSU by $13.5 million, 6.3 percent

By Communications staff, Washington State University
OLYMPIA – A compromise supplemental operating budget that cuts WSU’s existing programs about 6.3 percent for the coming year – but retains most state student financial aid – passed the Washington Legislature Monday night.
 
In addition to tax and operating budget legislation, lawmakers worked late into the night to pass a major jobs referendum that could provide funding for university building maintenance, a capital construction budget that funds WSU student information systems, design of an expanded Riverpoint building, and a plan to expand the state lottery to benefit higher education. After 89 days in session this year, the Legislature adjourned its special session “sine die” at just after 1 a.m.
 
The operating budget (Engrossed Substitute Senate Bill 6444) provides for university cuts that total about $13.5 million, an amount in the range that university leaders were expecting. The House approved the compromise budget tonight 54-43. The Senate passed it 25-21 without a vote to spare. 
Legislative leaders also passed a compromise capital construction budget to begin design of expanded medical education facilities at WSU Spokane. The expanded “Riverpoint Biomedical and Health Sciences Building” was recommended in the Senate budget but not initially contained in the versions supported by the House and the governor. The budget added $3.5 million to change the design to make the Spokane building 46,000 square feet larger. The total project cost may be around $80 million.
 

President comments in video

By WSU News Service

PULLMAN – A compromise House-Senate budget has passed the Legislature that cuts Washington State University’s funding for the coming year by approximately the amount recommended by Gov. Christine Gregoire last January.

WSU’s operating budget will be reduced by $13.5 million for the second year of the biennium or about 6.3 percent by the compromise budget that still faces votes on the floors of each house. These cuts are in addition to the reduction of $54 million that lawmakers made last year for WSU for the biennium.

No reductions in financial aid grant funding to WSU students are expected because nearly all of the state need grants were preserved. The Legislature, however, does appear to have preserved about two-thirds of the state work study funding that was cut in the governor’s preliminary budget.

“We are pleased that the budget reductions for WSU are within the parameters that we had expected. The $13.5 million reduction is consistent with the governor’s original proposal and with what we were anticipating in this most difficult budget year,” said WSU President Elson S. Floyd.

There are some bright spots in the budget for WSU:

* A $15 million project to upgrade the school’s aging WSU Student Services core computing system. Much of the system is 30-40 years old. The system is failing and that jeopardizes many core university functions including admissions, registration, financial aid, advising, transcripts and the collection of tuition.

* Continuing student financial aid funding will provide access to WSU for thousands of students.

* $3.5 million to expand design of the Riverpoint Biomedical and Health Sciences Building for an additional 46,000 square feet. The expansion was recommended by the Senate but was not in the governor’s or House proposals. The 2009 Legislature authorized a $45 million building. This 2010 budget will expand it to a $78 million facility that will accommodate expanded medical education in Spokane.

* Passage of a $500 million referendum that could provide building renovation funds for WSU and other universities to improve energy efficiency.

* Extension of the state lottery to benefit student financial aid.

“I am particularly pleased with the restoration of the state need grant and the work study program. Those two programs are instrumental to our efforts to safeguard access to higher education for all Washingtonians,” Floyd said.

“Also, the investment in expanded medical education facilities in Spokane and the legislative support for funding for our core computing systems are absolutely critical in achieving our institutional priorities,” he said.

 

The compromise construction budget also authorized $15 million in financing for the “WSU Student Information System.” The funding will go toward the replacement of the university’s core computing system. Much of the current system is 30-40 years old and failing, which puts university functions such as admissions, registration, financial aid, and collecting tuition in jeopardy. The only WSU project negatively affected by the compromise construction budget was the Vancouver Applied Technology Classroom Building. This project was cut by $3.1 million, which is the same reduction that was seen in the original House and Senate budget proposals.

 
On the operating budget, the $13.5 million cut is slightly less than the reduction originally proposed by the Senate. But it is larger than the 4% cut which was proposed by the House. It is very close to the WSU cut level proposed by Gov. Christine Gregoire last January. Included in the 6.3% cut is a one-time reduction of $3.3 million in personnel costs that is connected to separate legislation (Senate Bill 6503.)
 
The budget compromises were unveiled Monday morning after weeks of negotiations between House and Senate leaders over which tax increases were needed to plug a remaining $800 million hole in the budget. The major chunk of the compromise tax package,
 

Tax increases
Second Engrossed Substitute Senate Bill 6143, passed the Senate 25-21 Monday night with the bare minimum of votes required. The House approved the same measure 52-44 Saturday, so the Senate action sends it to the governor who is expected to sign it.
 
The bill increases taxes on professional services, beer, candy and bottled water.
 
Republicans assailed the tax proposal as a “jobs killer” and “the biggest tax increase in state history.” They said it will cause the economy to shrink at a time when the government should be passing legislation to make it grow. Democrats said it was necessary to prevent cuts to many program areas, and often cited higher education in their floor speeches. Senate Majority Leader Lisa Brown said higher education is “the number one job creator of all.” The legal title of SB 6143 begins with, “an act relating to modifying excise tax laws to preserve funding for public schools, colleges and universities…”
 
Tax increases and budget cuts were used to cover a $2.8 billion projected state deficit that applies to the second fiscal year of the biennium which begins this July. The cuts to state government far outnumber this Legislature’s revenue increases that came during the economic recession. With passage of the compromise supplemental budget, the total cuts to state government for this current 2009-2011 biennium now totals $5 billion.
 
Last year, the Legislature cut WSU by $54 million dollars, bringing WSU’s total biennial cut now to approximately $67.5 million. With the compromise budget, WSU’s state funding is currently at 2001 levels, with tuition increases used by the Legislature to supplement institutional funding with declining state funds.
 
State need grant funding was in jeopardy without revenue increases. More than 4,900 WSU students receive state need grant funding which makes up a critical component of the “Cougar Commitment” offered to students from families with lower incomes. The final budget cuts student financial aid statewide by just $4.9 million on a $233.4 million base, according to John Klacik, the financial aid officer of the Higher Education Coordinating Board.
 
Another key student financial aid element of the compromise operating budget was the state work study program. In the final budget, 70 percent of work study was preserved, a program that benefits 800 WSU students. The work study cut amounts to $7.4 million reduced on a $23.5 million base statewide. The governor proposed no funding for work study. In a statement issued today, Pres. Elson Floyd said, “The restoration of the state need grant program and the work study program are important in fulfilling our commitment to access and opportunity for Washingtonians. These efforts are appreciated.”
 

Jobs and higher ed lottery
In addition to the supplemental capital and operating budgets – and tax legislation – lawmakers passed a major jobs bill and a higher education lottery before final adjournment.
 
They are called “Hans Bonds Legislation sponsored by Rep. Hans Dunshee, D-Snohomish, provides for a refererendum to sell $500 million in bonds outside the state debt limit. It finally passed the Legislature on the final day after a serious of tedious Senate parliamentary maneuvers by opposing minority Republicans.
 
The final Senate vote was 28-18 after being considered on the floor for more than three hours.
 
Dunshee compared the proposal to the “New Deal” projects of the post-Depression Roosevelt Administration. He said his goal is to create 30,000 construction jobs statewide and $130 million per year in efficiency savings for schools and universities.
 
The claims by Dunshee were sharply disputed by Republicans. House Minority Leader Richard DeBolt said the proposal only retrofitted buildings, it did not truly create “bricks and mortar.” DeBolt concluded that “its not the New Deal … The Hans Bonds seems more like a Raw Deal to me.”
 

Matching capital funds
House Bill 2561, if it is approved by the voters, could provide matching capital funds for projects that improve energy and operational efficiency of K-12 and university buildings. WSU’s Energy Extension Program is called on in the bill to provide technical assistance. The bill promotes energy conservation strategies such as those applied in recent years at WSU, according to Senate Ways and Means testimony Sunday by Ash Awad, vice president of the McKinstry Co. McKinstry, who been under contract with WSU for many years, argues the bill will allow for unfunded “deeper” improvements for building efficiency such as new roofs and plumbing. WSU and McKinstry hope that funding would be made available for projects such as the heating and ventilation system upgrades required for its engineering buildings in Pullman. Other projects in places like Puyallup and Spokane could benefit from the bill. There were three main changes to the bill as it passed Senate Ways and Means and was ultimately approved by the Legislature:
 
1. The overall bond authority was reduced to $505 million from $861 million.
2. The language was narrowed from including all state agencies to only including public k-12 schools and public higher education institutions.
3. A permanent tax on bottled water would be imposed to pay for the debt service costs of the bonds.
 
Higher Education Lottery Bill.
“The Opportunity Pathways Bill,” a plan for a state lottery benefitting higher education, sprang to life late in the special legislative session. The bill had passed the state Senate in the 2010 session twice but never came to a vote on the House floor until 11:30 p.m. Monday.
 
Opponents protested that the state lottery should exclusively benefit K-12 education. The bill creates a state lottery marketing campaign pegged to public colleges and universities. Earlier in the week, the bill was considered to be part of the legislature’s “revenue package” for this biennium. It was assumed that the bill will bring additional $15 million to state coffers in the coming year. The bill was sponsored by Sen. Jim Kastama, D-Puyallup, and has been supported by WSU. Kastama says the long-term benefits of marketing to higher education could result in hundreds of millions of dollars going to higher education student financial aid.
 

Small business development
Legislation that provides fee funding for Small Business Development Centers died in the final days of the legislative session. Proposed legislation in each house would have imposed a $5 voluntary fee on business license applications and renewals to fund the statewide WSU system. (HB 2641 and SB 6669 died.)
 
However, the compromise operating budget does provide $100,000 to WSU for statewide coordination of business strategies. The appropriation was made to the SBDC so that they can execute the duties prescribed in SB 6667 (the so-called Monster business bill), which was signed into law by the governor on March 22, 2010. The SBDC will work with Department of Commerce to fulfill the duties of developing plans to integrate small business and entrepreneurial programs, meet the needs of small start-ups, develop entrepreneurial training, and create policies to reduce barriers to efficient coordination of assistance.
 

Global Health
Global Health Funded Legislation signed last week received $1 million for implementation in the final operating budget. The legislation promotes the establishment of manufacturing activities in the state around global health research centers such as WSU.
 

80 bills tracked
WSU has tracked more than 80 bills during the 2010 regular and special session of the Washington State Legislature. For the latest status on each bill and links to actual language and bill reports,
click here
. A list of just the special session bills is also available online at the
WSU Olympia site
.  Legislation that appears to be alive in the special session or has passed the 2010 sessions is marked in green.Legislation that appears dead for this year is marked in red.
 
Olympia Update is produced for persons interested in state government developments affecting Washington State University.