Olympia
Update No. 1 • December 18,
2008
Governor's Biennial Budgets
From: Larry Ganders, Assistant to the President
1. Printable Adobe PDF Version
2. Comments on the
governor's budget by Pres.
Floyd
Gregoire budget cuts WSU
by 12 percent, $31 million
A 12% reduction in state funding for Washington State University was proposed
today in the 2009-2011 state budget recommendations by Gov. Christine Gregoire.
The cuts are to help
balance a forecast $5.1 billion revenue shortfall amidst an economic recession.
The governor’s December recommendations mark the
first step in a legislative process to balance the state biennial operating
budget that is not likely to be completed until late next spring. If the
governor’s budget is adopted by the Legislature that convenes Jan. 12, WSU would
be required to reduce its annual $262 million state budget by $31 million or
about 12 percent. If WSU regents approved the maximum tuition rates presumed by
the governor and applied new tuition funds to the governor’s cut level, the
actual university budget cuts could be $22 million or 8.5 percent.
After being briefed on the governor's budget, President Elson S. Floyd said,
“WSU
fully realizes that sacrifices must be made during these difficult financial
times. The governor has repeatedly made a
commitment to education and her proposed budget reflects this priority. WSU will
continue to take the appropriate steps to manage within this fiscal environment.”
Generally, the governor’s budget provides maximum flexibility for the university
to make its own decisions on reducing state funding.
One exception is that the governor will require that most of the high-demand
student enrollments be preserved. High demand enrollments are in areas like
nursing and engineering that the Legislature has emphasized because of great
employer demand.
The university has been anticipating operating budget
reductions for next biennium. Pres. Floyd ordered a slow down on WSU hiring last
spring and later froze all vacant positions. The university has also severely
restricted travel and taken steps to eliminate about 20 percent of courses
offered. A university budget committee has been formed to make mission-driven
budget decisions that seek to maintain student enrollments, quality instruction,
and emerge from budget reductions as a stronger research university.
No pay increases or program enhancements.
The governor’s budget provides for no employee cost-of-living increases anywhere
in state government. As expected, she funded no new programs requested by the
universities. She proposed one of the first budgets in many years that does not
provide for new enrollment funding.
Gregoire’s budget proposal presumes a maximum of a 7
percent tuition increase for all four-year university students (which is the
current statutory limit for undergraduate students.)
It is one of a very few fee increases she
allows anywhere in government. She will freeze all other fees in higher
education and most of state government. This would include such things as
student laboratory fees or student activities fees.
More state financial aid funding was proposed by the
governor to keep pace with a 7 percent tuition increase. However, the governor
proposed some changes to the state need grant program.
She lowered student eligibility from 70
percent to 65 percent of median family income. There are also changes in
benefits for qualifying students from families above 50 percent of median
income. WSU is still evaluating these changes.
The House and Senate will each separately take up the
governor’s budget recommendations when the 2009 Legislative session convenes in
three weeks at the state capitol here in Olympia. The efforts in the House will
be focused in a new House Ways and Means Committee chaired by Rep. Kelli
Linville, D-Bellingham. Much of the Higher Education budget may be formulated in
an appropriations-education subcommittee of Ways & Means chaired by Rep. Kathy
Haigh, D-Shelton. As in past years, the Senate Ways and Means Committee will
take up the budget. Sen. Margarita Prentice will chair the committee and Sen.
Rodney Tom has been named the lead on the operating budget.
The governor had been sending signals for weeks that
the nationwide recession was going to drive an “ugly” budget for the state.
State revenues rely heavily on Christmas season retail sales, auto sales, and
home sales, which have all dropped dramatically in recent months. As she
promised during her re-election campaign, her budget proposals contained no
general tax increases to help ease the impact.
Governor Proposes $104 million in New WSU Construction
Also today, the governor unveiled a special capital
construction package intended to quickly stimulate the state economy that has
been reeling from recession. The debt limit, which is in part based on operating
revenues, is holding down higher education construction. The $104 million
recommendation for the next two years is down from WSU’s current capital
construction budget of $190.8 million. The governor proposes eliminating a
statutory debt limit, leaving in place only a constitutional debt limit.
Among the projects recommended by the governor for
funding is WSU’s highest priority: the $38.6 million Applied Technology
Classroom Building on the campus of WSU Vancouver. WSU has requested that it be
included in the governor’s state economic stimulus package, allowing
consideration early in the legislative session. The governor said she will
announce that package next month. If that project is included, WSU will break
ground on the project in March that will support high-demand engineering degrees
and research for the semi-conductor industry.
Gregoire’s capital construction budget also proposes
$7.4 million in design funds for WSU’s second highest priority, the Veterinary
Medical Research Building in Pullman. The building would be on a pace to begin
construction in 2011.
Pullman Wastewater Facility Moves Forward
The governor funded
no major higher education infrastructure projects with state bond money.
However, she provided in her budget an alternative financing mechanism for the
$15.7 million Pullman Wastewater Facility. The project has been criticized
because effluent would be used to irrigate the new Palouse Hills golf course and
was the object of a veto by then-Gov. Gary Locke. Gov. Gregoire, in her new
capital budget, would allow WSU to bond against student building fees paid at
the time of tuition to construct the plant. Her proposal requires treated water
to be used only for the domestic water requirements of the Pullman energy plant,
chilled water facilities and irrigating general university grounds “excluding
the golf course.” WSU has indicated that may be feasible.
Global Animal Health Buildings Move Forward
It appears the governor is also moving ahead on
Global Animal Health facilities. Global Animal Health Phase I is being
considered for a federal stimulus package that the governor intends to propose
to Congress. If successful, $10 million in federal funds might combine with $25
million from the Gates Foundation to begin construction of the $35 million
building next spring, a year or two earlier than scheduled.
Gregoire’s capital budget also provides $200,000 to
pre-design Global Animal Health Building, Phase II.
Pre-design for a Spokane Biomedical Building.
Spokane’s Riverpoint Campus received a boost on two
fronts. The Gregoire budget funds $250,000 for pre-design and the Riverpoint
Biomedical and Health Sciences Facility. That puts that project on track for
construction in 2013. Eastern Washington University also received permission to
purchase an existing building on the Riverpoint Campus for classroom and other
space.
For other
information on the upcoming legislative session and how it impacts WSU, go to:
http://www.olympia.wsu.edu/Status.aspx
Olympia Update is produced for persons interested
in state government developments affecting Washington State University. For more
information, go to
www.olympia.wsu.edu. Contact: Larry Ganders, Assistant to the
President, 360-956-2165. From WSU campuses, dial 8-2165. If you wish to
subscribe to Olympia Update directly by email go to
www.olympia.wsu.edu/Update.aspx
