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WSU Government Relations Newsbeat

Tax collections dip only slightly but dark clouds loom

The state’s Economic and Revenue Forecast Council reported today that tax collections for the past month came in just $9.5 million below expectations but hinted that a significant downturn in expected revenue is in the offing.

The Council is due to release its quarterly revenue forecast at 10 a.m. Thursday. It is thought that it could decrease expected revenue through the end of the brand new two-year budget cycle by as much as $2 billion. Though less than the $5 billion hole the Legislature just plugged, it would be a significant number because so many methods for balancing the budget – including tuition increases – already have been deployed for the biennium.

Total tax collections since the June forecast have been just $40 million below expectations. But an expected national slowdown in economic activity is drawing itself out and “estimates of national growth for the remainder of this year and the following year have been revised down sharply,” the Council wrote in its report.

“We do not, therefore, expect future revenues to come in close to the levels forecasted in June,” it wrote.

Higher education cuts among worst in nation

The American Association of Colleges and Universities has a new study out offering a sobering glimpse into how Washington stacks up nationwide when it comes to funding its four-year public universities.

Long story short, cuts to the state appropriation in Washington for fiscal year 2012 are the third deepest in the nation at 23 percent. And it’s getting some ink here, here and here.

So while it’s true that the national economic slump created a budget crisis in all but a few states, only Arizona and New Hampshire saw deeper cuts to their four-year public university systems.

Super Committee and debt negotiations

Just this morning, a public organizational meeting of the Super Committee took place marking the beginning of debt negotiations by this special committee.  The group is made up of 12 members from both Houses and is charged to produce a proposal to create $1.5 trillion in debt savings over the next 10 years.  See the Super Committee Overview and Updates from McBee Strategic for details on what we could expect to see from this group as they work towards the December 23rd deadline.

Co-Chaired by Senator Patty Murray, Washington is in a key position to engage in the process, and WSU is working with coalitions statewide around the institution’s pillars of excellence.

Forecast Council ‘increasingly pessimistic’ about economy

The state’s Revenue and Economic Forecast Council issued a new report Friday that only serves to fuel speculation the September 15th revenue forecast could dramatically reduce state revenues.

The quarterly economic review, found here, generally informs the revenue forecast which follows a week or two later. It is thought next week’s forecast could drop anticipated tax collections for the two-year budget cycle by much as $2 billion. State agencies, including state universities, already have been asked to model cuts of 5 percent to 10 percent.

In last week’s economic report, the council reported that it is “increasingly pessimistic about the outlook for the future” and that “the probability that this fragile recovery gives way to another recession has increased.” While Washington has added 6,800 new jobs in June and July, some 9,200 were previously projected.

The council has revised its job growth expectations downward into 2013.

As legislators mull a possible special session and new cuts, it’s important to note that a number of options are off the table because they’ve already been implemented in the underlying two-year budget. College tuition is among them as the Legislature already has assumed consecutive undergraduate increases of 16 percent for the current academic year and the next.

A closer look at the Puyallup Research and Extension Center

Last week we hosted Rep. Susan Fagan on a tour of the WSU Puyallup Research and Extension Center.

The experiment station is one of four research stations in the WSU system and is one of the oldest WSU facilities, having opened just two years after the main campus in the 1890s.

Today it’s home to world class research and extension programs and of late has become noted for research being conducted on stormwater, a significant issue in both Western and Eastern Washington.

In her latest e-newsletter, Rep. Fagan recounts her visit and you can check it out here.

Tax collections slip by $9 million

We’re a bit late in posting this – WSU’s government relations team just wrapped up a four-day, three campus tour for legislative and congressional staff – but state tax collection for the past month have fallen short of projections by $9 million.

It’s not a huge number. But add that to the shortfall witnessed a month ago and collections are down by $31 million since the most recent quarterly revenue forecast.

You can find the state Economic and Revenue Forecast Council’s revenue update here. And the Spokesman-Review had a good write-up here.

The bigger news is what implications this has for the next quarterly revenue forecast, due to be released Sept. 15. If it falls by a steep margin, talk of another special session and even more budget cuts can be expected.

Talk of more cuts, special session, starts anew

The new two-year budget cycle is barely a month old and already talk is turning to the prospect of a budget re-write and more cuts.

The state budget office on Monday instructed state agencies to identify cuts to achieve a 10 percent reduction should they be required by no later than January. You can read the Spokesman-Review’s write up of the development here and the Olympian’s report here.

The next quarterly revenue forecast comes Sept. 15. We should get a preview of where things stand late this week when the state’s Economic and  Revenue  Forecast Council reports actual tax collection numbers for the past month.

Update on Debt Ceiling

Voting is underway in Washington DC on the deal that was struck late last night on raising the debt ceiling.  McBee Strategic has provided this detailed analysis and below are a few more notable points to be aware of.

• President Obama reached an agreement with Congressional leaders last night on a multi-step deficit-reduction package expected to total $2.4 trillion over 10 years, to be accompanied by nearly matching increases to the debt limit.

• Last night’s agreement makes it almost certain the U.S. will not default this week. However, it’s not yet clear the U.S. can preserve its AAA credit-rating since $2.4 trillion falls well short of the $4 trillion standard cited by Standard & Poor’s.

• Spending cuts will be historic if not unprecedented, and the battle will continue likely throughout the 2012 election cycle; no tax increases; at least $2.1 trillion in debt ceiling headroom; requires defense to shoulder a large part of spending cuts.

Debt Ceiling and WSU

As you know, the U.S. Congress and President Obama are in negotiations regarding the debt ceiling.  This discussion  includes many proposals to cut federal spending and The House of Representatives have begun to pass legislation to eliminate programs or funding of programs.  As a result, many of you may receive notifications from professional organizations that you are affiliated with, asking you to contact elected officials and urge them not to make cuts to programs.

The Government Relations team understands how news of program cuts can be disturbing and scary.  We know these funds in many cases are vital to the implementation of research and programs faculty and staff manage at WSU for the benefit of Washington’s citizens and its economy.  Please forward information you receive regarding program cuts to Kristi Growdon, Director of Federal Relations, growdonk@wsu.edu and we will respond to you with what the University’s response will be to the proposed cut.  Government Relations seeks to advance the University’s positions in the most efficient and effective manner, and we need your help to do so. Please do not contact elected officials regarding the cuts as a WSU employee.

As a private individual you have the right to communicate with elected officials and express your opinions.  Please make sure you do so using your own resources and during personal time.

If you have any questions please contact either Colleen Kerr at colleen.kerr@wsu.edu or Kristi Growdon at growdonk@wsu.edu and we will continue to disseminate information as it becomes available.

Debt Ceiling Q&A

This Debt Ceiling Q&A document was written by our federal lobbyist group at McBee Strategic.  The WSU Government Affairs team found it informative and hope you will find it likewise.  Please keep in mind that the section describing possible outcomes was written before July 19th and there may be different options being discussed and finally agreed upon by the Congress and the President.