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WSU Government Relations Newsbeat

Legislature adjourns special session

The Legislature put the finishing touches on its special session and adjourned sine die this afternoon, sending a $480 million early savings bill to the governor.

As was reported earlier, it contained no general cuts to higher education and left the most difficult choices for the 2012 regular session. That 60-day session is scheduled to commence Jan. 9.

Revenue collections flat

Anyone hoping for good news out of today’s monthly report of tax collections didn’t get it. Collections over the past month are largely flat.

Collections are actually up by $19.7 million but only due to the timing of property tax payments, not economic factors. Without that factor, collections would have been down by $14.2 million.

Otherwise, the state economy is performing as expected. In short, very little has changed since the November revenue forecast and hopes for a positive February forecast will not be bolstered by this report.

Early cuts bill introduced

The House and Senate have released details of the early cuts legislation will consider starting today and they contain no general cuts for higher education.

You can find details here. Both bills will be heard this afternoon in the House and Senate. If either were to be approved it would save $480 million through administrative reductions and fund transfers.

Special session is underway

The Legislature convened its special session on Monday and got right to work. That’s especially true in the House, where the Ways and Means Committee heard testimony on the governor’s proposed budget for seven hours.

It’s worth noting that, on the eve of the session’s first day, two major newspapers editorialized in favor of maintaining funding for higher education. “Washington state cannot afford to gamble with spending on higher education,” it begins. You can find it here.

And the News Tribune in Tacoma weighed in Sunday as well with this editorial.

Looking ahead, the Senate Ways and Means Committee is scheduled to hear testimony tomorrow on the education and higher education portion of the governor’s budget proposal.

Budget proposal calls for 17 percent cut

A budget proposal issued by Gov. Chris Gregoire today would cut Washington State University’s state appropriation by 17 percent in the second year of the biennium. But a separate revenue package, if approved by voters, would buy it all back.

You can find the budget proposal here and the revenue proposal here.

President Elson S. Floyd issued the following statement this afternoon:

“These are clearly very difficult financial times in which the governor is trying to find solutions. A balanced approach to the fiscal crisis in which we find ourselves is appreciated. We look forward to working with the governor and the legislature as we seek to balance our budget during these unprecedented financial times.”

Revenue forecast falls $122 million

Anticipated state tax collections for the rest of the current two-year budget cycle fell by $122 million this morning, a relatively small variance from previous expectations. The state’s anticipated budget shortfall is still in the neighborhood of $2 billion.

You can find the new forecast here, produced by the state’s Economic and Revenue Forecast Council.

Gov. Chris Gregoire will use the assumptions found in this forecast as a basis for the operating budget proposal she’s expected to release next week. The Legislature is scheduled to convene Nov. 28 to begin drafting its own versions.

Arun Raha, the state’s chief economist warns of significant downside risks due to international financial instability and its potential impacts on the U.S. banking industry.

Project Pegasus would boost WSU engineering enrollment

Washington State University and the University of Washington would increase engineering enrollments by 775 students to bolster the state’s aerospace industry under a plan announced today by Gov. Chris Gregoire.

You can read the press release here and the Seattle Times story here.

The two universities would split $7.6 million a year to support a significant increase in the production of engineering degrees. The plan also includes $1.5 million to support aerospace research at the two universities.

WSU formalizes 2012 legislative agenda

Washington State University’s 2012 legislative agenda promotes four key priorities to maintain the land grant research university’s commitment to advance the state. You can find it here and also on our website.

Priorities include protecting public higher education in the budget, helping WSU meet the needs of the aerospace industry, complete the Biomedical and Health Sciences Building in Spokane and allowing for an array of operational flexibilities that will allow the university to operate more nimbly.

Other priorities will be addressed by WSU during the upcoming session as well. Though the 2012 legislative session isn’t slated to begin until January, a special session has been called to begin Nov. 28.

Tax collections dip, forecast due Thursday

State tax collections for the past month fell $22 million shy of expectations, according to this report issued this morning by the state’s Economic and Revenue Forecast Council. The Olympian’s Brad Shannon filed this report on it here.

This comes just days before the council releases its quarterly forecast of tax revenues which is set for 10 a.m. Thursday. That report will be the one used by the governor, and at least initially by the Legislature, when they begin crafting their budget proposals. The governor’s is expected to be released sometime next week.

Tax collections since the last forecast have generally hit the target and are down by just $11.8 million. But state economist Arun Raha continues to warn against large downside risks. Those continued worries could push the forecast lower.

In fact, Shannon reported over the weekend that one key lawmaker is predicting the forecast could drop by something on the order of $100 million, expanding the state’s $2 billion shortfall.

Forecast: Economic outlook unchanged

The state’s Economic and Revenue Forecast this afternoon approved a new economic forecast that is largely unchanged from the September forecast.

It is noteworthy because the economic forecast generally informs the next state revenue forecast, due out Nov. 17. It’s that forecast that will tell state budget writers how much money they have, or in this case, don’t have. The state is currently facing a budget shortfall nearing $2 billion.

Based on today’s report, there’s little hope the Nov. 17 revenue forecast will offer a surge in anticipated tax collections to reduce that shortfall. As of Wednesday, actual tax collections were $2 million below what was forecast in September, a tiny variance.

Arun Raha, the state’s chief economist, cited continued economic uncertainty in Europe and disappointing employment growth as major contributors to the significant risks still facing the state economy. He noted that, should Greece default on its sovereign debt, it could set off a chain of events that could lead to a banking crisis in the U.S., sending the U.S. economy back into recession.