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WSU Government Relations Newsbeat

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, 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 or Kristi Growdon at 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.

State reserve accounts fall again

The state’s Economic and Revenue Forecast Council this morning adopted a new projection of tax collections that dropped anticipated reserve accounts from about $730 million to just $163 million. This comes not even a day after the governor signed the state’s new two year budget into law.

You can find the forecast here.

If there is a silver lining, it’s that the budget cycle doesn’t end until June 30, 2013, leaving lots of time for economic improvement that could push the state onto stronger fiscal ground. The Council is due to issue a new forecast on September 15 and another on November 17.

The latter forecast is the one the governor will use to write the supplemental budget she’ll propose to the Legislature in December. Lawmakers will then convene in January to draft their own plans for a budget rewrite.

Governor signs operating, capital budgets

Gov. Chris Gregoire yesterday afternoon signed into law the operating and capital budgets approved by the Legislature last month.

TVW live blogged the event and you can read about the governor’s comments here.

There were no major surprises for WSU in the veto messages for either bill. You can check out a breakdown of what both budgets mean for WSU here.

And just as a bow is finally put on the arduous process of writing the next two year budget, the state’s Economic and Revenue Forecast Council is scheduled to issue a new forecast of state tax collections at 10 a.m. this morning. It’s quite possible, given news this week of a sudden downturn in actual tax collections over the past month, that the forecast will eat into the reserve left by the Legislature in the newly signed budget.

We’ll have a full report later today.

Tax collections fall by $70 million

A new report out this morning from the state’s Economic and Revenue Forecast Council indicates that tax collections for the past month fell short of expectations by $69.7 million due to an “unexpectedly large” slowdown in economic activity. You can read the report here.

The report that really matters, the state’s quarterly revenue forecast, is due to be issued on Thursday. It’s these quarterly reports that are used as the basis for determining the state’s fiscal health. A drop in anticipated revenues will effectively reduce the state’s anticipated ending fund balance.

The budget adopted by the Legislature last month and due to be signed by the governor on Wednesday leaves $723 million in reserve, though only $442 million of it is unrestricted.

Today’s report for the May 11 through June 10 period actually would have been worse had it not been for a one-time payment of taxes on activity that occurred during a prior period.

And total collections for the quarter are still above expectations but only because of a windfall provided by a program that allowed delinquent taxpayers to pay past due taxes without penalties.

Recapping a busy week

WSU’s government relations team spent much of this week in Pullman, keeping us away from the blog. And in that time a number of noteworthy happenings occurred.

Gov. Chris Gregoire signed a series of bills of great interest to higher education that were approved in the recently completed legislative session.

House Bill 1795 gives universities authority to set their own tuition for eight years while also increasing financial aid obligations. The governor vetoed a series of provisions that would have extended additional operational flexibility to state universities as it relates to procurement.

The very same day, WSU’s Board of Regents approved a 16 percent tuition increase for the upcoming academic year for resident undergraduates. The increase mirrors what was authorized in the state budget recently approved by the Legislature and due to be signed by the governor next week.  The board did not exercise authority provided under House Bill 1795.

Also signed into law was House Bill 2088 creating the Opportunity Scholarship Program, a public/private partnership designed to provide near term scholarships for low and middle-income students while also establishing an endowment to provide a funding source for future scholarships.

The governor also signed Senate Bill 5182, which will eliminate the Higher Education Coordinating Board on July 1, 2012, and transfer its duties to other entities. A steering committee will recommend what duties go where. The Legislature will then have to act on those recommendations during its 2012 legislative session.

Governor: WSU Vancouver ‘part of the heart of the community’

Governor Chris Gregoire told nearly 150 community leaders, students, faculty, staff and others at WSU Vancouver Thursday that the branch campus and university at large are keys to the state’s economic recovery.

On campus to tour the Engineering and Computer Science Building –scheduled to open in January 2012 – Gregoire hailed the university’s increasing commitment to producing engineering degrees, its collaboration with Clark College and noted that it could be tempting to take WSU Vancouver for granted.

“It hasn’t been here that long and now it’s part of the heart of the community,” Gregoire said.

In recapping the recently completed legislative session, Gregoire recounted deep cuts made to higher education and explained how students and families will be asked to help keep institutions whole through tuition rates that, while higher, will still lag behind schools in comparable states.

“This great institution cannot continue to absorb the cuts,” the governor said.

She said the community and its developing high tech economy is situated well to rebound from the recession “but without WSU Vancouver I don’t think it would be what it is today or what it can be tomorrow.”