Governors budget priorities: SBCTC Finance Division Summary

Governor Inslee released his 2013-15 Biennial operating budget priorities last week, with no cuts to higher education proposed. To balance shortfalls in the general fund as well as those created by the McCleary fund lawsuit the Governor reduces funding to other state agencies (including $400-million-plus in reduced funding to health and human services programs) and proposes multiple changes to taxes (including continuations and expansions on beer taxes as well as the elimination of multiple tax breaks). Overall, the Governors request for SBCTC is very similar to Governor Gregoires request in December. Governor Inslee increases funding to the SBCTC in FY 2014 and FY 2015 by 6.8% and 8.2% (respectively) over FY 2013 appropriated levels. The annual funding level for FY 2014 is $624 million, while FY 2015 is $632.5 million (compared to current year funding of $585 million). For complete information, see Governor Inslee's 2013-15 Budget Priorities for a Working Washington. It appears there wont be an appropriations bill submitted in support of the Governors budget release, which leaves certain budget-related issues unaddressed in the Governors proposal. Unknowns for the community and technical colleges include: Type of authority provided to address potential non-tuition-based fee increases. Whether the plan allows for use of faculty turnover savings toward funding faculty increments.

Highlights of interest: The Governors budget prohibits increases to tuition for resident, undergraduate students. It is not known if the Governors proposal includes authority to increase tuition for non-residents. The Governor restores the funding related to the 3% salary reduction ($30.0 million for the biennium) as well as the one-time budget reductions ($13.0 million for the biennium) taken in 2011-13. High Demand Enrollments for CTCs: The Governor proposes $2.5 million per year to support 330 additional STEM and Aerospace FTEs. (Same as Governor Gregoire) Governor Inslee proposes an additional investment of $8.0 million in FY 2014 and $4.0 million in FY 2015 to ensure continued expansion of high demand, high cost programs (from aerospace to nursing). No FTE target has been attached to investment. Labor Center and Archive: The Governor provides $200,000 per year to support the Labor Education Center at South Seattle. Leases, Maintenance and Operations: All funding is provided for our Leases and M&O request, with the exception of M&O for Everett CCs Student Fitness Center.

Collective Bargaining: The Governor provides funding for the newly negotiated Step M for classified employees, which was included in statewide negotiating. Because of the lack of an appropriation bill, it is unknown how Governor Inslee is handling the Yakima Valley CC CBA is also approved. Financial Aid: $35.0 million in funding is provided to fund unanticipated activity in the College Bound scholarship program in the Student Achievement Council budget. State Need Grant and Work Study are expanded by $24.7 million to keep pace with tuition authority provided for the four year institutions (see below). Workfirst funding in DSHS is reduced by $36 million. It is not known how this change might impact the CTC systems contractual arrangement with DSHS. Running Start: There are no changes to the running start program. I-732 Increases to salary: The Governor does not provide funding for I-732 (or any other compensation related increases beyond the restoration of the above mentioned 3%).

Compensation and other changes: The employer health benefit funding rate is decreased to match anticipated health expenditure experience; it will not impact employee benefits. The monthly rate is changing from $800 to $782 in FY 2014 and $791 in FY 2015. There are several changes to central services agencies, which translate into changes in all state agency budgets. But our costs for these central services will also be changed through rate adjustments. Most of these changes mirror Governor Gregoires budget proposal.

Other items of note in the higher education budget: WSU receives $750K for two cohorts of 20 students in electrical engineering at North Puget Sound University Center at Everett; $2 million for engineering enrollments; $5.2 million for biofuels research. UW receives $12 million to create a new Clean Energy Institute; $1.8 million for ocean acidification research; $2 million for engineering enrollments $11 million enrollment funding pool for the baccalaureate institutions, to be administered by OFM. Regional four year institutions have authority to increase tuition by 3% and the research institutions were granted 5%. (In the Governors proposal, the four year institutions still have final tuition setting authority).

In OFM and Governors Office: An additional $10.9 million to implement E2SHB 1872 (STEM Education Alliance). The funding will expand regional networks of educators and businesses to align STEM education best practices to local economic opportunities, expand STEM professional development, and extend STEM learning opportunities to students from preschool through higher education.