February 21, 2008
Recession woes spell slim budgets in state Legislature
The best news out of Olympia is likely to be that this session will finish on or before its appointed March 13 deadline, meaning that the Legislature and the public will not be subject to even more gloomy news on state revenue forecasts.
Although the state goes into the second year of the biennium with a $1.4 billion surplus, the abrupt reversal in state fortunes has cast a pall over many new proposals or ideas, however urgent and desirable, that call for substantial new expenditures in the operating or capital budgets. While the fundamentals of the state economy overall are fairly strong, the tax base in Washington depends heavily on consumer spending, which has been soured by the national stories of an impending recession.
Combined with a rise in mandatory expenses of at least $75 million, the outlook in Olympia is likely to dictate very slim budgets that call for deferrals of any decisions that would result in major hits on the treasury.
An exception to this could be funds for campus safety. Recent events in Louisiana and Illinois have again made the governor’s request for campus safety funding a front-burner issue. “These issues are being taken more seriously now,” says Randy Hodgins, director of state relations. “Hopefully some new money will be proposed for addressing these concerns.”
The fate of the North Sound campus remains uncertain. Snohomish County legislators are still divided into two camps, one supporting the Everett Station site recommended by consultants and the others supporting the Marysville site, which was ranked second. But many legislators who question whether the state can afford a new campus, especially the costly addition of an institution focusing on science, technology and engineering, requiring an expensive physical plant.
Another proposal facing uncertainty is public funding for a portion of the costs of the remodel of Husky Stadium. Although the financing bill has passed the Senate Ways and Means committee, other legislators have expressed a reluctance to act on the measure this year, particularly in light of the recent revenue forecast decline. It’s possible that the legislature will look more broadly at the issue of what to do with taxes that were designated for sports facilities, but that examination would not take place until 2009.
A bill that would change the way capital projects for four-year higher education institutions are prioritized at the state level appears likely to pass. The bill would assign the Office of Financial Management the responsibility of creating this priority list. Currently, the six four-year institutions go through the process under the direction of the Council of Presidents. The UW and the five others are supportive of this revised approach.
However, the bill also would establish a process that separates capital funding of the UW’s Seattle campus from Bothell and Tacoma. “We do not think this is a good approach,” Hodgins says. “We think of the University of Washington as a three-campus institution. We don’t think it’s productive to peel off functions or institutions, which then could be pitted against one another for funding.”
The Legislature also is taking what Hodgins terms an encouraging look at the overall capital budgeting process in the state, with an eye toward possible future additional funding sources. The capital budget is very over-subscribed, at least partly due to the growing dependence of K-12 schools on state resources for new and remodeled buildings.
One possible bright spot in the budget could be additional funds for child care. Students have been successful thus far in pushing an approach that would make the Higher Education Coordinating Board responsible for distributing grants that would match student fee allocations for child care. This bill is likely to come with modest amounts of new money. “The focus on child care also has allowed us to spotlight the challenges the UW faces in providing care for children of faculty, staff and students, and it may help with a UW capital request that would create more space for child care on campus,” Hodgins says.
The state House of Representatives, which originates the budget bill this year, unveiled its plan Feb. 20. Hodgins will post information on this budget, and how it is likely to affect the UW, on his <a href=http://depts.washington.edu/staterel/wordpress>blog</a>. Hodgins testified in an operating budget hearing Feb. 20 and testifies in a capital budget hearing today.
