Budget Topics from the March 1, 2010 Budget Roundtable and Other Questions

What budget period are we talking about?

We are talking about a budget for the remainder of the 2009-2011 biennium ending June 30, 2010. The work being done in the Legislature is an update to the budgets passed in the last session for the current biennium.

What messages have you been sharing with the legislature?

• Protect student aid (State Need Grant, state work study, other state financial aid)
• Cuts in state support for higher education have been larger than many people realize
• Cuts to higher education will stall economic recovery today and economic prosperity in the future
• Students and their families can’t continue to be the state’s rainy day fund (through continued steep increases in tuition)

What’s the budget cut we’re expecting at Evergreen?

At this point it looks like it will be between $1.1 million and $1.6 million for the remainder of the biennium.  This will be a 3% permanent cut to our base budget.  These numbers could change as the legislative process continues.

What’s the plan to address that cut?

Right now we are awaiting a final legislative budget that will ultimately set the parameters that we must use to implement our budget changes.  At the moment we have uncertainty about tax increases that would minimize the impacts to student financial aid programs.  At the same time we don’t know the final size of expected budget cuts.  Also in the mix is that there are several bills that if enacted will direct the how to cut the budget taking away our local decision making ability.  If however, the legislature does increases tax revenues to minimize impact to financial aid so that we don’t have to cut deeper to locally create more resources for student aid AND IF the legislature grants the college the management flexibility to manage the cuts locally – the current thinking of the President and Vice Presidents is to structure the changes to next years budget in the following manner.

1. Apply the amount already budgeted for 2010 cuts (solves about 1/3 of cut level)|
In last year’s budget cuts, we cut an additional $500,000, anticipating there would be further cuts ahead.  We will use that $500,000 to fill part of the gap.

2. Implement cuts amounting to about 1/3 of the cut level to meet expected minimal budget cut levels
The House and Senate are currently proposing that Evergreen meet about $400,000 of its cut through reductions in salary and compensation (talked about as “furlough” proposals, though the current proposals would allow for a range of compensation-related options – eliminating positions prospectively or through attrition, retirements, unpaid leave, etc.). We don’t know whether this approach will remain in legislative directives and if it does exactly how we will be required to implement it.

3. Use one time reserve to ‘bridge’ the remaining 1/3 of the cut level until June 2011 to allow for a more robust strategic planning process next year.
We will cover the additional cuts in the short run through reserves and use the rest of the biennium to achieve the total required and prepare for potential future cuts.  This will give us a little more time to take a thoughtful approach.   

What’s the status of the State Need Grant?  What about other state financial aid (e.g. work study)? 

Both the House and Senate budget proposals preserved the State Need Grant.  How each chamber approached the restoration of the State Need Grant differed as did their actions regarding the state work study program and other financial aid programs. An analysis of financial aid in the various budgets is offered on Evergreen’s Office of Governmental Relations website. The State Need Grant remains dependent on the Legislature’s revenue packages.

How many students would be affected by a cut in state work study? 

State work study represents about 13% of college-related student jobs at Evergreen.  Proposals now under consideration could cut state work study by about 30%.  162 Evergreen currently receive state work study.  The average award is $3000.  It’s difficult to knowhow many of these would have to leave school if their state work study was reduced or eliminated.

What’s the expected timeline for budget decisions? 

The House and Senate have released their 2010 operating budget proposals.  The proposals must still be moved out of their respective committees and are likely to change as amendments are considered and proceed to the floor. The committees are expected to take committee action over the next several days.  While the Legislature is scheduled to adjourn March 11, it’s not yet clear whether they will be finished by then.  

The Governor and Legislature will set the budget levels and expectations for Evergreen.  This may or may not include specific actions or restrictions Evergreen must implement to address budget shortfalls.  We are encouraging the Governor and Legislature to set the budget and leave us the flexibility to determine actual budget actions.

On campus, the vice presidents are currently working with their budget coordinators, deans, directors and each other.  They will propose budget modifications to the 2010-11 budget actions to President Purce, once the legislature finalizes the budget this month.  President Purce and the vice presidents will present their recommendations for community feedback prior to finalizing the budget proposal in May and present it to our Board of Trustees for ultimate approval in June.  The budget takes effect July 1.  

How are you using the budget cutting recommendations from last year to inform this year’s decisions? 

Last year’s work provides a starting point for this year’s decisions.  Each of the divisions is revisiting its prioritized cut lists from last year to determine whether those choices are still the best ones to guide further cuts.  They will make changes as necessary before combining those recommendations with the other divisions for further review.  

How does that compare to the cuts we took last year? 

This cut will be on top of the 9% cuts level and 14% per year tuition increases that were implemented in the current 2009-11 biennium.

What if the tax increases don’t pass?  

The operating and to some extent the capital budgets released by the House and Senate this past week are dependent on the passage of the revenue packages in their entirety. Any changes to the revenue packages will directly impact the operating budgets presented this week. In both versions of the budget, the tax increases are directly linked to replacing financial aid cuts.   This means that Evergreen would need to re-examine how it might be able to support through one-time additional budget reduction measures ways in which to minimize impacts to currently enrolled students.  System wide, the lack of state supported financial aid program would likely mean enrollment reductions an most campuses, including Evergreen.  In addition, actions are expected regarding taking any legislative revenue decisions to the voters.

Will there be across the board cuts? 

As we did last time, we will look first at proposals for proportional cuts based on each division’s share of the overall budget.  We will then  look across the divisions to ensure that high priority items are protected, even if that means there will be some differences in the share each division takes of the final cuts.  

What’s the status of furlough proposals?  How will they affect Evergreen?  

The furlough title on the salary reduction bill is somewhat misleading in that the legislature would allow great flexibility in managing just how we will arrive at the expected salary reduction targets.  For example, we would have the authority to manage the goal by eliminating vacant positions, reduction in employee contracts, voluntary actions or numerous other strategies listed out in bill.  So it’s not yet clear how these “furlough” proposals will play out in the legislature or here on campus.  

What are you doing to limit the size of tuition increases in the next biennium?

The Evergreen State College has been active in the tuition policy dialogue this session. The College has chosen to not be included in either the Senate Bill (6562) or the proposed House striker to the Senate Bill.

As we reflect on the tuition policy dialogue this session to date, the college appreciates the work of UW, WSU, and WWU in opening the door for Washington’s higher education institutions to discuss with policymakers the unique interplay between tuition, state funding, and financial aid at each of our institutions through SB 6562. The dialogue with policymakers created with the introduction of SB 6562 has highlighted the legitimacy and the need to recognize the different missions among the six public baccalaureate institutions, and the different student bodies we serve. With the numerous conversations Evergreen has had and continues to have with policymakers this session we have come to the realization that the policies identified in SB 6562 do not meet the needs of our diverse student population nor does it respond to the imbalance in funding sources which has increased the burden of the cost of higher education onto students and their families. Evergreen is committed to working through the interim with policymakers and our higher education colleagues to continue the dialogue regarding the unique interplay between state funding, tuition, and financial aid that shapes our college and seek policy(ies) in the 2011 session that maintain the diversity among Washington’s higher education institutions and are relevant to the circumstances we find ourselves in as a sector and as a state.

Why is the Labor Center being moved? 

At the request of the Washington State Labor Council, and with the support of the Labor Center and its advisory committee, the House budget includes language transferring the Labor Center from Evergreen to South Seattle Community College.  This would locate the Center at a college campus with a significant presence of unions and apprenticeship programs, in an area of the Puget Sound with significant union density, and in the population center of the state.  The proposal shifts $150,000 in state funding from Evergreen to SSCC.

Where can I find basic information on the college’s budget (where the money comes from, detail on where it’s spent, etc.)?

The Office of Budget & Operations site at www.evergreen.edu/president/budget/. You can also find budget updates here (www.evergreen.edu/budget) and legislative updates at Evergreen’s Governmental Relations site.   

Why are we still building the CAB if we don’t have enough money for operations? 

Other than minor contingency levels, the project is already committed under binding contracts.  

What can I do to support funding for higher education and Evergreen?  

• Identify your state legislators
• Share your views on issues related to funding, revenue (tax increases), etc. with your legislator and the Governor.
• Urge others to share their views with legislators and the Governor.
• Get involved in organized communication efforts with an interest group that shares your concerns (student, union, etc.)

Why wasn’t there a representative of the Federation (classified union) on the roundtable panel Monday? 

The roundtable was composed primarily of people that have been regularly attending Friday afternoon legislative update sessions here on campus.  Members of the Federation have participated from time to time, but multiple invitations have not yet yielded regular participation by Federation leadership.  The meetings are open to everyone.  If there are future roundtables of this type, there’s definitely a role for Federation representatives there as well.  They can contact Julie Suchanek to get involved.    

What position has Evergreen taken on tuition setting authority? 

While some proposals have suggested that colleges and universities be given authority to set tuition levels on their own at increased levels ranging from 9-14% per year, Evergreen has held to its values of accessibility and argued that tuition should be set by the legislature; the state should provide a basic level of funding for higher education; and tuition increases should be moderated to traditional levels (about 7% per year) for the next biennium and beyond.  If tuition increases are simply offset by deeper cuts in state funding, the college may find itself needing to institute larger increases if those are allowed.    

Is it likely that colleges and universities will be given tuition authority and the higher tuition increases in the current legislative session? 

No.  These proposals have lost momentum in recent days.

What size tuition increase can we expect in the fall?

14% for resident undergraduates, 5% for non-residents undergraduates and resident graduate students, and no increase for non-resident graduate students.  These tuition increases were set in the last legislative session for the current two-year period (biennium).   

What about after the 2010-11 academic year? 

We have argued for adequate state funding and about 7% annual tuition increases.  If the state further reduces funding, the tuition increases may be higher.  

I’ve heard that there’s a new hiring freeze coming soon.  How will this affect current hires in the works? 

If an offer is made prior to March 17, it would not be affected by this freeze.  If an offer cannot be made by that time, vice presidents will review exemption requests in consultation with the president.  If they approve an exemption, the college may need to channel that request to the state Office of Financial Management for approval.  With that approval, the hire will continue.  For more information about a specific hire, consult with your vice president.  

Are we going to move to a longer term planning process so we’re not just patching holes each time another budget cut comes around? 

Yes, as part of our accreditation process we’ll be revisiting our strategic plan. We will be looking at how the college can prosper in an environment of reduced state funding today and in the future.  We’ll be starting that short- and longer-term planning over the summer and into the fall.  This will be a process to develop a sustainable approach for the long term.  We’ll look at mission, access and student mix, curriculum mix, systems and processes, revenue streams and other elements necessary to achieve a sustainable model. 

Funding for health benefits for state workers has not kept up with increased costs.  The result has been higher premiums and co-pays for state workers.  This can have an especially negative impact on the lowest paid workers. 

What is the college doing to address the underfunding of health benefits? 

With limited time and resources, advocates for the college are focusing on legislation directly related to higher education funding.  While health benefit funding does have an impact on higher education employees, it is a broader issue beyond the scope of current legislative and communication efforts.  

What position has the college taken on furlough legislation (unpaid time off and/or other salary reduction proposals)? 

We have argued for flexibility to make cuts in the ways that make the most sense for our institution and against proposals – including furloughs – that specify the ways in which we should cut.  

Is one group of employees hurt worse by wage freezes than others? 

Some people have observed that the current wage freeze (no cost of living increases) disproportionately hurts the lowest wage earners.  While the freeze is painful for these employees, individuals that belong to the classified union may have been eligible for step increases during the freeze.  Exempt employees, many of whom are not “high wage” earners, do not have step increases; so they have seen no pay increases of any kind since the freeze began.  The pain of the wage freeze is shared by a range of employees at the college.    

I understand that the president took a salary cut last year, but didn’t the Board of Trustees just backfill that with additional money to help pay off the president’s house? 

No.  President Purce took a voluntary $13,000 pay cut last year.  In addition to his salary, he receives a housing allowance.  That allowance did not change and was in place well before the voluntary pay cut. 

Based on salary alone, President Purce does not even make the list of the top 100 highest paid individuals in Washington’s public higher education system.  His overall compensation puts him on the low end of the continuum relative to other public college presidents in the state.  

Other house-related questions that have been asked:

Is the college building the president a new house? 

No.

Why doesn’t the president live in the college’s official president’s house? 

When he was hired, President Purce told the board that he might eventually need to move to accommodate the needs of his youngest daughter who has a disability.  He agreed to live in the official president’s house for at least one year.  After five years, he exercised the option to move and the board instituted a monthly housing allowance.  President Purce bought a house closer to the center of town with easy access to public transportation to meet his daughter’s needs.  After the president moved out, the college tried to sell the official president’s residence.  With the collapse of the housing market, it didn’t sell and the college felt it was better to hold onto the house rather than sell it for too little.  The house is currently rented and the college will revisit a sale when the market improves.  

Is the college doing any work to address larger issues including the state’s regressive tax structure (taxing lower income people at a higher rate than higher income people)? 

Not at this time.  College advocates are concentrating on funding for higher education in this current session.  Revenue issues may take a more central role in the next session.    

What’s being done to communicate to the general public the magnitude of the financial crisis taking place in higher education? 

Students, staff, faculty and administrators have been working to share that message.  As one example, President Purce worked with the presidents of Central Washington University and Western Washington University to get the word out through the state’s two largest newspapers: the Seattle Times and the Tacoma News Tribune.  They met with editorial boards at the papers and submitted guest editorials pointing out the severity of cuts to higher education and the consequences those cuts would have on students and the state.  Here is President Purce’s editorial from the Tacoma News Tribune last month.  These editorials were also picked up by other media.