Budget Update March 31, 2009

From:    Purce, Les
Sent:    Tuesday, March 31, 2009 5:39 PM
To:    All Staff & Faculty DL
Subject:    Senate and House Budget Proposals

As you may know, the Senate released its operating budget proposal Monday.  The House released its proposal today.  As we expected, both budget proposals cut deeper than the Governor's December budget, reflecting the continued decline in the state's projected revenue.  Overall, the Senate would trim $513 million from higher education budgets.  The House would trim $683 million.

While we are still working to understand the fine detail of each of these proposals, I want to share with you our preliminary understanding of how these budget proposals would affect Evergreen.   In general, both budgets fall within the range of assumptions we have been using to plan for budget reductions.

The Senate Proposal

The Senate budget cuts about $12.7 million from Evergreen’s operating budget over the biennium.  It incorporates federal stimulus money and authorizes a 7% tuition increase in each year of the biennium.  It appears that the net effect would be an 8.4% cut in the first year and a 12% cut in the second year.  This includes the cost of funding the salary increases in the faculty union contract.  As you may have read in the newspaper, based on the payroll data in the state system, the Senate calculates that Evergreen’s payroll would be reduced by 64 positions.

The House Proposal

In the House, Evergreen's budget is reduced by $14.1 million over the biennium.  The House proposal incorporates federal stimulus money and allows a 10% tuition increase.  Our estimate is that Evergreen’s net cut would be 7.1% in the first year and 13.8% in the second year. This includes the cost of funding the salary increases in the faculty union contract.  The House calculates that Evergreen's payroll would be reduced by 52 positions.

Both budgets continue to fund the State Need Grant, which would offset the effect of tuition increases for the neediest Washington students.  The House gives Evergreen's Board of Trustees the authority to decide how best to make these reductions.  The Senate's budget is more prescriptive in how we administer the budget reduction and requires that at least $100,000 be provided to the Labor Center.

Uncertainties remain, and the final legislative budget is likely to be different than either of these proposals.  We still have some questions about these budget proposals that we will be working to answer and we have not yet seen the legislature's capital budget proposals.  The public four-year institutions continue to urge the legislature to provide more support from the state general fund, to give us flexibility to manage these reductions and, in the absence of more general fund support, to provide the option of offsetting budget cuts with further tuition authority.

Next Steps

These legislative budget proposals will provide guidance to the vice presidents and budget coordinators as they work to combine the draft divisional budget scenarios and begin working to draft an institution-wide plan.  Our goal is to have a college-wide draft budget proposal to share with our campus community shortly after the legislature’s scheduled adjournment date of April 26.  With that in mind, we have scheduled a campus-wide budget forum for Wednesday, April 29 from 3-4:30 p.m.  (NOTE: This forum was later rescheduled to Wednesday, May 6 from 1-2:30 in Lecture Hall 1).

Thank you for your continued patience with this challenging process.