Friday, October 28, 2011

Cuts in student aid and college budgets proposed to help ease state budget crisis

A package of possible state spending cuts—including a proposed 15 percent ($166 million) reduction in state support for public colleges and universities, and the suspension of all remaining State Work Study funding ($8 million) —was proposed by Gov. Chris Gregoire Thursday.
A budget document prepared with the assistance of the Office of Financial Management noted a range of possible budget cuts across many areas of government.
To help ensure transparency in the budget development process, the Governor took the unusual step of announcing likely elements of her budget proposal before the proposal is ready to be delivered to the Legislature and the public.
At a Thursday morning news conference, the Governor said she expected that her proposals will generate feedback from communities and stakeholder groups that could lead to changes in the list of cuts she will include in her official state budget proposal.  “But not much—our options are limited,” the Governor said.
HECB Executive Director Don Bennett said today that he already has urged the Governor’s staff and key legislative representatives not to suspend the State Work Study program, even if preserving it would mean a slight reduction in the State Need Grant (SNG) program.
Later in the day, at a meeting of the Higher Education Steering Committee, which includes representatives from baccalaureate and two-year institutions,  the Governor again alluded to the difficult choices the state will have to make to deal with the current budget crisis, and the potential impact those decisions could have on higher education. “I’m surprised some of you are talking to me,” the Governor remarked to committee members.
Governor Gregoire has called the Legislature in for a special session, beginning Nov. 28, to address a projected $1.4 billion shortfall in state revenue for the remainder of the 2011-13 biennium. In light of the shortfall, the Governor has proposed a $2 billion spending reduction in the biennial budget.  
“I don’t want anyone to think that I like these options,” the Governor said. “The list of options I’ve presented hurts. This is not what I signed up for when I started as a caseworker 40 years ago. But it’s what the world economy handed our state and our country.”
Another budget cutting proposal that has been mentioned but not recommended by the Governor is elimination or reduction of the State Need Grant (SNG) program (up to $303 million). The SNG program annually provides financial assistance to 72,000 low-income students in Washington.  
Also on the table but not recommended by the Governor is an even deeper 20 percent reduction ($222 million) in General Fund support  for the state’s six public baccalaureate institutions and 34 community and technical colleges. 
The Governor’s recommended 15 percent reduction would come on top of a 24 percent reduction in state funding for public colleges and universities approved earlier this year.
To partly offset the impact of continuing cuts to higher education, the Legislature earlier this year granted the baccalaureate institutions expanded flexibility to raise tuition.
More information on the budget reduction alternatives is available on the Office of Financial Management website.

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