Budget

October 12, 2011 - Changes, Current Information, Having Your Voice Heard

Update from Les 10-12-11

I am writing to update you on developments related to the state budget. In my last message, prior to the September 17 state revenue forecast, I noted that the Governor had asked state agencies to prepare for potential cuts up to 10 percent in their state operating funds. Because about 35 percent of Evergreen’s operating budget comes from the state, the 10% reduction plan in general funds ($3.1 million over the 2011-13 two-year budget) would equate to a net cut of about 3 percent for our total combined tuition and state general funds that support the college’s operating budget. I told you in early September that we had set aside some funds in our budget finalized last spring that would mitigate that level of cuts to a great degree.

Since then, we have learned more about the state’s finances and about the budget options that the legislature is likely to consider. In short, the size of the budget challenge is larger than earlier state predictions.

Based on the latest revenue forecasts, and the fact that a large proportion of the state budget is constitutionally or legislatively protected from cuts, we are now starting to see estimates that indicate the remainder of unprotected state functions, which includes higher education, could face cuts of 20-30 percent from our remaining state general fund base. That would be a net cut of 7 to10 percent for Evergreen ($8 million). Our budget set last spring is not adequate to mitigate a cut of that size. Our current plan would only cover the first 3 percent. Beyond that, the college would need to find ways to cut yet another 4 to 7 percent.

In addition to cuts to Evergreen’s operating budget, the legislature will consider reductions to state student financial aid programs. As we all know, this aid provides a direct benefit to students needing financial support. It is also important to realize that these dollars ultimately impact net tuition collections that we rely on to finance college operations.

That said, it is too soon to draw any firm conclusions about possible cuts or other legislative actions, including any possible revenue measures that could help fund vital public services and access to higher education. The Governor has called a special session of the legislature to begin on November 28. Her goal is to identify and implement necessary budget reductions sooner rather than later, to help spread the impact over a longer portion of the current biennium (which ends June 30, 2013). She has indicated that a preview of potential budget reductions will be provided the week of October 24. Given the size of the challenge, however, it is possible that many elements of the budget will not be addressed until the regular supplemental legislative session which is scheduled to begin January 9.

In this environment, the college could be directed to take specific actions and/or be required to respond very quickly to legislative action. Although we may have to act quickly in response to a rapidly evolving legislative session, we will keep you informed along the way. As a starting point, the vice presidents and I have begun working from previously developed budget reduction options that have not yet been taken and we are looking closely at current sources of financial flexibility that may be needed to bridge cuts that can’t be implemented immediately.

We have already set up a voluntary leave-without-pay program and we will closely review employee turnover in an effort to build further capacity to address deeper cuts in the coming months. We are also working to identify and evaluate options we may have, if any, to mitigate the impact of reduced financial aid resources. Things are likely to move quickly at various points in this process and we will do our best to keep you informed along the way. To provide a sense of the sequence of events ahead, here is a current timeline of budget related activities on and off campus.

As with any political process, it is difficult to predict the ultimate decisions the legislature will make regarding state budgets, let alone the specific impacts for higher education and Evergreen. We should know more as the special session convenes and progresses, but we may not have final information until March or later, when the regular supplemental session is scheduled to conclude. We will be working in the coming weeks and months to help inform the legislative conversation about higher education funding, advocating on behalf our students, their families and the campus community.

You can lend your voice to that legislative conversation as well. I encourage you to visit the College Promise Coalition (www.collegepromisewa.com) to learn more about efforts to protect higher education in Washington. You can also share your views regarding the prospects of 20-30 percent cuts to state services, additional tuition increases and proposals to raise additional revenues to preserve our social safety net, higher education, K-12 education and other critical public services directly with your elected officials.

We will provide more information as it becomes available.  

Les Purce