Overview of Governor Locke�s
2001-03 General Fund Operating and Capital Budget
Proposals
Prepared
by
Senate Ways and Means
Committee Staff
January 8,
2001
Major Features of Governor
Locke�s Proposed 2001-03 Operating Budget
�
$770 million or 70% of all
program enhancements are for compensation.
These include:
�
$235 million to fund an IPD
(2.2% and 2.5%)COLA for higher education, state employees and
vendors.
�
$138 million to pay a
portion of the additional costs of maintaining health care benefits for state
employees.
�
$49 million in other
adjustments including partial implementation of the salary survey, 6767
recruitment and retention increases and Attorney General salary
increases.
�
$10 million for a pool of
funds for recruiting and retaining four-year college
faculty.
�
$10 million to raise
salaries for part-time community college faculty and pay for longevity and merit
increments.
�
$14 million for school
safety initiatives.
�
$8 million for �performance
school districts� which would be exempted from state rules and
regulations.
�
$8 million for focused
assistance to struggling schools.
�
$6 million for high tech
programs.
�
$3.5 million for alternative
teacher certification programs.
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$10 million for other
miscellaneous programs.
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$42 million for new
enrollments at four year and community college institutions, of which $17
million increases programs in high demand like computer
science.
�
$17 million for additional
financial aid ($9 million State Need Grant and $8 million for the Promise
Scholarship program).
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$7 million to start a new
state technology institute at the UW Tacoma Branch Campus.
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$23 million for other
initiatives including technology programs.
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$34 million for the DSHS
Children and Family Services division to reduce CPS caseworker ratios, expand
child-placing agencies and increase foster care
reimbursements.
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$14 million for Department
of Health a new childhood vaccine.
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$12 million is provided to
enhance developmental disabilities caseworker staffing
ratios.
�
$80 million (of which $3
million is from the general fund) is provided to support the state strategy to
recover salmon.
�
$7 million is provided to
stabilize the Department of Natural Resources fire protection program and to add
additional staff and equipment for the program.
�
$3 million new funding is
provided for the parks commission for ranger and visitor safety, parks
management and a Lewis and Clark interpretive center.
General
Government
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$22 million for debt
service resulting from new capital budget projects.
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$12 million to hire 70
additional auditing staff at the Department of Revenue to increase compliance
with existing tax laws.
The $1.1 billion in
Enhancements Is Paid For By (1) Making $484 million in Savings and Reductions
and by (2) Increasing the Spending Limit by $632 million.
�
$207 million in savings are
achieved by assuming a greater return on pension fund
investments.
�
State employees will be
asked to assume a greater share of the cost of their health care benefits,
saving $75 million. This proposal
will increase the average employee share of health care benefits from 6% to 10%
by the end of the biennium.
�
The Better Schools Fund is
reduced by $40 million by eliminating the professional development
component.
�
The state traffic education
program is eliminated in the second half of the biennium saving about $6
million.
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$23 million is saved through
a 2% across-the-board cut in higher education �non-instructional�
programs.
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The state-funded Medically
Indigent program is reduced by $34 million.
�
Eliminating Medicaid dental
services for most adult clients saves $20 million.
�
Reducing state mental
hospital populations by 32% and moving these clients to boarding homes saves a
net $10 million.
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Growth in the Developmental
Disabilities Volunteer Placement program is reduced by $11
million.
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Eliminating inflation
adjustments throughout state government saves $31 million.
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Eliminates funding for
vocational education in the Department of Corrections, saving $6
million.
The Governor adjusts the
I-601-spending limit in two ways:
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A proposed amendment to
I-601 to increase the spending limit for the cost of Initiative 732 (teacher
COLA) and all future voter-approved spending (+$325
million).
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Extensive use of the
so-called �two-way street� provisions of HB 3169 passed in the 2000 session that
permits the spending limit to be increased when revenues or programs are
transferred from non-general fund accounts, and moving some general fund
expenditure growth to non-general fund accounts. These adjustments are included in both
the 2001-03 budget and the 2001 supplemental budget (+$307
million).
� The Unrestricted Ending Balance is reduced from $480 million to $158 million. Most of what�s left in the unrestricted balance depends on the hiring of additional tax auditors at the Department of Revenue.
�
The Emergency Reserve
Account is reduced from $570 million to $433 million by spending some revenue
before it gets to the emergency reserve and through a proposal to spend an
additional $100 million of the reserve for
transportation.
�
The Governor�s Budget leaves
$75 million in capacity under the revised 601 spending limit for future
supplemental budgets.
The
Governor concurs with the Treasurer's recommendation to add 3/4% to the interest
rate forecast as a cushion for possible rate fluctuations. This approach
limits bond proceeds to $900 million for the biennium. This amount is $87 million less than the
1999-01 capital budget.
Approximately
$20 million of the Education Construction Account (ECA) is held in fund balance
for 2003-05 expenditures. (The Education Construction Account comes from the
excess revenue over the emergency reserve and was dedicated to education.
The Legislature change the threshold for spillover above the emergency
reserve from 5% biennially to 5% annually in the 2000 session
but that flow of funds was changed again by Initiative 728.
Now a portion of the lottery will flow to the Education Construction
Account).
The
Governor's budget does not assume any changes in the rules for school
construction funding. This is
primarily due to the fact that timber revenues and lottery funds to the ECA will
not sustain the current rules in future biennia.
Since the ECA may be spent
on either K-12 or Higher Education it adds to the discretionary level of the
budget. The Governor proposes
spending 1/3 ($97 million) of the
current balance of the ECA on higher education. More than half of that amount is
earmarked for the Community Colleges.
Expenditures
from the combination of bonds and Ed Construction Account total $1.2 billion in
discretionary capital spending, the highest since 1991.
Highlights
of Major Capital Expenditures Include:
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K-12 received $200 million
in bonds and ECA to supplement timber revenues and other dedicated funds to meet
the current construction program rules.
�
The Community Colleges
received $225 million in bonds and ECA. This amount goes further than any
previous budget proposal to meet repairs and renovations at the
CCs.
�
The 4-year colleges receive
$300 million in bonds and ECA for various projects. Major building initiatives
continue at UW Tacoma and WSU Vancouver. In general the Governor�s budget places
more emphasis on preservation and renovation than on new
projects.
�
Education (K-12 and
Higher Education combined) receives 65% of the discretionary funding in the
capital budget.
�
DSHS receives $90 million,
$53 million of which is earmarked for the Special Commitment Center (sex
offenders) at McNeil Island.
�
Housing receives $63 million
that is the same as the current biennium's appropriation.
�
The
proposed funding for the Washington Wildlife and Recreation Program (WWRP) is
$45 million in bonds. While the Natural Resources area including WWRP gets $136
million in bond. Of that amount,
$28 million is for salmon habitat restoration, $4.5 million is for the forest
and fish agreement, $11 million for hatchery reforms and $4 million for Yakima
Basin projects.
�
The recommendation for
General Government is $64 million in state bonds. $15 million for the Military
Department that funds both the Bremerton and Spokane armories plus other
preservation projects and finishes Yakima. The schedule for the School for the
Deaf is maintained with $5 million. And the various new projects (Seattle
Center, Ft Vancouver, Mirabeau Pt in Spokane, Chewelah Peak ELC) may
compete in a competitive grant process funded with $6
bond.