State-wide Budget News

To colleagues at the Seattle Community Colleges –

Many of you are aware of news media reports this week on the continuing decline in state revenues. Today, we received the following information from the State Board for Community and Technical Colleges on the expected impacts to our budgets in the coming two-year period. Discussions will continue in the district office and at the colleges about the effects to our district budgets in light of this new information, and we will share information as it becomes available.

Dr. Jill A. Wakefield
Chancellor
Seattle Community Colleges


Presidents, Chancellors, and Business Officers:

Last week I sent you a message discussing the decline in the June forecast. State revenues have fallen by approximately $500 million, eating through the state’s unrestricted ending balance and leaving the state general fund almost $200 million in the red. Further, caseload forecasts (demand for public state services such as Medicaid, Corrections, and more) are expected to add $250 million in mandatory spending obligations. The Governor is reducing state spending beyond the cuts already levied to state government as a first step in addressing this financial deterioration.

Please see the memo from Victor Moore:
http://www.ofm.wa.gov/budget/instructions/other/implementgfsbudgetsavings070109.pdf

The community and technical college system's share of the cut is $13.526 million for the 2009-11 biennium. Therefore, we are planning to reduce colleges’ allocations for FY2010 by a total of $6.763 million. By making a permanent cut in the first year, we will carry it forward next year to achieve our total biennial target of $13.526 million.

We have used the same methodology to distribute this reduction that was used to calculate the FY2010 cut included in the initial allocation emailed May 22, 2009 (see attached spreadsheet for college district reductions). Denise Graham will send an official allocation to the business officers later this month that will reflect these reductions.

Victor Moore’s letter makes a strong point that the budget situation is likely to deteriorate further before any measurable improvement. The September revenue forecast will be pivotal in determining next steps for the Governor and the Legislature. This latest reduction is planned to be a permanent cut to your base.

We do not expect restoration, so you should not attempt to balance your local budgets with one-time sources of money or temporary changes on the expenditure side. With the exception of salary increases (legislatively frozen until next February), colleges retain the flexibility to spend as they choose, consistent with the state allocation requirements.

Cabinet agencies are being asked to further adhere to the various freezes (such as contracts, equipment, travel). While colleges may be well served to observe those freezes in principle, you are not required to reduce your spending in those areas. There will be no exemption request process, and we do not expect you to seek any permissions in fulfilling your local obligations.

Please let me, Chris Reykdal (360-704-4390), or Denise Graham (360-704-4350) know if you have any questions.

Charlie Earl

Charles N. Earl
Executive Director
STATE BOARD FOR COMMUNITY & TECHNICAL COLLEGES