The hard work on budget reductions looks like it is going to start sooner rather than later, and the numbers to remember may just be 4, 6 and 10, according to Shoreline Community College President Lee Lambert.
“The presidents met Friday, Aug. 27, via ITV,” Lambert said. “The main agenda item was the state budget and the implications for the community and technical colleges.” While details are not yet available, Lambert said the picture of general reduction targets is clearer and the timeline shorter.
“For this fiscal year, it looks like we’ll be asked to cut about 4 percent. We’ll be asked to show a 6 percent cut. Four is the more likely actual cut, but we just don’t know yet,” Lambert said. “Then, for the next biennium starting July 1, 2011, we’ll be asked for a plan that cuts 10 percent.”
Lambert said the starting point for these various plans will probably be the same, the original 2010-11 allocation. The deadline for submitting the general outline of the plans would also be the same, roughly Oct. 1.
“The Governor wants plans to her by Oct. 13,” Lambert said. “I’m hoping we’ll have some time to work out details because the Legislature will still have work to do.”
The primary reason behind the reductions is the economy.
“First, the state is anticipating that the Sept. 16 revenue forecast will show the state is underwater, basically broke,” Lambert said. The numbers provided to the presidents show a positive balance of $453 million in May has all but disappeared under a tide of red ink pushed higher by continued slow revenue collections. Another factor is lower federal Medicaid reimbursements despite the recent vote in Congress to continue Medicaid-related stimulus-package payments to states.
As of August, the state’s fund balance was down to $72 million, which is expected to be swept away by September’s predicted gloomy numbers, he said.
Anticipating the trend, Gov. Chris Gregoire said on Aug. 12 that state agencies should prepare to cut 4-7 percent, about $500 million total, from their budgets for the current fiscal year ending June 30, 2011. Lambert said the presidents heard that message again, with a little more definition.
“The Governor is expected to announce across-the-board cuts of 6 percent on Oct. 1,” Lambert said, adding that agencies would be asked to submit reduction plans by Oct. 13. What that means for Shoreline isn’t at all sure.
“While the Governor will ask for 6 percent, the federally required maintenance-of-effort threshold for taking the stimulus money would say about 4 percent for higher education,” Lambert said. Six percent would be about $74 million, putting the SBCTC share at about $38 million. However, if maintenance of effort is considered, that means about $48 million cut from higher education with about $25 million coming from the SBCTC.
“And, while recent cuts have distributed evenly across the colleges and it is likely they’ll continue in that fashion, there’s no guarantee,” Lambert said.
At this point, Lambert said, methods to achieve a 4 percent reduction wouldn’t likely involve layoffs and were identified back in July when a similar cut was anticipated. Those methods included:
Lapsed salaries from employees who leave and the positions aren’t filled
Tighter spending controls
Moving employee salaries off state funding support
Goods-and-services spending reductions
A 6 percent reduction plan might have to include people, Lambert said, adding that the 10 percent level must include staff restructuring. “The question is, looking ahead, what’s the right mix of cuts and when,” Lambert said. “And, we won’t have much time to decide.”