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*State budget problem now $2.6 billion

Sources of $2.6 Billion Shortfall

Revenues dropping
- $686 million      June Forecast
- $238 million      September Forecast
- $760 million      November Forecast
- $154 million      Tax Lawsuit Pending
- $1.84 billion      Subtotal

Costs Rising, Issues Emerging

- $659 million       Demand for health care, schools, prisons
- $12 million         Forest fires, landslides, dam failures, other

- $71 million         Lawsuits blocking planned cuts
- $742 million      Subtotal

- $2.6 billion     Total



Chart from SBCTC staff reviews issues related the state budget deficit.


As anticipated, the projected hole in the state budget got deeper when officials announced Thursday that the expected deficit is now $2.6 billion.


“As Gov. Gregoire said a week ago, ‘This is dire,’” Shoreline Community College President Lee Lambert said Thursday afternoon, Nov. 19, 2009. “The previous forecast put the problem at $1.8 billion, but most people thought it would slide to at least $2 billion, maybe a little more. This is worse than we expected.”


Lambert said the new revenue forecast makes SCC’s planning efforts now underway all the more urgent.


“The subgroup formed from the Budget and Strategic Planning committees is meeting this month,” Lambert said. “They’ll make recommendations and assist college administrators as we look for ways to deal with the budget cuts that are undoubtedly coming our way.”


Previously, officials from the State Board of Community and Technical Colleges said, as a best-case scenario, colleges could expect to be asked to cut an additional 6 percent from their budgets. A worst-case scenario would be double that, 12 percent. For Shoreline Community College, those percentages would translate to $1.2 million to $2.4 million.


Just how potential impacts would be felt aren’t well known at this time. While the state budget is definitely in trouble, strings attached to the acceptance of federal stimulus package money may tie lawmakers’ hands.


“Through our conversations with OFM (the Office of Financial Management), House and Senate staff, we continue to believe that the maintenance-of-effort requirements that are attached to federal stimulus dollars, places some protection around education (including higher education),” said Chris Reykdal, of the SBCTC staff. “As we’ve mentioned before, the current estimate is that higher education institutions can’t be cut by more than $80 million in total for (fiscal year) 2011.”


 However, Reykdal cautioned that there are variables such as the federal restrictions don’t cover financial aid, the restrictions are based on interpretations of U.S. Department of Education rules and it isn’t clear how the Legislature might choose to spread any anticipated higher-education cuts.


Reykdal called the coming choices for lawmakers, “gut-wrenching.”


“There will be tremendous pressure to spread the pain more evenly across all of the major functions of state government,” Reykdal said. “Message: higher education will have a target on its back, and the $80 million fence … is not a guaranteed protection.”

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