Elson S. Floyd, Ph.D. - 3/17/11
The New State Revenue Forecast
The latest revenue forecast issued by the Office of Financial Management on Thursday provides another dose of sobering news.
Tax revenue continues to run below projections. The state's chief economist estimates that state tax collections will be down another $698 million for the 2011-13 biennium.
I recognize that this is another disheartening development for all of us who have been working our way through a series of budget reductions for the better part of three years now. When looking at this report, however, there are several points to keep in mind.
First, this does not come as a surprise. This latest shortfall has been widely predicted as state tax revenues have continued to lag. The larger deficit has been part of the discussions that I and other university officials have been having with state leaders in Olympia and our key stakeholders around the state in recent weeks.
Second, despite all the economic uncertainties, I want to report that those discussions have been most constructive. Most state leaders understand the importance of higher education and the impact that further cuts would have on access, affordability, and quality at Washington universities. When faced with a deficit of this size, legislators cannot promise to protect higher education. However, I do believe they are trying to come up with the best possible solution in the face of an economic circumstance that we have not seen since the Great Depression.
Third, during this session, our state's college and university representatives have come together in a true sense of collaboration and shared purpose. We sincerely believe that higher education is part of the long-term economic solution and WSU is working with our higher education partners and stakeholders for answers that will best serve our state in both the short term and the long term.
Fourth, there are signs of economic improvement ahead. Even though it has not significantly impacted the revenue forecasts yet, our state's unemployment rate is declining. Economists are seeing signs of slow and sustainable growth, which should be reflected in more revenues to support public services in the future.
We must, however, respond to current conditions, as opposed to promises of future revenues. Over the next two weeks, budget reductions that WSU is likely to face in the 2011-13 biennium will become clearer. The House and the Senate will each produce their own biennial budgets, which, along with the budget the governor released in December, will frame the discussion ahead.
I will continue to share information with you both about the likely size of impending reductions and about our process for adopting a budget for the upcoming biennium through this and other forums.
I assure you that we will maintain our focus on how to minimize the long-term damage to this great university and how to be well-positioned to achieve our goals as the economy improves.
Thank you all for your patience and for your hard work as this process goes forward.