Gov. Christine Gregoire presented her proposed 2006-07 supplemental budget package on Dec. 20, including a recommendation that Washington State University be given authority to issue bonds to build its $63 million Life Sciences building on the Pullman campus. The bonds would be paid for through proceeds from the university’s Land Grant fund.

Gregoire noted in a press conference that she actually asked for $45 million in funding for the biotech building last year, but that the Legislature took that item out of the budget and used the money to fund new branch campuses. “We found an alternate way,” Gregoire said.

Her proposed supplemental capital budget adopted a plan fashioned by Greg Royer, WSU’s vice president for Business Affairs, and Karl Boehmke, executive budget director. Because the money comes out of proceeds from the university’s own fund, it does not count toward the Legislature’s debt limit and it takes the project out of competition with other state-funded buildings.
Because this is a supplemental budget year, capital projects are normally not funded by the Legislature. The supplemental budget cycle generally is used to deal with “emergencies and adjustments,” said Deborah Carlson, the university’s associate budget director.

“I believe one of the most targeted industries the state of Washington has to offer is research and innovation,” said Gregoire. She said that is why she supported a “Life Sciences Discovery Fund” last year. That fund, paid by anticipated tobacco settlement dollars, could make research dollars in the health sciences available for scientists that will occupy the proposed Life Sciences Building. But Gregoire acknowledged that many of the biomedical research laboratories in the building also collaborate with agriculture.

Gregoire noted that WSU through President V. Lane Rawlins’ leadership is “ready to do the kind of research and innovation that will allow us (Washington state) to build an economy that is second to none … “that’s going to help us with our alternative fuels…So all of this is the single greatest investment we can make,” she said.

The governor’s proposal to build the Life Sciences building, the second building in a Pullman biotechnology complex, now goes to the state Legislature, which convenes Jan. 9.

Support in the Legislature for the proposal is growing but Senate and House leaders have been more reserved than many of the other members. House Capital Budget Chair Hans Dunshee, D-Snohomish, told the Spokane Chamber of Commerce forum last week that he was still considering the proposal. A Senate committee is considering holding a hearing on the issue on Jan. 17 in Olympia.
 
Life Science Discovery Fund

The governor also proposed $1 million to fund the administration of the Life Sciences Discovery Fund headed by Lee Huntsman, the former interim president of the University of Washington. The funding will allow the group private fundraising capacity to get the fund off the ground. The governor said the proposal has already seen a greater response from private donors than anticipated, “so I have asked for money to get that going.”
 
All of the emphasis on research will help Washington “reinvent itself” to stay competitive in the global economy,” she said.
 
The governor’s also suggests that money be provided to the University of Washington and WSU for permanent staffing for the UW-WSU “Policy Consensus Center.” The center, already with offices at UW and WSU, is overseen by an advisory board chaired by William Ruckelshaus. The Consensus center attempts to provide a neutral forum for discussion of issues and seeks to marshal resources and research that could lead to collaborative problem-solving by interests that can not otherwise find agreement.
 
A lean supplemental budget with targeted investments. The governor noted the broad swing in state revenue that has occurred since she became governor. Just about a year ago, the state was facing an estimated $2.2 billion shortfall. Now, driven by a boom in home sales, the supplemental budget is facing a $1.4 billion reserve. But the governor said the dangers of revenue swings means that she decided to put $904 million of the $1.4 billion into emergency reserves, an economic stability account, pension stabilization and unrestricted reserves.

She said she was proud of the biennial budget passed this year by the Legislature and intended to only make relatively small tune-ups in the supplemental budget to be considered by the upcoming Legislature.
 
Other spending

Much of the remaining funding was targeted for “technical corrections” or “required spending” for areas like human services caseload increases and K-12 enrollment.
 
Some of the technical corrections were significant for WSU. When the 2005-07 budget was passed, maintenance and operations funding was inadvertently left out for three capital projects.  The Governor’s budget adds $501,000 to fully fund maintenance and operations for Vancouver Student Services, a new building at WSU-Prosser, and the Spokane South Campus Annex renovation (F.O. Berg Building.)  WSU is analyzing new budget language restricting which buildings may be eligible for state funding in the future.

The governor put some funding in for schools and universities that were facing increased costs of energy to heat their building or fuel their vehicles. WSU’s share of that supplemental budget allocation by the governor was $913,000. She made “targeted investments” to make the state more “energy independent” including a $17.5 million bioenergy fund. The state Department of Ecology and Washington State University received $225,000 to partner on research into markets, products and potential for bioenergy development. Specific work, according to the governor’s budget notes, will include a pilot project to convert solid waste to biogas through anerobic digestion and to work with biomass. The source of the funding is the state toxics control account.

The governor’s remaining “targeted investments” were made in areas like improving early learning for pre-school kids, assistance in helping struggling high school students meet graduation rates, and enabling some community colleges to offer four-year degree programs. These strategies by the governor left many budget requests unfunded, including some proposed by WSU that sill appear to be live issues in the 2006 Legislature:

* Not funded by the governor was a coordinated technology transfer program that would identify and facilitate the movement of new research discoveries into the private sector where they can be developed by private businesses and assist in economic development. If the Legislature provides funding, UW and WSU intend to hire staff to work within selected academic programs to link with industrial needs. Some funding is requested to carry research that is too applied for academic funding yet not developed enough to attract industry investment.  The total WSU share of these requests for technology transfer is about $350,000.

* Not funded by the governor was $800,000 in supplemental funds to hire the necessary personnel for the “Ag Weathernet” system. The 2005 Legislature appropriated funds for WSU to fund upgrade and expand a system of weather-data stations from 65 to 135 sites throughout the state of Washington. However, no funds were appropriated for the meteorologist and technicians to actually operate this new equipment.

* Not recommended by the governor was $800,000 for a Biologically Intensive Agriculture and Organic Farming request know as “BioAg.”  Some legislators urged WSU to put forward a formal request on “BioAg,” and secure the first state appropriation for the “WSU Center for Sustaining Agriculture and Natural Resources.” Created by the Legislature years ago – but never explicitly funded – this academic center works on biological approaches to farming with natural systems. WSU is requesting $800,000 total in this area.