Tuesday, December 22, 2009

Bonding hearings announced; President signs appropriations; Congress works on Jobs bill; Student Aid and Fiscal Responsibility update

Bonding hearings scheduled prior to the start of session with the hopes of an early bonding bill

Lawmakers have been busy this fall traveling the state to gain a better understanding of the bonding projects being requested this upcoming session. The Minnesota State Colleges and Universities campuses have collectively hosted the House and Senate Capital Investment committees and Minnesota Management and Budget Commissioner Tom Hanson at more than 50 visits.

The 2010 legislative session does not convene until Feb. 4, but bonding presentations will begin next month at the Capitol. The Minnesota State Colleges and Universities system is scheduled to present its $396.8 million bonding request to the Senate Higher Education Budget and Policy Division Tuesday, Jan. 12. The system is scheduled to be before the House Higher Education and Workforce Development Finance and Policy Division the last week of January (details are still yet to be confirmed). Once the higher education committees hear the bonding request, they will make a recommendation to the Capital Investment committees early in session.

Legislators have said they hope to pass a large bonding bill early in the 2010 legislative session in order to help the state’s slumping economy. Lawmakers are hoping the passage of a capital investment bill early in the session would put more people back to work.

You may view the complete Minnesota State Colleges and Universities 2010 capital budget request here.

President signs the consolidated appropriations bill

Late last week, the House and Senate passed the FY2010 consolidated appropriations bill that combines the Transportation; Commerce, Justice, Science; Financial Services; Labor-Health-Education; Military Construction, Veterans Affairs; and State Foreign Operations Appropriations bill. Total funding for the six appropriations bills is $446.8 billion. President Obama signed the bill into law Dec. 16.

Chairman of the House Appropriations Committee, Congressman Dave Obey, D-WI, said, "The bill before us today is one of the key measures Congress will pass this year to help provide relief for millions of hard-working Americans caught in a struggle for economic survival."

Highlights of the bill include nearly $110 billion to meet veterans needs, including the expansion of the GI Bill education benefits. There is also funding to help veterans transition to civilian workforce, including $6 million for a new college-based Centers of Excellence for Veterans Success initiative by the Education Department to provide academic, counseling and support services for veterans seeking to use their new GI education benefits.

The bill also funds the Dislocated Worker Employment and Training program at $1.4 billion, a 5.3 percent increase over last year, for training and support services for workers affected by mass layoffs and plant closures. $125 million is included for competitive grants to community colleges and local adult education providers to prepare workers for careers in high-demand and emerging industries. Also included is $103 million for YouthBuild and $1.7 billion for Job Corps, to provide training, counseling and educational opportunities to low-income kids.

The bill includes $400 million for the Teacher Incentive Fund, which supports school districts and states aimed at rewarding effective teachers and schools through compensation systems tied to student achievement results. Also included is $256 million to support the start-up of over 1,300 new charter schools in FY2010. And $250 million is included to transform Striving Readers into a new comprehensive literacy initiative from pre-K through grade 12 to help struggling students build their literacy skills and improve the integration of reading initiatives across the Dept. of Education.

The bill includes $17.495 billion to maintain the discretionary portion of the maximum Pell Grant award at $4,860, which, combined with a mandatory supplement of $690, is a $5,550 maximum Pell Grant in FY2010. This is an increase of $200 over FY2009 levels. $853 million is appropriated for TRIO programs ($5 million increase) and $323 million for GEAR UP ($10 million increase) to assist approximately 1.6 million disadvantaged and first-generation students prepare for, enter, and complete college.

$603 million is appropriated to strengthen the capacity of Historically Black and Predominantly black Colleges and Universities, Hispanic-serving Institutions, Tribal Colleges and Universities and Native American-serving Institutions, Asian Pacific Islander, and Native American Institutions. In addition, the bill provides for $178 million in new loan guarantees for Historically Black College and University facilities.

Adult Education received $628 million (an increase of $74 million), while Perkins Career and Technical Education funding remained flat at FY2009 levels. The bill also supports President Obama's commitment to increase the funding for scientific research and provides nearly $7 billion ($436 million increase) to the National Science Foundation. And $31 billion was included for the National Institutes of Health for biomedical research.

And the bill includes $244 million for nurse training (an increase of $73 million). The Health Resources and Services Administration estimates that the nation's nursing shortage will grow to more than one million nurses by the year 2020.

Congress works on "Jobs for Main Street" bill

The U.S. House of Representatives passed the "Jobs for Main Street Act, 2010" Wednesday by a narrow vote of 217-212. The bill includes $154 billion in funding for a number of initiatives aimed at creating or retaining jobs and extends unemployment insurance and other crucial safety net programs. The Senate is not expected to take up the bill until after the new year.

The American Association of Community Colleges reports that there is $23 billion in the bill dedicated to the Education Jobs Fund. These funds would go to the states under provisions established in the American Recovery and Reinvestment Act (ARRA) State Fiscal Stabilization Fund. Of the funds that go to the states, at least 95 percent must be allocated to elementary, secondary and public higher education to help retain and provide on-the-job training to existing employees, and hire new employees to provide educational or related services or for modernization, renovation and repair of facilities.

Governors would have discretion on how to allocate these funds within the states, but would be required to do so in proportion to any reductions in state funds for elementary and secondary education and public institutions of higher education.

The bill also provides $1.25 billion of additional funding for Department of Labor training programs. $500 million of this total would be earmarked for summer youth employment programs and $750 million would go to competitive grants for worker training in high growth and emerging industry sectors.

Upon passage of the bill by the House, President Obama said, "All over our country this holiday season, Americans who lost their jobs in the Great Recession are looking for work. Today the House answered with some productive ideas to respond to this great need, offering new initiatives including repairing our roads and bridges, providing relief to Americans who have lost their jobs and preventing layoffs at the state and local level."

Update on Student Aid and Fiscal Responsibility Act

In September we reported that the U.S. House of Representatives passed the Student Aid and Fiscal Responsibility Act, which contains the community college initiative, guaranteed increases in the Pell Grant maximum, and changes in financial aid, such as simplifying the FAFSA form. Funding is available for these initiatives and others in the bill, by requiring that all institutions begin participating in the Direct Loan program by July 2010. There has been an estimated $80 billion cost savings over 10 years from moving to the Direct Loan program.

The Senate has been working on its version of the bill, but it is likely there will be no Senate action until the new year.

Conversation with Secretary of Education Arne Duncan

U.S. Secretary of Education Arne Duncan met with American Association of State Colleges and Universities presidents and chancellors late November at the AASCU Annual Meeting. The Secretary communicated the Administration priorities as they relate to public higher education and encouraged presidents and chancellors to engage in a dialogue regarding policy issues of mutual interest. You may view this conversation here.

Postsecondary collaboration in Race to the Top

The American Recovery and Reinvestment Act of 2009's Saving and Creating Jobs and Reforming Education fund provides "Race to the Top" competitive funds to improve statewide education quality and to drive substantial gains in student achievement. Achieve (an independent, bipartisan, non-profit education reform organization based in Washington, D.C.) has created a Race to the Top Higher Education Tip Sheet. You may view that sheet here.

Legislative Commission addresses budget

The Legislative Commission on Planning and Fiscal Policy’s Subcommittee on a Balanced Budget has been meeting to address the state's budget and the forecasted deficit. As a reminder, a $1.203 billion deficit is being projected for the FY2010-2011 biennium due to an extended weakness in the economy. For the next biennium, 2012-13, a $5.426 billion deficit is being projected.

According to Senate Lead Fiscal Analyst Matt Massman, and House Chief Fiscal Analyst Bill Marx, a 7.6 percent cut would be needed to solve an estimated $1.2 billion deficit in FY2011. If that cut was made permanent, the state would still need to cut an additional $3 billion, or 8.9 percent, in fiscal years 2012 and 2013. Legislators and the governor will begin putting forth budget recommendations in order to solve the deficit.

You may review the complete forecast materials here.

Special election to be held Jan. 26

Sen. Dick Day, R-Owatonna, is stepping down after 19 years in the Senate to lobby for state-backed racetrack gambling. He will become president of Racino Now, a group funded by horse owners to push for slot machines at Canterbury Park and Running Aces Harness Park.

Gov. Tim Pawlenty has set the special election for Sen. Day's seat for January 26. If a special primary election is necessary, it will be held Jan. 12, 2010.

Government Relations goes virtual

Find up-to-the-minute information on legislative happenings on the government relations facebook page,
twitter, or the government relations blog. These virtual ports are designed to keep folks updated about legislative happenings as they relate to higher education.

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