The Senate operating budget proposal includes a mostly hidden swap of higher education funding for the Washington Student Achievement Council (WSAC) that would result in more spending from the workforce education investment account (WEIA).

First, some background on the WEIA: The account may be used for higher education purposes, and it “must be used to supplement, not supplant, other federal, state, and local funding for higher education” (RCW 43.79.195). Revenues from the business and occupation tax surcharge that was adopted in 2019 are deposited in the WEIA. Additionally, the WEIA is a fund subject to the outlook (NGFO).

Now, to the mystery: As I noted earlier this week, the Senate proposal would transfer the $150 million that is currently in the Washington student loan account (WSLA) to the WEIA. (Note that the $150 million in the WSLA was originally funded with $39 million from the WEIA and $111 million from the general fund–state.)

The governor’s 2023–25 budget proposal would appropriate $245.2 million from the WEIA for new policies, and the House Appropriations Committee chair’s proposal would appropriate $238.7 million from the WEIA for new policies. The Senate proposal would appropriate $283.2 million from the WEIA for new policies. However, the Senate proposal’s new WEIA appropriations would include $141.2 million in various policies plus $142.0 million for a “fund source alignment.”

This “fund source alignment” is described in the agency detail report (one of the interactive data reports available at fiscal.wa.gov) for WSAC in this way: “Funding is shifted from General Fund-State to the Opportunity Pathways Account and the Workforce Education Investment Account.” The report shows that, for WSAC’s student financial assistance program, this policy would reduce spending from the general fund–state (GFS) by $167.0 million, increase spending from the WEIA by $142.0 million, and increase spending from the opportunity pathways account by $25.0 million.

Because the GFS, the opportunity pathways account, and the WEIA are all part of NGFO, this shift has a net zero impact on the NGFO. Thus, it does not show up in the budget summary document.

It also does not explicitly show up in the budget bill itself. However, the budget bill specifies how much would be appropriated for the Washington college grant program by fund (see Sec. 612(2) of the bill that was approved by Ways & Means). Comparing that section to the same section in the budget bills proposed by the governor and the House chair shows that the Senate proposal is effectively shifting more responsibility for the Washington college grant to the WEIA and the opportunity pathways account and away from the GFS.

For example, both the governor and the House chair would appropriate $552.8 million from the GFS for the Washington college grant. The Senate would appropriate exactly $167.0 million less from the GFS than in the other two proposals and increase the amounts from the WEIA and the opportunity pathways account.

For 2023–25, the one-time influx to the WEIA from the WSLA essentially covers the cost of the increased responsibility for the college grant. But is this a one-time funding shift, or does the outlook assume it will be continued?

I estimate that the Senate proposal would leave a rather large ending balance in the WEIA of about $149 million in 2023–25. (The ending balance in the House proposal would be about $43 million.) This suggests to me that the outlook assumes that the shift to WEIA would continue, but none of the budget documents provide clarity on that point.