Update on College Budget: Reality vs. Rhetoric

Late Sunday, Apr. 27:

A quick report, more soon.

It’s important to be clear about the budget process, including what is supposed to be happening, what is actually happening, where things are now, and what we can expect in the days to come.

What is supposed to be happening:  The college’s Budget and Finance Subcommittee, with representatives of the Administration, Managers, Classified Staff Federation, Student Government, and Faculty Association, is supposed to recommend a budget to the President, and through her to the Board of Education.  The Subcommittee had succeeded the last two years in developing a consensus proposal, despite the different interests and views of the five groups represented in our governance system.

What is actually happening:  Despite Administration reports that it would have its budget recommendations months ago (January 27 according to the College’s webpage), the Administration only provided its recommended budget last week, and several of the key figures were only at the aggregate level, making it impossible for stakeholders to understand or fully consider the proposal elements.  We only received the list of proposed position vacancies to be kept open this weekend, with the Board of Education scheduled to receive a budget recommendation Monday evening.

After seeing the Administration’s proposal, most of the other stakeholder groups offered their proposal to balance the budget, incorporating some of the Administration’s proposals, revising some, adding others.  It is at this point that the Subcommittee can finally work through the differences, as we successfully did the last years.  A meeting has been proposed for Monday so that we can work through our proposals; I’m optimistic that such a meeting would be very productive.  It isn’t clear, however, if the Administration will agree to meet, as it seems this year to prefer to make all such decisions unilaterally.  The Association remains hopeful that a meeting will happen and that consensus can be found.

The oddest aspect of the Administration’s proposal is that despite saying time and time and time again that “cutting people is the very last thing we want to do,” the Administration has a plan that would nearly balance the projected budget deficit, leaving only $1.6M to be addressed, but then, rather than propose to use existing resources or slightly raise the tuition rate, the Administration is proposing to cut programs and do the very thing they say would be their last choice.  This is especially odd since the President asked the Board of Education at a recent Board meeting whether they wanted to consider raising the tuition rate as part of the budget process this year, and while none of them (or us) liked the idea, only one or two indicated they wouldn’t consider it.  So why isn’t it even listed as an option in the Administration’s plans?
Of course, we are highly skeptical that cutting programs would actually save any money since, as President Spilde has publicly noted, virtually all of our programs bring in more revenues than they cost, making it clear that President Spilde’s plan to eliminate college programs has little to do actually balancing the budget, and would likely actually hurt it.  Maybe that’s why it has not been presented in any of the Administration’s “options” lately; the cuts really have nothing to do with the projected deficit.
Attached find an Excel file that we developed in order to make the actual financial conditions of the college more clear, and to see how they have changed over the last ten years.  The data come from the annual college audits, and show the main components of the college budgets, and compare the Budgeted figures with each year’s Actual figures.  A few things stand out:  the bottom right corner of the first worksheet shows the General Fund balance at the end of the year (after adjusting for the “fifth quarter payment” after the end of the biennium into the fourth).  As you’ll see, we were in MUCH worse shape in 2005, 2006, 2007, and 2008 than we are now; at the end of 2011 we had a $21M balance, and are still projected to have an $8M or more balance at the end of this year.  Clearly, revenues have fallen off with the decline in enrollment, but we are hardly about to fall off the cliff this year.

Many might ask, but isn’t there a $12m deficit projected, which would more than eat up the $8M?  But consider that the College’s official budget typically projects to spend $7M a year more than it actually does, and that’s AFTER all of the typical “crisis” driven steps are taken to “eliminate” the projected deficit.

The reality is that while we all need to work on supporting true state revenue reform, controlling costs, using existing resources, and slightly raising the tuition rate and other revenue sources will balance the deficit next year, without cutting college programs and laying off faculty and staff.  Cutting programs is wholly unnecessary, and would largely make matters worse, not better, by reducing the primary source of revenue (tuition and state support based upon Student FTE).
We strongly encourage the faculty to come to the Board of Education meeting Monday at 5:00 p.m. in the College Boardroom, and urge the Board, in the strongest way possible, to not support the Administration repeating the mistake it made twelve years ago when many programs were eliminated under similarly flawed logic and dozens of faculty positions disappeared, along with the tuition and state revenue they would have brought our college.
We will send the proposals being discussed at the Budget and Finance Subcommittee, hopefully after progress is made in reaching a common proposal that balances protecting our college and limiting the impact on students.  The Student Government President has proposed a $3 hike in the tuition rate, which is $3 more than the Administration has; surely rational heads can work this out, unless, of course, the Administration simply wants to use their (inflated) budget projections as an excuse to eliminate programs that they don’t support.

More tomorrow,
Jim Salt
LCCEA President

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