Post by title1parent on Dec 4, 2009 6:21:53 GMT -5
www.dailyherald.com/story/?id=341640&src=76
Community colleges could lose half of state funding
By Madhu Krishnamurthy and Bob Susnjara | Daily Herald
In a troubled economy where rising unemployment is forcing throngs of jobseekers to return to school, community colleges offer a beacon of hope as a low-cost educational alternative.
Yet, a cloud of uncertainty hangs over the state's 39 community colleges, which could lose half their state funding this year, or roughly $148 million, despite seeing a 10 percent to 12 percent spike in student enrollment.
Colleges received the first of four quarterly disbursements from the state, due in August, just last week.
State officials confirmed the second funding installment originally scheduled for November could be delayed until May, which means the last two payments for the year would be pushed back until the 2010-2011 school year.
Colleges with healthy reserves will likely dip into their savings to make up for the shortfall, and institutions without that cushion are forced to make cuts.
"This is not a good time to be putting somebody out of work," Palatine-based Harper College President Kenneth Ender said. "We're going to look at some other remedies."
Harper College would lose $3.5 million from the state. The school's reserves stand at a little more than $50 million.
"From a cash-flow perspective, if the college needed to finance that $3.5 million (shortfall), we certainly have a sufficient fund balance to do that. That would be the last resort," Ender said.
The school is anticipating 5 percent growth in student enrollment this year but budgeted for only 3 percent growth. "If we end up with 5 percent, we are about $600,000 more on the revenue side (from tuition)," Ender said.
Not filling personnel vacancies unrelated to faculty would be another way to cut costs, he said.
Depleting reserves, though not the most desirable option, will bail out many colleges, but without more revenue coming in, the hole will only get larger, warned Ellen Andres, chief financial officer for the Illinois Community College Board, the agency that administers the state funds.
"Some of them are digging in to the point where it's going to get really close to making payroll," Andres said. "No matter what your size or what your wealth is, everybody is being hurt. Quite frankly, some colleges can't do it with only 50 percent (of state) revenues."
Further complicating matters, the state has other commitments such as repaying the more than $2 billion it borrowed for its own operations, which is due starting in March, Andres said.
"That's the worry - that cash flow might be off," Andres said. And state revenues are continuing to fall, she said.
Andres said that while the money would eventually come, it's not like colleges will receive six payments next school year to make up for the loss this year.
The chief financial officers of all community colleges are meeting today with Andres to discuss the funding delays. The meeting will run from 10 a.m. to 2 p.m. at Heartland Community College in Normal.
This isn't the first time the state has delayed payments to community colleges. Last academic year's fourth-quarter disbursement was made this August.
Public universities are in the same boat.
According to the Illinois State comptroller's Web site, the majority of payments out of the state's general fund will continue to be delayed more than 105 business days due to insufficient revenues. That number is expected to increase over the next several months.
State funding for community colleges, which by state law should be one-third of colleges' revenues, has long been dwindling. The funding level has dropped to about 8 percent on average. Colleges depend mostly on local property tax revenue and tuition to keep operating.
College of DuPage President Robert Breuder said he's lost faith in the state after seeing a continuing decline in its support for community colleges in funding for both operations and maintenance.
"I think what a good institution is doing is weaning itself off the state budget," said Breuder. "We're becoming quasi-private. We have to run colleges and universities like businesses. We can't continue to be dependent on state and federal funding. There's no other choice."
Breuder said to make up for this year's more than $5 million shortfall, the college will freeze hiring, curb unnecessary spending, encourage retirements, and cut courses such as massage therapy and medical transcription, which were already on the chopping block due to low enrollment.
The college doesn't want to dip into its reserves of roughly $50 million because officials are trying to grow the balance to 50 percent of operating expenses, or $155 million, the ideal target, he said.
Colleges likely will use more part-time teachers rather than hire full-time faculty to cut costs, he said.
Grayslake-based College of Lake County is bracing for cuts to supplies and travel, said Nancy McNerney, interim vice president of administrative affairs. The potential loss would not affect student programs funded mostly through local property tax revenue, she said.
Elgin Community College expects to cover the shortfall with its own reserves.
"It's a small piece of our revenue," said ECC's vice president of business and finance, Sharon Konny. "The college also is in a strong financial position."
Oakton will curb hiring and travel despite having a healthy reserve balance, said Carl Costanza, Oakton vice president for business and finance.
"We don't really want to take reserve money to do operating," Costanza said, adding though that the reserves likely will be used to cover at least part of the shortfall.
State revenues make up 7.1 percent of the college's $65 million operating budget this year.
"It will have a major impact on the college not to get that funding," he said. "We are very concerned and we're hoping that state can come through for us."
Community colleges could lose half of state funding
By Madhu Krishnamurthy and Bob Susnjara | Daily Herald
In a troubled economy where rising unemployment is forcing throngs of jobseekers to return to school, community colleges offer a beacon of hope as a low-cost educational alternative.
Yet, a cloud of uncertainty hangs over the state's 39 community colleges, which could lose half their state funding this year, or roughly $148 million, despite seeing a 10 percent to 12 percent spike in student enrollment.
Colleges received the first of four quarterly disbursements from the state, due in August, just last week.
State officials confirmed the second funding installment originally scheduled for November could be delayed until May, which means the last two payments for the year would be pushed back until the 2010-2011 school year.
Colleges with healthy reserves will likely dip into their savings to make up for the shortfall, and institutions without that cushion are forced to make cuts.
"This is not a good time to be putting somebody out of work," Palatine-based Harper College President Kenneth Ender said. "We're going to look at some other remedies."
Harper College would lose $3.5 million from the state. The school's reserves stand at a little more than $50 million.
"From a cash-flow perspective, if the college needed to finance that $3.5 million (shortfall), we certainly have a sufficient fund balance to do that. That would be the last resort," Ender said.
The school is anticipating 5 percent growth in student enrollment this year but budgeted for only 3 percent growth. "If we end up with 5 percent, we are about $600,000 more on the revenue side (from tuition)," Ender said.
Not filling personnel vacancies unrelated to faculty would be another way to cut costs, he said.
Depleting reserves, though not the most desirable option, will bail out many colleges, but without more revenue coming in, the hole will only get larger, warned Ellen Andres, chief financial officer for the Illinois Community College Board, the agency that administers the state funds.
"Some of them are digging in to the point where it's going to get really close to making payroll," Andres said. "No matter what your size or what your wealth is, everybody is being hurt. Quite frankly, some colleges can't do it with only 50 percent (of state) revenues."
Further complicating matters, the state has other commitments such as repaying the more than $2 billion it borrowed for its own operations, which is due starting in March, Andres said.
"That's the worry - that cash flow might be off," Andres said. And state revenues are continuing to fall, she said.
Andres said that while the money would eventually come, it's not like colleges will receive six payments next school year to make up for the loss this year.
The chief financial officers of all community colleges are meeting today with Andres to discuss the funding delays. The meeting will run from 10 a.m. to 2 p.m. at Heartland Community College in Normal.
This isn't the first time the state has delayed payments to community colleges. Last academic year's fourth-quarter disbursement was made this August.
Public universities are in the same boat.
According to the Illinois State comptroller's Web site, the majority of payments out of the state's general fund will continue to be delayed more than 105 business days due to insufficient revenues. That number is expected to increase over the next several months.
State funding for community colleges, which by state law should be one-third of colleges' revenues, has long been dwindling. The funding level has dropped to about 8 percent on average. Colleges depend mostly on local property tax revenue and tuition to keep operating.
College of DuPage President Robert Breuder said he's lost faith in the state after seeing a continuing decline in its support for community colleges in funding for both operations and maintenance.
"I think what a good institution is doing is weaning itself off the state budget," said Breuder. "We're becoming quasi-private. We have to run colleges and universities like businesses. We can't continue to be dependent on state and federal funding. There's no other choice."
Breuder said to make up for this year's more than $5 million shortfall, the college will freeze hiring, curb unnecessary spending, encourage retirements, and cut courses such as massage therapy and medical transcription, which were already on the chopping block due to low enrollment.
The college doesn't want to dip into its reserves of roughly $50 million because officials are trying to grow the balance to 50 percent of operating expenses, or $155 million, the ideal target, he said.
Colleges likely will use more part-time teachers rather than hire full-time faculty to cut costs, he said.
Grayslake-based College of Lake County is bracing for cuts to supplies and travel, said Nancy McNerney, interim vice president of administrative affairs. The potential loss would not affect student programs funded mostly through local property tax revenue, she said.
Elgin Community College expects to cover the shortfall with its own reserves.
"It's a small piece of our revenue," said ECC's vice president of business and finance, Sharon Konny. "The college also is in a strong financial position."
Oakton will curb hiring and travel despite having a healthy reserve balance, said Carl Costanza, Oakton vice president for business and finance.
"We don't really want to take reserve money to do operating," Costanza said, adding though that the reserves likely will be used to cover at least part of the shortfall.
State revenues make up 7.1 percent of the college's $65 million operating budget this year.
"It will have a major impact on the college not to get that funding," he said. "We are very concerned and we're hoping that state can come through for us."