The latest economic news out of Olympia has Shoreline Community College officials thinking about how to make immediate budget reductions.
Biting the hand
While facing continued budget reductions, the latest figures from the State Board of Community and Technical Colleges show demand is up in a number of areas, including:
The final 2009-10 annualized state FTES is 159,939, 9% higher than the previous academic year.
From an allocation stand-point, which includes university contracts and the University Center of North Puget Sound (UCNPS), the CTC system finished the year 16% over enrolled (roughly 21,500 FTES over the budgeted target).
Pre-College and Academic courses grew the most during the academic year by 14% and 11% respectfully.
Workforce enrollments grew by 9% while Basic Skills decreased by 3%.
Worker Retraining enrollments (11,011 FTE for Spring) remained at the same level as those generated during Winter quarter. The system produced slightly over 13,000 annualized FTES as was expected.
eLearning FTES continue to grow and are 34% higher than last spring at 27,874 state FTE and contributing to the year-end total of 30,587 FTES.
“The state’s economic forecast isn’t good,” said Shoreline President Lee Lambert. “We’re being advised by staff at the State Board for Community and Technical Colleges to reduce expenditures now.”
According to this month’s report from the state Economic and Revenue Forecast Council, June revenue to the state was 7.7 percent ($91 million) below the forecast, a target that had already been lowered $200 million from the February forecast. The Council report says the U.S. economy is at greater risk of stalling and that Washington’s “near-term economic outlook is weaker than anticipated in June.”
Budget advice to the state’s 34 community and technical colleges came in a July 15, 2010, message from Chris Reykdal, deputy executive director - finance, for the State Board.
“I feel like a broken record here, but please plan accordingly,” Reykdal wrote. “Reducing your spending trajectories immediately will mitigate, in part, some of the cuts that are likely coming. In other words, spread this cut over 11 months by taking action now.
“Waiting until it is official will only leave you with less and less time to make reductions for the current year.”
Lambert said it is instructive that the state system is now advising the approach Shoreline has taken for the past two years. “We’ve been proactive when and where we could be and it has helped to some degree,” Lambert said. “We’ll continue to do that, but now everyone is being told to do it.”
Shoreline’s Board of Trustees Chairman Jerry Smith said the situation requires action. “I believe the College must react quickly to these economic realities,” Smith said. “If we are to continue to serve students and the state, facing these facts sooner rather than later is advisable.”
While the economic trend is gloomy, of more immediate concern is word from the state Office of Financial Management that there is room under the American Recovery and Reinvestment Act of 2009 to cut another 4 percent from overall higher-education funding for the current fiscal year.
The ARRA, sometimes called the stimulus package, required maintenance-of-effort equal to 2006 funding levels. In his memo, Reykdal said the State Board was recently notified that state budget officials reviewed the language and believe the level could be $48 million to $50 million lower.
“Of that amount, about half could fall to the community and technical colleges,” Lambert said.
And that number gives Shoreline a potential budget-reduction target, said Vice President for Administrative Services Daryl Campbell. “Assuming the same formula used in recent cuts, Shoreline would be looking at cutting $800,000 to $1 million, this year,” he said.
Just how cuts of that magnitude could be made, given the short timeline and two-years worth of previous reductions, hasn’t been decided, Lambert said.
“However, go back to the list of reduction strategies that we’ve already considered,” Lambert said. “A plan could include holding positions open and using lapsed salaries, furloughs could be back on the table, much tighter spending controls and then reducing the number of employees and moving employees off state funding support.”
It won’t be just higher education in the budget cross-hairs.
“We are hearing that the most likely approach to addressing the potential current year shortfall is across-the-board cuts ordered by the Governor,” said the State Board’s Reykdall. “The other option is a second special session for 2010, but there is little appetite for that among legislative leaders. There are too many unknowns at this point to accurately predict the level of cuts, or our system’s share of those cuts, but a cut of at least 4 percent seems increasingly likely.”