Funding Prospects for FY2009
Yesterday afternoon, March 24, we joined a conference call with Senator Evelyn Lynn, Chair of the Higher Education Appropriations Committee. It was not a pleasant conversation. Along with approximately 20 other community college presidents, we heard about possible appropriations that would be as much as 6 percent less than what was received this year after the cuts. In the current year, the SFCC budget absorbed two reductions for a combined $600,000 loss in state revenues. The first reduction was approved during the special legislative session last September, and we received official notification of the the second reduction last week after the governor signed the legislation. This 4 percent loss of state revenue comes during a year when enrollment is soaring, up 15 percent and climbing.
Community colleges, there are 28 in the Florida system, receive most of their operating revenue from the state. For SFCC, tuition and fees amount to only about 17 percent of general revenues. When the state economy is down and state revenues are down, community college funding declines. For our system, the challenges that come with budget reductions are compounded because when the economy is down, people who are out of work or who are underemployed go back to school to improve their career prospects–thus, the large enrollment increases. Add to this the squeezing out of students who want to attend one of the state universities, and you have the picture.
We did see this coming, fortunately! In late February of last year, several of us attended a briefing by a trusted finance and political guru who knows the state economy better than most. He warned us of the impending revenue shortfall. We learned some time ago to trust his forecasts, and we immediately began to reduce expenses. This is done by not filling vacancies that occur, freezing equipment and supply purchases, delaying new initiatives that are planned and budgeted, reorganizing to fill the voids created by the vacancies, and generally tightening our belts. We managed to drive up our ending fund balance for FY2007 by a couple of percentage points, and this, along with continuing similar efforts during FY2008, softened the impact of the current cuts.
And there was and is a silver lining. The enrollment increase brought increased tuition revenues, and we are able to enroll some additional students without adding significant costs, but there is a real limit to this. We also sought and received significant grant funding to support the expansion of the nursing program and the addition of the new radiography program. There was a bit of luck as well–good timing! The cuts came just as we were opening the new Health and Science Education Center. With this facility, and any new facility, comes additional funding–from a different source than our operating revenues–a source that had not declined. So our costs of operating the new facility, along with the new equipment and supplies, were mostly covered. We were also fortunate that the previous two years of funding were among the best ever for SFCC and community colleges, when the economy was good. We do our best to plan and budget for the long run, and it paid off. We’ll always accept good fortune when it shines on us.
Next year will be a very significant challenge! We won’t know the extent of the reductions until next month, or perhaps well into May. In the meantime, we are planning for all contingencies. Our first priority will be to make sure that our students have the classes they need, taught by the very best professors we can find, and that the faculty will have the supplies and equipment they need to do their jobs. Beyond that, we’ll endure until better economic times return, as they certainly will.