Community Colleges Coping With Cuts

While most community colleges face flat budgets and enrollment gains, GCC suffers 10 percent enrollment drop

Gila Community College Payson Campus

Gila Community College Payson Campus Photo by Andy Towle. |

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Question: What’s the best thing about getting beat with a stick?

Answer: It feels so good when they stop.

That sounds like a bad joke — but it nicely summarizes the budget year for community colleges.

At least, that’s one message that emerged from last week’s report to the Gila Community College board from Triadvocates, the college’s sometimes-controversial lobbying firm.

The independent consultant reported that GCC will lose another $28,000 in state aid in the upcoming budget year — but that’s because of the college’s drop in enrollment, not because of a decline in state funding formulas.

And that’s more or less the good news.

State spending on community colleges in fiscal 2013 dropped again from $71 million to about $66 million, according to a report by the Joint Legislative Budget Office. That’s a 7 percent decrease — although it comes in spite of a 7 percent increase in community college enrollment statewide.

But it sure beats the nearly 50 percent cut in 2012.

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Tom Loeffler GCC board member

Then again — to build on the beat with a stick analogy — GCC gets so little help from the state on account of its status as the state’s lone provisional community college that it hardly made any difference.

Perhaps the worst budget news to emerge from last week’s meeting was a 10 percent decline in GCC’s enrollment. That contrasts with a 7 percent increase in community college enrollment statewide. It’s especially striking since GCC has in the past several years reported some of the healthiest growth rates in the state.

GCC received $658,400 from the state in 2011, $428,000 last year — and can look forward to getting just $400,000 in the current fiscal year.

Every other community college in the state gets far more help from the state —especially other rural community colleges. For instance, Eastern Arizona College gets $4.2 million in basic aid from the state plus $17 million in “equalization” funding, intended to help rural colleges with a narrow property tax base. Navajo Community College gets $3.9 million in base aid and $6.6 million in equalization funding, according to the JLBC summary of community college funding for 2012-13.

The Legislature two sessions ago did approve a way for GCC to shed its provisional college status and presumably get more state assistance, although the legislation locked GCC out of ever getting the equalization funding other rural districts enjoy.

Triadvocates’ lack of success in winning equal treatment for GCC prompted board member Thomas Loeffler earlier this year to oppose renewal of the contract.

He also objected to Triadvocates’ representation of EAC, which Loeffler considered a conflict of interest since GCC’s contract with EAC to provide academic credentials and administrative services costs about $1.2 million annually. GCC’s budget totals about $6 million.

Still, the districts that have been getting equalization money now face deep state cuts. For instance, for 2013 the Legislature cut $7.4 million from the equalization fund, a 20 percent reduction.

The state budget has made a striking recovery from the plunge in revenue produced by the onset of the recession, when revenues dropped by nearly a third due to the state’s heavy reliance on sales taxes.

This year, the state budget projects a surplus, even after lawmakers set aside $450 million to restore the state’s “Rainy Day” fund.

So far, lawmakers have elected not to restore any of the cuts in funding for the state’s community college districts, which mostly raised their property tax rates and tuition rates significantly to compensate for the shortfall.

GCC’s lack of much state aid to start with cushioned the blow. GCC gets about two-thirds of its money from local property taxes, which the board voted to increase by 9 percent in the current budget year. GCC has the highest per-unit tuition in the state, although students taking three to six units get what amounts to a discount based on the rate structure, which tops out at about $1,200 for 12 units.

The district’s lobbyist reported that the Legislature voted to skip funding for capital improvements at community colleges, although existing formulas would have required a payment of $24 million.

Gila Community College remains heavily dependent on local property taxes, with another year’s decline in property values putting increased pressure on the budget.

GCC has a property tax rate of .68, which has risen 13 percent since 2011, according to the JLBC. Only Santa Cruz and Coconino counties have a lower combined primary and secondary property tax rate.

Surprisingly, EAC has the highest combined rate in the state — a whopping 2.14 — roughly three times GCC’s rate. The Safford community college has that high property tax rate despite collecting $21 million in state aid.

The JLBC’s figures show community colleges statewide operating revenue rising about 4 percent to $1.7 billion in fiscal 2012. That’s about half the increase in new students, which means another tight year for community colleges. Total spending comes to about $2.2 billion.

Statewide, community colleges get 42 percent of their operating revenue from property taxes, 23 percent from tuition, 4 percent from state aid, 25 percent from grants and 6 percent from other sources.

The JLBC numbers suggest that out of the total spending statewide, 23 percent goes to instruction and 11 percent to administrative support. Capital costs account for another 21 percent and 5 percent for operating things like bookstores, food service and businesses services. Much of the rest goes to debt service.

Scrambling to cope with dwindling assessed values and state support, community college districts statewide have scrambled to increase tuition. The JLBC report noted that the increases between 2011 and 2012 ranged from 17 percent at Coconino Community College to 5.3 percent at EAC. On average, tuition increased 8 percent.

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