College Studies Bare Bones Budget

Rise in property tax offsets continued decline in state support for GCC

Larry Stephenson
GCC Board President

Larry Stephenson GCC Board President Photo by Andy Towle. |

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The Gila Community College Board last week had its first look at a hold-the-line budget, which would replace dwindling state aid with yet another boost in the property tax.

The $6.4-million budget features an $89,000 decline from this year, matching one of first enrollment decreases in years, said GCC Board President Larry Stephenson. That works out to a decline of about 1.4 percent.

Stephenson said, “It looks a lot like last year’s budget, with a few small improvements.”

However, he noted that once again the GCC Board had little input into the budget, due in part to continued communications problems involving the board and Eastern Arizona College, with which GCC contracts to provide a credential and manage its operations.

He noted that Senior Dean Cullen prepares the budget, then checks the figures with EAC, since he’s technically an employee of EAC, not of the GCC Board.

Stephenson noted that EAC has been making regular reports, but in a format that most of the board members couldn’t figure out. EAC and Cullen have agreed to start providing monthly updates in a streamlined, easier-to-understand format.

“The board did not have much input into this budget,” concedes Stephenson. “But what we did do is to set the stage in the last couple of meetings so that we can take that big budget number and break it down.”

He said the best news in the budget came in the form of a projected $300,000 carry-forward amount, which will cushion continued declines in state support compounded by a small enrollment decrease, a sharp break with the past couple of years when GCC had one of the fastest growing enrollment rates in the state.

He noted that state support fell from $418,000 in the current fiscal year to $410,000 in the fiscal year starting in June.

Ironically, GCC’s paltry levels of state support insulated it from deep cuts the Legislature has made in community college funding in the past few years. GCC remains a provisional community college, which means it gets far less per-student funding from the state than any other college district. GCC also doesn’t share in “equalization funding” intended for other rural community college districts that include so much federal land they have a narrow property tax base. If GCC did get that money on an equal basis with other community colleges, it would effectively double its budget. However, big drops in per-student and equalization funding have caused much greater budget traumas for better-funded districts in the past several years.

Stephenson said the board would discuss tuition levels at a future meeting prior to adopting a final form of the budget. The district has a relatively high tuition rate for full-time students, one of the lowest rates in the state for part-time students taking more than three units and bargain basement tuition for seniors — who pay about 25 percent of the full tuition bill. The board has fiddled with the rate for seniors. Several years ago, seniors could take classes for free. Then the board removed the tuition waiver for seniors, only to offer the discount when enrollment dropped.

The preliminary budget assumes no change in current tuition rates, although the board has scheduled a discussion of tuition rates in the next few weeks.

The budget also assumes a 2 percent increase in the property tax rate, the maximum allowed under state law. Currently, the owner of a $100,000 house would pay $73.10 to the community college district. If the board approves the 2 percent increase in adopting a final budget, that homeowner would pay an extra $1.47. The owner of a $200,000 house would pay twice that amount.

Although it’s only 2 percent, the increase could irritate some Payson homeowners. Various fire and school districts that rely heavily on the property tax have boosted their rate substantially; often to make up for dwindling state support as the Legislature diverts money from local governments to the state’s general fund. So even as homeowners see their appraised values shrinking, property tax bills have increased — in some cases substantially. The biggest share of that increase this year came from a rise in the rate levied by the Payson Unified School District, which not only set its rate as high as possible to compensate for plunging state support, but also ended up slapping on what amounted to a million-dollar surcharge in the wake of bad, year-end revenue and spending estimates in the fiscal year that ended last June.

Other property tax changes besides the rate increase resulted in a total increase in revenues from property taxes to $3.6 million, an increase of $116,000 over the current year.

The 3.3 percent increase in property tax revenue compensated for the 4 percent decrease in state assistance.

The Community College District still doesn’t know whether Gila County will agree to continue its $300,000 contribution to maintenance costs now that it has turned over ownership of the facilities to the district. Until recently, Gila County owned the campus’ land and buildings and contributed $300,000 annually to cover maintenance costs.

An overhaul of computer classrooms in both Payson and Globe remained the only significant new initiative included in GCC’s proposed budget. For the second year in a row, the state has cut all help on capital improvements for community colleges statewide. “So we’re going to spend some money for capital costs — and redo a couple of the computer labs in Payson and Globe,” said Stephenson.

Stephenson noted that the budget includes about $1.4 million to pay EAC for the management and the accreditation. EAC’s contract allows it to cover its costs by imposing a 25 percent overhead on everything GCC spends.

State Sen. Sylvia Allen last year pushed through legislation that will make it possible for GCC to eventually win its independence and seek its own accreditation. Unfortunately, the state’s other community colleges insisted on changes in that bill that will prevent GCC from getting things like equalization funding even if it does go through the years-long process of achieving independence.

Stephenson acknowledged that the budget for the upcoming year doesn’t include any extra money for the college to start shifting toward independence.

“That’s a question that will be dealt with the next year,” said Stephenson. “Independence is not a part of this budget year. With the board having input into the budget for next year, there will be an opportunity for such initiatives.”

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