Community Colleges Still Evaluating Impact of Sequestration

Bit by bit, sequestration is making its impact: veterans are losing tuition reimbursements; public schools on American Indian reservations are trimming faculty and staff.

But Susan Muha, vice president of workforce and economic development at Cuyahoga Community College in Ohio, still isn’t sure how budget cuts will affect the school’s federal funding, especially for workforce development.

For example, the Cleveland-area college recently got a letter from the Department of Energy warning grant recipients to limit spending. When Muha called to follow up, she got different news.

“They said, ‘Oh, you’re under a different grant.’ It was from the stimulus funds, so that’s not affected.”

Such uncertainty about what’s included — and what’s not — means community colleges are at a standstill when planning on money for the next fiscal year.

The reduction, or sequester, is a $1.2 trillion package of cuts to discretionary and military programs. The legislation authorizing the cuts was passed two years ago and was designed to force Congress to reduce the national debt by presenting an onerous alternative.

That causes a clash of numbers. For example, President Obama’s 2013 budget requests $769.5 million for Workforce Investment Act training programs for adults. If approved, the program would be funded at the same level as in 2012. But the Department of Labor, which administers the money, warned that money for training programs will be reduced in July if the sequester continues.

According to the directive, the government will allocate $1.17 billion in WIA granta for dislocated workers, starting next fiscal year, compared to $1.23 billion this year.

The Department of Labor emphasized its directive was for planning and was not a “formal notification of allotment levels” because Congress hasn’t passed any appropriations legislation.

Theoretically, all federal spending is subject to a 5 percent decrease. But, as Muha found, some money from allotments that predate the sequester can be exempted. Such fluidity has her looking toward the next few months, trying to see what might be cut and when.

“As this rolls into place in the next three or six or nine months, you’re not sure if you’re affected,” she said.

Even without the sequester, community colleges are in limbo when it comes to some types of federal funding. Jim Hermes, associate vice president for government relations for the American Association of Community Colleges, said many administrations haven’t heard about the final status of their grant applications.

“In many cases, an institution wouldn’t know that they’re going to get a grant at this point anyway, so they’re not planning for cutbacks,” he said.

But the budget cuts mean less money from important pools, such as the Carl D. Perkins Career and Technical Improvement Act of 2006. Last year, the bill provided about $1.3 billion for technical education programs.

“Those go out on a formula basis. That money gets spread out to nearly everyone, and that’s money the colleges do plan on getting.” he said. “Now they’re planning on what they’re going to do less of with that money for the coming academic years.”

He also noted that the sequester will shrink money available for the next round of TAA grants.

“If sequester remains in effect, that program will be reduced by a little over $25 million,” he said, “So that’s either one big grant or several smaller grants. But it’s $25 million less in helping community colleges expand workforce training capacity.”

Here’s a sampling of the workforce development funding that Cuyahoga Community College got last fiscal year:

  • $330,000 in Workforce Investment Act or WIA vouchers. The money served 121 students.
  • $118,000 in Trade Adjustment Assistance or TAA vouchers for workers whose jobs moved overseas. That money went to 32 students.
  • $469,000 in Perkins Funds that financed multiple programs.

 

Although she isn’t sure about specific dollar amounts, Muha predicts that if the budget cuts aren’t lifted, there will be a significant slow down in the awarding of grants, the processing of grants already funded and in the approval of grant modifications.

“All of this will have an impact on direct delivery of training and services to people in workforce training programs,” she said. “When the employees of the federal government are furloughed one or more days in a pay period, significant work is not accomplished.

“Overall, this will delay training for people needing to obtain skills for entry level jobs, retraining of dislocated workers and other types of workforce support and assistance.”