Dire Financial Future Projected for U.S. Community Colleges

WASHINGTON – Hundreds of community college trustees and officials, meeting this week at the 2010 Community College National Legislative Summit, are girding themselves for projected state funding shortfalls in 2012 when stimulus funds will dry up and recessionary budget gaps are expected to swell.   

During a Thursday policy session at the annual legislative summit organized by the Association of Community College Trustees (ACCT) and the American Association of Community Colleges (AACC), officials presented a bleak outlook for states and the recession’s potential long-term effects. Without stimulus money, higher education is poised to see deeper drops in funding than the projected revenue gains resulting from record high enrollments, summit speakers cautioned.   

Collectively, states’ budgets have shrunk since last year about $628 billion or 5.4 percent in the 2010 fiscal year. Additionally, $56 billion has been cut and 36 states are still looking at greater shortfalls, said Daniel Hurley, director of state relations and policy analysis for the American Association of State Colleges and Universities (AASCU).

Hurley, a legislative summit speaker, has been compiling data from the National Governors Association and other sources to assess each state’s higher education investment. Nationally, state support decreased 2 percent in 2009, but was offset by 1 percent increase with monies from the State Fiscal Stabilization Funds. States are increasingly relying on federal money to fund their schools; in 2010, state support dropped 3 percent, according to Hurley.

To neutralize depleting funds, state legislatures have passed record tax increases of about $24 billion but the economic forecast shows no signs of massive improvement through 2014, Hurley told summit attendees.

Meanwhile, community college enrollments have jumped about 16.9 percent in the economic downturn, according to an analysis prepared by the summit’s conveners.

Mary Davenport, director of government relations for the Minnesota State Colleges and Universities, said states are resorting to spending cuts to balance budgets, putting more pressure on school system trustees.

Using her state as an example, Davenport said Minnesota’s 32-school higher education system faced a 7.5 percent reduction in state funds that was lessened to 3.2 percent with money from the American Recovery and Reinvestment Act of Congress.

But the clock is ticking for trustees, who need to make tough budget decisions with complex financing and reorganization schemes are trying to figure out how to make the best decisions for students with less revenue. For many, that means increased accountability and more emphasis on productivity, performance, and efficiency, she noted.

Davenport said that in Minnesota and across the U.S. there is more talk about consolidating, streamlining and possibly eliminating  academic programs than ever before. They are also looking at cutting administrative costs, providing early retirement for tenured faculty and cutting academic programs, she added.

“It may seem a long ways away now but planning needs to take place to balance those budgets before the 2012 biennium begins,” Davenport warned.

To help fend off estimated revenue shortfalls, community college advocates and trustees have begun to throw their support behind the Student Aid and Fiscal Responsibility Act (SAFRA), a bill that includes President Barack Obama’s American Graduation Initiative (AGI), which is expected to yield $12 billion in competitive federal grant funding for higher education institutions, officials said Thursday.

The Obama administration has targeted community colleges as a central component in its plans to make the U.S. the world leader in degree completion. On Thursday afternoon, members of the AACC and ACCT members met with legislators on Capitol Hill to urge SAFRA’s passage.