Chemeketa faces budget deficit and decreasing enrollment
At the end of the 2016-17 academic year, Chemeketa had its lowest enrollment numbers in over a decade. Moving into the 2019-20 academic year, administrators have predicted a further 3% decrease in enrollment, dropping the college to the lowest rate in comparable FTE (full-time enrollment) history, dating back to 1995-96.
Low enrollment means less income, and despite the recent 6% increase in tuition and fees, the school’s revenue has been outpaced by its costs, leading to a budget deficit.
“What we are playing with right now is a $2 to $3 million dollar shortfall,” said Chief Financial Officer Miriam Scharer.
In order to combat the deficit, Chemeketa is looking into various ways to cut down on spending. In the past, the school has attempted to avoid directly cutting employees and positions. “We recognize what happens is, that when we cut positions, it affects people’s lives, and also it affects the economy and affects students,” said President Julie Huckestein
Employee costs, however, make up a combined 78% of Chemeketa’s annual expenses, making it difficult to prevent cuts entirely. In 2017, Chemeketa left 17 vacant positions unfilled in an attempt to alleviate the deficit. Despite that, neither enrollment nor funding have improved enough to outpace the school’s costs since then.
“We are trying to avoid cuts,” said Huckestein. “But just like last year, it is very likely. More than likely that we will have cuts and also that we will have a tuition increase. Our financial model just won’t allow us to do anything different anymore. The amount of money that the state is providing, it gets to be less and less.”
“We are looking at all vacant positions,” said Scharer. “Do we eliminate? Do we not?”
Each biennium, the state provides funding to all community colleges in Oregon. The allocated funding for this biennium totals $570 million, of which Chemeketa receives around 10-11%. However, this funding only comprised 36% of the school’s income this biennium, with another 20% coming from tuition, and the remaining 43% coming from various sources including property taxes, fees, and leftover funds from previous years.
“We are asking $647 million from the state,” Scharer said. That amount would exceed the current state funding by $77 million. If that happens, that would be wonderful,” she said. “I don’t want to be the boy that cried wolf.”
The Oregon Department of Administrative Services (DAS), however, has proposed a more conservative 4% increase to $592 million for the 2019-20 academic year.
“That [4% increase] doesn’t really keep up with anything,” Huckestein said. “If you think, that is less than 4% over two years. That means only 2% per year, and our costs rise faster than 2% per year.”
Whether or not the school will receive increased funding from the state at all remains to be seen, as the final decision is not set to be announced until June 2019.
“One of the things we won’t know,” said Johnny Mack, Executive Dean of Career and Technical Education (CTE), “is how much money we will get from the legislature until late June. But with our faculty contract, we have to notify faculty in January.”
According to Huckestein, The 5-month gap means that budget management (including cuts) must be predictive, not reactionary, complicating the process.
“We are lucky to have a little bit of time,” said Huckestein. “But we have to make sure that we are right. We have to make those right decisions this year, and we have to make those for the following year as well.”
This is not the first time the school has faced a budget problem.
“We are used to this,” said Huckestein. “…It is cyclical. There’s always, there were years where we had to cut, and there are times we have money.”
“Back in 2004-2005, we went through kind of a similar process,” said Mack. “We are just looking at the data of each program and everything, and we’ll just make the best budget decisions for the college and community that we can.”
Starting this November, the school will be sending out “Budget Adjustment Worksheets” to each department in order to prepare for the coming biennium. In the past, they were known as “Budget Request Forms.’ But, as Scharer put it, “It seems very silly to have a budget request form when we are like, ‘please don’t ask for anything.’”
Chemeketa will be holding an All Staff meeting on Nov. 13 to discuss the issue. In April, 2019, the coming budget will be presented to the Budget Committee.