General Fund Projections

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General Fund Revenues

 

State Appropriation

At this time, the level of state funding for the 2013-15 biennium is unknown.  The Governor proposed $428 million for all community colleges.  A proposal from the Joint Committee on Ways and Means recommends funding community colleges at a level no less than the Governor’s budget and includes a strategy to withhold two percent of the second-year funding to help mitigate the impact of a potential downturn in the economy.  If economic conditions remain as currently projected, the funds would be released after the February 2014 legislative session.  It’s likely that the final amount of biennial funding won’t be known until just prior to the adoption of the FY2013-14 budget.  The college has decided to budget state revenue using a $428 million appropriation.  The legislature’s desire to fund community colleges at the $428 million level depends on their ability to reduce PERS costs, healthcare, and corrections.  Based on the uncertainty of past funding, the expenditure budget was built on a $410 million appropriation.  Eight hundred and twenty thousand dollars, the amount equal to the difference in funding at $428 million and $410 million, has been placed in an expenditure contingency fund.  This allows for a designated control of the budget and expenditures.

Tuition and Fees

  • Increased the tuition rate by $2/credit hour from $80 to $82.  This is estimated to generate $500,000.
  • Increase the Universal Fee rate by $4/credit hour from $10 to $14.  This is estimated to generate $1,600,000.  Three dollars of the rate increase, or an anticipated $1,200,000, will be reflected in the General Fund.  The remaining $1 is expected to generate $400,000 and will be in the Self-Supporting Services Fund.  The increase in the Universal Fee is targeted toward student success initiatives.

Property Taxes

Property taxes are expected to grow at a very low level historically.  The assumed rate for FY2013-14 is 1%.  Taxes imposed slowed to this rate in FY2012-13 and it is anticipated that they will remain in the range of no growth to very slow growth for the next few years or when employment and the housing market improve.  The two reasons property tax revenues have declined are:

  • Assessed and real market values are rapidly approaching one another.  Prior to the recession and the decline in housing values, the ratio of assessed value to market value was typically about 50%.  However, property values have significantly declined and assessed values have continued to increase by about 2-3% per year.  There are many individual properties where the assessed and market value are now equal.
  • An increase in the rate of default on taxes paid.  The rate of default has been higher than the long-term average for the past three years.  This is likely the result of higher than normal unemployment.

 

Miscellaneous Revenue

  • Miscellaneous revenue was budgeted conservatively since the amount generated from indirect rates is expected to continue to be lower than average. 
  • It is also anticipated that interest rates will remain at historic lows limiting the amount of interest revenue received.

Fund Balance

The college slowly grew the ending fund balance over nine years to just over $9.4 million at the end of fiscal year 2011-12.  The college’s target for the ending fund balance is ten to fifteen percent of expenditures.  It is anticipated that portions of the 2011-12 fund balance will be used in both fiscal years 2012-13 and 2013-14 to help support the General Fund with the hope that the economy and resulting funding will rebound.