General Fund Projections

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General Fund Revenues

 

State Appropriation

For the 2013-15 biennium, the legislature approved $450 million for community colleges. This amount was later increased to $465 million contingent on state revenue forecasts meeting expectations. Community college funding was distributed in FY 2013-14 at the $450 million level and for FY2014-15 it will be distributed as if funding for the entire biennium were $465 million. This means state revenue will be higher in FY2014-15 than it would have been had the $465 million been equally distributed among both fiscal years. With the formation of the Oregon Education Investment Board (OEIB) in 2011, future funding is uncertain. OEIB was created for the purpose of “overseeing a unified system of public education from birth to college and career”. The overarching goal of OEIB is known as “the 40-40-20 goal”. This is shorthand for the commitment by the state to improve educational attainment. The Oregon legislature adopted the goal to ensure that, among the group of all adult Oregonians, 40% will have earned a bachelor’s degree or higher, 40% will have earned an associate’s degree or post-secondary credential, and 20% will have earned at least a high school diploma or equivalent by the year 2025. In support of the 40-40-20 goal, the Higher Education Coordinating Commission was formed and charged with overseeing  and coordinating all higher education in Oregon. Part of their responsibility is to develop funding requests and their methods of distribution. This is the cause of the funding uncertainty, fortunately community colleges are seen as a critical piece of the education continuum from birth to college and career and the achievement of the 40-40-20 goal. Any future additional funding for community colleges will likely be tied to the achievement of this goal.

Tuition and Fees

  • The tuition rate was kept the same at $80/credit hour. Total tuition revenue is expected to drop by approximately $1.8 million due to anticipated enrollment loss.
  • The universal fee was also kept the same at $14/credit hour. Universal fee revenue is expected to drop by approximately $190,000 due to anticipated enrollment loss. The distribution of the universal fee was approved to remain the same as the current year.

Property Taxes

Property taxes are expected to continue to grow at a low level. The assumed growth rate for FY2014-15 is 1%. Taxes imposed slowed to this rate in FY2012-13 and it is anticipated that the rate of growth will return to the capped 3% rate within a few years as the economy and housing market continue to improve. The factors that may slow a quicker return are:

  • For many individual properties, the assessed value exceeds the real market value.  Measure 50, passed by the 1997 legislature, stipulates that if this is the case, the taxable value will be the market value. The increased tax from the appreciation of some properties plus the addition of new taxable construction is partially offset by the loss of taxes from these properties.
  • The rate of tax default continues to be slightly higher than historical norms. This shows that the number of distressed properties is still a little higher than normal.

Miscellaneous Revenue

  • Miscellaneous revenue was increased to be more in line with the last two years of actual revenues. The budget for miscellaneous revenue was reduced to $1.1 million in FY2011-12 in anticipation of significantly less grant administration and interest revenues. These revenues were less than in the few preceding years but did not drop as much as expected. Since the last two years have shown consistent revenues, it was appropriate to increase the budget.
  • It is also anticipated that interest rates will remain low but continue to slowly increase.

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 in order to save for unanticipated revenue shortfalls. The college’s target for the ending fund balance is ten to fifteen percent of expenditures. Part of the 2011-12 fund balance was used in fiscal year 2012-13 and it is anticipated that additional amounts of fund balance will also be used in fiscal years 2013-14 and 2014-15 to help support the General Fund with the hope that the economy and resulting funding will rebound.