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President's Budget Message

In preparation for writing this budget message, I took some time to read through the budget messages from the past five or six years. Two common threads run through them. These two threads are the reductions in funding levels from the Oregon legislature and future resource uncertainty. Unfortunately, the budget proposed in this document also continues this theme of reductions in funding and uncertainty.

Oregon’s economy, measured by the current double-digit unemployment rate, is among the state economies hardest hit by the world-wide economic recession. Although the official economic forecast for Oregon will not be issued until after this budget is made public, all the indications are that the legislature will have very difficult decisions to make.

While preparing a balanced budget in the current economic environment has been difficult, this year’s budget is not my biggest concern. With a combination of revenue increases, expenditure reductions, reserves, and Federal stimulus dollars, we will be able to weather this first year of the biennium. The bigger concern for me is the longer-term economic sustainability of Chemeketa and other educational institutions both regionally and nationally.

Education, in general, continues to take an increasingly larger portion of federal, state, and local budgets. At Chemeketa, our costs continue to grow faster than our revenue. This is not sustainable. Additionally, we have limits to how much we can raise our tuition, cut expenditures, or use our reserves. Federal stimulus dollars are certainly unique to our immediate situation. We must continue to explore strategies which move Chemeketa forward and create a more sustainable level and method of operating through these challenging economic times.

What follows this budget message is Chemeketa’s proposed budget for the 2009-2010 year. The first section is the proposed budget for the General Fund, which is the operating fund of the college. The General Fund is followed by the proposed budgets for Other Funds. A short summary of the significant changes in those funds is at the end of this budget message. The last section of the budget contains appendices and indexes.

General Fund:

The principle sources of revenue for the General Fund are tuition and fees, funding from state sources, beginning fund balance, and property taxes. Included in this budget is an increase in tuition from $61 to $70 per credit hour, a 14% increase from 2008-2009. Even with this significant increase, Chemeketa’s tuition remains close to the state average for community colleges and is significantly lower than the tuition of Oregon’s public universities. In addition, the universal fee has been increased to $8 per credit. Like tuition, Chemeketa’s fees also remain among the lowest in the state.

Chemeketa’s largest source of General Fund revenue is the appropriation we receive from the legislature. Currently, the legislature is in session and has yet to take up the issue of funding for community colleges. As a result, we are bringing this budget to you with a projection of the anticipated amount of funding we will receive from the legislature.

We have built our budget on the assumption that the legislature will fund community colleges below the levels of the 2007-2009 biennium and below the budget proposal brought to the legislature by the governor. It is also assumed that the legislative funding will be distributed to Oregon’s community colleges using the distribution formula recommended by the Department of Community Colleges and Workforce Development.

Historically, property tax revenue has been a predictable and stable source of funding. While we are not anticipating any reduction in property tax revenue, we have used a more conservative growth rate for the next biennium. Because of the current downturn in the economy we will continue to monitor our property tax revenue.

For costs affecting the General Fund overall, this budget includes salary step increases for all eligible employees, but assumes that there will be no cost of living increases to salary. The college is currently in negotiations with the faculty on a new contract. A key variable in personnel costs are costs associated with that next contract. Further cost containment measures related to personnel costs in this budget include a reduction in the rate Chemeketa pays to the Public Employees Retirement System and limited increases in materials and services budgets.

For this budget, we have adopted a strategy of expenditure reductions to specific programs rather than across-the-board reductions. Targeted expense reductions have been made to specific programs and services in every college division, and include faculty, support, and administrative staff retrenchments; leaving open positions unfilled, reductions in materials and services, and hourly/part-time faculty reductions.

The proposed budget also reflects some investments in areas of critical need. We are recommending targeted increases in General Fund full-time faculty positions, our student success initiatives, and program enhancements to our McMinnville campus and to our Career and Technical Education programs.

Other Funds:

The Capital Projects and Debt Service Funds have been increased to account for receipt of Community College Support funds to partially fund the construction of the Health Sciences building, for receipt of the “Go Oregon” Economic Stimulus Package funds and to account for payments on the $50 million bond that voters approved in 2008.

The Special Projects Fund has been increased to account for lottery and XIG bonds that the college expects to receive from the state “Go Oregon” Economic Stimulus Package for construction projects.

The Financial Aid Fund has been increased to provide budget for anticipated increases in student need for financial aid. Additional funds are available from the Federal Stimulus package, the Federal Work Study program and Oregon Opportunity Grant as well as the Chemeketa Scholars Program.

Respectfully submitted,

Signature