The Board of Trustees has adopted a new tentative budget for the 2016-2017 academic year, and although the over $159 million in appropriations is in line with last year’s historically high budget, the details may foreshadow future fiscal frustrations.
In December the sales tax portion of Prop 30, the school-funding measure also known as the Educational Protection Act (EPA), will expire costing the college over $1 million. This is just the beginning of the effect the cessation of the EPA will have on school budgets as the entire act is set to sunset the following year barring a voter extension.
“The difference of a little over a million dollars [between this year’s budget and last year’s] is primarily related to the reduction in funding because of the sales tax component of Prop 30 ending in December of 2016,” Executive Director of Business Services Joe Simoneschi explained.
Additionally, the school went without the $12.5 million in state-mandated one-time funds it was gifted last year.
“[O]ur budget must accommodate an additional $12.4 million in ongoing expenses over and above what we carried last year,” Simoneschi said.
The largest driver of these new ongoing expenses is the recent deluge of new hires on campus. The over 50 new hires and their associated health and employer-mandated costs account for over $6 million in ongoing expenditures, which is almost half of the new expenses.
To try to offset this, the school will reduce funding for adjunct instruction by nearly $2 million.
“By bringing 50 new full-time faculty members onto our team, it is anticipated that we will not need to spend as much money on adjunct instruction during fiscal year 2016/2017,” Executive Director of Strategic Communications and Marketing Alex Boekelheide wrote in an email to staff explaining the cost saving plan.
“Division deans have been asked to adjust their teaching plans to reflect this reduction,” Boekelheide said. “We will also continue to refine our enrollment management efforts to ensure the most effective use of instructional funds.”
According to Boekelheide, the college has also overspent on student workers and assistants over the last three years. In response, funding for student workers and college assistants has been extremely limited, with employees being terminated and only re-hired on a need basis, saving over $600,000.
With a goal to save over $12 million, the school has also stopped interviewing for some positions that they were previously filling.
“A number of open classified positions across the campus will be left unfilled, and some newly approved management positions will not be funded or filled,” Boekelheide said, which should save $2.7 million.
There have been a few interesting positives, however, with revenues for programs like Workforce and Career Technical Education and Deferred Maintenance and Instruction Equipment increasing by close to $4 million each.
Although the budget is still tentative and may change, with these additional expenses and the perennial cost drivers of pension programs CALSTRS and CALPERS adding over $2 million in ongoing expenditures, future PCC budgets will need to be monitored very carefully.