Budget Update
April 2005
TO: Lane Faculty and Staff
FROM: Mary Spilde
DATE: April 15, 2005
RE: Budget Update - slightly better news!
There are several changes to our budget projections since I last sent a budget update in January. For the most part itís good news ñ not great news but going in the right direction! If you want to cut to the chase, page down to the second to last paragraph!
In January, we based our projections on the Governorís budget (388 million for all community colleges) plus $8 million to correct the mistake that the Governorís office made, for a total of $396 million. We also built in a 4% enrollment increase for next year. This resulted in a deficit of 2.9 million in 06 with a close to $4 million deficit in 07. However, there were five major ìunknownsî that could make a significant difference to our financial position either way, so the board approved a proposal to hold off on recurring budget reductions or substantial tuition increases for 06 until some of these ìunknownsî became ìknownsî.
At this point, three of the unknowns are known:
- Our PERS rate was approved by the PERS Board in March and came in at slightly less than our projection. So we have adjusted the projections accordingly. However, we have already been told that the rate will increase in 08 and that rate change will cost the college an additional $1.9 million each year.
- The Oregon Supreme Court has ruled on the PERS legislation. They upheld some of the new law and overturned other parts. It will make a difference to our PERS rate in the future (in addition to PERS Rate increase shown above) but we have been told that there will be no change to our rate for the next biennium.
- We had projected an increase of 10% in our health insurance premiums for 06 based on the trend line for increases. (Two years ago it was 24%) I am pleased to say that our increase for 06 is 4.14%. This is quite remarkable. Contributing to this are the efforts of the college Wellness Program and the expansion of the Health Clinic for staff.
All of these improve our financial position. There are still two unknowns.
- We do not know how much we will receive from the legislature. The co chairs were supposed to publish their budget on April 4 but there was no agreement and the House and the Senate published their own budgets. Both increased the funding for community colleges and so we have based our new projection on $415 million instead of $396 million (statewide figures)
- The State Board of Education is still considering a new funding distribution formula. We are getting closer to a decision but it will not be finalized until May at the earliest.
So what does all this mean? When you put it all together our new projection shows a deficit of $264,000 for 06 (small cheer!) and $2.7 million for 07. Obviously, this is much better than it was, but still challenging for 07. I need to say that these projections will change as we receive more information but itís where we are as of today.
In the meantime, if you know any legislators or want to write a letter to one, please let them know we really need $440,000 million for community colleges. Our mantra is $440,000 or fight! Thanks. |
