Harford Community College officials have developed a proposed $47.2 million operating budget for their next fiscal year that anticipates yet another tuition increase – proposed at $12 per credit hour.
College officials say they believe this budget, which will take effect next July 1, will not run at an operating deficit, unlike the budgets of recent years.
To accomplish that, however, they say funding increases of up to 2 percent are needed from the county and the state, in addition to the proposed tuition increase.
"As the budget shakes out in the next eight months, we'll see what the state and county will do for us to see if we are able to use this specific budget that we will talk about this evening," Rick Johnson, vice president for finance and operations, told members of the college's Board of Trustees Tuesday, as he presented the proposed operating and capital budgets for the 2015-2016 fiscal year.
"Since 2004, this is the first budget that is balanced without a transfer in," Johnson said, a reference to financial issues the college has faced that have necessitated dipping into reserve funds to meet expenses.
In the 2013-14 fiscal year that ended on June 30, HCC's general operating expenditures of $44.4 million exceeded revenue of $43 million, a $1.4 million deficit, according to audited financial statements. The final deficit, however, was about half of what had been projected.
Board members adopted a $48.1 million general operating budget for the 2014-15 fiscal year in June, and a $2.4 million transfer from the college's fund balance, or cash reserves, was required to balance it.
Board Chair James Valdes, who was absent from Tuesday's meeting, has blasted the need to transfer millions of dollars each year from the fund balance, and he called the recurring gap between revenues and expenditures a "structural deficit."
HCC President Dennis Golladay has blamed the college's financial condition on the economy which has decreased enrollment and checked funding increases from the county and state. Last winter he said the college has tried to hold the line on spending but faced increases in typical fixed costs, such as energy and employee benefits, over which it has little control.
Ongoing tuition hikes
As with the proposed budget for next year, the current budget also came with a $12 per credit hour tuition increase, pushing tuition for students who live in Harford County to $104 per credit hour. Students outside of Harford County pay $191 per credit, and out-of-state students pay $278. The college also increased the consolidated student fee in the current budget by 2.6 percent to $20.80 per credit hour for in-county students.
Tuition has increased four times, by a combined $27, since 2010. If the anticipated new increase takes place, in-county students will be paying $116 per credit hour, $39 or 51 percent more than five years earlier.
With a potential fifth increase, college officials project $20.06 million, or 42.4 percent, of total revenue in the next budget will come from tuition and fees, according to budget documents.
"The original concept is supposed to be, in Maryland, one-third state, one-third local and one-third tuition," board Vice Chair Richard Norling said about what was long regarded as the traditional funding formula for community colleges in Maryland.
Board member John Haggerty was incensed that "that partnership is just kind of eliminated."
"I think we've got to be much more proactive when it comes to reminding the county and the state representatives what their obligation is and make sure that they realize that and come up with the financial support to make that happen," he said.
Haggerty said he would "like to take 10 busloads of students down to a County Council meeting and have them raise hell."
Norling noted the county and state legislative bodies cannot add funds to budgets submitted by the county executive and the governor. Harford County Council members have often said they can only move money around within the county executive's proposed budget and typically face satisfying competing interests, if they take such actions, which they seldom do.
"We have to get in the budget that's originally proposed," Norling said of the annual requests for operating funds to the county and state.
More buildings, less operating revenue
He said state and county officials have been generous with funding for capital projects. HCC has built or modernized several buildings in recent years; however, as Norling noted, capital and operations funding come from separate revenue streams and cannot be mixed.
"It's the operating budget where the tuition enters into it and where the original goal [of shared funding] has not been met," Norling added.
Johnson said HCC officials have also cut expenses to close the budget gap, but the 2 percent increases in county and state funding are critical to erasing the structural deficit next fiscal year.
He said a 2 percent increase in county funding would bring in an additional $299,000, and a 2 percent increase in the state's contribution would bring in $220,000 more.
"Just 2 percent a year doesn't make us rich, but it certainly makes our reserve grow back to where it should be, and it allows us the flexibility in terms of our cash balance," he said.
The proposed FY2016 budget is nearly $854,000 lower, or 1.77 percent, than the FY2015 budget, according to budget documents.
College officials have adopted employee wellness programs and hired a consultant to provide data to help lower health care costs, and they have also increased funding in next year's budget for marketing efforts.
Officials have stated that recruitment of new students and retention of existing students is another key factor in closing the budget gap.
Enrollment at HCC spiked during the recession years, but it has since declined. College officials are enrolling students for the spring 2015 semester, and they project a student head count of 5,906. There have been 4,232 enrollments so far, or 71.7 percent of that projection; the head count for the spring 2014 semester was 6,201, according to an enrollment report presented Tuesday.
Johnson also presented a $12.9 million capital request for FY2016. Major projects include $8 million to renovate and expand Edgewood Hall, $1.01 million for improvements to Thomas Run Road and Route 22 and $2.5 million for a regional workforce development center, according to budget documents.
HCC Board members are scheduled to vote on the 2015-16 budget request in January. It will still be subject to final modifications in June, once HCC has received final funding allocations from the state and county and pending any changes that may be suggested by Golladay and his staff.