Transcript Mott Community College Budget Update

Mott Community College
Special Committee of The Whole
June 11, 2012
College Finances
STRATEGIC PLAN
_____________________________________________________________________
• 7-0. Budget/Finance
• 7-1. Focus on controllable revenues and costs to sustain
our current reputation and facilities and provide funding
for strategic priorities
• 7-2. Establish short and long-term budget and finance
priorities that provide a balanced approach to the needs
of a learning organization with the flexibility to realign
resources
• 7-3. Implement a comprehensive strategy to address the
long-term deficit which enables us to continue to provide
affordable high quality education
• A balanced approach
2
PRIOR YEAR BUDGET IMPACT
3
$9,000,000
Prior Year Impact in Dollars
$8,000,000
$453,656
$675,000
$7,000,000
$750,000
$6,000,000
$850,000
$5,000,000
$900,000
$4,000,000
$1,500,000
$8,128,656
$3,000,000
$2,000,000
$3,000,000
$1,000,000
$0
Capital Funding Restoration
Health Insurance Increase
Contingency Restoration
Lost State Aid
Lost Property Taxes
Debt Contribution
MPSERS Increase
4
Tuition Keeps Up with Lost Funding/Increase in
$160 Non-controllable costs for prior year
$155
$150
$145
$140
$135
$130
$125
$120
$115
$110
$105
$100
$95
$90
$85
$80
$3.17
$4.71
$3.11
$5.93
$6.28
$10.47
$54.61
$153.29
$20.94
$98.68
Current Tuition
Lost Property Taxes
Debt Contribution
MPSERS Increase
Capital Funding Restoration
Health Insurance Increase
Contingency Restoration
Lost State Aid
5
Prior Years
Budget Balancing Steps
6
Prior Year Budget Cuts
•
•
•
•
•
Decreased Hiring (Open Position Pool)
Cut funding to Reserves
Capital Funding Reduction
Debt Contribution
Cut Contingency
Total budgetary expenditure cuts
$ 750,000
$1,150,000
$3,000,000
$ 850,000
$ 750,000
$6,500,000
7
Prior Year Budget Cuts (continued)
Total Budgetary Expenditure Cuts
(from previous slide)
Prior Year Shortfall
$6,500,000
($8,100,000)
Shortfall Remaining
($1,600,000)
Received from tuition increase
8
FUNDING SOURCES
(2012-2013)
State Aid
Property Taxes
-Operating
-Debt
Tuition
9
Trends in Funding Sources & Enrollment
40,000
$33,500,000
35,000
30,000
$23,500,000
25,000
$18,500,000
20,000
15,000
$13,500,000
10,000
$8,500,000
5,000
$3,500,000
0
State Aid
Property Taxes
Headcount
Headcount
Funding
$28,500,000
Trends in Funding Sources & Enrollment, Fiscal
Year Equated Students (FYES)
$6,500
$33,500,000
$6,000
$28,500,000
Funding
$23,500,000
$5,500
$18,500,000
$5,000
$13,500,000
$4,500
$8,500,000
$3,500,000
State Aid
$4,000
Property Taxes
Revenue per FYES
11
Projected Property Tax Funding
FYE 2010 through FYE 2016
$3.1 Million
$24
$22
$1.3 Million
Decrease
$23.3
$1.3 Million
Decrease
Millions
$20
$20.2
$18
$18.9
$17.6
$16
$17.1
$17.1
$17.4
$14
$12
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
13
Percentage of Property Tax and
State Aid of Total Funding
70%
60%
63%
58%
50%
51%
47%
06/30/11
06/30/10
06/30/05
06/30/00
06/30/12
44%
40%
14
CURRENT YEAR BUDGET IMPACT
15
$6,000,000
FYE 2013 Impact in Dollars
$620,000.00
$5,000,000
$900,000
$4,000,000
$675,000
$3,000,000
$1,300,000
$5,795,000
$2,000,000
$2,300,000
$1,000,000
$0
Capital Funding Restoration
Lost Property Taxes
MPSERS Increase
Contingency Restoration
Reserve Funding
16
Tuition Keeps Up with Lost Funding/Increase in
$150 Non-controllable costs for FYE 2013
$145
$4.37
$140
$6.35
$135
$4.76
$130
$9.17
$125
$40.87
$120
$16.22
$115
$148.92
$110
$105
$100
$95
$108.05
$90
$85
$80
Current Tuition
Capital Funding Restoration
Lost Property Taxes
MPSERS Increase
Contingency Restoration
Reserve Funding
17
Current Year
Budget Balancing Steps
18
Current Year Budget Cuts
•
•
•
•
•
•
Decreased Hiring (Open Position Pool)
Health Insurance Savings
State Aid Increase
Cut Reserve Funding
Capital Funding Reduction
Cut Contingency
Total budgetary expenditure cuts
Beginning shortfall
Shortfall remaining
$ 350,000
$ 600,000
$ 637,000
$ 620,000
$1,060,000
$ 900,000
$4,167,000
($5,795,000)
($1,628,000)
THEN and NOW
1999-2000
Tuition
32%
Other
6%
2011-2012
Tuition
52%
Taxes
26%
State
Aid
36%
Other
4%
State Aid Funding
$15,344,107
State
Aid
19%
Taxes
25%
State Aid Funding
$14,383,600
20
What if Tuition Covered State Aid Losses?
Add in Property tax loss = $325.48
$170.00
$160.00
$168.82
Actual
Hypothetical
$150.00
$140.00
$133.30
$130.00
$120.00
$110.00
$99.88
$100.00
$103.37
$90.00
$86.52
$80.00
$70.00
$60.00
$70.55
$61.34
$61.15
2001-2002
2004-2005
2009-2010
2011-2012
Tuition and Financial Aid
Federal Aid
Other Aid
Cash Paying
23.26%
$9.3 mil
67%
9.74%
$26.7 mil
$3.9 mil
Total aid comprises 76.74% of MCC's total tuition revenue.
22
THE AMERICAN
OPPORTUNITY
TAX CREDIT (AOTC)
“PELL for Most EVERYONE ELSE ?
Available Financial Aid (Pell and
American Opportunity Tax Credit)
Pell
American Opportunity Tax Credit
(AOTC)
“Pell for Most Everyone Else”
Maximum Award
$5,550
$2,500
Enrollment
Sliding Scale up to full-time
At least Half Time
Income Limits
Expected Family Contribution
Modified AGI< $80,000 Single
< $160,000 MFJ
Program of Study
Degree or Certificate-Accredited
Institution
Degree or Certificate-Accredited
Institution
Can be used for
Tuition, fees, books, equipment,
supplies, leftover can be for living
expenses
Tuition, fees, books, equipment,
supplies
Length of Award
6 years
4 years
Other Eligibility
Not convicted of a felony drug
offense
Not convicted of a felony drug
offense
Estimated - $14.3 Billion available annually for AOTC
American Opportunity
Tax Credit (AOTC)
How did they get this?
INTENT OF THE AMERICAN
OPPORTUNITY TAX CREDIT
“That means reducing financial aid for 8 million
students and leaving our community colleges
without the resources they need to prepare
our students for the jobs of the future.”
The Amelias, Maynards, Mahans…..How about the
Students?
The Students
 Joe and Jane are 28 years old
 They are married and live in
Genesee County
 They have a 3-year old daughter,
Mary
More about Joe and Jane
 Joe went into construction right out of high
school but unfortunately has been
laid off more than employed for the
past 4 years
 Jane is a paralegal, attending MCC at
nights working on 3 + 1 transfer program
Joe and Jane in 2011
 This was an especially rough year for the
Students
 Joe was laid off most of the year and
and had to collect nearly $11,000 in
unemployment benefits
$11K = almost 1/3 of their
Household Income
Financial Aid
 Jane applied for a Pell Grant at MCC
 Unfortunately she was ineligible due in part
to the fact that the EFC Formula considered
their family earnings and Adjusted Gross
Income of $39,787 too high for a family of 3
 Fortunately, MCC offered a payment plan that
helped tremendously
Pell
Grant
Tax Time March 2012
 In March, 2102, the Students filed their
tax return
 Due to their income level and a new Higher
Education Tax credit, the Students were
delighted to receive a refund of $2,178
for their tuition
Net Tuition Cost for Full Time for 1 Year at MCC = $535
Comparable to Tuition and Fees in 1980-81 or $21/contact hour
More in 2012
 Joe and Jane were advised by their CPA
 That Jane should reduce her federal
withholdings to get more money throughout the
year instead of waiting until tax time
 The Students were worried since Joe was back to
work, their income would be too high.

Their CPA informed them that the income limits
were $160,000 MFJ and $80,000 Single
Reduce withholdings
CPA
EXPANDED BENEFIT OF A REFUNDABLE CREDIT
 Tax Year 2011
 Students Total Tax Liability equaled
 They had Paid in (withheld from wages)
 Refund without any credits would be
$1,658
$2,699
$1,041
 But Wait……
 They were refunded with the AOTC
$3,219
 Only the Hope Credit?……
 The refund would have been
$2,348
 Or a “Federal Financial Aid Award” of
$871
Tuition Increases and Amount
Refunded from the AOTC
Total tuition/fees increase
Annual Amount
$ Increase
AOTC Refundable
Credit
12 Contact Hours (PT)
137.66
634.79
24 Contact Hours (FT)
256.60
895.78
30 Contact Hours (FT)
316.07
964.33
Year: 2011-2012
BUDGET SHORTFALL 2012-2013
Remaining Shortfall
$ 1,628,000
Tuition To Cover
$9.18/contact hour
What Have We Done Regarding
Controlling/Cutting Costs?
39
Expenditure Reductions
1) Energy Conservation Project
- Utility costs averaged 8.2% in 2003, Now they are 3.1%
2) Hold on vacant positions
•
Average savings of $750K per year
3) Change in timing of custodial shift
•
Savings of approximately $170K per year
4) Eliminating and restructuring food service
•
•
Was losing approximately $100K per year
Now generating $48K per year in revenues
40
Expenditure Reductions
5) Utility Reduction Analyst Project
•
Resulted in $720K savings between 2004-2010 on
Telecommunications/IT, Water, and Waste
6) Employee Contract Bargaining
•
•
Employees agreed to pay freezes with incremental
increases over 9 years at 1.35%
Industry average is 2.8%
–
Savings of $460K per year
7) Course Section Efficiency
•
Maximizing section seat count before adding new
sections
8) Discretionary budget cuts
•
Average savings of $400K per year
41
Expenditure Reductions
9)
10)
12)
13)
14)
15)
Reduction of ORP (optional retirement plan) costs
• Average annual savings of $400K
Combining Deans position
• Fine Arts and Social Science combined saving $168K per year
Outsourcing custodial and grounds work at sites
• Savings of approx. $350K per year
Health Insurance changes to coverage and plans
• Savings $550K
New print shop lease
• Savings of $200,000 per year
New Auditors
• Savings of $60,580 over five years
42
A Comparison
to
7 Other Michigan
Peer Community Colleges
Based on 2010 –2011 ACS Data
Current Year Comparison of State Peer
Group Total Revenue
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
0
MCC is 4th lowest in Total Revenue
Prior Year Comparison of Millage
Rates/Property Tax Declines with
State Grouping
6.00
4.00
2.00
1.79
1.80
1.99
2.04
2.41
2.48
3.00
3.41
-12.00
-8.64
-3.14
-8.64
-8.64
Washtenaw
Henry Ford
-8.00
-10.00
Delta
Mott
-3.76
Wayne County
-6.00
-1.64
Kalamazoo Valley
-4.00
Schoolcraft
-2.00
Grand Rapids
0.00
-5.33
-10.98
MCC is 3rd Lowest in Millage Rate, and has the Largest Property Tax
Decline
Current Year Comparison of Millage
Rates/Property Tax Declines with
State Grouping
4.00
2.00
1.79
1.80
1.99
2.04
2.41
2.48
3.00
3.41
-2.39
-6.00
Washtenaw
Henry Ford
Wayne County
Delta
Mott
-1.42
Kalamazoo Valley
-4.00
Schoolcraft
-2.00
Grand Rapids
0.00
-2.85
-0.65
-6.39
-6.76
-6.39
-6.39
-8.00
MCC is 3rd Lowest in Millage Rate, and has the Largest Property Tax
Decline
Current Year Comparison of State Aid
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
48
Current Year Comparison of State of
Michigan Peer Group Property Tax
Revenue
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
50
Tuition & Fees: Local Comparison
College
Mott CC
Saginaw Valley University
Eastern Michigan University
Oakland University
Baker College - Flint
Ferris State University
University of Michigan - Flint
Central Michigan University
Michigan State University
Davenport University
University of Michigan - Ann Arbor
ITT Technical of Flint
Kettering University
Yearly Tuition & Fees
3,329
7,308
8,377
9,285
9,840
9,930
10,097
10,380
11,722
11,814
13,461
25,064
29,116
Cost as based on in district/state rates from the College’s web sites
MCC’s annual cost is approximately 46% of that of the next
51
most affordable college/university in our area.
Tuition & Fees:
Community College Comparison
Yearly Tuition & Fees
College
Mott CC (In-District)
Wayne County CC
Oakland CC
Macomb CC
Schoolcraft CC
Delta CC
Washtenaw CC
Lansing CC
Henry Ford CC
St. Clair CC
$3,229
$3,310
$3,457
$3,760
$3,910
$3,977
$4,140
$4,300
$4,402
$5,663
Costs based on published “out of district” rates for other
Community Colleges for 30 Credit/Contact hours
52
COMPARISON PRIOR YEAR/CURRENT YEAR
2012
$155.00
$150.00
$145.00
$140.00
$135.00
$130.00
$125.00
$120.00
$115.00
$110.00
$105.00
$100.00
$95.00
$90.00
$85.00
$80.00
2013
3.17
4.71
$3.11
$5.93
$6.28
$10.47
$54.61
$153.29
$20.94
$98.68
$150
$145
$140
$135
$130
$40.87
$125
$120
$115
$110
$105
$100 $148.92
$95
$90
$85
$80
$4.37
$6.35
$4.76
$9.17
$16.22
$108.05
53
Reserve Requirements
9
8
Still need $757K
Current
Reserve
In millions
7
6
5
4
Still need $1 mil
Still need $92K
Required
Reserve
3
2
Adequately funded
1
0
General Fund
(01)
Rainy Day (02)
Maint &
Replacement
(72)
Building & Site
(78)
54
Current Year
Budget Balancing Steps
55
Current Year Budget Cuts
•
•
•
•
•
•
Decreased Hiring (Open Position Pool)
Health Insurance Savings
State Aid Increase
Cut Reserve Funding
Capital Funding Reduction
Cut Contingency
Total budgetary expenditure cuts
Beginning shortfall
Shortfall remaining
$ 350,000
$ 600,000
$ 637,000
$ 620,000
$1,060,000
$ 900,000
$4,167,000
($5,795,000)
($1,628,000)
FEDERAL FINANCIAL ASSISTANCE
PELL GRANTS
57
Millions
Pell Awards
35
30
Increased Five-Fold in Ten Years
25
20
15
10
5
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Academic Year
Pell Award & Cost of Tuition
Mott Community
College
In-District
(Published 10/11)
Saginaw Valley
State University
In-State
(Published 10/11)
Delta CC
Out of District Rate
Pell Awarded
$5,550
$5,550
$5,550
Tuition & Fees
$3,535
$7,815
$4,510
Books & Supplies
$1,000
$1,000
$1,000
Difference
$1,015
-$3,265
$ 40
(30 contact hours)
Student Receives
Remaining
Balance
Student Needs
Unmet
Student Receives
Remaining
Balance
Pell Distribution – 11/12
Sample of Approx. 9,700
Students
Awarded
$31,013,885
Educational
NonEducational
Books & Supplies Educational
Tuition & Fees
Charges
Govt. Refund
$21,128,548
$4,493,632
$5,391,705
COMMENTS/QUESTIONS?
61