Transcript Mott Community College Budget Update

Mott Community College
Employee Forum
Mott Community College
June 26, 2012
College Budget/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
FUNDING SOURCES
(2012-2013)
State Aid
Property Taxes
-Operating
-Debt
Tuition
3
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
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
5
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%
6
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
7
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
8
Prior Years
Budget Balancing Steps
9
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
10
Prior Year Budget Cuts (continued)
Total Budgetary Expenditure Cuts
Prior Year Shortfall
$6,500,000
($8,100,000)
Shortfall Remaining
($1,600,000)
Received from tuition increase
11
CURRENT YEAR BUDGET IMPACT
12
$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
13
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
14
What if Tuition Covered State Aid Losses?
$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
Steps Taken to Control/Cut Costs
16
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
17
Expenditure Reductions
5)
6)
7)
8)
9)
10)
Utility Reduction Analyst Project
• Resulted in $720K savings between 2004-2010 on
Telecommunications/IT, Water, and Waste
Course Section Efficiency
• Maximizing section seat count before adding new sections
Discretionary budget cuts
• Average savings of $400K per year
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
18
Expenditure Reductions
11) Health Insurance changes to coverage and plans
• Savings $550K
12) New print shop lease
• Savings of $200,000 per year
13) New Auditors
• Savings of $60,580 over five years
14) 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
19
Compensation as a Percentage of
the General Fund Budget
77.00%
76.50%
76.00%
75.50%
75.00%
74.50%
74.00%
2001
2013
Compensation expense would be $1.25 M higher if it was at 2001 levels as a
percentage of budget.
Ten year average salary increases are 1.35%.
Current Year
Budget Balancing Steps
21
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)
THE FINANCIAL AID AND TUITION
RELATIONSHIP
23
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.
24
FEDERAL FINANCIAL ASSISTANCE
PELL GRANTS
25
Millions
Pell Awards
35
30
Increased Five-Fold in Ten Years
25
20
15
10
5
2002
2003
2004
2005
2006 2007 2008
Academic Year
2009
2010
2011
2012
Pell Distribution – 10/11
Sample of Approx. 9,540
Students
Awarded
$27,919,272
Educational
NonEducational
Books & Supplies Educational
Tuition & Fees
Charges
Govt. Refund
$18,729,369
$4,491,705
$4,698,199
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
Pell Award & Cost of Tuition
Mott Community College
In-District
(Published 12/13)
Saginaw Valley
State University
In-State
Pell Awarded
$5,550
$5,550
Tuition & Fees
$3,644
$8,134
$1,000
$1,000
$906
-$3,584
(30 contact hours)
Books & Supplies
Difference
Student Receives
Remaining
Balance
Student Needs
Unmet
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, 2012, 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
A Comparison
to
7 Other Michigan
Peer Community Colleges
Based on 2010 –2011 ACS Data
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
47
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
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
Tuition & Fees: Local Comparison
College
Mott CC
Saginaw Valley University
Eastern Michigan University
University of Michigan - Flint
Oakland University
Baker College - Flint
Ferris State University
Central Michigan University
University of Michigan – Ann Arbor
Michigan State University
Davenport University
ITT Technical of Flint
Kettering University
Yearly Tuition & Fees
3,644
8,134
8,637
9,182
9,938
10,080
10,440
10,950
12,634
12,821
15,150
31,272
33,946
Cost as based on in district/state rates from the College’s web sites
MCC’s annual cost is approximately 45% of that of the next
50
most affordable college/university in our area.
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7 Year Forecast at June 2012
Forecasts:>>>>>>>>>>>>>>>>>>>
Revenues
Amended
Initial
Budget
Budget
2011-2012
2012-2013 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Tuition and Fees
39.0
40.6
42.2
43.9
45.6
47.4
49.2
51.1
Property Taxes
18.9
17.7
17.1
17.1
17.4
17.6
17.9
18.4
State Appropriations
14.4
15.0
15.5
15.9
16.3
16.6
16.9
17.2
3.7
3.5
3.6
3.7
3.7
3.8
3.9
4.0
76.0
76.8
78.4
80.6
83.0
85.4
87.9
90.7
1.0%
2.1%
2.8%
2.9%
2.9%
3.0%
3.2%
All Others
Total Revenue
Revenue Increase (Decrease):
Expenditures
Salaries
39.5
40.6
41.8
43.4
45.1
46.8
48.6
50.4
Fringe Benefits
17.6
17.0
17.8
18.6
19.4
20.3
21.2
22.2
All Others
19.7
19.2
20.4
20.9
21.4
21.9
22.4
23.0
76.8
76.8
80.0
82.9
85.9
89.0
92.2
95.6
-0.1%
4.1%
3.6%
3.6%
3.6%
3.6%
3.6%
-0.80
0.01
(1.6)
(2.3)
(2.9)
(3.6)
(4.3)
(4.9)
6.7
6.7
5.1
2.8
(0.1)
(3.7)
(8.0)
(12.9)
Total Expenditures
Expenditure Increase (Decrease):
Surplus/(Deficit):
Fund Balance
Note: the forecast illustrates proforma data if current trends were to continue. The College is obligated to
balance it’s budget each year and will take necessary steps to do so.
55
COMMENTS/QUESTIONS?
56