East Central College trustees approved an $18,014,000 budget at the monthly board meeting Monday, May 14, for the new fiscal year that begins July 1.
The budget represents a decrease of 2.1 percent from the current budget.
In presenting the budget to board members, Dr. Jon Bauer, vice president of finance and administration, noted that development of the budget for fiscal year 2013 presented several challenges.
“Again this coming year our state aid is likely to be reduced, local tax revenue is expected to be even, and certain expenses will increase,” said Bauer. “In addition, enrollment trends indicate level enrollment at best which will impact our tuition revenue in the coming year.”
Tuition, local taxes and state aid account for more than 98 percent of revenue in the budget.
Tuition and fees represent the largest source of revenue for the college, accounting for almost 39 percent of the total budget. For the second consecutive year, a tuition increase goes into effect for the upcoming fall semester.
In March, trustees approved a tuition rate of $71 per credit hour for in-district students, a $5 increase. The rate for out-of-district students goes to $101 per credit hour, an increase of $7 per hour.
Tuition also went up $11 per credit hour for out-of-state students to $152; and $12 per credit hour for international students to $164.
Bauer noted that though students will be paying more to attend, flat or declining enrollment will limit the amount of new revenue available.
Tax Revenue, State Aid
No growth is planned for local tax revenue. Assessed valuation declined slightly in 2011. The resulting roll-up in the tax levy approved in August enables ECC to realize substantially the same revenue as the prior year.
Local revenue represents 33 percent of general revenue to the college, up slightly from the 2012 budget.
State aid accounts for 26.3 percent of general revenue for ECC.
Bauer said that the 2013 budget projects an 8 percent reduction in state aid, the same level of spending proposed in the governor’s budget.
The Legislature has approved a budget with no decrease for colleges and universities, but the governor has not taken action on the budget and Bauer said state funds for higher education are still at risk.
“Even if we begin the fiscal year with no decrease in state aid, midyear withholdings remain a distinct possibility,” Bauer said. “The projected reduction and a contingency fund of $272,715 enable the college to deal with a withholding should it occur.”
There will be no salary increases for college employees and for the first time in many years, the state retirement system will not increase the mandatory contribution rate.
Contribution rates now stand at 14.5 percent for faculty and salaried staff and 6.86 percent for support staff. The budget also reflects a 15 percent reduction for most discretionary expenses.
Most of the new positions on the staffing table are grant funded, and effective July 1 human resources will report to the president. Since 2006, that department has reported to the vice president of finance and administration.
The 2013 budget also reflects a decrease of 2.4 percent for health insurance through the end of the 2012 calendar year, and estimates a 5 percent increase in health insurance for the first six months of 2013.
Salaries and benefits account for the largest share of expenses for the college, totaling over 77 percent of general fund spending in the upcoming fiscal year.