East Central College is reaching the end of its fiscal year and facing new challenges as it approaches the budget 2020-21.
President Dr. Jon Bauer last week gave the ECC Board of Trustees an update on what is known about the budget for next year.
“The plan originally was to have the budget for the 2020-21 to you this month,” he explained. “But with all the changes that have occurred over the last month it was important that we have more time to work on it.”
Bauer said that over the last couple of months the college has seen a loss of revenue, along with changes to the revenue in general, which has affected the budget for next year.
The biggest unknown in terms of the new fiscal year budget that will begin July 1 has to do with the state budget, according to Bauer.
“The House has started working on the revised version of the state budget for higher education, including community colleges,” he explained. “Their recommendation was that there would be a 10 percent reduction in state aid.”
Bauer added that the 10 percent reduction would equate to about half a million dollars that the college would lose.
“The Senate then took the proposal and Friday, May 1, recommended that state aid would be even with last year,” he said. “Resulting in no increase or decrease.”
State aid is not the only thing hindering the budget, according to Bauer.
“Locally, the uncertain part of our budget has to do with what will happen with enrollment this fall,” he said.
The plan as of now, according to Bauer, is to continue to make revisions to the budget projections as the picture becomes more clear.
“For the general revenue we will be seeing fluctuations with state aid, tuition and fees,” said Bauer, adding that he does not anticipate the general revenue being affected by local taxes.
“The loss of activity has been with retail and that is not necessarily affecting property values in the short term,” he said.
ECC is expected to receive federal funds related to the COVID-19 pandemic, but there will be restrictions on how it can be used.
“We will be receiving out of the CARES Act a base amount of $1.6 million,” Bauer said. “It is to be used for students in the form of emergency aid grants related to the pandemic and for institutional purposes.”
Bauer reported that half, roughly $800,000, will be used for students and the rest will be for the institution itself, but how that $800,000 can be used is still a little unclear.
“We have received some guidance from the board of education for the institutional expenses, but we need more information,” he said.
While it is known that the $800,000 for institutional expenses is allotted for extraordinary expenses related to COVID-19, like the purchase of technology for remote work and learning, it cannot be used for loss of revenue as a result of COVID-19.
“The loss of state aid is not a reimbursable expense, like we originally understood,” said Bauer, who expressed concern and reported that ECC, along with other area community colleges, have shared those concerns in writing to its senators from Missouri.
“I don’t know if that is going to change from the guidance from the board of education,” he said. “But we are tracking every expense related to COVID-19.”
Bauer noted the college has a year to utilize the $1.6 million. The $800,000 for student emergency aid will be distributed through grants.
“We have been working up models that will distribute those student grants based on the financial need, using FASFA as a starting point,” Bauer said. “I would like to see those funds pushed out in the next few weeks, we are just waiting on federal guidance.”
The plan for the institutional expenses is to wait until there is clear guidance before submitting things for reimbursement.
Bauer did add that ECC was advised of additional institutional funding of $80,000 and expects it will have the same parameters as the federal funding the college is receiving.
He added that the pandemic has resulted in an ever-changing situation for the college and there are still unknowns about what additional funding ECC might receive and how that pertains to next year’s budget.
As new things continue to come up, Bauer’s plan is to bring the budget for 2020-21 back to the board for review June 8.