GRCC Balancing State Cuts

August 1, 2005
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GRAND RAPIDS — Decreased state funding is causing Grand Rapids Community College to dip into its rainy day fund, with no sun in sight.

Executive Vice President of Business and Financial Services Robert Partridge said GRCC has used $562,000 from its fund balance for the first time and has used the full amount ($234,000) of its fringe benefits stabilization fund, which had been put aside for health insurance and retirement.

Partridge said the proposed state reductions in community college funding — 1.8 percent — could cause more money to be taken from the fund balance during a mid-year budget adjustment. GRCC would lose $290,500 if the current budget passes. With $8.9 million left in the fund balance, Partridge said that practice cannot continue.

"You can only go to that well so many times," Partridge said.

Solutions such as 5-percent across-the-board cuts, raises in tuition, voluntary time off and sharing health benefit costs are ways GRCC is trying to make up for the reduction in state funding, which Partridge said is back to the level it was in 1995, about $16 million before state reductions. In 2001 it had been up to $19 million and has since decreased year by year.

Per-credit tuition at GRCC has been increased, from $66 to $69.50 for residents and from $110 to $125 for non-residents. Tuition and fees account for about 40 percent of the revenue sources for the 2006 budget while state aid is about 22 percent and property taxes are about 35 percent. This is a change from 10 years ago when tuition and fees accounted for only about 29 percent, state aid for 33 percent and property taxes for 33 percent.

"We've had a significant shift between state aid declining and tuition and fees increasing," he said.

Partridge said cost sharing of health benefits has been an important part of reducing the budget. A voluntary unpaid time-off program has also been put in place, he said, which saves the college about $55,000 to $60,000.

"When you're looking for every penny that you can save, it all helps," he said.

The GRCC budget was passed in June, not taking into account any cuts from the state funding.

"We certainly understand the dilemma that the state is in," Partridge said. "We think that higher education is very important and we would think funding higher education is a priority for the state."

Partridge said he thinks community colleges and universities should be treated equally.

"We're all higher education and, frankly, we serve a tremendous amount of students in this state among the community colleges," he said.

The most pressing expenses for GRCC are health care, insurance and retirement contributions. Health care was up $735,000 this year, while retirement contributions were up $979,000. The total $76 million budget was up $3.3 million, with the majority of that being fringe benefits and salary, Partridge said.

Though Partridge said there have been cycles of economic distress before, this time it does not seem to be improving.

"It doesn't appear to be coming back like it has in the past," he said.

Partridge said the solution is working together for education funding.

"I think going forward our challenge is to work with the legislature, work with the governor, in an effort to find an equitable funding method for community colleges and higher education," he said.

State Rep. Jerry Kooiman, R-Grand Rapids, said the government tries to keep funding level between universities and community colleges.

"We've always tried to retain parity between those two," Kooiman said.

For this budget, a 1.8 percent decrease in funding was also suggested for higher education but then the decrease was cut in half for universities. Kooiman said he believes community colleges also will receive that same percentage of funding back.

"My guess is that at the end of the budget process, we will put that money back in," he said.

With the state universities, the House didn't reduce each school by the same amount as it did with the community colleges, Kooiman said.

"We put together a plan or a formula for higher education," he said. "It's much different than what we did for community colleges."

The reduction to community college funding is across the board, Kooiman said.

"Hopefully, when the budget is completed, it will be at least the same amount that they got this year," he said.    

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