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DEPARTMENT OF COMMUNITY COLLEGES AND WORKFORCE DEVELOPMENT

•COMMUNITY COLLEGE SUPPORT FUND–Support Fund Distribution Formula and Implementation

–Support Fund Request and Implications

–Options

–Impact of Budget Reductions on Community Colleges              

April 17, 2003

Presented to Ways & Means Education Subcommittee

By: Cam Preus-Braly

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Community College Mission Statutory ORS 341.009 (1)

The community college is an educational institution which is intended to fill the institutional gap in education by offering broad, comprehensive programs in academic as well as professional technical subjects.

It is primarily designed to provide associate or certificate degree programs for some, serve a transitional purpose for others who will continue baccalaureate or other college work, provide the ability to enter the workforce immediately and serve to determine future educational needs for other students.

It can provide means for continuation of academic education, professional technical training or the attainment of entirely new skills as demands for old skills and old occupations are supplanted by new technologies.

It may also provide the means to coordinate courses and programs with high schools to enhance the Certificate of Advanced Mastery and to accommodate successful transition to college degree programs.

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State Board of Education Policies

• The State Board of Education has statutory authority to govern Oregon’s community college districts

• As part of that responsibility, the State Board has the authority to develop and implement a formula for the distribution of state resources to fund community colleges

• The State Board develops the formula within the policy framework of access and equity

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State Board of Education Policies

• Access – All Oregonians should have access to community college services regardless of where they live

• Equity – Each college should receive the same funding per student

• Quality – In January of 2003 adopted a freeze on enrollments to stop the erosion of the dollar value of an FTE

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Funding Formula

• The passage Ballot Measure 5 in 1991 fundamentally changed the funding of community colleges

• Over time, state resources have grown to be the largest share of revenue for local community college districts

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Community College Primary Sources of Revenue

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Academic Year

Fund

ing

Lev

el State

District Taxes

Tuition

7

Funding Formula

• As the State Board and CCWD staff looked to the future, it became apparent that a new formula would need to be adopted

• In 1991-93, a temporary formula was enacted in which community colleges received a proportional share of state funds based on past allocations

• Early versions of the current funding formula were first adopted in the 1993-95 biennium

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Funding Formula Principles

• The overarching principles of the new formula were:– Provide equity in the distribution of resources

– Provide a base for infrastructure and school size

– Equalize property tax revenues per student

– Funding follows the student

• These principles continue to be reflected in the current funding formula

9

Funding Formula Implementation

• Individual elements within the funding formula have stayed relatively unchanged since its adoption in 1993-95– 50% of local property taxes are included– A base factor is included to reflect the

differences in college size– Full-time equivalent enrollments (FTE) are the

basis for distribution following students

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Basic Formula Equation

State Appropriationplus

50% of Imposed Property Taxes

Equals: Total Formula Funds

Minus: Base Funding

Divided by: Enrollments

Equals: Funds per FTE

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Future of Funding Formula

• In January of 2003 the State Board of Education directed CCWD to work with the Community College Presidents Council to review and recommend a new formula for 2005-07– Members include:– Wes Channell, Klamath CC, Chair– Mary Spilde, Lane CC– Jess Carreon, Portland CC– Bob Barber, Central Oregon CC– Joe Johnson, Clackamas CC– Travis Kirkland, Blue Mountain CC

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Property TaxesCollege

Actual 2001-02 RFTE

Rate per

Thousand

Property Taxes Imposed

Taxes per FTE

Blue Mountain 2,349.28 $0.6611 3,008,881 $ 1,281 Central Oregon 3,988.99 $0.6204 7,173,672 $ 1,798

Chemeketa 11,637.35 $0.6259 11,298,620 $ 971 Clackamas 7,792.56 $0.5582 9,004,227 $ 1,155 Clatsop 1,715.84 $0.7785 2,517,860 $ 1,467 Columbia Gorge 845.05 $0.2703 317,708 $ 376 Klamath 1,193.83 $0.4117 1,183,902 $ 992

Lane 12,746.88 $0.6191 10,982,571 $ 862 Linn-Benton 6,765.55 $0.5019 4,631,609 $ 685 Mt. Hood 9,467.29 $0.4416 7,378,789 $ 779 Oregon Coast 461.09 $0.1757 716,742 $ 1,554

Portland 24,851.77 $0.2828 18,640,144 $ 750 Rogue 4,939.67 $0.5128 7,031,022 $ 1,423 Southwestern Oregon 3,029.86 $0.7017 3,391,497 $ 1,119 Tillamook Bay 426.20 $0.2636 653,693 $ 1,534 Treasure Valley 1,797.43 $1.2235 1,407,800 $ 783 Umpqua 3,541.33 $0.4551 2,053,736 $ 580

Totals/Averages 97,549.97 $0.5433 91,392,473 $ 937

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Impact of Property Taxes on Distribution of State Resources

• No property tax revenues actually leave districts• Including one-half of local property taxes in the

formula does affect the amount of state funds that a community college receives

• The following chart indicates which colleges gain or lose state funds as a result of property taxes being included in the formula

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Impact of Property Taxes on Distribution

*Projections based on funding included in Governor’s Budget

Community College

Projected 2003-05 State Funding*

Effect of Property Taxes on

State Funding % Change

Blue Mountain $10,402,477 ($277,832) -2.7%

Central Oregon $13,109,665 ($3,797,028) -29.0%

Chemeketa $46,075,028 ($473,855) -1.0%

Clackamas $29,026,204 ($2,033,782) -7.0%

Clatsop $6,614,544 ($1,124,194) -17.0%

Columbia Gorge $5,277,961 $579,385 11.0%

Klamath $6,999,755 $135,119 1.9%

Lane $52,418,609 $1,173,690 2.2%

Linn-Benton $29,046,058 $1,816,253 6.3%

Mt. Hood $40,251,925 $1,773,088 4.4%

Oregon Coast $2,486,292 ($260,299) -10.5%

Portland $98,850,883 $4,267,181 4.3%

Rogue $18,242,284 ($2,603,938) -14.3%

Southwestern Oregon $12,204,669 ($663,832) -5.4%

Tillamook Bay $2,371,298 ($221,586) -9.3%

Treasure Valley $8,790,483 $310,325 3.5%

Umpqua $16,375,806 $1,401,305 8.6%

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Projected State & Property Taxes per FTE – Property Taxes Included in Formula

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

Stat

e &

Pro

pert

Tax

Rev

enue

s pe

r F

TE

Property Taxes per FTE State Funds per FTE

Average Public

Support per FTE: $3,135

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Projected State & Property Taxes per FTE – Property Taxes Excluded from Formula

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

Stat

e &

Pro

pert

Tax

Rev

enue

s pe

r F

TE

Property Taxes per FTE State Funds per FTE

Average Public Support per FTE: $3,135

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Comparisons with OUS and K-12

Property Taxes •Community Colleges: 50% of property taxes imposed included in formula •OUS: No property tax support for public universities•K-12: 100% of property taxes included in formula

State Aid Significant source of revenues for all three education sectors

Tuition •Community Colleges: Provides about 1/3 of local revenues•OUS: Large source of revenue•K-12: Not a source of revenue for public schools

Enrollments •Community colleges: Used in the formula as basis for distribution of state funds•OUS: Used in the RAM as basis for distribution of state funds•K-12: ADMw used as basis for distribution of state funds

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State Support for Community Colleges—Historically

• Current service plus inflation=biennial allocation

• Not reflective of increases in student enrollment

• No connection to the actual average cost of serving a student

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New Approach to Community College Funding in 2001

• Budget request based on:– conservative projection of student enrollment– statewide average cost to serve a student

• Average cost per student derived from national reporting (IPEDS) and college revenue and expenditure reports

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2001 Community College Support Fund Appropriation

• appropriated $464 million for student enrollment of 192,005

• legislature funded 45.9% of projected cost of community college full-time equivalent students

• $32 million, of the $45 million community college enrollment growth appropriation, was lost to state budget reductions

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Agency Request 2003-2005

.

$2,483 2003-05 state share of average cost per student (45% of projected cost)

208,905 multiplied by students (derived from 3% increase in reimbursable FTE per year)

$518.75 million

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Enrollment Scenarios

91,125

97,550

95,558

92,064

90,08291,125

97,550

95,558

90,165

88,224

91,125

97,550

95,558

88,267

86,367

91,125

97,550

95,558

86,368

84,509

91,125

97,550

95,558

84,469

82,651

91,125

97,550

95,558

82,57180,793

70,000

75,000

80,000

85,000

90,000

95,000

100,000

2000-01 2001-02 2002-03 2003-04 2004-05

Pro

ject

ed E

nro

llm

ents

Governor's Balanced Budget - Projected FTE Governor's Budget Minus 2% - Projected FTE

Governor's Budget Minus 4% - Projected FTE Governor's Budget Minus 6% - Projected FTE

Governor's Budget Minus 8% - Projected FTE Governor's Budget Minus 10% - Projected FTE

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State Funding Assumptions

State Resources per FTE

$2,299$2,272

$2,301

$2,258

$2,114

$2,164

$2,212

$2,000

$2,050

$2,100

$2,150

$2,200

$2,250

$2,300

$2,350

1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

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Enrollment Scenarios Including Agency Request

91,125

96,069

99,912

102,909

105,996

91,125

97,55095,558

92,06490,082

91,125

97,55095,558

90,16588,224

91,125

97,55095,558

88,26786,367

91,125

97,55095,558

86,36884,509

91,125

97,55095,558

84,46982,651

91,125

97,55095,558

82,57180,793

60,000

65,000

70,000

75,000

80,000

85,000

90,000

95,000

100,000

105,000

110,000

2000-01 2001-02 2002-03 2003-04 2004-05

Year

Pro

ject

ed E

nro

llm

ents

Agency Request - Projected FTE Governor's Balanced Budget - Projected FTEGovernor's Budget Minus 2% - Projected FTE Governor's Budget Minus 4% - Projected FTEGovernor's Budget Minus 6% - Projected FTE Governor's Budget Minus 8% - Projected FTEGovernor's Budget Minus 10% - Projected FTE

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Budget Numbers

2003-05 FundingTotal CCSF Appropriation - Gov. Balanced Budget 407,668,252 Net Impact of Payment Shift (April 15 moved to July 15) (5,761,748) State Funds Available for 2003-05 401,906,504 Less: Distance Learning 602,565 COD Allocations 1,590,000 Columbia Gorge Annexation 1,170,000 Subtotal 3,362,565

Biennial Funds Available for Formula Distribution 398,543,939

Harney2122.8%

Malheur3,85912.1%

Lake6398.6%

Klamath2,8364.4%

Jackson7,2203.8%

Josephine 5,379 3.8%

Curry2,33011.0%

Coos10,65517.0%

Douglas16,23316.0%

Lane37,05411.3%

Deschutes13,46810.6%

Crook1,2836.4%

Grant3744.8%

Linn14,39613.8%

Benton11,91814.9%

Lincoln4,4279.9%

Baker7554.5%

Wallowa3054.3%

Union5822.4%

Umatilla7,00810.0%

Morrow8157.2%

Jefferson1,6318.2%

Wasco2,97412.5%

Wheeler785.0%

Gilliam985.2%

Sherman 1377.4%

Hood R.

2,37311.6%

Marion35,494 12.2%

Clackamas33,4389.5%

Multnomah73,607 11.0%

Clatsop5,89416.3%

Columbia

2,8846.5%

Tillamook3,81315.5%

Wash.44,531 9.6%

Yamhill6,4697.4%

Polk5,9629.4%

• CC Students by County• Total Students Enrolled, 2001-02• % of Population Enrolled

Community Colleges

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All Students2001-02

15,093 17,046

53,618

28,073

8,7015,975 5,782

40,365

28,54631,455

4,141

107,158

16,944 15,168

3,3837,601

17,385

0

20,000

40,000

60,000

80,000

100,000

120,000

College

Und

upli

cate

d H

eadc

ount

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Community Colleges Served 406,434 Students in 2001-02

17,298

102,056

154,373

93,860

22,09716,750

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

17 & Under 18-24 25-44 45-64 65 & Over Unknown

Age

Num

ber

Ser

ved

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Increased Student Demand Over the Last Decade

280,000

290,000

300,000

310,000

320,000

330,000

340,000

350,000

360,000

370,000

380,000

390,000

400,000

410,000

1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02

Year

Tot

al S

tude

nts

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Increased Demand for Highly Skilled Workforce

“Oregon’s future will depend on having a critical mass of highly skilled technology workers and researchers.”

“We need to immediately retrain existing workers for today’s high demand jobs.”Oregon Council for Knowledge and Economic Development Report, 2002

“The current supply of graduates produced by Oregon’s community colleges and universities falls short of the demand created by new positions and vacancies in these critical shortage fields.”

Final Report of the Interim Task Force on Health Care Personnel, 2002

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The Capacity Gap

• Nursing and Allied Health Programs are full but colleges do not have funds to expand to meet market demand.

• Waiting lists for ESL classes• Funding cuts = fewer programs, classes, seats

statewide• Physical plants in need of repair or expansion to

meet the need for classroom and lab space.

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The Capacity Gap

Professional Technical Programs are the training ground for a highly skilled workforce.

But in 2001-2003 the gap in PT programs grew:

15 AAS Programs were suspended12 Certificate Programs were suspended

17 AAS Programs were deleted 8 Certificate Programs were deleted

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What are the Options?

• The “cap”…freezing funding allocations to last year’s levels.

• More $$$!• Differentiated Funding • Greater reliance on grant and “other” funds• Cost savings: cut staff, cut programs, cut courses• Tuition Strategies

– Raising Tuition– Differentiated Tuition

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Tuition/Fees

Tuition increased 12% this year•rates are set by local college boards.•state average yearly tuition and fees for a full-time in-district student = $2,337•tuition for 2002-03 ranges from $40-$55 per credit

Projected average increase next year of 8% or $6.35 per credit for a range of $45 to $60

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Community College Tuition

-

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

Academic Year

Av

era

ge A

nn

ua

lized

Tu

itio

n

02-03 increase 12% 03-04 projected 8%

Student share of their education for the decade 1992 to 2002 increased from 22% to 33%

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2002-03 Annual Tuition and Fees: Cost to Students

$3,678

$2,348

$2,610

$3,843

$2,580

$4,014

$1,935

$3,600

$2,274

$3,885

$2,205

$1,992

$2,453

$3,687

$2,370

$4,359

$2,550

$3,720

$2,115

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

EOU

BMCC

TVCCOIT

KCCOSU

LBCC

OSU- Cas

cade

COCCPSU

PCC

ClackCC

MHCC

SOURCC

UOLCC

WOU

ChemCC

Tui

tion

/Fee

s

Eastern Oregon

South Central Oregon

Mid-Willamette Central Oregon Portland/Metro Southern Oregon Eugene Willamette Valley

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Socio-Economic Benefits

• Return on investment (source: CC Benefits Inc. Study, March 2002)

– 17% ROI in Oregon’s Community Colleges.

– The state of Oregon benefits from improved health, reduced welfare, unemployment and crime saving the public $61.5 million per year.

• Benefits of a community college education (Bureau of Labor Statistics publication)

– Increase wages $100 to $400 per week

– Decreases likelihood of unemployment by 50%