Community Colleges Could Lose Half of State Funding CanAEt Rely on State

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Byline: Madhu Krishnamurthy and Bob Susnjara mkrishnamurthy@dailyherald.com, bsusnjara@dailyherald.com

In a troubled economy where rising unemployment is forcing throngs of jobseekers to return to school, community colleges offer a beacon of hope as a low-cost educational alternative.

Yet, a cloud of uncertainty hangs over the stateAEs 39 community colleges, which could lose half their state funding this year, or roughly $148 million, despite seeing a 10 percent to 12 percent spike in student enrollment.

Colleges received the first of four quarterly disbursements from the state, due in August, just last week.

State officials confirmed the second funding installment originally scheduled for November could be delayed until May, which means the last two payments for the year would be pushed back until the 2010-2011 school year.

Colleges with healthy reserves will likely dip into their savings to make up for the shortfall, and institutions

without that cushion are forced to make cuts.

"This is not a good time to be putting somebody out of work," Palatine-based Harper College President Kenneth Ender said. "WeAEre going to look at some other remedies."

Harper College would lose $3.5 million from the state. The schoolAEs reserves stand at a little more than $50 million.

"From a cash-flow perspective, if the college needed to finance that $3.5 million (shortfall), we certainly have a sufficient fund balance to do that. That would be the last resort," Ender said.

The school is anticipating 5 percent growth in student enrollment this year but budgeted for only 3 percent growth. "If we end up with 5 percent, we are about $600,000 more on the revenue side (from tuition)," Ender said.

Not filling personnel vacancies unrelated to faculty would be another way to cut costs, he said.

Depleting reserves, though not the most desirable option, will bail out many colleges, but without more revenue coming in, the hole will only get larger, warned Ellen Andres, chief financial officer for the Illinois Community College Board, the agency that administers the state funds.

"Some of them are digging in to the point where itAEs going to get really close to making payroll," Andres said. "No matter what your size or what your wealth is, everybody is being hurt. Quite frankly, some colleges canAEt do it with only 50 percent (of state) revenues."

Further complicating matters, the state has other commitments such as repaying the more than $2 billion it borrowed for its own operations, which is due starting in March, Andres said.

"ThatAEs the worry u that cash flow might be off," Andres said. And state revenues are continuing to fall, she said.

Andres said that while the money would eventually come, itAEs not like colleges will receive six payments next school year to make up for the loss this year.

The chief financial officers of all community colleges are meeting today with Andres to discuss the funding delays. The meeting will run from 10 a. …