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Budget woes
Improving economy could spell trouble for community colleges

04/02/15
By Ryan Lessard news@hippopress.com



After a projected revenue shortfall of about $2 million and about 40 layoffs for the Community College System of New Hampshire, one might wonder if this is the first leak in a sinking ship. 

In fact, the state’s improving economy may be partly to blame for this drop in expected enrollment. As Chancellor Ross Gittell, a trained economist, likes to point out, enrollment at community colleges is counter-cyclical.
“As the economy improves, enrollment in community colleges goes down, particularly with older students, who are 40 percent of our student population,” Gittell said. 
As employment rates improve, fewer adults seek out community colleges for retraining and re-education to improve their chances at getting a job, he said. The community college system doubled enrollment in the last decade. 
“The biggest growth was during the depths of the recession around 2008/2009,” he said.
And New Hampshire’s economy is certainly rebounding. February’s adjusted unemployment rate reached 3.9 percent, well below the national average. Assuming this trend continues, does that mean community colleges in New Hampshire are doomed to languish from a continued loss of students? Not necessarily, according to Gittell. 
“Our enrollment last year has been stronger than the national average. Nationally, community college enrollment was down by about 4 percent last year and ours is a little bit positive so we’re not even down. We just haven’t grown as much as was budgeted,” Gittell said.
Still, he said, this is only a temporary setback. 
“Longer-term, we are on a growth trajectory and we expect to maintain that,” said Gittell.
But not everyone is so sure. Laura Morgan is a full-time accounting professor at NHTI, the president of its faculty forum and a union steward for the State Employees Association. 
“I don’t see the student population increasing any time soon,” said Morgan. 
NHTI was the hardest-hit community college. About 20 people have been laid off there so far in fiscal year 2015, according to CCSNH spokesperson Shannon Reid. Great Bay Community College saw about 10 layoffs while Nashua Community College and White Mountain Community College each laid off two. These schools failed to make their predicted enrollment goals, while the other schools enrolled enough students that the overall system experienced net enrollment growth.
Morgan says the current budget woes are partly due to mismanagement. 
“What I have been concerned about over the past couple of years is the way our limited revenue that we receive from the state is being spent. There’s concern among faculty in the system that the money is being spent on top administration and not in the classroom,” said Morgan.
In January, the chancellor’s office laid off nine people. Morgan said these were lower-paid, front-line staff and she pointed to the recent creation of new positions in the chancellor’s office as evidence of an ever-expanding administration. 
“When you look at the numbers, the chancellor’s office hired five new administrators who have a combined payroll of $850,000,” said Morgan. 
The five new positions were paid for by a strategic initiative fund the office dipped into last July. Gittell characterized the changes at his office as a consolidation. 
“The associate vice-chancellor for finance — that combined two positions, the CFO position and the strategic planning position. ... And also, we put into place a vice-chancellor of human resources and partly that reflected that we now have three bargaining units,” said Gittell, referring to the new union contract for the adjunct faculty finalized in 2013. 
Morgan also pointed to $1.6 million from the strategic initiatives fund that was spent on a student database and other technology upgrades she said are unnecessary. 
“Money is being spent on top administration, on software upgrades, while front-line staff are being laid off. The money isn’t being spent on teaching and learning,” Morgan said.
Expenses at the university have been outpacing tuition revenue over the past few years. Between fiscal years 2012 and 2014, expenses grew by 20 percent. During that same period, tuition revenue increased by only 3 percent. Gittell said much of the growth in expenses has been necessary in meeting the recession-era boom in demand, and that growth is already slowing. 
“Expenses have been leveling out because we had to adjust given our current picture of 2015,” Gittell said. “And then we expect expenses for [fiscal year] 2016 to be flat to a little negative.”
Morgan argues if the tuition revenue isn’t increasing by very much, then these expenses can’t be explained as meeting enrollment demand.
Meanwhile, depending on how much money CCSNH receives from the state, a tuition decrease is on the table. Governor Maggie Hassan had called for an increase to the system budget by $6.5 million. But House Finance Committee Division II Chair Karen Umberger says the committee is recommending an increase of $5.25 million. 
“We’re saddened that we don’t have sufficient dollars to give what was requested,” said Umberger.
The community college system had signaled that even though the governor’s proposed increase was $1.7 million less than requested, it would still be enough to decrease tuition. But Gittell said the board will wait until the final budget is signed before deciding.
Morgan wonders how the system can afford to decrease tuition when its faculty are among the lowest-paid in the country. She cites a survey by the American Association of University Professors from 2012 that placed New Hampshire’s two-year schools last in New England when it comes to faculty pay. 
“I have no reason to believe that’s changed,” said Morgan. 
According to the survey, NHTI professors’ pay ranked in the bottom 10 percent nationwide.  
“Cutting tuition will only continue to starve the colleges of funds and cause more faculty layoffs,” Morgan wrote in an email.
As for the potential for future growth and financial stability, Gittell said the system is making efforts to increase online enrollment. But Morgan says high schools in the state are graduating fewer students. She fears that, after faculty is laid off, program quality will suffer and admissions will have a harder job selling the schools to prospective students. 
 
As seen in the April 2, 2015 issue of the Hippo.





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