Press "Enter" to skip to content

Community College Budget Cuts on the Horizon

The end of the federal government’s COVID-19 relief funds means that administrators are looking to make community college budget cuts. The cuts, which community college administrations appear poised to make, will bring budgets back in line with lower enrollments. Although enrollment declines seemed to correlate with the advent of COVID-19, deeper analysis shows that community college enrollments have been in decline for about a decade.

Chemeketa Community College faculty asked the Board members there to direct the college administration to cut administration and overhead before seeking to cut the college’s instructional budget. The college, in Salem, OR is part of the statewide Oregon community college system. State officials with the Oregon Higher Education Coordinating Commission (OHECC) have been examining the system for the past year to retune the state’s higher education funding mechanism. OHECC finalized outcomes-based funding changes to the state’s budget process for its universities in 2015.

The new community college budget model, which will coincide with the end of federal COVID-19 support, rewards community colleges that meet enrollment targets among what the commission terms “underrepresented groups” including adult learners, low income students, and minorities. The current funding mechanism is weighted heavily toward undifferentiated enrollment.

The new model is supposed to debut next fiscal year, but officials from around the state have asked the state legislature to delay its implementation until 2024-25. Administrators argue that they have not had time to assess the model and its impact on the community college budget cycle. In addition to preparing for revenue losses related to the end of federal aid, they argue that they will need to contend with a new state funding model that may leave them significantly short on funding. They argue that will result in program cuts that will directly and negatively impact students.

Community college budget strategies are changing

Oregon isn’t the only state looking at outcome-based changes to its community college funding model. Texas also recently announced that it was close to implementing a model that would reward community colleges that met certain performance standards and reduce funding for institutions that did not. In Oregon, community colleges fear that the new model will prompt administrators to cut instruction to compensate for lost revenue.

Other community colleges have opted to reduce their payrolls through attrition. For example, four community colleges in Western New York have reduced their payroll expenses by not refilling vacant positions. Collectively, the losses represent about 250 jobs.

Pennsylvania offers a similar story; since 2019, the state’s community colleges have eliminated about 500 jobs, mostly through attrition and voluntary retirement incentive programs. Job losses at community colleges in Western Pennsylvania have been significantly higher than in other parts of the state. At the same time, the remaining employees have seen their salaries increase by an average of more than $8,000 since the payroll reductions began in 2019.

Of four community colleges in Western Pennsylvania, enrollment increased at just one. The Community College of Allegheny County, which serves the City of Pittsburgh and surrounding areas, saw its enrollment increase by 2,500 students. Other community colleges in Butler, Beaver, and Westmoreland counties all saw enrollment declines.

But officials at these institutions don’t characterize the staff reductions as a plan to reduce expenses. Even though the employee count is dropping, they recognize that they must keep certain positions filled to maintain or increase enrollment. They emphasize the difficulty in recruiting and retaining instructional staff, and say that they’ve improved the benefits package as a way to attract qualified employees to key positions.

Shifting funding models may cloud the future of community colleges

The takeaway here is that states are rethinking the way they fund community colleges. Enrollment, which has been the basis for funding formulas, is giving way to performance metrics – graduation rates, enrollment demographics, four-year transfer rates, and even earnings after graduation. These changes come at a time when community colleges are also dealing with declining enrollment and uncertain federal support. In addition to the termination of COVID-19 support, the Department of Education is on the cusp of reviving federal regulations that consider post-graduation earnings as a condition for granting federal financial aid. Unless community colleges can solve the problem of declining enrollment, new funding models will only make survival harder for two-year schools.

Photo Credit: Milwaukee Teachers’ Education Association, via Flickr