Recently, WCC announced that it will freeze in-district tuition at $95 per credit hour for the 2020-21 school year. It will follow with a planned tuition increases of $1 per year for the following two years. The rationale for freezing tuition is that WCC has a commitment to affordability. Additionally, the administration wants to recognize the impact of COVID-19 on students.
That’s all well and good. But the real commitment to affordability must include reducing the size and cost of the WCC administration. In the budget presentation on April 28, the Chief Financial Officer indicated that WCC has a structural deficit, which will cause expenses to exceed revenues in 2023.
In the same presentation, the CFO indicates that WCC has held tuition constant for three years, and will again forgo a tuition increase in FY21. Increasing the tuition rate by $1 per credit hour for in-district students means an additional $250,000 annually or so in revenue – not much. So giving up the increase isn’t that much of a sacrifice. The rise in property tax revenues more than offsets the “loss” in revenues.
Tuition freeze contributes to structural deficit
But holding tuition constant contributes to the structural deficit that WCC is facing. WCC’s expenses go up every year. The cost of maintenance goes up. The penalty for deferring maintenance goes up. The cost of utilities go up.
If you’re going to voluntarily hold your revenues constant, you have to cut expenses for every year you forgo revenue. Despite the layoffs, WCC hasn’t done the hard work of cutting expenses. Between now and FY 23, if all goes according to plan, WCC will increase its tuition revenues by about $500,000 or so. At the same time, it will spend about $7.5M on “Executive Management.” Instead of opting to invest in energy efficiency, it will spend another $7.5M on utilities in that time. Those two items alone represent $15M in expenses, offset by $500,000 in tuition revenues and a few million in property tax revenues.
Cutting the size of the College workforce to preserve the size of the Executive team is a losing proposition. The Board of Trustees has to decide (and now is better than later) that continued, unrestrained spending on executive management is leading the College toward financial ruin.
It is time for the Board to demand that the Administration make meaningful reductions to spending on Executive Management.
Photo Credit: campodf , via Flickr