State Rep. Andy Olson: Don’t cut community colleges

Press Release from Rep. Andy Olson
As featured in Corvallis Gazette Times 2/16/09

The majority party in Salem is struggling with how to address the challenges facing Oregon. The state is facing a budget shortfall that could reach $2 billion and beyond. As a result, Gov. Ted Kulongoski and the Democrats are searching for any loose change they can find. They are actively considering billions of dollars in tax and fee increases. Now, they are looking to pick the pockets of Oregon’s community colleges.

The Legislative Fiscal Office recently asked all community colleges to make their ending fund balances as of Dec. 31, 2008, public.

The office believes that this will allow them to determine the colleges’ ability to handle cuts from the state to solve short-term budget deficits potentially totaling $1 billion.

It’s important to understand that the ending fund balance is not a separate savings account, but a true reserve that is encumbered by obligations colleges have already made but have not paid.

In light of the dramatic enrollment increase, expenses have sky rocketed. Meanwhile, the governor’s 2009-11 budget reduces community college revenues across the board.

Linn-Benton Community College will use this year’s ending fund balance for two main areas:

LBCC will pay for operations and expenses already obligated while they await the state’s fourth-quarter payment.

LBCC will contribute to the general fund to match science construction funding from the state and federal governments to help pay for the new science building.

Additionally, the college intends to use its ending-fund balance to manage the current reductions from the state.

Obviously, major cuts will be made this year to deal with the declining state of the economy. Community colleges, as well as other state agencies, must absorb the cuts and make necessary changes to their curriculums, operations, and personnel.

However, the state should not tap the college’s reserve accounts. Fiscally responsible colleges could potentially be affected by bad fiscal policy.

While everyone will have to absorb cuts, there are areas which need to be protected so that students and communities can still be served and survive.

Community colleges like LBCC are facing enrollments that are increasing dramatically in light of the recession.

Operational costs are also increasing, making it difficult for community colleges to plan for future expenses, making the reserve accounts that much more important.

In order to meet the demands of training a workforce and putting people back to work in this economy, keeping community colleges financially solvent is critical.

Picking the pockets of Oregon’s community colleges is a mistake that the state will regret for years to come.

Rep. Andy Olson, R-Albany, represents state House District 15, which includes North Albany.

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Posted by at 06:49 | Posted in Measure 37 | 10 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Steve Plunk

    Ending fund balances are not encumbered. They may have plans for them but the term encumbered is misleading.

    Let’s face it, every government funded entity has a similar story of woe. Unless I took the time to analyze the books of this particular community college I couldn’t tell you if they are deserving or not. In most cases the waste is there, the wants are limitless, and the administrative personnel well paid and overstaffed.

    With due respect to Rep. Olson I just can’t work up that much sympathy when the rest of us are struggling largely because of government and it’s spending excesses.

    • Anonymous

      Olson is generally right, but he should put the solution square on where it needs to be.

      We need to cut K-12 education, force schools to seriously start tightening their belt and raising their standards and lower the per kid dollar amount that is north of 11K.

      Take that savings in money, and apply it to Higher Education.

    • Jay Bozievich

      Steve,

      As a former Board member for Lane CC, I disagree with you. The State distributes funds to the CC’s on a quarterly basis so and during the 2002 budget crisis the postponed one of the payments into the next budget cycle so that CC’s have to carry a certain abount of reserves to pay expenses like contracted personnel costs, prior to getting the funds that support them. It may not be restricted as you are thinking about, but they are “encumbered” by the need to fulfill contractual obligations to keep the doors open.

      As far as working up sympathy, the Senate majority caucus has a history of shorting CC’s. CC’s where still forced to make cuts last budget cycle when the rest of the general fund grew by $2 Billion. LCC has done significant cost cutting and has negotiated significant cost savings with the classified employees and is currently working on a similar contract with faculty.

      Olsen is partially right. Ending funds of CC’s should be left alone, but their general fund allocation, which has suffered major cuts, should at least be kept level if they are expected to continue to operate. CC’s save taxpayer’s money over the University system. When was the last time you heard of a CC faculty member that does not teach classes?

      If the rest of the state ran like LCC, then we would be in a budget surplus right now.

      • UO fan

        No, Jay, LCC isn’t well run, nor is the CC system generally. The reason they have been taking a hit in the legislature lately is that they historically have been very well funded (in contrast to the public 4 year colleges and universities in Oregon).

        Why do I say LCC is not well run? The out of line cost structure for personnel, plus the egregiously wasteful program like diversity and sustainability. Your LCC pres Mary Spilde is going around sounding alarms about global warming. It may play well in Lane County, but it’s not good management.

        • Jay Bozievich

          What are your facts that show LCC has “out of line” personnel costs? Have you compared the UO faculty contract with Lane’s? How about the classified contracts? I have don’t remember Lane ever hiring someone out of the Big O, but I aware of it going the other direction…and CC’s have been taking a hit in the budget for quite a while, not just recently.

          As to the GW stuff, unfortunately 5 out of the 7 Board members out voted me on that issue and now it is written into policy. The lesson their is pay more attention to who get’s elected to school boards, the envirocrats do.

          • eagle eye

            Jay, UO is supposed to be a major research university, LCC is a community college. The comparison you suggest is silly. If you don’t believe it, have your LCC faculty apply, say, for a faculty position in neuroscience at UO.

  • davidg

    Enrollment at the community colleges is going up as Olsen notes. Oregon’s state supported universities and colleges are having the same experience with enrollment: it is going up and has been for the past decade.

    The enrollment increases are coinciding with sometimes steep increases in fees and tuition. These two trends (increasing enrollment and fees) are unexplainable by current education orthodoxy which postulates that increasing fees will drive students away. Actually, as fees have gone up, more students have enrolled.

    The explanation for this apparent anomaly is that students see value in their education and are willing to budget their resources to allow them to get it. The government often has difficulty understanding that people will pay for the things they want – and so don’t need greater subsidies. We are seeing an example.

    So if enrollments are increasing and the colleges need more funds, let the colleges increase tuition. Students are demonstrating an ability to meet that challenge on their own – without increasing state subsidies.

  • eagle eye

    Olson is absolutely right. (He should have included the public universities, too, but let that pass.)

    He is not saying that community colleges should be exempt from state budget cuts, only that their reserves not be confiscated by the state.

    To take the reserves would be to punish frugality and prudence and reward extravagance (on the part of agencies that haven’t built up prudent reserves.)

    Even the threat of taking the reserves is enough to force agencies to spend down their reserves, lest they lose the money. Completely irresponsible.

    Olson is right.

  • Steve Plunk

    So here we are back to square one. Unlimited wants with limited resources. Every program the state funds can come up with reasons it should not have those funds cut. So if everyone can justify no cuts what’s the state to do? Raise taxes. Guess who’s funds that cuts? Taxpayers. Me.

    So there is still no sympathy coming from this citizen. By the way, any tax increases I endure will cut the available funds for my son’s college education. People need to understand there are finite resources, cuts must be made in the public sector.

    • eagle eye

      Oh, so you’re planning on college for your son? I’m kind of surprised, given the attitudes you’ve expressed here about higher education. Why do you want him to waste his time and your/his money?

      I hope your son isn’t planning on attending a public university, because when the cuts you long for are enacted, tuition is going to go up.

      By the way, you still don’t seem to see what Olson is talking about: raiding the CC reserve funds for other uses. Not raising taxes.

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