Hi Folks,
This is a quick update on where we are with the budget, and proposals for addressing our problems.
Current estimates have state funding for community colleges dropping from 500 million to anywhere from 460 to 375. Assuming we land somewhere in the middle, we could see a college deficit for next year (FY 10) in the 2-4 million dollar range.
Additionally, there is the possibility of the legislature taking back money from this fiscal year, by as much as another 2 million.
OK, so that's the bad news. How are we addressing it?
As far as process is concerned, it's complicated. Some issues are being addressed in the governance system, mostly in College Council and the CC Budget Development Sub-committee. (As a side note, this week I was elected Chair of College Council, replacing Siv Serene, who left after several years on the Council. Siv will be missed; and I would like to thank Jim Salt for nominating me, and the rest of the Council for supporting me.)
On the Budget Development Sub-committee, the classified staff are represented by me, and Denise Brinkman (thank you Denise).
One problem we face is that many decisions are already made, by the Board and administration. The Board has already set next year's tuition rate. While that can be changed, politically it is more difficult to change the rate than to set it at a higher rate initially. Also, the Board management have already determined that we are not allowed to fundamentally address the college mission. We can talk about some program cuts; others are off-limits for political reasons. We're still working out what we can and can not address.
This is, in my opinion, a fundamental flaw in Lane's budget process, and one I have argued for changing for several years, with no success. Essentially, management sets the one revenue function we control (tuition), determines what we can and can not address as far as program changes, and then allows the staff level work start in the governance system. Of course, at that point really all that is left is tinkering around with small M&S issues (last year we had quite a debate around the cost of tissue paper in offices) and, of course, reducing the cost of labor (wages and benefits).
My argument is that we should start by figuring out what the fixed costs are, including wages, benefits, utilities, etc., and then see if we can devise a mission for the college which is financially sustainable. Simply stated, we are managing the budget backwards, and with no meaningful strategic planning. Each year becomes a crisis to be solved by cutting wages, with no long-term solution.
At this point, there seem to be two proposals being floated. One is an across the board pay cut, the other is an across the board increase in health insurance (cutting wages and benefits again). As an example, we'd be talking about something like a 5% wage cut, or an increase in the cost of insurance by two or three hundred dollars per month (for 12 month employees). As I've said previously, I do not believe that such cuts are "fair", by any meaningful definition of the word. Those cuts result in some people cutting their food budget while others reconsider luxuries. That's hardly an equal level of sacrifice.
So, looking for a more equitable way to address "shared sacrifice", and considering some of the ideas being discussed in D.C., at the last Budget Development Sub-committee I floated an idea we haven't seen at Lane: salary caps. If we set the maximum salary at $75,000 per year, the immediate savings would be $594,465 (based on the wage data I sent out earlier this week). With a 20% OPE factor, the total savings would be $713,358 annually.
To be clear, I am by no means suggesting that people earning more than $75,000 don't "deserve" what they earn. I will agree that they do. But I will also insist that people earning far less deserve to at least keep what they earn, measured against inflation.
So, if we can't pay everyone what they deserve, then the question becomes one of how to fairly share sacrifice. And I believe that $75,000 is quite enough to live on. When Lane develops a financially sustainable mission, then we can reinstate the salaries that were capped.
I'll continue sending out updates as the budget process develops, as well as updates regarding Bargaining, which starts next month (Our bargaining team is myself, Alen Bahret, Denise Brinkman; Thwing Havens; Marcia Bell and Rodger Gamblin).
Thanks,
Robert Baldwin, MT,
541-463-5574