2003-04 Michigan State Aid Information An informational meeting for ACC faculty and staff March 13,...

2003-04 Michigan State Aid Information

An informational meeting for

ACC faculty and staffMarch 13, 2003

2003-04 MI State Aid Information

Most States Face Revenue Challenges

• Average 4-year public institution tuition increase across the U.S. last year was 9.6%.

• Texas public schools have been asked to cut their budgets by 12.5% to help trim a projected $10 billion budget shortfall.• New Jersey proposes to cut $100 million from college operating budgets for 2003-04.

• 46 states are facing significant budget shortfall for FY04. California is facing a $35 billion shortfall.

• Wisconsin’s governor has proposed $250 million in cuts for higher education.• Virginia has initiated freezes on pay increases and hiring.

• Missouri’s governor has ordered every third light bulb unscrewed in state offices.


Michigan Also Faces Challenges• State tax revenue is highly dependent on auto sales,

which have declined over recent years.

• Projected MI budget shortfall of $1.8-2.0 BILLION for FY04.

• State aid will be cut along with most other state government operations.


Proposed Michigan Budget Cuts• FY03 state appropriation cut by executive orders of 3.5% (about

$190,000).• Governor Granholm’s FY04 budget proposal calls for an additional 6.5% cut over the reduced FY03 amount (about $340,000).• Michigan’s financial future continues to be unclear and precarious.


This is not a catastrophe!• But yes, these are challenging times.

• There are ways to intelligently deal with reduced state aid and still be the same strong community college.

• This is going to be a multi-year challenge.

• All ACC faculty and staff need to participate in the process.

2003-04 MI State Aid InformationACC Financial History

Alpena Community CollegeRevenues as a Percent of Budget

0%

10%

20%

30%

40%

50%

60%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Michigan State Appropriations Tuition and Fees Property Tax

ALPENA COMMUNITY COLLEGE EXPENDITURES & REVENUES 1981-2002

2

3

4

5

6

7

8

9

10

11

12

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Year Ended June 30,

Mil

lio

ns

Expenditures Revenues



-$1

$1

$3

$5

$7

$9

$11

Mil

lio

ns

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Year Ended June 30,

ALPENA COMMUNITY COLLEGE EXPENSE BY CLASSIFICATION 1981-2002

Salaries & Fringes Supplies & Others Utilities Equipment

ALPENA COMMUNITY COLLEGECREDIT HOUR ENROLLMENT HISTORY 1953-2003

0

5

10

15

20

25

53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03

Th

ou

san

ds

Fall Spring


Alpena Community College General Fund Revenue

Budget 2002/2003

Tuition/Fees29.5%

Property Taxes19.1%

State Aid49.2%

Other2.1%


Alpena Community CollegeGeneral Fund Expenditures

Budget 2002/2003

Salaries/ Fringe Benefits77.0%

Misc4.4%

Library & Equipment1.0%

Outside Sources5.1%

Advertising1.4%

Supplies3.1%

Utilities/ Telephone4.0%

Transfers4.0%



ACC Planning Assumptions for FY04

• Board of Trustees expects College to maintain at least a 5% reserve in general fund balance.

• Steady enrollment figures – same number of credit hours as FY03.• Millage passage in FY04.

• Slow growth in property tax revenue.

• Continued double-digit increases in health care costs.

• Continued energy cost increases.

• Multi-year budget planning process.

• Non-personnel costs remain level.

• No tuition caps are mandated by the state or federal government.

$0

$100

$200

$300

$400

$500

$600

$700

$800

Th

ou

san

ds

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001

Year Ended June 30,

ALPENA COMMUNITY COLLEGEGENERAL FUND BALANCE 1981-2002

Balance at the End of the Year



ACC FY04 Budget Options• Keep the FY03 parameters?

• Decrease expenses and increase revenue.

DescriptionAdj. Budget

Totals% of

BudgetBudget Totals

% of Budget

% Increas

e

Budget Totals

% of Budget

% Increas

e

Budget Totals

% of Budget

% Increase

Property Taxes 2,063,400 18.71% 2,127,950 19.78% 3.1% 2,213,068 19.86% 4.0% 2,301,591 19.86% 4.0%Tuition/Fees 3,604,000 32.68% 3,604,000 33.50% 0.0% 3,899,528 35.00% 8.2% 4,063,308 35.06% 4.2%State Aid 5,126,054 46.48% 4,782,608 44.46% -6.7% 4,782,608 42.93% 0.0% 4,973,913 42.92% 4.0%Federal 63,076 0.57% 66,041 0.61% 4.7% 67,361 0.60% 2.0% 68,709 0.59% 2.0%Interest 30,000 0.27% 30,000 0.28% 0.0% 30,000 0.27% 0.0% 30,000 0.26% 0.0%Sales & Services 0 0.00% 0 0.00% 0.0% 0 0.00% 0.0% 0 0.00% 0.0%Other 142,038 1.29% 147,577 1.37% 3.9% 149,053 1.34% 1.0% 150,544 1.30% 1.0%Transfers 0 0.00% 0 0.00% 0.0% 0 0.00% 0.0% 0 0.00% 0.0%

Total Revenue 11,028,568 100.00% 10,758,177 100.00% -2.5% 11,141,619 100.00% 3.6% 11,588,064 100.00% 4.0%

Salaries 6,077,632 55.59% 6,235,650 55.20% 2.6% 6,422,720 54.35% 3.0% 6,647,515 53.84% 3.5%Fringe Benefits 2,339,341 21.40% 2,601,347 23.03% 11.2% 2,861,482 24.21% 10.0% 3,104,708 25.14% 8.5%Outside Sources 445,789 4.08% 476,994 4.22% 7.0% 508,476 4.30% 6.6% 531,866 4.31% 4.6%Advertising 146,630 1.34% 146,630 1.30% 0.0% 149,563 1.27% 2.0% 152,554 1.24% 2.0%Supplies 334,542 3.06% 340,229 3.01% 1.7% 347,034 2.94% 2.0% 353,974 2.87% 2.0%Rental 8,540 0.08% 8,540 0.08% 0.0% 8,711 0.07% 2.0% 8,885 0.07% 2.0%Utilities 355,238 3.25% 372,645 3.30% 4.9% 387,550 3.28% 4.0% 403,052 3.26% 4.0%Telephone 70,000 0.64% 70,000 0.62% 0.0% 71,400 0.60% 2.0% 72,828 0.59% 2.0%Postage 46,000 0.42% 47,978 0.42% 4.3% 48,938 0.41% 2.0% 49,916 0.40% 2.0%Insurance 115,500 1.06% 121,968 1.08% 5.6% 124,407 1.05% 2.0% 126,896 1.03% 2.0%Travel & Mileage 153,505 1.40% 141,532 1.25% -7.8% 141,532 1.20% 0.0% 144,362 1.17% 2.0%Tuition Waivers/Dues 91,500 0.84% 91,500 0.81% 0.0% 93,330 0.79% 2.0% 95,197 0.77% 2.0%Library & Equipment 111,320 1.02% 104,307 0.92% -6.3% 114,738 0.97% 10.0% 117,032 0.95% 2.0%Other 67,690 0.62% 67,690 0.60% 0.0% 69,044 0.58% 2.0% 70,425 0.57% 2.0%Transfers 569,250 5.21% 468,493 4.15% -17.7% 468,493 3.96% 0.0% 468,493 3.79% 0.0%

10,932,477 100.00% 11,295,503 100.00% 3.3% 11,817,416 100.00% 4.6% 12,347,703 100.00% 4.5%

96,091 (537,326) (675,797) (759,639)

2003-2004 2004-2005 2005-2006

Alpena Community CollegeGeneral Fund

If We Do Nothing - Three Year ProjectionMarch 13, 2003

2002-2003

DescriptionAdj. Budget

Totals% of

BudgetBudget Totals

% of Budget

% Increas

e

Budget Totals

% of Budget

% Increas

e

Budget Totals

% of Budget

% Increas

e

Property Taxes 2,063,400 18.71% 2,127,950 19.25% 3.1% 2,213,068 19.35% 4.0% 2,301,591 19.35% 4.0%Tuition/Fees 3,604,000 32.68% 3,899,528 35.28% 8.2% 4,195,892 36.68% 7.6% 4,372,120 36.75% 4.2%State Aid 5,126,054 46.48% 4,782,608 43.27% -6.7% 4,782,608 41.81% 0.0% 4,973,913 41.81% 4.0%Federal 63,076 0.57% 66,041 0.60% 4.7% 67,361 0.59% 2.0% 68,709 0.58% 2.0%Interest 30,000 0.27% 30,000 0.27% 0.0% 30,000 0.26% 0.0% 30,000 0.25% 0.0%Sales & Services 0 0.00% 0 0.00% 0.0% 0 0.00% 0.0% 0 0.00% 0.0%Other 142,038 1.29% 147,577 1.34% 3.9% 149,053 1.30% 1.0% 150,544 1.27% 1.0%Transfers 0 0.00% 0 0.00% 0.0% 0 0.00% 0.0% 0 0.00% 0.0%

Total Revenue 11,028,568 100.00% 11,053,705 100.00% 0.2% 11,437,984 100.00% 3.5% 11,896,876 100.00% 4.0%

Salaries 6,077,632 55.59% 6,235,650 55.30% 2.6% 6,422,720 54.44% 3.0% 6,647,515 53.93% 3.5%Fringe Benefits 2,339,341 21.40% 2,601,347 23.07% 11.2% 2,861,482 24.26% 10.0% 3,104,708 25.19% 8.5%Outside Sources 445,789 4.08% 476,994 4.23% 7.0% 508,476 4.31% 6.6% 531,866 4.31% 4.6%Advertising 146,630 1.34% 146,630 1.30% 0.0% 149,563 1.27% 2.0% 152,554 1.24% 2.0%Supplies 334,542 3.06% 340,229 3.02% 1.7% 347,034 2.94% 2.0% 353,974 2.87% 2.0%Rental 8,540 0.08% 8,540 0.08% 0.0% 8,711 0.07% 2.0% 8,885 0.07% 2.0%Utilities 355,238 3.25% 372,645 3.30% 4.9% 387,550 3.29% 4.0% 403,052 3.27% 4.0%Telephone 70,000 0.64% 60,000 0.53% -14.3% 61,200 0.52% 2.0% 62,424 0.51% 2.0%Postage 46,000 0.42% 47,978 0.43% 4.3% 48,938 0.41% 2.0% 49,916 0.40% 2.0%Insurance 115,500 1.06% 121,968 1.08% 5.6% 124,407 1.05% 2.0% 126,896 1.03% 2.0%Travel & Mileage 153,505 1.40% 141,532 1.26% -7.8% 141,532 1.20% 0.0% 144,362 1.17% 2.0%Tuition Waivers/Dues 91,500 0.84% 91,500 0.81% 0.0% 93,330 0.79% 2.0% 95,197 0.77% 2.0%Library & Equipment 111,320 1.02% 99,320 0.88% -10.8% 109,252 0.93% 10.0% 111,437 0.90% 2.0%Other 67,690 0.62% 63,222 0.56% -6.6% 64,487 0.55% 2.0% 65,777 0.53% 2.0%Transfers 569,250 5.21% 468,493 4.15% -17.7% 468,493 3.97% 0.0% 468,493 3.80% 0.0%

10,932,477 100.00% 11,276,049 100.00% 3.1% 11,797,174 100.00% 4.6% 12,327,056 100.00% 4.5%

96,091 (222,344) (359,190) (430,180)

2003-2004 2004-2005 2005-2006

Alpena Community CollegeGeneral Fund

8.2% Tuition Increase - Three Year ProjectionMarch 13, 2003

2002-2003


Alpena Community CollegeRevenues as a Percent of Budget

0%

10%

20%

30%

40%

50%

60%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Michigan State Appropriations Tuition and Fees Property Tax

Alpena Community CollegeFY04 Expenditure Distribution

$11,276,049

Salaries, 55.3%

Fringe Benefits, 23.1%

Library & Equipment, 0.9%

Telephone, Postage, Rental, & Other, 1.6%

Tuition Waivers/Dues, 0.8%

Travel & Mileage, 1.3%

Insurance, 1.1%Utilities, 3.3%

Supplies, 3.0%

Advertising, 1.3%

Transfers, 4.2%

Outside Sources, 4.2%


Alpena Community CollegeFringe Benefits as a Percent of Expenditures

18%

19%

20%

21%

22%

23%

24%

25%

26%

1999 2000 2001 2002 2003 2004 2005 2006


$1,664,000

$2,339,000

$3,062,000


What Does This All Mean?• We’re a great institution and that’s not going to change.

• Quality teaching and learning must and will continue.

• We have a good mix of programs and services.• Enrollment targets must be met.• Costs will go up.

• Layoffs are not in the interest of the institution.

• Bankruptcy is not an option!

• Tuition and fees will go up.

• Facilities improvements and equipment purchases will slow but not stop.• We must come together in spring 2004 to pass a property tax renewal.• Remember, we’re a great institution and that’s not going to change!


We’re All Part of the Budgeting Solution!• Each of us has valuable knowledge of their operations and can

offer important suggestions on how to reduce expenses and increase revenue.• We all have a vested interest in continuing to make ACC as strong an institution as possible!

• Individuals and department groups can make suggestions via the website (http://www.alpenacc.edu/internal/suggest/savefundsform.htm), printed forms, etc.

2003-04 Michigan State Aid Information An informational meeting for ACC faculty and staff March 13,...

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