Budgeting and you“Or, how I learned to pillage cities and accumulate loot with no tool other than a spreadsheet and a keen understanding of funding formulae…”

Quick. Conjure an image of budgeting…

A vast wasteland?

Something like sausage?

(Something you don’t want to see made.)

Something more explosive?

Let me argue that budgeting is actually a key skill…

… A key to victory …

… to crushing opposition …

… to fame and fortune …

Here’s the hard truth.

Funding

(Anyone who says anything else didn’t get their project funded.)

=Priority

If this seems too mercenary…

Budgeting is fluid.

(You get second chances)

There’s another chance for impact…

Another chance to protect what you value…

Another chance to elevate your goals…

Today’s discussion:•Budgeting for Community Colleges in Oregon

•Budgeting within your institution

•An exercise in budgeting

All budgets are political exercises.

They’re the product of argument…

…not algorithm.

Oregon’s budget processState Board

of Ed & CCWD

Budget

Political tensions•SBE, CCWD are

state agencies working for the Governor

•OCCA is our lobbyist, paid for with public funds

•Discretion matters in this game…

Next?

The Funding Formula!

First, some history•CCs used to be funded primarily from

their own district taxation, and tuition. Funding levels varied from district to district.

•Measures 47 and 50 changed this in 1997.•District property taxes now get sent to the

state, where they’re combined with income tax revenue and redistributed among the 17 colleges, and CCWD.

•How does this happen, you ask?

The Funding Formula!

How it’s done•CCWD gets paid first

•Base support for all schools comes next

•Proportional FTE distribution is the last step

So, in practice…FY 2010-12

General Fund (income tax) $217 million

+ Property Taxes (redirected) $145 million

Total available $362 million

- Base Support $14 million

Total Available for FTE distribution

$348 million

Computing the Base Support• =(IF(B26<1100,ROUND(B26*C$43+(1100-

B26)*(0.5*C$43),2),ROUND(1100*C$43,2)))*(IF(B26<751,$I$33,IF(B26<1251,$I$34,IF(B26<1751,$I$35,IF(B26<2251,$I$36,IF(B26<2751,$I$37,IF(B26<3251,$I$38,IF(B26<3751,$I$39, IF(B26>3751,"")))))))))

•Put simply, we support all colleges’ first 1100 FTE at a variable rate, so that the smallest schools get the most money and are able to provide a basic level of services.

•After that, it’s all about the FTE…

The cold fact about FTE distribution…

Yes, it’s a big game of Tug-o-war•Let’s look at a hypothetical example•Variable growth creates winners and

losers, even before the legislative funding decisions are made.

•“No one is ever completely satisfied with the funding formula, but since decisions are never final, losers can always dream about victory in the next reel” – Mike Holland

What we’ve got going against us…•Like other educational institutions, our

costs are heavily influenced by the cost of personnel.

•Community Colleges, unlike K-12 or OUS, are not mandated by the state constitution.

•The range and variety of our student populations challenges outcomes-based funding, and makes it hard to tell one simple story about what we do.

What we’ve got going for us…•Oregon CCs have historically enjoyed

increased state funding, except in rare cases.•The regional nature of CCs ensures a

broader level of legislative support than OUS.

•Despite our own internal doubts and differences, Oregon’s CCs have been an effective group when lobbying the legislature. (Our presidents deserve credit for maintaining this sort of cohesion.)

Ok, let’s talk about local budgets…

Things you should know (or find out):•When does the budget process REALLY

begin?•How much of your institution’s budget is in

salaries and benefits?•What’s the true cost of an employee (full or

part-time)?•As close as possible, what is your per-FTE

reimbursement from the state?•Does your institution budget on a one-year,

or multi-year basis?

What judgments must you make?•What is the Administration and Board’s risk

tolerance?•What is your tolerance for risk? •How long is the organizational “honeymoon

period” for new initiatives?•Are your institution’s stated and unstated

goals aligned?•Where are the centers of power on your

campus?•How does your supervisor approach

budgeting?

Budgeting people you should know•HR

▫Benefits information (Example – TVCC)▫Job creation and classification processes

•IT▫Technology pricing and adoption processes

•Physical plant▫Office space, and other limitations

•Grant officer (if applicable)▫Coordination processes for grants

People to know (pt. 2)

•Fiscal officer▫“If the money guys ain’t happy, ain’t

nobody happy….”•Public information

▫Publicize your efforts, attract participants, etc.

•Institutional Research▫Assessment and effectiveness.

•Your supervisor

Components of every budget• First, the reason for doing it

▫ Alignment with mission and goals (stated or not)• The Expense side

▫ The people (salaries and benefits)▫ Their tools (materials and supplies)▫ Their stuff (capital purchases)▫ Their place (where they’ll work)

• The Revenue side▫ State (Total public resources – FTE and reallocated

property tax)▫ Student (Tuition, fees, financial aid)▫ The miscellany (Grants, other income)

• (And if you really want to “wow” folks)...▫ Your outcomes and assessments

Cynical bugeting tips

•“Double plus Ten”•“Leave Five-year plans to the Soviets”•Nothing says “shiny” like “A NEW CAR!”•The most important spending is done in

the first three months of the fiscal year.•“A penny saved is … a missed

opportunity”•“Give me last year’s budget plus 3%”

Somewhat more pragmatic tips…•Giving can be getting – there’s always next year•Round up (judiciously) for flexibility•Know the limits of reallocation within categories•Transparency encourages personal longevity•You can buy it now. What about in three years?•Could you do this with one less person?•What’s your order of cuts?•Don’t forget the administrative overhead•Who will champion your budget if you leave?•What’s your budget’s elevator pitch?

Now is the time when we budget!

Welcome to Oregon’s 18th CC!

Crater Lake CC facts and figures• Founded when federal government went bankrupt,

handed over all public lands to the state.• Mysterious backroom deal led to establishment of

CLCC as “magnet community college” for science research.

• Classroom building built on Wizard Island.• Crater Lake Lodge is now CLCC’s residence hall.• CLCC currently has annual FTE of 450.• Annual general fund budget is about $4.5 million.• Total state support is $1.9 million.• Tuition is $100/credit for all students

New Limnology program• Study of inland waters, in this case, crater lakes.• Students will travel once a year to various lakes.

▫2010-11 trips will be to Italy, Guatemala and Indonesia▫Trips cost $3,500 per individual

• 1 Fulltime instructor hired from OSU to chair the program @ $62,000

• 45 credits of additional instruction needed for the program

• 1 Fulltime lab assistant needed, as well .5 clerical support

• Students are charged a $2,000 surcharge for program.• You’ll need to equip several offices for your staff.• Allow for $17,500 in materials and supplies.

New Athletics program• Competitive open water swimming program• Students have a five-meet competition schedule.

▫Travel costs are $1,000 per athlete• 1 Fulltime coach hired for the program• .75 FTE Boat captain/lifeguard needed during

training.• .5 FTE secretarial support needed• You’ll need to equip several offices for your staff.• Allow for $17,500 in materials and supplies.• Your supervisor has asked you to establish the

minimum number of students needed to break even, given that you’re allowed to count tuition and state FTE reimbursement in your calculations.

Micronesian student grant program• Private foundation offers $300,000 annually to serve

students from Federated States of Micronesia• Grant will pay:

▫Director salary and travel costs of up to $10,000.▫Student travel allowance - $3,000 annually▫Student room and board - $4,400 annually

• 1 Fulltime director needs to be hired for the program▫ Director makes three trips to FS of M every year

• 1 Fulltime residence life coordinator will need to be hired

• .5 secretarial support and a .5 SS advisor are needed• Program necessitates additional 45 credits of instruction• Equip staff offices, and allow for $17,500 in M&S

TRIO SSS program• Maximum grant $200,000 annually for five years• A program director is required by the grant.• 100 students is target population.• You’re committed to a three-quarter, 3-credit

success class sequence for every student.• You’re committed to providing 1 hour/week of

tutoring per student throughout the school year.• You anticipate you’ll need clerical support, as

well as an advisor.• You’ll need to equip offices for your staff.• Allow for $17,500 in materials and supplies.• Grant allows for annual % increase tied to CPI.

Criteria for all projects

•Who needs to be included in your decision making?

•How will you evaluate your project?•Identify some questions that the

instructions leave unanswered.

Debrief

•Presentations from groups•Questions or comments

My perspective on budgeting•Budgets are the reification of institutional

culture.•My own impression is that less than 5% of

an organization’s staff understand their own budget. If you’re looking for a way to differentiate yourself, becoming skilled in budgeting isn’t a bad place to start.

•Where else are you going to get to use those math skills you had to get in order to get your degree?

Thanks go to:

•Mike Holland•Jonathan Gillen

•Google images▫ All images are stolen through the use of Teh Intarwebz,

and remain the property of their respective copyright holders, wherever they may be….