Portland Community College | Portland, Oregon

PCC receives approximately 51% of our funding from the state, primarily through the Community College Support Fund. Each year, Oregon’s Higher Education Coordinating Commission (HECC) allocates a certain amount to community colleges across the state, based on the overall budget approved by the state legislature. This allocation helps fund the college’s programs and operations but is impacted by state budget priorities and economic conditions.

However, competition for limited state resources means that PCC cannot always count on meaningful increases in funding each year. In the upcoming year, the Governor’s requested budget is expected to be only 1% higher than the previous biennium. Given inflation and rising operational costs, this minimal increase places additional pressure on PCC to sustain its service levels.

Property Taxes: PCC receives funds from property taxes in our service district. In FY24, this was approximately 18% of our total general fund revenue.

Enrollment-Related Revenue: Tuition and fees are another critical source of revenue for the college, making up approximately 31% of our total revenue. However, as enrollment numbers fluctuate, so does this revenue, making it vital to plan for changes in student enrollment. To maintain stability, the college caps tuition and fee revenue at no more than 40% of total revenue. This cap helps reduce the financial burden on students, but it also requires PCC to balance the budget through careful expense management.

Budgeting at PCC is cyclical, meaning it follows a regular, repeatable process each year with specific milestones and evaluations:

• Evaluating Financial Health: The college assesses its fiscal position throughout the year using tools like the Comprehensive Financial Index (CFI). The CFI helps PCC evaluate fiscal health and stability, taking into account factors like reserves, debt, and operational costs. The CFI and other financial metrics support HECC’s annual evaluation of Oregon community colleges, helping the college align with state standards and goals.
• Setting Priorities and Making Decisions: The budget cycle involves setting fiscal priorities that align with PCC’s goals and Strategic Plan, which focus on expanding student access, equity, and success. The Key Roles in Budget Decision-Making offers a high-level visual overview of stakeholders and their roles in the budget decision-making process at Portland Community College, presenting an interconnected framework for budget planning and fiscal sustainability.

Once priorities are set, PCC allocates our resources to meet operational costs, fund critical programs, and support student success initiatives. Key considerations include:

• Operational Costs: The college manages rising costs in areas like utilities, IT infrastructure, and maintenance. Budgeting for these essential expenses ensures that PCC can continue to operate smoothly.
• Personnel Costs: Accurate personnel cost forecasting is essential, as it allows PCC to honor contractual obligations as well as increases to management, executive and confidential compensation, prepare for mandated benefit changes, and adjust for inflation.

To provide a safety net for emergencies or revenue shortfalls, PCC maintains a General Fund Reserve. PCC’s General Fund Reserve Policy (B510) requires that 9-18% percent of the college’s budget be set aside each year to ensure continuity of services and financial stability. The College’s Fiscal Sustainability Framework and Action Plan aims to keep a reserve available of 12-18% to manage unexpected costs and help maintain sufficient cash flow. This policy reflects PCC’s proactive approach to fiscal management by setting guidelines for fund use and establishing a minimum reserve threshold. As internal and external factors put pressure on our existing funds, it is critical that we maintain a reserve fund to allow us to meet the evolving needs of our community.

Throughout the year, PCC monitors its budget to adjust as needed. By regularly evaluating revenue and expenses, the college ensures that fiscal plans stay on track. Any significant changes in state funding, enrollment, or operational costs prompt reevaluation to ensure the college remains fiscally sustainable.