Portland Community College | Portland, Oregon

PCC President Preston Pulliams' updated budget message: Feb. 24

Photos and story by James Hill

Dear Colleagues:

On Friday February 20, 2009, the State of Oregon released its latest revenue forecast. As expected, the budget shortfall for the State is projected to increase to $855 million in the current biennium ending June 30, 2009. The revenue shortfall projection for the next biennium (2009-11) is worse, down to $2.5 to 2.9 billion from $1 billion 3 months ago. That is almost a 20% decrease from December 2008 when the Governor proposed his state budget. The State is required by its constitution to have a balanced budget. If cut across the board, the Community College Support Fund (CCSF) in the 2009-11 biennium could be reduced by as much as $100 million from the current biennium’s allocation of $500 million. PCC receives approximately 25% of the CCSF for instructional and operational support.

Last Wednesday, the co-chairs of the Way and Means Committee proposed to keep community colleges from further cuts in the current biennium (2007-09). This is good news and an excellent starting point. However, this proposal will need to be approved by both chambers of the legislature. The two other sectors of education (K-12 & OUS) are concerned with this proposal and I am sure there will be more discussions and lobbying before the outcome is determined. Also, the passing of the Federal Stimulus bill is helpful to the State as it includes approximately $567 million to help Oregon education. There are still many questions about how the funds will be received and distributed by the State. A word of caution about the stimulus funds: these are one-time dollars. It is problematic to use one-time dollars to fund ongoing operations. There are only 4 months left in this biennium ending June 30, 2009. Regardless of the budget decisions in the legislature, we must act to make sure we end this fiscal year in a relatively good standing to prepare for the likely reductions in the next biennium. Therefore I have directed the Cabinet to reduce spending by at least $3 million (about 2% of our total general fund budget) in the last 4 months of this fiscal year. This will help us to maximize our ability to buffer further budget cuts in the next biennium. If the co-chairs’ proposal were to become a reality, then we would be in an even stronger position to start our next biennium.

The legislature will take up the 2009-11 budget only after it completes its work on the 07-09 biennial budget. In the meantime, regardless of the timing of the final legislature budget, we must propose a budget for the Board to consider and approve in their April board meeting so that PCC has a legal budget to operate starting July 1, 2009. We will assume a CCSF allocation of $428 million (down from $435 million 2 weeks ago) as a base case to develop the budget. With this level of funding, we estimate State funding to PCC would be reduced by $11 million in the 1st year of the biennium and $9 million in the 2nd year.

At this point, I want to share with you the process that we will use from now until April to prepare the proposed 09-11 budget for the PCC Board:

1. Continue to monitor the state revenue projection: to assess what the Federal stimulus means to the CCSF budget and whether/when the State will tap the rainy day fund.

2. Continue to work with the legislature actively to communicate the critical role of community colleges in a down economy and to minimize cuts to the community college budget. The co-chairs’ recent proposal not to cut community colleges any more this fiscal year is indicative of their support for our mission and the effectiveness of our message to date.

3. Host Budget forums over the next few weeks to share information and answer questions regarding the budget and to solicit budget saving and revenue generating ideas.

4. Convene the President’s Budget and Planning Advisory Committee (BPAC) monthly to seek their advice on the budget.

5. Using the budget principles developed for the College,

a. The Cabinet will continue weekly budget deliberations to explore all options—everything is on the table

b. Deans/managers and their counterparts across the district are working with their faculty/staff to brainstorm a list of possible permanent budget reduction and revenue enhancement ideas that would help maintain our core business for the 2009-11 biennium. Ideas will be presented to the Cabinet in the next few weeks and will be prioritized before recommendations are made to me for the proposed budget

c. Using the base case ($428 million), the Cabinet will move forward in putting together details needed for the April 19 board meeting, subject to change as information becomes available. The legal budget timeline for PCC is as follows:

· 1st Board Budget Committee budget hearing—March 19, 2009

· 2nd Board Budget Committee budget hearing and to approve budget—April 21, 2009

· Multnomah County Tax Supervising & Conversation Commission (TSCC) hears and certifies PCC approved budget on May 27, 2009

· PCC Board adopts the approved budget certified by TSCC in the June board meeting

It is important to remember that any decision to increase tuition or fees will be made by the College Board of Directors. If the final community college budget approved by the legislature later in the spring differs from the $428 million base, we will propose a revised budget to the Board as soon as legally possible that incorporates the new revenue figure. Meanwhile, I am continuing to work with the Board to get their sense on strategic and policy matters regarding the budget.

This is a challenging time for our state, our college, our community and our students. Like the legislature, PCC has some difficult choices ahead. But I am confident that if we plan carefully and stay focused on our mission, we will weather this fiscal storm, as we have in years past. While the financial outlook is uncertain, there is one thing of which I am sure – PCC will always be an integral part of the Portland metro region – serving as the largest gateway to higher education and workforce training for the residents of our community. Thank you for your support and commitment to our college. I will keep you posted in the weeks ahead.

Preston Pulliams

District President