Lane Community College budget crisis
It was completely predictable. In fact, I've predicted it several times and although my timing was a bit off, the essential outline is what I said in the 2003 election campaign for the LCC Board. The college continues to fund the trappings of a university on a budget that no longer permits such indulgences. It can only do this by running up tuition and crunching essential classes, which will drive down enrollment and eventually state funding.
There is a lag between the loss of students and the loss of funding. After the budget crisis a few years ago, the state froze the formula for distributing available cash among colleges so for a few years, there was absolutely no impact from declining enrollments. Lane took this breathing space as an opportunity lard up its expenses. It actually is spending more than it was three years ago when FTE enrollment was 25% higher.
The piper now wants to be paid. Cash from the state is declining in absolute dollars at the same time that costs are rising faster than CPI. Tuition is already the steepest in Oregon, so raising it significantly is no longer an option. That card has been played already.
When a college recognizes that society has a problem, it has two choices. It can ameliorate the situation in general by increasing the number of educated citizens, who will tend to deal well with the problem, or it can create a program, hire staff, designate classes, and generally make a visible effort to specifically address the issue on campus.
Lane invariable chooses the latter and this makes it a high-cost provider of education. The problem is that the state now provides most of its funding on an FTE reimbursement basis and under a new plan, perhaps misnamed as "equity," all colleges will get equal tax funding per student within another five years. Low cost providers will be able to charge lower tuition, which will attract more students, which will bring them more money and the high cost providers less.
Lane is presently on the brink of a cost/revenue death spiral. The administration seems to recognize this only dimly. There is very little time left to recognize the full gravity of the situation and reverse a lot of ill-advised decisions. The odds that the present Board, determining policies for the present administration, will meet the challenge are not good.
There is a lag between the loss of students and the loss of funding. After the budget crisis a few years ago, the state froze the formula for distributing available cash among colleges so for a few years, there was absolutely no impact from declining enrollments. Lane took this breathing space as an opportunity lard up its expenses. It actually is spending more than it was three years ago when FTE enrollment was 25% higher.
The piper now wants to be paid. Cash from the state is declining in absolute dollars at the same time that costs are rising faster than CPI. Tuition is already the steepest in Oregon, so raising it significantly is no longer an option. That card has been played already.
When a college recognizes that society has a problem, it has two choices. It can ameliorate the situation in general by increasing the number of educated citizens, who will tend to deal well with the problem, or it can create a program, hire staff, designate classes, and generally make a visible effort to specifically address the issue on campus.
Lane invariable chooses the latter and this makes it a high-cost provider of education. The problem is that the state now provides most of its funding on an FTE reimbursement basis and under a new plan, perhaps misnamed as "equity," all colleges will get equal tax funding per student within another five years. Low cost providers will be able to charge lower tuition, which will attract more students, which will bring them more money and the high cost providers less.
Lane is presently on the brink of a cost/revenue death spiral. The administration seems to recognize this only dimly. There is very little time left to recognize the full gravity of the situation and reverse a lot of ill-advised decisions. The odds that the present Board, determining policies for the present administration, will meet the challenge are not good.
posted by Rob Spooner at 6:57 AM
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