Stateless Community College

April 29, 2009

Rufus Glasper, chancellor of the Maricopa Community College District, is through waiting for the other shoe to drop. Instead of just watching state aid disappear, he is encouraging his administrators to seek out new revenue streams in an effort to plan for the possibility of not receiving any state funds in the near future.

This strategic plan was hinted at by Glasper in a presentation at this year’s American Association of Community Colleges convention, held this month in Phoenix. Though Maricopa officials have yet to generate any formal drafts of the district’s budget without the use of state dollars, Glasper indicated that this could be a reality of the budget planning process some day soon.

“This is not just an exercise to prove a point,” Glasper said of his preparation for the disappearance of state appropriations. “If the state doesn’t fix its structural deficit, it is possible in the next five years this will happen because the state has very few choices.”

Many states operate under the theory that community colleges should be supported by states, localities and tuition. As late as the early 1980s, Arizona community colleges received anywhere between a quarter to a third of their funding from the state. Since there was no tuition charged in-state then, most community college budgets were funded by local tax dollars. As state funds have dwindled, districts like Maricopa have had to start charging tuition and slowly increase it over time. For example, in the past decade alone, Maricopa's tuition per credit hour has increased from $40 to $71.

At the beginning of the fiscal year, Maricopa was slated to receive about $59 million, or 10 percent of its budget, from the state. The district receives almost 59 percent of its budget from local property taxes, more than 25 percent from tuition and the remainder through grants and contracts.

In January, the Arizona legislature cut $9 million in funding from the state’s community colleges to help meet a $1.6 billion state budget shortfall. Now, Glasper noted that state aid only makes up about 8.5 percent of his district’s budget. Even with federal stimulus money on the horizon, he said he expects this percentage to dwindle further in the coming years.

Some $140 million dollars will soon be redistributed to Arizona’s public higher education system thanks to the federal stimulus package. Rich Crandall, Republican chairman of the House of Representative’s Education Committee, said it is still being determined just how this money will be funneled back into the system.

“You don’t have to restore the level of money in the same proportion [within a sector] that you took it,” Crandall said. “For example, we could restore a bit more to community colleges than to the universities. Actually, the community colleges might get a bit more than their cuts were.”

Crandall blames the state’s term limits and government-financed elections -- both changes introduced in the 1990s -- for some of its evaporating financial commitment to higher education. This, he said, has eliminated the legislature’s institutional memory to the point that it can no longer remember the days when the state funded between a quarter and a third of community college budgets and students did not pay tuition.

This week, the state Senate and House review budget drafts for the coming year. The current House plan, said Crandall, has the state’s community colleges taking a $1 million net loss in revenue. At the end of negotiations, he said, the best the state's community colleges could hope for was maintenance of the status quo. Still, though Crandall does not expect state funding to dry up entirely, he said he cannot blame Glasper for being cautious.

“I cannot foresee the day when our community colleges have no state funding,” Crandall said. “It would be extremely shortsighted for us to fund the higher education system one day and then make them go out on their own the next. [Glasper] is just being smart by thinking, ‘Since I have very little control over what the legislature does, I’d better have a back-up plan just in case.’ ”

Maricopa recently decided not to increase its tuition, and new property level assessment levels in the foreclosure-permeated city of Phoenix are expected to decrease the amount of money the district receives from local taxes. This, in addition to the bleak state picture, has Glasper and others in the district looking to corporate support as a growing “fourth revenue stream” to supplement state dollars.

At the district’s GateWay Community College, for example, Glasper said there are tentative plans to partner with a hotel and some businesses to build and maintain a convention center on campus. The college’s location near the Phoenix airport, he noted, makes it an ideal spot for growth.

“We need to be able to talk to business and industry, and we’d like be able to have them on our college campuses and in our facilities,” said Glasper, mentioning that Mesa Community College recently hosted a corporate training program called Motorola University for the major manufacturer. “We’d like to bring a company aboard where we’d be able to have a revenue-sharing project and also share workspace and offices.”

Corporate relationships, Glasper argued, could be a solid financial base of Maricopa’s future.

“Everyone is looking at many places to find a predictable revenue source,” Glasper said. “Business and industry are being asked to step up and provide the pipeline they need. Over time, as our resources start to change, I could see us have those. We need to plan for a permanent revenue source."

Given that there are not any concrete plans to review, Maricopa faculty have yet to express any major concern with Glasper’s proposal to lure more corporate partners to the district. Still, some faculty leaders note they will be part of the formal discussion to ensure that the plans are made with their support.

“These decisions require being tempered against academic integrity,” said Barry Vaughan, president of the Maricopa Community College District Faculty Association and philosophy professor at Mesa Community College. “We'd have to make sure they have no impact on the quality of education we provide to our students. Honestly, I don't think the chancellor would take money if it challenged the academic integrity of the institution. There are no philosophical qualms with the 'fourth revenue stream' in the faculty association. Money's money."

Still, even if other sources do make up for state funding, there will be many of the same obstacles to overcome.

“You get the worst of both worlds,” said Stephen G. Katsinas, director of the Education Policy Center at the University of Alabama at Tuscaloosa. “You have all the regulation with none of the funding. If you think they’ll have one less hoop to jump through, they’ll have every bit of the regulation they had before.”

Maricopa, however, is not in the difficult position in which many rural community college districts find themselves. Katsinas said only a large district like Maricopa could possibly attempt to make up for state aid with contracts from business and industry.

“To [Maricopa’s] credit, they have the entrepreneurship to try this,” he said. “There aren’t a lot of community college districts in the country that can consider what they’re doing. It’s a sad state of community college funding in this country that so many states are not fully funding their formulas anymore.”

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