ICC’s Two Legged Stool

Lane Hardy

Sept. 29 – President Quirk-Bailey leaned into the microphone, she spoke confidently, “We are not in a crisis at this organization.” She continued, “We are financially challenged.”

This was not how she had hoped her time in office would begin. Her audience, a crowd of ICC faculty and staff was invited the day before to attend a meeting on the state of the budget.

The meeting convened Sept. 28 to inform employees, $1.8 million in state funding has yet to be delivered, and it may never come.

Those funds represent money which is in the budget, money which has been allocated to be spent, money which the school needs to operate, and if it is not provided, it will need to be found.

There is no doubt the issue is concerning, but there is no need to panic, in her address Quirk-Bailey, joined by Executive Vice President Bruce Budde explained the contingency plan, aimed to find the missing funds within the fiscal year.

Action has already been taken, $250,000 was saved by amending the retiree health plan. Employee travel is frozen, there will be a 10 percent reduction in supplies, and faculty positions are being continually reviewed for restructure to achieve maximum efficiency, among other measures.

Unfortunately, the absent state funding is not even the real problem.

Quirk-Bailey put the grim reality plainly, “Right now we are systemically upside-down” she said. “We are currently spending more money than we take in.”

The situation is unprecedented.

Ideally, funding is based on a model referred to as the three legged stool. The state pays a third, local homeowners pay a third through property taxes, and students bear the final third. However, this has never been the case. ICC currently rests precariously on a seat with only two legs, one of which is crumbling.

Since 2010, enrollment has decreased 33 percent, an average yearly loss of 459 students. That is heavy. Tuition makes up 26 percent of total revenue, and 42 percent of operating revenue. The decline since 2010 represents and eight million dollar loss, much more than what is at stake with the state government.

This is not just a local problem, the trend is national. While four year institutions have not had as much of a hit, in two year institutions across almost all ages and ethnic groups, numbers are down. According to the National Center for Education Statistics, from 2010-2014, National enrollment in 2 year institutions dropped 13 percent, and has continued even further since.

There are not any definitive, encompassing answers as to where the students have gone, it is a complex issue, but current theories involve shifts in key demographics, shrinking high school classes, changing industry needs, and growing poverty.

Students have already felt the effect of this decline. Tuition rates per credit hour have risen twenty dollars since 2014, and are expected to go up another five in 2017.

Fortunately, the latest data from the National Student Clearinghouse Research Center shows that Nationwide, the decline in enrollment is slowing, which could possibly signify the beginning of a trend of recovery.

Still, it is abundantly clear that solutions must be found. Those involved in finding them have been searching intensively, but they do not have much to work with.

Property taxes, which represent the biggest income source at 34.5 percent of total revenue have been stretched to their limits. State funding has been steadily declining since 2009, and due to the drop in enrollment, in 2015 ICC became ineligible for equalization funds, special state provisions meant to equalize the funding of colleges around Illinois.

To add to this, money problems are not a new issue. In 2015 $6 million was expected from the government, but only $1.8 million received.

Vice President Budde explained that the $4.7 million loss was covered, “Through expenditure control, tightening our belt where we could, and being very efficient with the money we were provided.”

Even with efforts to control loss, enrollment has been dropping faster than being frugal can keep up with. It became so serious last year that the decision was made to dip into the schools fund balance, special savings taken every year from the difference in revenue and expenses, which is put away for situations such as this.

The general goal is to keep them between the cap of 50 percent, and floor at 25 percent. From 2015-2016 5.6 percent was used, lowering the balance from 41.4 percent to 35.8 percent, and though the target for 2017 is 30.9 percent, if the solutions currently being put into place hold, the fund is expected to begin to rise again in 2018 and onward.

Quirk-Bailey issued stalwart assurance that the quality provided to students in classrooms will not be affected by the current financial troubles. Challenging as the situation is, she and supporting staff are facing the future with confidence, and a plan.

“These are very difficult things to talk about”, Quirk-Bailey said. “We understand this isn’t about budget cutting”

The goal is to rebuild revenue streams and current level of enrollment because this is not a short term problem.

The move from downtown Peoria to north campus will save $500,000 a year in utility costs alone. A review of employee benefits is planned, and staff wellness program incentives may be eliminated. There will be investigations into retirement incentives, which could allow for more efficient restructuring. If the $1.8 million is not received, furlough days for some faculty are also under consideration.

In addition to money saving budgets, Quirk-Bailey discussed a new operational plan, which will address the decline in enrollment. The plan includes an intense look at how to stem the tide of enrollment loss, marketing for job ready career programs, analysis of onboarding, where students are lost in the process of enrollment, and a completion concierge program which will reach out to students who are close to finishing, but have stopped pursing degrees.

As she closed, President Quirk-Bailey reiterated how unprecedented the situation is, and how the options being considered are not ones which would be favorable to continue in the future. She said, “I know sometimes transparency creates other issues, but I guess if I had to pick an issue to have my heart would say, share what you’re considering and let everyone know what’s possible.”