Jan. 5, 2009

No doubt all of us sense the seriousness of our economic times. The links on the right lead to articles that indicate the severity nationwide.

The Florida Legislature today began a special session on the budget. This action is necessitated by the Florida Constitution, which requires a balanced budget. It is anticipated that this special session will mandate further cuts in our funding.

St. Petersburg College is positioned to address these reductions without significant impact on the college’s core mission. Over the last several months, particularly in the last six weeks, we have aggressively cut recurring expenses in order to successfully finish the current fiscal year, which ends June 30, and in anticipation of this special session.

On our positive side:

• Enrollment for both the two- and four-year programs is solid and increasing. 
• The limit on the number of hours faculty may teach has been removed temporarily so that full-time instructors who wish to teach more hours may request to do so. 
• Reserve funds equivalent to 9.9 percent of the retirement budget have been set aside in case the amount we are required to contribute to the Florida Retirement System increases.  This is our attempt to keep your retirement funds more secure through our budget. We are probably the only college in the United States to do this.

No doubt, it will be necessary to continue cutting in some areas, but, as I expressed in my holiday message of faith, I believe we will be substantially intact at the end of June. 

Granting contracts for next year will present a unique challenge, as revenue resources will not be determined until May for the fiscal year that begins July 1.  Shortly before the holidays, the Full Senate Briefing on Budget and Revenue was made available to me.  We have provided a link to the report for those of you who would like a snapshot of the many aspects of the Florida economy.  It is sobering, for both your household budget and the college’s budget. 

There are three areas that will directly affect the amount of available revenue:

• Three months ago, the Florida Lottery had lost $50-million in revenue.  A month later, the amount grew to $100-million, and the latest figures show the revenue is $250-million below what the Legislature already has appropriated this year for governmental agencies, including St. Petersburg College.  This year the college was appropriated more than $7-million from lottery funds.  To date, we have received no actual funds.
• Property tax valuations have declined in Pinellas County by approximately 8.5 percent, resulting in far less revenue for the required K-12 local effort.  It appears the state will have to balance the loss of revenue against the declining student population, which is not falling as rapidly as revenue.  This puts a strain on the already-reduced state funds, which we will need for our budget.  Unlike the School Board, St. Petersburg College receives no funding from local taxes.
• Private investing in our Foundation is greatly diminished.  Virtually every 501(c)(3) and college/university/K-12 foundation is suffering due to stock market valuations. St. Petersburg College has been affected in this area, and the result will be fewer scholarships offered for the summer and fall sessions of 2009.

(On a more positive note, the college has invested almost $23-million in cash,
from both our general budget and some of the Foundation funds, in CDs, which
are  insured. Taking this money out of bond investment portfolios managed
by the state has increased the revenue in the two funds, helping our budget
somewhat.)

The best information available when this report was prepared stated that the special legislative session this month will address budget cuts only, with no discussion regarding new revenue. There seems to be agreement that other sources of revenue will be considered during the regular session in March/April.  The media has reported the possibility of new taxes being levied on alcohol, tobacco, gambling and Internet sales.  Also, sales tax exemptions will be reviewed. 

Without additional revenue, cuts between $3.8- and $5.8-billion (the difference being between the Governor’s and Senate’s plans) would be required to balance the budget.

It appears the Legislature will not consider new revenue during the special session. The word today is that the Legislature will ratify what the governor has done in withholding 4 percent.

That means the big, tough decisions about further cuts and issues of revenue will wait until the regular session.

Sadly, today it was announced that revenue has fallen another $100-million shy of projections.

The information I’ve given here is, I believe, fairly accurate. The administration at St. Petersburg College faces a challenge as we attempt to plan for the fall with unknown revenue resources and, at the same time, inform you, our respected faculty and staff, as early as possible of decisions that will affect all of our futures. 

Again, special thanks to a wise Board of Trustees which continues to guide us.

Please use the links on this page to review the articles and Senate report.  If you have specific questions, feel free to e-mail me. I will do my best to find the answers. In the meantime, our professional staff will closely monitor the state financial situation, and we will continue to communicate with the college family as details become available.

The new term is about to get underway, and our students – many of them facing this financial crisis with great difficulty – will be looking to us for inspiration, dedication, faith and, in some cases, hope.  I know we can count on our college family to continue to provide its outstanding level of teaching, learning and support, especially in these extraordinary times.

» Two-year colleges chasing more bachelor's degrees
seattlepi.com, Dec. 3

The state of Washington reportedly looks at “two-year colleges chasing more bachelor’s degrees.”

» College may become unaffordable for most in U.S.
iht.com, Dec. 3

The New York Times maintains that colleges may become unaffordable for most in the U.S.

Financial missteps at Harvard likely could have been avoided
heraldtribune.com, Dec. 16

Harvard University announces a $8 billion loss in its foundation, a restriction on hiring and a cessation of granting tenure.

» Community colleges cutting classes, sessions
ocregister.com, Dec. 8

California colleges drastically reduce the number of students that will be accepted next year, as well as the number of classes offered, shrinking the promise of college for all Californians.  The state faces up to a $28 billion deficit over next 18 months.

» Illinois might cut funding for colleges
stltoday.com, Nov. 28

Illinois announces potential cuts for its colleges.

» ASU seeks tuition hike to help with budget cuts
eastvalleytribune.com,
Nov. 30

Arizona State University expects upward of a $100 million loss in funding.

» University furloughs
baltimoresun.com, Dec. 18

The state of Maryland furloughs state employees for two weeks to recoup losses.

» MUSC to handle cuts with furloughs
charleston.net, Nov. 25

A Charleston South Carolina newspaper reports that the Medical University of South Carolina will furlough hundreds of employees to absorb a $17 million shortfall.

» Dartmouth offers early retirement incentives for employees
bloomberg.com, Dec. 12

Dartmouth College offers early retirement incentive for employees.