JOHNSTOWN — Fulton-Montgomery Community College may see a drop in state aid for the current academic year under the state budget that was approved by lawmakers earlier this month that will allow the state to review revenue as it is received over the course of the year and revise spending accordingly. The college has been cutting spending each year as enrollment has declined and will look to make further cuts while crafting the 2020-21 operating budget.
FMCC Acting President Greg Truckenmiller reported to the Board of Trustees on Thursday that preliminary calculations show state aid to the college will be reduced by approximately $360,000 for the 2020-21 academic year under the budget approved by lawmakers on April 3.
State aid for next year and even the current academic year that includes the summer session could be reduced further under a provision included in the budget allowing the state to adjust or reduce aid over the course of the year based on actual revenue received by the state as lawmakers project a budget shortfall this year due to expenditures related to the coronavirus and losses in revenue related to restrictions closing non-essential businesses to slow the spread of the virus.
The state will determine actual spending following three “measurement periods” running from April 1 to 30, May 1 to June 30 and July 1 to Dec. 31.
“We are being told to plan for a range of 10 to 25 percent in additional cuts in state aid and not waiting until next year, in fact this could impact our June state aid payment, because obviously the first quarter has been a rough quarter for New York state,” said Truckenmiller.
The State University of New York is requiring schools in the system to plan for possible budget cuts by preparing budget scenarios that account for cuts in state aid at various levels that must be submitted to SUNY for review along with reports on expense control measures.
“They are asking us to curtail unnecessary expenditures, which of course we are already doing, consider hiring freezes,” said Truckenmiller. “There is recognition of course there may be some hiring that may need to take place, but that’s prioritized for things such as construction and health and safety and other positions that are important for retention and student support.”
The college leadership team is currently discussing options, said Truckenmiller, while Vice President of Administration and Finance Gregg Wilbur has already begun compiling the required reports.
Reviewing the current academic year’s $17.19 million operating budget, Truckenmiller reported that the college has been able to reduce spending this year and may avoid utilizing any portion of the $303,878 in applied fund balance included in the original budget. The fund balance may not be touched even if state aid is cut for the current year by 10 percent or approximately $117,000.
“It has come through significant underspending and some vacancies that we had, some insurance things that are making the budget better than we anticipated, so we are very hopeful that the worst case scenario for us is that we don’t draw on the fund balance this year and we hope that better days are even here for us in terms of adding to that fund balance, because the budget scenario that we’ve developed for next year certainly is going to rely on some of that fund balance,” said Truckenmiller.
Looking ahead to the 2020-21 operating budget that is typically adopted by the Board of Trustees in May, Truckenmiller said administrators are anticipating a loss in state aid and revenue from enrollment declines totaling approximately $1 million, which would result in a roughly 6 percent reduction from the current year’s budget.
“We’ve already made some cuts in the budget in the prep for next year and we’ve got some revenue generation ideas that we’re going to be bringing to you centered around fees and a tuition increase and so there will be more discussion to come on that,” said Truckenmiller.
The college and enrolled students will see some relief from federal funding included in the Coronavirus Aid, Relief, and Economic Security Act for higher education with approximately $1.63 million allocated to FMCC. Truckenmiller reported that at least 50 percent of the funding must be directed to aiding students facing hardships related to the coronavirus while the remainder is available to help support the institution.
To release the funding, Truckenmiller said the college must submit a spending plan for the funds to SUNY and then the state Department of Budget for approval. SUNY has requested that colleges wait to apply for the allocated funds until receiving guidance from SUNY on how to prepare spending plans.
“They’ve determined that it’s trickier and more complicated than they anticipated and our direction as a member of SUNY is that we are to wait until we are told that it is OK to apply for that money,” said Truckenmiller. “That funding is reserved for us and that’s why SUNY isn’t bolting to the gate. They’re trying to be careful and cautious, because they want to make sure that we are receiving every penny that has been allocated to us.”