College Funding: Where Does the

Money Come From?Maderia Ellison, Director of Financial Services

Northland Pioneer CollegeJune 11, 2015

Money Doesn’t Grow on Trees

Gain a high level understanding of:

1. How the State of Arizona funds Universities & Community Colleges

2. How the funding model for Community Colleges is changing

3. How funding impacts you as an employee

Learning Objectives

FY 2014 FY 2015 FY 2016 $8.0

$8.5

$9.0

$9.5

$10.0

$9.5 $9.3

$9.1

Governor and State Legislature allocate resources based on estimated revenue collections

Billion

s

Arizona Budget - Enacted

General Fund Revenues

Arizona BudgetHigher Ed Reductions

UniversitiesFY 2016

Reduction

ASU $53.3 million

NAU $17.3 million

U of A $28.4 million

Community Colleges FY 2016

Reduction

Maricopa $8.8 million

Pima $7.1 million

Pinal $1.0 million

FY 14 FY 15 FY 16 $10.0

$20.0

$30.0

$40.0 $34.5

$32.5

$18.2

Operating State Aid

Million

sArizona Budget

Community Colleges

StateLocalStudents

Historic Funding ModelCommunity Colleges

Operating State Aid (A.R.S. §15-1466)

Support operating and maintenance expenses Funding formula is based on enrollment

STEM Funding (A.R.S. §15-1464) Support for science, technology, engineering and

mathematics (STEM) and workforce programs

Equalization Aid (A.R.S. §15-1402 and §15-1468) Support to community colleges that have an insufficient

property tax base

Community CollegesFunding Sources - State

Property Taxes (A.R.S. §42-17151)

Community Colleges have authority to levy taxes on property Primary - Support operating and maintenance

expenses Secondary – Voter approved; supports debt

Truth in Taxation (A.R.S. §15-1461.01) Increase requires hearing Maximum increase is 2% increase

Community CollegesFunding Sources - Local

Tuition

AZ Constitution state “…instruction furnished shall be as nearly free as possible”

How Students Pay for Tuition Grants - Pell implemented new restrictions July

2012 Scholarships – Limited and competitive Student Loans – Default rates are increasing Employers/Third Parties - Have limited funding

Community CollegesFunding Source -

Students

Compensation

Furlough Downsize Reorganize

Department Budgets/Programs Reductions Eliminations Defer costs

Funding Reductions Impacts to Employees

Joint Legislative Budget Committee

Arizona Budgets for Universities and Community Colleges http://www.azleg.gov/jlbc.htm

Arizona State Legislature State Constitution & Arizona Revised Statutes Financial Reports for Universities and Community Colleges http://www.azleg.gov/

Office of the Auditor General Financial Reports for Universities and Community Colleges http://www.azauditor.gov/

Websites