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Red ink is trying to creep into Howard College's new budget.
Despite recent good financial news from the state of Texas, college officials are still faced with deficits as they prepare their new fiscal package, which will be the subject of a trustees' budget workshop set for 9:15 a.m. Monday in the student union building's Tumbleweed Room. The trustees' monthly meeting will follow the workshop at 12:15 p.m.
As recently as a month ago, college officials were staring at the very real possibility of losing upward to $1 million in state revenue because of a change in the way moneys are allocated to Texas community colleges. However, College President Dr. Cheryl Sparks said state leadership has tossed Howard a financial lifeline of sorts.
â€śWithin the past couple of days, state leadership has agreed to to a 3 percent 'hold harmless' clause to their allocations to Texas community colleges,â€ť Sparks said. â€śThat means â€¦ that in the allocation we receive from the state this year, we will not lose more than 3 percent from the previous year.â€ť
The good news comes with a catch, however â€” all 50 Texas community colleges must sign off on the new provision for it to take effect.
Sparks said 36 of the 50 institutions, including Howard, had agreed to the provision as of Friday afternoon.
â€śWe're definitely in favor of it,â€ť Sparks said. â€śWithout this, our Big Spring budget is $656,000 in the red. If the 'hold harmless' provision stands, we'll receive an additional $395,167 from the state, which will still leave us more than $260,000 short heading into Monday's workshop, but $260,000 is better than $656,000.â€ť
The major reason for the loss in revenue can be traced to a change state education officials made in the way they dole out allocations to community colleges. In the past, the state would look at a community college's contact hours (the total amount of times students were in classes or labs) for the year immediately preceding the biennial session of the Texas Legislature and use that to determine the school's allocation for the next two years.
However, allocations will be determined on a year-by-year basis from now on, which could put some community colleges in an immediate financial bind.
â€śWe did see a decrease in our contact hours this past year, which will result in a smaller allocation from the state,â€ť Sparks said in June.
Complicating matters is that Howard's state allocations have been shrinking for the past three years. The state's general revenue allocation has dropped 15 percent during that time, and the share of employees' benefits the state pays has dropped from 85 percent three years ago to 40 percent today.
Sparks said trustees will examine several possible ways to further pare the shortfall.
â€śWe'll talk about our fund balance, taxes, reduction of staff â€¦ all of that stuff has to be looked at,â€ť she said.
The college will formally adopt its new budget and tax rate in late August.