MARICOPA COMMUNITY COLLEGES Financial Planning Update Fall 2010

FY to FY

A recession, but all things considered… Maricopa has done pretty well  Annual State tax support cut $23.3 million since June 2008, but we escaped with no additional cut in FY  Property tax revenue down – no 2%, new property down  No tuition increase for two years

Maricopa is doing pretty well  No massive lay-offs  Governing Board gave money to ASRS and Flex Benefit increases so employee pay was not cut  Colleges received enrollment growth funding to help offset the cost of serving more students

FY 2011 General Fund Increase  General Fund reflects most of the operational costs of running 10 colleges and the district office  FY 2011 increased $20.5m for a total of $655.4m Amount In Millions Revenue Increases, including carryforward $ 20.5 Plus: Carryforward Adjustment (for one-time expenses) $ (0.6) Enrollment Growth Funding $ (12.6) Other Adjustments: ( for uncollected tax levy and bad debt) $ (0.4) Move Scholarships and Other Expenditures from Fund 2 to Fund 1 $ (2.5) ASRS, salary, health insurance, plus other mandatory adjustments $ (8.6) Budget Cut Reallocation $ 5.8 Available for Allocation $ 1.6

 Disability Resources - $300k  Permanent Funding for Prop 301 Faculty -$500k  Operating Support for new Facilities constructed through the Bond Program - $600k  Higher than anticipated mandatory contract costs - $200k FY 2011 Discretionary Funding Allocation of the $1.6 million:

Building the FY 2012 Budget

Source: JLBC Budget Status Update, June 3, 2010 State Has an Unresolved Deficit NOTE: A “structural deficit” means that it’s built in

 State Aid  Very slow economic recovery  No stimulus protection  All paths lead to more state cuts; the unknown is how much and when  Property Tax  Estimated 50% drop in new property; $5 to $6 million less to us  Levy increases capped at 2%  Tuition  Rate based on Governing Board decision FY 2012 Resources

FY 2012 Preliminary Look New Resources and Internal Reallocation can cover the cost of Mandatory Expenses estimated at $6.6 Million

STATE AID APPROPRIATION $45.3 MILLION FY 2012 Additional Issues Discretionary Expenses Not in Any Particular order Flex Benefit 21% (maybe more) Meet & Confer Adjustment Strategic Initiatives (21 st Century Maricopa) Specific College Needs Consideration of Discretionary Expenses and the possibility of additional State Aid cuts also will occur during the FY 2012 Budget Development Process

Bad News More budget cuts are likely Arizona’s economic recovery will occur slowly over an extended period of years We will see increasing service demands as well as demands for accountability and improved performance Good News We saw this coming & have been planning for it We are not living in the shadow of massive layoffs, salary cuts or mandatory furlough days. We have momentum and are moving forward to fulfill a critical role of educating students for the 21 st Century Financial Update Summary