All 15 Pa. Community Colleges, Including MCCC, Still Waiting for State Funding for 2024

Dan Sokil | The Reporter•

Pennsylvania lawmakers who managed to pass a long-overdue appropriation for state-related universities before Thanksgiving left Harrisburg without doing the same for the state’s 15 community colleges.

The appropriations for the 2024 fiscal year were due July 1 and are now five months late. Some community college leaders say they have begun taking "detrimental measures” to keep their campuses operating, including short-term borrowing and drawing down on reserves.

"We have our youngest learners of children, through our seniors and the adult population. We’re providing continuity of education, workforce development, and also cultural experiences. All three facets are part of our mission,” said Montgomery County Community College President Victoria Bastecki-Perez.

The funding shortfall has affected MCCC and its operations since the start of the current fiscal year on July 1, "so we are at the five-month mark, and are quickly approaching the six-month mark,” she said.

The MCCC operating budget support from the commonwealth is just short of $21 million, and six months of shortfall have led to a roughly $10.5 million gap in funding that the college has had to cover in lieu of the state subsidy, Bastecki-Perez said this week.

That funding goes to all areas of the school’s operations.

"It’s to help support the operations, to support student learning, and all of the enterprises at the college: for student experience, wraparound services, all of our K-12 initiatives, everything that we do at the college,” with parts of the funding going toward salaries and benefits and more toward tutorial services, she said.

Staff have tried to mitigate the impact on students "as much as possible, from any of the decisions that we are making not to compromise their education, but we’re really at a critical juncture right now, not having a significant portion of our budget at nearing a six-month mark.”

Bastecki-Perez said MCCC has been in contact with local legislators to spread the word about the impact that the funding standstill has had on the 15 community colleges across the state, and the roughly quarter-million students who attend them.

"They are the most diverse students, and in some cases the most vulnerable students. They are students who are seeking the opportunity of industry credentials, certificates, associate degrees, to go directly into the workforce or to transfer, so it’s impacting all type of students,” she said.

At MCCC the funding shortfall has also impacted K-12 students at the school’s Challenger Learning Center, located in Pottstown, which opened in August 2022 as the only such center in the state that provides STEM learning through space science "missions,” as part of a nationwide initiative in memory of the astronauts lost aboard the space shuttle Challenger in 1986. In the year-plus since opening, that center has sent more than 5,500 students on space-themed "missions” that teach the importance of science, technology, engineering and math.

"It provides STEM inspiration and education through deep immersion, of space science, teaching and learning about careers in STEM — to inspire learners to be the future scientists, to be the future accountants, engineers, and so on,” Bastecki-Perez said.

In 2022, MCCC’s return on investment to Montgomery County was roughly $595 million in added income via school operations, construction, student spending and alumni impact. Last year, MCCC served over 14,000 students at the Pottstown and Blue Bell campuses and online, of which 77% were part time; 44% were Black, Indigenous or People of Color; 21% were funded by Pell grants, 30% were adult students over 25 years old, 31% were the first generation in their families to go to college; and 10% were single parents.

MCCC has graduated more than 90,000 alumni statewide, and plans to celebrate its 60th anniversary next year.

"You can see the impact in not only our students but future generations as well,” Bastecki-Perez said.

MCCC also provides tutoring, mental health and wellness supports that are 24/7, a child care center, food pantries, college credits for high school students looking to get ahead, and aid for veterans.

"We are working with every population here in Montgomery County,” Bastecki-Perez said.

Most of the 15 colleges are preparing to — or already have begun — tapping into millions of dollars in lines of credit, which would collectively require hundreds of thousands of dollars in monthly interest payments.

That and other lost earnings tied to the appropriation holdup would otherwise be available for classroom and other campus needs, said Tuesday Stanley, who chairs the Pennsylvania Commission for Community Colleges and is president of Westmoreland County Community College.

Depending on the length of delay, those lost funds will erode or eventually exceed the two percent funding increase that community colleges were anticipating from the state this fiscal year, she said.

"The delay in state payments may become a net funding cut,” Stanley’s organization warned in a statement.

So far, MCCC has shifted $2 million from its investment accounts to apply toward operational budgets, and has therefore lost out on possible income from investing those savings at higher market rates.

Qadim Ghani, MCCC vice president of finance, has led efforts to renegotiate contracts with vendors, defer certain payments, implement cost cuts such as a freeze on nonessential travel, cut back on utility costs wherever possible, and take out a $10 million line of credit with a regional bank.

"We’ve never, as an organization, had to dip into a line of credit. We’ve never had one, prior to this,” Ghani said.

That line of credit is secured against MCCC’s investment portfolio, and the borrowing costs for daily interest on that line of credit add up to about $182 per day, or about $5,500 per month, per $1 million borrowed.

The 15 institutions collectively enroll 230,000 students. That’s larger than the combined enrollment in the State System of Higher Education’s 10 member universities or the combined enrollment at Pennsylvania’s four state-related campuses, including the University of Pittsburgh and Penn State, Temple and Lincoln universities.

The appropriation totaling $261.6 million for community colleges is frozen until the House and Senate agree on a fiscal code — the vehicle that governs the annual disbursement of funds to certain state agencies including community colleges, Stanley said.

The Legislature isn’t due to be back in session until Dec. 11, 12 and 13, then is off until next year. Even if lawmakers approve a code during those three December days, it would take another month for the colleges to receive their funding, Stanley said.

"As you know, interest rates are somewhere between seven percent and eight percent,” she said. "And so (colleges) are having to pay interest every month for a line of credit that they would continue to draw down each month.”

Other colleges, she said, are taking money out of reserves. These colleges are forgoing interest income they would have earned on their reserves.

Stanley said the schools have agreed to preserve current student services and worker salaries as long as they can.

Among the impacts felt so far on area campuses:

• The Community College of Beaver County had to draw against a line of credit that, at 7% interest, is costing the college $7,800 a month in interest payments. Bond payments this month and next will require additional credit.

• Butler County Community College said it needs temporary access to at least $3 million since cash levels are at "dangerously low levels.” Starting next month, without state funding, it’s facing $25,000 in monthly interest payments on top of $40,000 in interest earnings lost.

• Westmoreland County Community College could face a loss of $85,000 a month once it begins drawing down on budgeted interest income, something that within three months would more than negate the 2% funding increase included in the state budget.

Community College of Allegheny County President Quintin Bullock said the situation for his school depends on what happens in the weeks and months ahead.

"CCAC has been able to sustain and meet its financial obligations during this period of time … However, if this persists, it will begin to have an impact that may require us to pursue some alternative funding to support us until we receive the state allocation,” Bullock said.

MCCC’s Director of Government and External Relations Michael Bettinger added that the impact of the standstill is statewide, and so are the residents and students impacted.

"There are community college students and employees in every single legislative district, and senate district, across the state,” he said. "My message to them would be, do not let these students, do not let these constituents, fall behind due to being caught up in an unrelated policy discussion.”

"There are certainly political realities going on in Harrisburg, but it seems that this important funding, for this large number of constituents, is simply caught up in the mix. Our message would be to not let your constituents fall behind unnecessarily.”

Originally published by the Tribune-Review; The Reporter staff writer Dan Sokil contributed to this story.

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