NMC 2003-04 Budget, Q&A

Northwestern Michigan College is committed to providing program and services to its students and the regional community while maintaining a balanced budget in the midst of cutbacks in State Aid. Frequently-asked questions about the 03-04 budget include:

1. What impact have State cutbacks had on NMC's budget?
   • The State reduced the 02-03 budget by 3.5% or $336,022 through Executive Order cuts in December and February;
   • The State proposes an additive 03-04 reduction of 6.7% which will reduce the 03-04 budget by $950,517 or 10% from beginning 02-03 allocations;
   • Additional "executive order cuts" can come at any time, depending on the economic situation the State level.
   • NMC has planned for a State allocation of $8,242,965 (a 14% reduction)
   • This level of funding is approximately the 1998-99 allocation.
     
     
2. What has NMC done to balance its budget?
   • Reduction in employee benefits to save $278,000;
   • Reduction in conference, travel, and meeting expenses to save $140,000;
   • Reduction in capital expenditures of $200,000;
   • Reduction in physical plant expenditures of $500,000;
   • Increase in academic tuition/fees of 9% per contact hour;
   • Yet-to-be-identified structural expense reductions or structural revenue increases netting $200,000;
   • Temporary borrowing from reserves of $450,000.
     
     
3. How will financial aid be affected?
   • The State is considering a proposal to consolidate most State-funded scholarships into one "Michigan Opportunity Grant"; it is not yet clear how this will affect funds available to NMC students;
   • Federal aid has not changed.
   • Privately funded NMC scholarships have been reduced this year as a result of a decline in interest earnings.
     
     
4. Will NMC's new programs and projects go forward?
   • NMC will continue to develop programs and services to meet the learning needs of our region, including:
     1. The new Great Lakes Campus, opening this year with four programs that meet economic and environmental needs for the region: the Great Lakes Maritime Academy, Great Lakes Culinary Institute, Water Studies Institute, and Professional Development Center;
     2. Addition of class sections to meet an anticipated 3%-5% increase in academic enrollment; NMC has experienced an approximate 10% growth in academic contact hour enrollment over past two years.
     3. Expansion of Construction Trades program;
     4. Increase in online programming opportunities including on-line nursing program;
     5. Expanded partnerships with area businesses to provide workforce development, i.e. Munson;
     6. The Training and Research activities will go forward, despite significant decreases in State grants for workforce development.
        
        
5. Why doesn't NMC spend its endowment to make up the loss in State appropriations?
   • The endowment in the NMC Foundation is mostly designated funds to support specific NMC programs such as the Museum Center, the University Center, and many scholarships;
   • NMC donors did not intend their gifts to support general operations but special programs;
   • Once spent, endowment funds are gone-while the State budget shortfall is a multi-year problem and must be managed over time.
     
     
6. Why doesn't NMC halt its construction program and apply the money elsewhere?
   • Much of campus construction is funded by one-time sources that would not be available to support ongoing operations;
   • For example, the Great Lakes Campus project is being funded by a State Capital Outlay grant ($8.1 million), bond millage ($7 million) and million private contributions ($2.9);
   • NMC must continue to build for the future of the region in order to fulfill its mission of providing lifelong learning opportunities.
     
     
7. What is NMC's general fund budget for 03-04?
   • The NMC general fund budget for 03-04 is $28.5 million, which supports instruction (63%), business operations and administration (21%), and other costs including utilities and debt service (16%).
   • Sources of revenue for the general fund budget are tuition and fees (42%); property taxes (25%); State appropriations (29%) and Other (4%).