Austin- Austin Community College’s tuition rates will not go up next year, if ACC President Richard Fonté’s recommendations are approved by the Board of Trustees later this summer.

Fonté’s recommendations come despite soaring enrollments and insufficient revenues from ACC’s other two major revenue sources – state reimbursement dollars and local property taxes.

“Our students pay one of the highest tuition rates among Texas’ 50 community colleges,” said Fonté, “and I am committed to holding the line on their financial burden.”

Students in ACC’s taxing district pay $32 per credit hour, plus a $12 per credit hour building fee. Out-of-district students pay $81 per credit hour, plus the building fee.

The ACC Board of Trustees will begin its deliberations on ACC’s FY03 budget on Monday night by reviewing revenue projections for next year. No action is expected at that time, as the budget review and approval process is expected to extend into July.

This year, ACC college credit enrollments grew to record levels, with the 6-7 percent increase far exceeding growth projections of 2.5 percent. As a result of this surge in enrollments, ACC had to add part-time faculty, and incurred other unanticipated costs due to lower demand for contract training, lower interest rates, and other factors affected by the economic downturn.

State reimbursements for student contact hours account for 39 percent of the budget, and are ACC’s largest revenue source. However, the college will not see state reimbursement for the additional students until FY04. As a result, ACC was recently forced to make a mid-year adjustment in the FY02 budget to account for a $2.1 million shortfall.

A hiring freeze was instituted, technology purchases have been delayed, the growth in classes to accommodate the influx of students was slowed, and individual college departments took an aggregate $1 million budget cut. Nonetheless, ACC will offer 92 more classes this year than last.

“Just as we are committed to ensuring access by offering quality education at an affordable price,” said Fonté, “we are also determined to maintain the level of service we provide this community.”

To that end, Fonté said ACC plans to offer 8900 classes over the course of the next academic year, compared with 8888 this year.

Revenue projections for FY03 are based on a projected enrollment growth of 3 percent.

“We have every reason to believe that our enrollment will continue to grow, but perhaps not at the level we have seen this year,” he said.

Community colleges typically see higher student enrollments during economic slowdowns, with higher unemployment rates fueling an influx of people returning to school for more skills training and education.

Fonté said the FY03 budget will be “very difficult,” as ACC attempts to achieve four major goals: (1) maintaining a level of service to the community in response to student demand, (2) achieving a balanced budget, (3) budgeting for a slight surplus in order to maintain the college’s cash reserve balance, and (4) avoiding any additional financial burden for students.

“It’s easy to see where the gaps are in our revenue stream,” said Fonté. “We project this year’s state reimbursements will actually be about $55,000 lower than we originally projected, and next year’s state funding will be flat. Our major source of revenue simply isn’t keeping up with the growth in our student body.”

The percentage of ACC’s budget derived from state funds has dwindled over time. In 1984, state reimbursements accounted for 60 percent of the budget; this year they account for only 38.5 percent. Next year’s projects show this state portion of ACC’s budget will decline to 37.3 percent.

ACC’s property tax collections have also slowed, with the rate of growth declining from 15 percent in FY01 to a projected 9 percent next year. Taxes accounted for 22.2 percent of this year’s budget.

“Our tax rate continues to be a problem,” said Fonté. “At five cents per $100 valuation, ACC’s rate is the lowest in the state and only a third of the state average.”

A recent benchmarking study shows ACC receives less than half the tax revenues per full-time equivalent student that the other eight metropolitan community colleges in Texas receive – $1,021 vs. $2,059 each year per student.

“Despite these revenue shortfalls, we are committed to serving our community and providing an affordable education,” Fonté said.

Recent financial monitoring improvements should help the college manage its budget. These include new monthly financial reports to the board, closer tracking of tuition revenue each month, and other initiatives designed to give the administration and Board a more current picture of the college’s finances. Fonté also said he welcomes the State Comptroller’s performance review that begins this month.

“We appreciate the interest the community is showing in our success,” he said, “and we will welcome any recommendations that will help us better serve students and maintain our fiduciary responsibilities.

Fonté also announced today that he has decided to accept the recommendation of ACC’s internal budget committee made up of faculty, staff, and students to suspend the college’s reduced tuition program for next year.

“While I am committed to using tuition discounts to increase access and help us fill class sections in our margins (for instance, the late afternoons), we will not have a reduced tuition program next year,” he said.

“These are difficult times, but the public’s confidence in our fiscal management is very important to us,” he said. “I can assure our taxpayers that ACC is managing its limited resources wisely.”