Neil Vickers, CPA
Associate Vice President of Finance & Budget

Last week we were notified of an additional reduction in our current year State appropriation. It is a 5% reduction in our ERS Group Insurance Appropriation. Unfortunately, it is a reduction of the entire biennium, so not only FY2011, but also FY2010. Yes, they are retroactively cutting last year’s appropriation. To make matters worse we are only left with a few weeks to address this cut. Please note that this does not impact individual employee insurance costs, but simply means that the college has to pay, instead of the State, for the employer contribution.

The reduction totals $845,426. Unfortunately, there is not enough cushion in the budget to simply absorb these cuts and maintain a balanced budget. The College-wide Capital Outlay and Technology Plan is the only budget that still has a significant amount of unspent dollars. Therefore, the Tech Plan will be frozen for the remainder of the year. This will save about $500k.

However, this is not enough to offset the entire state cut. There are many departmental budgets that have small amounts still remaining, and these add up to more than hundred thousand dollars. Therefore, departmental operating budgets (non-salary object codes) will also need to be frozen for the remainder of the year.

The purchasing deadline for regular orders was July 18, so any significant orders should have already been placed. Orders already placed can continue, but no new orders will be allowed. This includes all forms of procurement, including P-Cards and Office Depot.

Even with these actions, we will likely not be able to fully offset the state reduction, however it should be enough to keep a positive balance in the budget. Maintaining a balanced budget is critical for continued financial strength and a strong credit rating. It is this financial strength and discipline that has allowed the college to maintain service levels, prevent layoffs, and even give raises, unlike many other entities.

The good news is that the FY12 budget is very healthy. While there will still be a risk of additional state cuts next year, the FY12 budget took significant steps towards limiting the impact of future state cuts on college operations.

If there are purchases impacted that are absolutely critical, then contact me or Delphine Gonzales. We will review the situation, and discuss with the appropriate VP, as needed. As usual, priority for any exception will be given to those activities that have a direct impact on students.

Please let me know if there are any questions.