Nearly half of Iowa community colleges expect to spend more than they take in

Iowa’s 15 community colleges collectively are projecting a $2.3 million dip in total resources for the next budget year — contributing to a projected $36.8 million deficit — propelled largely by previous bumps in federal funding due to COVID-19, and more anticipated facility and program expenses.

Some disparities also are tied to the timing of income — like bond revenue — and expenses.

The State Board of Education on Thursday considered each community college’s “best estimate” of expected revenues and expenditures for the 2023 budget year, which starts July 1, including state appropriations, tuition and fee income and salary and benefit costs.

Although lawmakers haven’t yet agreed on a higher education appropriations package for fiscal 2023, the projected combined community college budget predicts a $5.8 million state-aid increase, upping the total from $216.8 million to $222.6 million.

That projected increase could be conservative, as it’s below the $6.5 million general aid increase the Iowa House has proposed for community colleges in its initial education appropriations bill.

Also expected to swell next year is community college income from student tuition and fees — largely due to higher rates, which increased across the board in the fall even as enrollment fell sharply in the pandemic.

Iowa’s community colleges have seen some enrollment recovery, including Kirkwood Community College in Cedar Rapids, which in fall 2021 saw a 2.7 percent enrollment uptick after a massive 13.4 percent slide in fall 2020.

Kirkwood is among seven community colleges looking at a budget deficit next year — projecting a $20.8 million drop in total resources, driven in part by big bumps in federal aid in both the 2021 and 2022 budget years.

Even though it's planning to spend $12.5 million less next year — paring down administrative costs — Kirkwood’s deficit in the Board of Education budget documents is projected at nearly $10.8 million, shown as the largest in the state.

But Kirkwood’s Vice President and Chief Financial Officer Jim Choate said some of the negative balance is due to the “difference in year of revenue recognition and the year in which the expenditures related to those revenues will be recognized.”

Although eight colleges are expecting some surplus in the next year, when combined the campuses are looking at a total deficit of $36.8 million — dropping the collective fund balance cushion to $631.1 million, down 8 percent from fiscal 2021.

Of Iowa’s 15 community colleges, eight are anticipating more income and seven expect to generate less next year.

While speaking Thursday to the Iowa City Noon Rotary Club, Kirkwood President Lori Sundberg highlighted efforts her campus is making to attract students and meet their needs, along with needs of the state to — among other things — keeping graduates in the local workforce.

“We estimate between 82 percent to 83 percent of our career and technical graduates stay in our district, and 90 percent stay within Iowa,” she said.

Her campus annually offers more than $3 million in scholarships to students, she said. And — although some enrollment areas are down, including a 60 percent drop in international students — Sundberg stressed concurrent enrollment, when high schoolers take community college courses as well, is strong.

“If your student is not in concurrent enrollment, you are missing out,” she said. “In Iowa, it is free. In Illinois, where I came from, it was so not. Students and parents had to pay a tuition. … It's one of the best opportunities in Iowa.”

Vanessa Miller covers higher education for The Gazette.

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