Original: May 10,2011 Issue 16

By: Viviane Hembrock

Contributing Writer

County recommends cuts of $7.4 million of funding to MC’s budget, suggests MC use its own money to bridge gap

On April 28, Donna Dimon, Chief Budget and Management Studies Officer, presented Montgomery College’s budget update for the next fiscal year.
Dimon began her presentation explaining Montgomery County’s budget for 2012. According to her, the County’s main sources of revenue are property and income taxes. Due to the current economic situation, however, revenue for the County is less than anticipated. Consequently, the County budget shortfall for fiscal year 2012 was projected at $300 million and the gap affected all agencies.

The County budget presented on March 15 closed that gap. 80 percent of County budget goes toward employee compensation. Because of that, the County has eliminated 216 positions, 140 of which were filled. The County Executive also recommended County government to adopt some measures to reduce expenditures, such as no pay increases and hiring freezes. Also, he proposed a change on group health insurance contribution from 80 to 70 percent and changes in the retirement plan to reduce expenditures. Opposite to these changes are further layoffs and reductions in public safety and education.

MC’s budget request to the County was of $3.1 million more than fiscal year 2011—the increase mostly covered by tuition revenue, according to Dimon. That increase is expected to cover the cost of the Rockville Science Center building, cost of benefit increases, and cost of retirement benefits.

The assumptions when the budget was created were that state and county funding would be flat (the same as last year’s) and an increase of tuition cost of $3 in-county, $6 in-state, and $9 out-of state. Still, the budget was reduced $4.7 million before it was sent to the County Executive.

In March, the County Executive recommended an increase of only $1.5 million (7 percent) from FY2011 budget -$1.6 million less than what the college had requested. Also, he recommended $7.4 million less County contribution and that the college use $5.8 million more fund balance.

“Our County funding fell two years in a row very significantly,” said Dimon. In 2007, County contribution was 50 percent. For 2012, the contribution decreased to 41 percent. State funding also decreased, and students had to pick up on the difference by paying higher tuition. In an attempt to work with the reductions, the college had to make some sacrifices. There was a loss of 14 positions and cuts were made in various departments: $1.4 million loss for the IT department, $1 million loss for facilities, and $714 thousand loss for human resources, to name a few.

In response to the County Executive’s budget, the college revised its request and decided not to ask for $7.4 million. Instead, recognizing the current economic situation, the school decided to ask for $4.6 million in County funding to be restored. The Education Committee of the County Council added the entire amount into a reconciliation list.
On May 19 funding details will be solidified.