Highline College

Thursday, September 24, 2020

Budget plans unveiled as Highline receives funding from stimulus package

Dr. John Mosby

Ally Valiente Staff Reporter May 18

Highline is likely facing budget cuts due to declining state revenues driven by coronavirus-driven restrictions on business and consumer activity in the state.

Last Thursday on May 14 at 1:30 p.m., President John Mosby held a virtual town hall via Zoom to discuss budget updates and strategy plans.

“It is not looking very good right now. Unemployment rates in the United States are hitting 14.7 percent. Washington [state] is not doing any better with over 1.4 million people filing for unemployment,” Vice President of Administrative Services Michael Pham said. “Right now it is 16 times higher than the peak of the Great Recession in 2008.”

Highline relies on state funds for as much as half of its budget. However, due to the coronavirus lockdown, it has resulted in shrinking business and consumer activity in Washington state.

It also impacts sales tax collections, which is a major source of revenue for state government.

Highline received institutional relief due to Covid-19 and has been awarded $3.5 million out of the Federal stimulus package - with $1.75 million “strictly dedicated” for student financial aid.

“We will, of course, be reimbursing and refunding students who have withdrawn from Highline due to COVID-19,” Pham said.

The institutional relief would alleviate costs for additional student aid, additional cleaning and health costs such as masks, sanitizers and supplies, faculty and staff training costs, lost revenue, technology and equipment, and reimbursement for refunds to students.

The Executive Cabinet has implemented strategies to reduce spending immediately including purchase and travel restrictions (except for essentials), a hiring freeze (except for critical positions), suspending most local capital improvement projects, and reducing spending on the federal stimulus.

The original fiscal year budget for Highline from 2019 to 2020 projected an estimated revenue of $75.2 million and an estimated expenditure of $72.3 million.

“We are right now planning to move forward with only a $69 million budget into the next fiscal year. To put it differently, it takes about $70 to $72 million a year to run Highline College the way we have been right now,” Pham said. “Anything less than that will require some adjustments.”

For the remainder of the fiscal year there is projected to be a revenue shortfall in every revenue category which includes Running Start, tuition, international students, state allocations, grants and contracts, student fees, and local funds.

“There’s many contributing factors but especially due to Covid-19 we are expected to have a revenue shortfall of approximately $5 million by the end of the fiscal year,” Pham said. “We’re talking about a month and a half from now to June 30.”

This will lead to potential state budget restrictions in Guided Pathways and cost of living adjustments and a cut in state funds by up to 20 percent.

“My real concern is that all of these cuts will happen after July 1, after we’re done with the fiscal year. It is much more difficult for us to adjust the budget after,” Pham said.

“What we are really looking at is the revenue challenge. Our international student enrollment is going to dry up for quite a while -- not because we are not doing a good job, but a main factor is that the United States is leading the entire world with the most number of cases,” Pham said.

Pham said that parents and students are concerned about coming to the United States right now, especially since there has been no determination as to whether Highline will re-open for face-to-face instruction.

As a result, it has been difficult to convince students to come.

“We are a higher education institution so student success is definitely our mission,” Pham said. “As we continue our budget planning, we want to keep those focuses in mind.”

The Budget Planning Principles include promoting innovative funding, external opportunities, creating a safe, accessible working and learning environment, and creating a budget that is “inclusive, transparent, and sustainable,” he said.

“With the current pandemic, we want to make sure our budget planning ensures the safety and healthy environment for working for all of us,” Pham said.

Pham says they will be approaching the budget planning with Plans A and B at the same time.

Plan A is to use the revised budget as their base budget, carry it forward with minimal changes, tighten on non-essential purchases, and not accept any new positions except for critical ones.

Plan B is to develop budget restriction strategies, implement budget cut exercises, review operations, and discuss and evaluate all options.

To help with this, Pham said Highline will establish a Budget Advisory Council to help advise the college President John Mosby on matters relating to the campus, “including budget planning and development, in alignment with the college mission and strategic goals.”

Another purpose of the budget council is to evaluate funding models and provide recommendations on budget adjustments and mitigations.

“One of the challenges that we are facing right now with the state budget is that we are so close to the end of the fiscal year. The state Legislature is not expected to be back in session until July,” Pham said. “Unless the governor continues to make directive decisions, it is very difficult for us to know what will be happening before June 30.”

For the time being, Pham said the three main focuses are to continue to monitor the budget status, keep the campus and community informed, and to provide additional information prior to the end of Spring Quarter.

“It is very hard to predict the worst-case scenario, what things are going to look like. I think it’s a very challenging time because there is a lot unknown for every college in the country,” Highline President John Mosby said.

“What we do know is that things are going to be very challenging. But when will we know the results exactly? We don’t know at this time.”