Thursday, May 12, 2011

Technical Colleges Face Increasing Enrollment, Decreasing Aid

Even in a budget full of cuts, the one proposed for Wisconsin’s technical colleges stand out. This cut may be especially hard for the technical college system to manage because it comes after a decade of decreasing state aid and increasing enrollment.

The Governor’s budget proposes reducing state aid to the technical college system by $71.6 million over the biennium, a cut of about 30 percent. This is on top of years of decline in state aid. Measured in 2010 dollars, general and categorical state aid to the technical college system declined by 21 percent between 2001 and 2010, according our analysis of figures from the Legislative Fiscal Bureau. The percentage of Wisconsin technical college district revenues from state aid dropped from 14 percent in 2001 to 8 percent in 2010. The steady downward march in state aid had leveled off in the last three years, as shown in the chart below. But that recent trend could be short-lived, if the provision in the Governor’s budget remains unchanged.


Meanwhile, the number of students enrolled in the technical college system increased by leaps and bounds. The number of full-time equivalent (FTE) students in our technical colleges increased by nearly 22,000 between 2001 and 2010, or 36 percent. The chart below shows that the biggest increases in enrollment came around the time of the 2001 recession and the current one, as jobless workers affected by the recession sought to upgrade their skills.


The combination of declining state aid and increasing enrollment means that state aid per student has tanked, dropping from about $2,900 (in 2010 dollars) in 2001 to about $1,700 in 2010. This represents a drop of more than 40 percent. The drop is shown in the chart below.


The Governor’s budget also includes a provision that would prohibit technical college districts from raising property taxes to offset reductions in state aid. The Wisconsin Technical College District Boards Association explains what this would mean for technical colleges:

"The proposed budget also completely freezes current year district levies for operations for each of the next two years. This means that a district’s levy for operations may not increase by any dollar amount above the current year in either 2011-12 or 2012-13. There is no provision for exceptions for any reason including by referendum or due to changes in a district’s property values, business and industry needs, waiting lists, increased enrollment, or unemployment levels."
Technical colleges will be able to compensate for a portion of the cut in state aid by reducing compensation to employees, in the form of higher employee costs for retirement and health insurance benefits. But additional savings have to come from other sources. Todd Finkelmeyer has an article in The Capital Times explaining how Madison Area Technical College is planning to address its $10.3 million budget shortfall. Faculty and support staff agreed to reopen contracts earlier this spring, allowing Madison College to save $6.4 million by reducing employee compensation in the form of higher costs for fringe benefits. The remaining $3.9 million will have to come from other cuts.

Wisconsin technical colleges are no strangers to managing increasing enrollment with fewer resources. But by asking technical colleges to take a disproportionately large hit in this budget, especially when it comes after years of declining state aid, we may be jeopardizing the ability of technical colleges to help train Wisconsin’s workers for the economic recovery.



Tamarine Cornelius

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