July 2, 2018
(CHICAGO) In an analysis released today, the Civic Federation announced its support of the City Colleges of Chicago’s proposed FY2019 operating budget. The $436.1 million budget is a prudent plan to continue to stabilize the District’s finances following the second full year of State funding since fiscal year 2015. The full report is available here.
As detailed in the report, the District will modestly increase its property tax levy and reinstitute a per-credit hour based tuition structure for part-time students while maintaining a flat-rate tuition structure for full-time students. To secure its financial position, City Colleges will again rely on cost containment strategies. The budget also follows through on prudent measures to reduce the District’s real estate footprint and stabilize its fund balance reserves by completing the sale of its Loop headquarters.
“The City Colleges’ proposed $436.1 million spending plan builds on significant improvements and cost reductions that should allow it to effectively balance its budget in the coming year,” said Civic Federation President Laurence Msall. “However, the Federation is concerned about the ability of the District and all Illinois local governments to anticipate and manage the risk of uncertain future State funding.”
In FY2016 and FY2017, City Colleges received only a fraction of the State funding it expected and the District relied on short-term solutions to balance these budgets, such as using cash reserves, delaying capital expenses and instituting a hiring freeze. The Civic Federation supported such austerity measures as a reasonable response to its funding emergency, but cautioned that the District’s financial stability could be damaged in the long-term. Although City Colleges developed a plan in FY2018 to stabilize its financial position by reducing expenses and rebuilding its reserves, the harm caused by the lack of State funding requires a sound multi-year plan by the District to restore long-term financial and operational health.
City Colleges expects its first year of positive growth in student enrollment in a decade. However, the tentative FY2019 budget relies on State funding that is still below the pre-budget crisis FY2015 level of funding. The District is also in contract negotiations with its labor unions, which could help reduce its operating costs, but might also add additional strain to the District’s finances in the future.
The Civic Federation recommends in its analysis that City Colleges develop a formal tuition and fee policy to avoid uneven impacts on students, improve its fund balance policy, institutionalize its long-term financial planning process and incorporate maximum stakeholder input into the new strategic plan that is being developed. The Federation also urges the District to advocate for the modernization of the community college equalization formula to more fairly fund City Colleges and other community colleges located in counties subject to the Property Tax Extension Limitation Law (PTELL), while also recognizing the continued importance of PTELL in controlling future property tax increases in the 39 counties that have adopted it.