Workforce training at issue in the Legislature

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Published: February 21,2000

News that legislators might cut education enhancement funds for community colleges by $17.7 million has sent community college leaders, economic developers and corporate heads scurrying to seek solutions for what could be a devastating blow to the economic progress of the state.

Suggested cuts could include a 45% reduction in funds for One-Stop Career Centers, or workforce education centers, that provided job training for 100,000 Mississippians last year. If that were the case, the centers’ budgets would be cut from $4.5 million to about $2.4 million, with each of the state’s 15 centers standing to lose about $136,800, or about two jobs apiece.

“The legislative budget recommendation was not specific in how cuts were recommended,” said Deborah J. Gilbert, associate executive director for finance and administration of the State Board for Community and Junior Colleges. “This year, we’re receiving $26.1 million in HB400. They’re proposing to cut $20.5 million of that. That will leave us $5.5 million. Capital improvements, information technology, our sign language interpreter training programs at Hinds, Itawamba and the Mississippi Gulf Coast, rural health corps, One-Stop Career Centers and our funding formula are all funded with that $26 million. When you whittle it down, it only leaves $5 million for all of that, so something has to be cut out. The Legislature didn’t say how to cut it, but the way we’ve interpreted it is almost all of it has to be cut out. We have a little over $3 million in debt service for technology bonds. We’re assuming that would have to be taken off the top and that the balance would go toward the career centers. That would consume the entire $5.5 million.”

If the problem is not corrected, essential training needed to assure the employment of people in the district will be reduced or eliminated, which could include the loss of 326 full-time jobs at the state’s two-year community colleges, or an almost 7% salary reduction for every full-time employee, said Olon Ray, executive director of the State Board for Community and Junior Colleges.

“We cannot afford to disrupt the workforce training programs which are so critical to the future of our community and our state,” said Ray.

“With Joint Legislative Budget Committee (JLBC) recommendations, not only will the above cuts take place, but the $14 million appropriated in FY2000 that is distributed through the funding formula would be totally eliminated, and that would be devastating,” Gilbert said. “Also, JLBC recommendations did not address any of the $50 million additional needs for community and junior college support that were requested for FY2001.”

Unless legislators find alternatives, they must accept recommendations from the Legislative Budget Office. House Appropriations Committee Chairman Charlie Capps (D-Cleveland) attributed the budget crunch to a recent slowdown in tax collections. Built-in expenses, such as prisons, have also been blamed.

Three pots make up the education enhancement money, said Gilbert.

“One is ‘one-cent,’ where we statutorily get a certain percentage,” she said. “We have discretionary one-cent, and that’s what’s left over of the one-cent after all of the percentages are doled out and the Legislature decides on that. The third pot is House Bill 400, where, of the ending cash balance at the end of the year, 50% goes back to the general fund and then the working cash stabilization fund is funded. For example, if the ending cash balance were $100 million, 50% would go back to the general fund. From the $50 million, you’d cap off the working cash stabilization fund, which is 7% of the general fund. Then with any excess, 50% goes to the state department of education, 25% to community colleges and 25% to IHL. House Bill 400 is separate from the one-cent money and is totally dependent on ending cash balance.”

Total estimated ending cash balance for FY2000 is $78.8 million. As of June 30, 2001, estimated general fund budget balance is $581,824.

“Here’s what happens,” Gilbert said. “Only 98% is appropriated. They project to spend almost as much as they get. That’s what’s leaving such a small balance at the end of FY2001.”

Because the carryover funds vary, it was not intended to cover recurring expenses. Last year, they did.

“(Capps) did give us permission to spend our one-time money on salaries and he’s been very gracious about standing up to the fact that he gave us permission to do that,” said Pam Meyer Smith, spokesperson for the Bureau for Long Range Economic Development Planning of the Institutions of Higher Learning.

Education proponents have raised concerns about approaching the Legislature to amend HB 400, fearing that legislators may eliminate the bill altogether. Others want to see it amended with half of the money earmarked for nonrecurring expenses with discretion on spending the other half.

At the same time community college budget cuts are being discussed, the state’s general fund budget has grown to a whopping $3.6 billion for FY2001. All of Mississippi’s universities will wind up this fiscal year, which ends June 30, with a 16% budget increase over FY1999. Now the Mississippi Legislative Black Caucus wants a share and has requested an additional $200 million for the state’s three historically-black colleges, which includes $99.3 million in general funds and $101.4 million in bonds. The Legislative Budget Committee has recommended giving $7.4 million to settle the Ayers case in FY2001 — more money than the College Board requested.

Smith said $17 million of enhancement money was cut from IHL’s budget last year.

“They gave us some general revenue money, so bottom line, we’re $13 million below where we were last year,” Smith said. “The community colleges did take a bigger hit, but so did the Department of Education. We all are down because of this $80-million shortfall in enhancement money. We’re not being assured at all that they’re going to find it, so we’re bracing ourselves for the options. For us, this means jobs, salary money and Ayers’ money, at least because that money absolutely has to be made up in those three areas.”

In the last two decades, community colleges have been hampered by erratic budget cuts. By FY1987, budgets for community colleges had decreased to $50 million, resulting in salaries that were below minimum foundation supplements that public school teachers received. Community college budgets dropped again from $72 million in FY1990 to $70 million in FY1991 and to $65 million in FY1992. Education Enhancement Funding was initiated in FY1993.

In the mid-1990s, the Midpoint Campaign raised salaries to midway between the average salaries of public school teachers and the average salaries of university professors. If the proposed cuts were instigated, community college teachers’ pay would fall below the midpoint once again.

First floor action for appropriation bills is March 29, with a second floor action deadline of April 18. State tax revenues, which have been growing at a rate of 7% to 8%, have slowed to about 4%. State economists generally hand revenue estimates to legislators in the fall for the following fiscal year. During the session, the revenue estimates are sometimes revised. February has traditionally been a slow tax-collecting month and an impact from individual income taxes won’t be known until April. Appropriation bills are to be finalized by April 29.

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or mbj@msbusiness.com.

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