MHCC follows Congress’s path
While the recession has put MHCC in a tough financial situation, the college is taking a page out of Congress’s playbook and borrowing from the future.
Although Measures 66 and 67 have passed, helping the college avoid cutting even more from an already slim budget, MHCC President John Sygielski said in an e-mail Wednesday morning his cabinet would be “recommending that some or all of the PERS reserve ($1,328,000) be transferred to the general fund to serve as operating revenue and operating reserve.” In essence, the college would be borrowing from the future to balance the budget today.
This is a bad idea on many levels. First and foremost, PERS (Public Employee Retirement System) operates as an employer lump-sum and contingency reserve for the college. Sygielski, in the e-mail, said, “This one-time allocation may be replenished in the 2010-2011 budget cycle.” But there is no guarantee the economic climate or state of the school will be better next year. What is the likelihood that “next year” becomes “in two years” or “by 2015, we hope to replenish the PERS reserve”?
Perhaps a scarier thought is what the college would be scrambling to do right now if Measures 66 & 67 had not passed. There has been no mention of layoffs or tuition increases to help make up additional funds, but starting spring term, “modest” course fees and “other” fee increases have been proposed. This is being done to mask the negative-sounding nature of a tuition increase, but it’s really doing the same thing – increasing the cost of college.
Much like the federal budget deficit, there appears to be no way out of the problems that the college faces without cutting spending and increasing costs to the students. But borrowing from the future is a dangerous idea when the view of the horizon is unclear, and no sunshine can be seen through the clouds.
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