Tuesday, August 16, 2016

Weathering a Financial Storm

The overall revenue at DACC comes from primarily three sources.  Sixty percent of our revenue comes from the state of New Mexico, 26.4% comes from tuition and fees, 13.2 percent comes from the local mill levy.  The remaining less than one percent comes from grants and gifts to the College.  Consequently, the two most important goals for the College are to focus on enrollment (directly related to tuition and fees) and completion (directly related to state funding that is based on course completion and degrees and certificates awarded).  As of my communication today, the number of new freshman beginning at DACC for the first time this fall is ahead of last fall’s census day numbers.  The number of undergraduate transfer students beginning at DACC this fall is ahead of last fall’s census day numbers.  The Student Services team has done an amazing job at recruitment – they are to be applauded.  Our main challenge is retention.  Presently we are just under 300 students less than census day numbers last fall.  These are students who were with us last fall who are not registered this fall.  Also, we have a number of our students who are taking courses both with us and with other campuses in the system. That means tuition revenue from the courses begin taken at other campus is not coming to DACC.  We need to understand how we can better provide a schedule that helps these students stay at DACC.  Last, the number of students from campuses within the system taking courses with us has declined – this may be directly related to changes in mathematics on the Las Cruces University campus.  After census day we will examine this data to see what might have occurred and whether or not we can respond to what we learn. 

While enrollment is something we can impact and control based upon our own actions and initiatives, changes in state revenue is something we can’t control.  Present projections pertaining to revenue for the State’s budget are much less than expected when the State budget was passed in February 2016.  As a result, it is possible that a special session will be called to address any revenue shortages.  The impact of decisions at the special session to DACC are yet unknown, but even last February we were told that we should not be surprised if a mid-year cut were to occur.  I am watching these events vigilantly and will communicate information as facts become known. 
How must we proceed as we anticipate a reduction to state revenue to our budget.  First, we need to reaffirm our mission and commit to that mission.  Second, we must focus on the two most important things which are enrollment and completion.  Third we must identify our values for making decisions and act on those values.  Forth, we must identify the "must have" versus the "nice to have" programs and initiatives  Fifth, we must prioritize the "must haves", and last, we must make the hard decisions. 
Jacob Lew once said that "The budget is not just a collection of numbers, but an expression of our values and aspirations".  We must also keep in mind that we can't just cut our way through a fiscal storm, but that we must carefully invest in people and programs to grow our enrollment.  John Hoeven said that, "Businesses must invest in products and people in order to create new wealth".  Often higher education institutions continue to do that same old things over and over.  We must recognize what Gary Hamel said, "Businesses fail when they over invest in what is over what could be".  As state revenue sources continue to decline, we must take a lesson from business in how to address revenue and expenditures in order to continue to serve our constituents. 

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