Editor's Note: This is the latest installment in the Deadbeat Illinois series, where reporters from GateHouse Illinois newsrooms examine the real-world effects of the state's failure to pay its bills. Each Monday, we'll share the stories of those affected. See more on the Deadbeat Illinois Facebook page.
FREEPORT — Jake Olberding enrolled at Highland Community College thinking it would be an affordable higher education option, but he’ll pay more for tuition this fall because his school is squeezed by Illinois’ $5.8 billion backlog of delinquent bills.
Highland trustees approved a 9.5 percent tuition hike in March, which means Olberding will pay $115 per credit hour to take classes this fall, his second year of college. The tuition increase hasn’t derailed the Lena student’s college path.
“It’d have to be a pretty big (tuition) increase for me not to go,” Olberding said.
Highland administrators worry that not all students will share his resolve.
Revenue supporting the city’s community college has historically resembled a three-legged stool of property taxes, tuition and state aid. Today, the stool is tipping over because HCC’s state aid is fraction of what it used to be and those payments typically arrive three months later than they’re supposed to.
Community colleges and practically any public or private sector agency that does business with Illinois is feeling the pinch of the state’s fiscal crisis.
Comptroller Judy Barr Topinka warned May 22 that the state’s $5.8 billion backlog of unpaid bills — down from $8.5 billion in early April — may swell back $7.5 billion by August. Longer payment delays could be in store, too.
Illinois is $380,000 in arrears to HCC.
State aid once accounted for a third of the college’s revenue, but has fallen by $500,000 a year for the last three years. This year, state aid accounts for about 14 percent of HCC’s budgeted revenue, said HCC Vice President of Administrative Services Jill Janssen.
“It’s been the perfect storm where property values have gone down 2 to 3 percent per year for the past four years in addition to losing state money and having a decrease in enrollment,” Janssen said. “With all these changes we may have to rethink the paradigm of college education.”
Taxes and tuition
Between 2009 and 2012, property values fell 9 percent — from $1.92 million to $1.76 million — within the Highland Community College district, which includes Stephenson and Jo Daviess counties and parts of Ogle and Carroll counties.
College trustees have held the line on the district’s tax levy, and HCC property tax revenues fell in lockstep from $9 million to $8.2 million during those years.
Page 2 of 3 - Students, not taxpayers, are filling the gap created by the college’s declining and delinquent state aid.
Highland’s tuition rate has risen between three and five percent each year over the past five years. The most recent increase came in March when trustees approved a 9.5 percent hike, raising the per-credit hour tuition rate from $105 to $115. In 2012, trustees approved a $10-per-credit-hour tuition rate increase.
This trend, college officials say, is unsustainable. Sooner or later, HCC will become unaffordable for students and enrollment will suffer. In fiscal 2012, HCC enrollment fell 5.4 percent to 5,110 full- and part-time students.
“We keep looking for new things we can do,” said President Joe Kanosky. “We keep looking to try new things. We may have to discontinue some programs to get by. It’s going to be a challenge for everyone for the next few years.”
‘Just no payments’
Some state funding to community colleges hasn’t come at all, such as money for the Illinois Veteran Grants program, which subsidizes higher education for vets. The state is no longer funding the program, forcing Illinois community colleges to waive tuition for eligible veterans to the collective tune of $13 million to $14 million, said Ellen Andres, chief financial officer for the Illinois Community College Board.
“Waiving tuition causes problems in the sense that it’s unfunded liability,” Andres said. “Community colleges are now having to waive payments that 10 years ago the state would have covered. That’s not late payments by the state, that’s just no payments.”
Andres said that the state budget for fiscal year 2014 again leaves out funding for vets. She said that schools can expect most of their state funding, but shouldn’t expect it to come on time.
“We’re basically telling them that their fiscal year 2013 funds won’t be received before Dec. 30 this year,” Andres said. “We don’t anticipate that they will stop making payments, they will just come late.”
Highland and other Illinois community colleges face many financial uncertainties in the years ahead, Kanosky said.
“The game and model are changing,” Kanosky said. “The way we do business will have to be looked at as we move forward. There’s different things we’re having to look at.”
One option Kanosky mentioned: beefing up HCC’s menu of online courses, which don’t cost the college as much to offer as a traditional college courses.
“Online classes aren’t expensive as far as technology goes, but if there’s no new funding, you can’t keep up on technology, and there are certain things you can’t do online,” Andres said. “It’s not the answer.”
Page 3 of 3 - The answer, Andres said, may be hard to swallow.
“At colleges with a small tax base, student tuition can only be raised so much or students can’t come,” Andres said. “They will have to increase class sizes or not offer as many classes. Student services like tutoring and counseling will go away and you end up with a staff that is a ‘jack of all trades.’ It’s definitely a disadvantage to the colleges. Most end up with more part-time than full-time faculty. I can tell you that the services already probably aren’t where they were five years ago.”
State’s IOU to Highland Community College: $380K
Annual state aid sent to Highland Community College in Freeport is $1.7 million, down from $3.2 million a decade ago.
The state paid Highland the full amount of fiscal 2012 aid it owed the college in September, three months after the college’s fiscal 2012 year ended. The community college has not received any fiscal 2013 state aid this calendar year, which puts the state’s tab of unpaid aid to Highland at $380,000.
Nick Crow can be reached at 815-232-0136 or firstname.lastname@example.org.