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College financing a challenge not just for students

By Dan Hust
LOCH SHELDRAKE — November 26, 2010 — County Manager David Fanslau’s recent presentation of the 2011 tentative county budget made mention of exploring a regional community college system.
While his stated intent is to keep an institution of higher learning in Sullivan County, Fanslau said cost efficiencies must be found because the county cannot sustain paying $4 million a year to Sullivan County Community College (SCCC), plus $1.5 million every year in what are known as “chargebacks.”
Virtually unique to New York State, chargebacks are fees set by state legislations that all the counties in the state must pay to SUNY community colleges outside their borders which have those counties’ students enrolled.
In other words, Sullivan County pays $1.5 million to community colleges around the state – 75 percent of it to Orange County Community College – which have Sullivan County residents enrolled in their programs.
Such chargebacks are arrived at via a SUNY-created formula that takes into account the county’s contribution per resident student, out-of-state tuition costs per full-time student, and fund balance.
“Simply put, it is the average local share per student,” explained SCCC President Mamie Howard Golladay.
She noted that SCCC draws in more chargebacks than the county lays out – more than $2 million per year, thanks to a student population that hails from almost every county in New York.
And Orange County residents, in fact, are the largest out-of-county component of the student body, save for New York City-area counties.
Last year, Orange County paid more than $427,000 in chargebacks to SCCC, a significant part of the college’s $15 million budget.
But in this economic crisis, Golladay understands why county officials across the state are decrying the 40-year-old chargeback system – especially when counties must pay the chargebacks, yet the community colleges collect and keep that revenue.
“We have real issues getting payments from the counties,” Golladay acknowledged, saying it can take as long as a year to receive chargeback fees. “They’d prefer to keep their students in their counties.”
But she pointed out that community colleges themselves don’t set that policy and rely heavily on such revenue to balance their budgets.
“We try not to get involved in the argument,” Golladay said.
Fanslau, however, is eager to see options explored.
“I am aware of a chargeback system in at least one other state,” he said this week. “In that case, the county would pay a chargeback to another county’s college for a resident that attended another county’s college for a course that wasn’t offered at the host county college. In that way, the various counties were not spending funds on resources by duplicating the programs offered.
“For example, Sullivan County may offer a nursing program, and Orange could offer a dental hygiene program, but both programs would not be offered in both places.”
As a result, Fanslau wants to explore regionalizing the area’s community colleges, but Golladay is certain there’s no cost savings to be found.
“I understand where they’re coming from,” she acknowledged, “but there is no savings, I can tell you that.”
For example, Golladay said Sullivan County would still have to pay chargebacks to Orange County Community College if Sullivan County residents were attending OCCC’s Middletown campus – even if it was a branch of a larger regional college that included SCCC.
“And if Sullivan County’s looking at combining,” she added, “it would actually be a merger.”
“Regional” community colleges, as defined by SUNY, only exist in two locations in the state and were designated such at their creation, she explained.
Merging SCCC with other community colleges might reduce the county’s say in operations, Golladay posited, and would take years to create, requiring state action as well as the involved counties.
Perhaps most importantly, “the county is not authorized to start this process,” Golladay said. “That request has to come from the college board and SUNY.”
“One of the traditional stumbling blocks to making government work is the age-old issue of turfs,” Fanslau replied. “I suggested that the County Legislature direct that a study be commenced. It should not be held up based upon a technicality of whether the college board of trustees or SUNY or the County Legislature were to initiate and request such discussions.
“I would think that there would be some cost efficiencies realized through either a regionalized or merger process,” he insisted. “I believe that the larger goal would be to have a successful institution of higher education in Sullivan County, and preferably one that would potentially support a public-private joint venture to offer not only the traditional community college degrees and programs but also a four-year university systems degrees and programs.”
Golladay hopes that whatever path is chosen does not result in less funding to the already-strapped SCCC. While tuition is supposed to pay for a third of the college’s budget, it’s had to take a larger role, because neither the state nor the county have fully funded their one-third-apiece obligations.
“It’s an interesting mix,” she said. “I’m making no judgment about any of it.”
That includes the chargeback system.
“Is this the best? I don’t know,” Golladay remarked. “Is there a better way? I don’t know that either.”
Fanslau said that’s why now is the time to explore options – options that he said aren’t intended to hurt SCCC, which will be celebrating its 50th anniversary in 2012.
“As I stated in my budget message, I strongly support higher education, but the fiscal realities facing the county would suggest that there is not likely to be additional funds available in the near term, in terms of succeeding fiscal years,” he said, pointing out the potential that incoming Governor Andrew Cuomo will enact a property tax cap. “However, the college provides a service, and all officials want to see the college succeed.”
Golladay is chief amongst them, noting how hard SCCC leaders and the board have worked to ensure no layoffs in a 50-strong faculty serving more than 1,800 students, 70 percent of whom are local residents.
“I feel strongly that Sullivan needs a college,” she said. “It certainly could be better ... but I think the college is going to be OK.”

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