As you have heard from various media reports, budget cuts loom for Northwest College. While the unpleasant task of reducing next year’s operating fund by $2.3 million will be challenging, our focus will be on Northwest’s future, and we will proceed truthfully and responsibly. We owe that to you, our owners, and to current and future students.
To help you put our budget shortfall in proper perspective, the college’s operating fund is roughly $22.5 million. (The annual budget is more than that, but it is the operating fund on which we must focus our attention.) About 75 percent of that $22.5 million operating fund is composed of employee compensation – salaries and benefits that result in our $1 million monthly payroll that has an enormously positive impact in this county.
I am frequently asked, “Is this a surprise?” No, it is not. All of us in Wyoming have been painfully aware of what would result from considerably depressed oil, natural gas and coal prices/production in our state. While we have seen this coming, the exact magnitude has only recently become apparent to the campus. Some who have been at the college many years say they do not remember a revenue shortfall this large. The deficit is attributed to the following developments, all of which stem from plummeting energy prices.
The State Legislature reduced the system of seven community colleges’ standard budget by just over $2 million for the next two-year period, a reduction we view as reasonable given the state’s revenue situation. NWC must assume its portion of that statewide amount; our share is not a simple one-seventh calculation.
An additional 3 percent cut over the next two years was imposed by the Legislature on all state agencies, including the community colleges.
The biggest hit to NWC comes from a projected sharp decrease in Park County’s valuation because of mineral prices/production. The result is a revenue loss of an estimated $1.44 million from NWC’s county-wide mill levy.
While energy prices are expected to increase in the future, it likely will not be for several years.
Such a formidable task requires broad involvement both on and off campus.
Campus budget managers are at work recommending expenditure reductions from their various areas. I have told them this shortfall cannot be handled by simple belt-tightening. Cuts will be permanent, and nothing is being ruled out, including personnel, elimination of services and instructional programs is a very real possibility.
My role as president is best stated in this quotation from adaptive leadership development author Katherine Tyler Scott: “The role of the leader is to read reality truthfully and to respond responsibly.” I take my responsibility very seriously. After considering campus input, the decision about what to recommend to the Board of Trustees is mine alone. Student recruitment and retention are critical to Northwest College’s future well-being and to our ability to make a positive impact on the area’s economy. Therefore, how directly programs and services contribute to student recruitment and retention will weigh heavily in my decision making.
The Board of Trustees plays a vital role by considering and approving the annual budget. With the best interests of the college in mind, trustees voted Monday to implement a one-time special early retirement offering for employees, including those whose age is below or above eligibility cut-off points. This special offering respects our employees’ dignity and helps them make decisions on their own terms. Further, board members approved use of some of our budget reserves to assist on a one-time basis. For example, in the event instructional programs are terminated, reserves can be used to “teach out” programs so second-year students can complete their program of study.
Area residents have a role to play as well. I hope you will speak up with questions and advice. After all, as taxpayers, you are the ones who own this college.
One suggestion I have heard among a few area residents is to reduce employee salaries. That will not be part of my proposed course of action; cutting employee salaries would erode our competitiveness in the marketplace when employees accept positions elsewhere or retire. We must not only compensate individual employees for their good work, we must fund their positions for the future.
In traveling the state as a member of this year’s Leadership Wyoming class, I have viewed firsthand how hard the mining industry has been hit. A tagline that has emerged in response – “Stay Strong Wyoming” – is easily adaptable to NWC’s current budget challenges. It is important Northwest College remain competitive and continue to thrive. I seek to keep this institution “Northwest Strong.”
Please know your college will do what is best for student success and for you, the taxpayers. We will bring to bear the best thinking possible to meet this challenge and build for the future. Strong colleges survive such trials, and Northwest College is just that and will remain so.
(Northwest College President Stefani Hicswa is completing her third year at NWC.)