SUNY Erie’s crisis

Regular readers of this blog are aware that there have been many posts devoted to issues concerning Erie Community College (ECC or SUNY Erie). I have regularly reported on the serious financial problems facing the school. A crisis that has been brewing for many years has arrived as a full blown storm.

The Board of Trustees has submitted a proposed budget to County Executive Mark Poloncarz and the County Legislature that cuts spending for the 2020-2021 year to $83.9 million, a reduction of $22 million compared with the current year. Layoffs are forecast and tuition will rise three percent. State aid will be slashed and the SUNY System has advised schools to use their fund balances before they receive additional funding.

The immediate cause of these draconian measures is, of course, the pandemic. The virus, which appears far from being contained, is forcing drastic cuts in businesses, governments and educational institutions throughout the country. While the pandemic has put a dramatic exclamation point on ECC’s finances, the fact is that the crisis has been in the works for years. Take note of the financial warning flags that were flying at the school before March 2020:

• The school’s auditors, Drescher & Malecki, reporting on the college’s 2018-2019 finances in early spring noted that operating revenues in 2018-2019 decreased $2.7 million from the previous year, while operating expenses only came down $1.6 million (the fiscal year ends August 31).

• Based on an analysis of enrollment figures from the current fiscal year it appears that the school was already running a new revenue deficit of about $2.7 million prior to the pandemic hit.

• Per the auditors, the school’s fund balance of August 31, 2019 was down $3.4 million from the previous year.

• Per County Comptroller Stefan Mychajliw, ECC’s student population, which drives revenues, has declined 33.5 percent over the past nine years, a pace that is greater than many other community colleges in the state.

The most recent President of the college, Dr. Dan Hocoy, has left for other work in Missouri after the Board of Trustees chose not to renew his contract. The college, with the concurrence of the State University of New York, has hired an interim president, William Reuter, who will, according to Board Chairman Len Lenihan, serve for six to twelve months while the college searches for a new president.

Reuter returns to the college after three years as CFO at another college, but his resume includes 19 years as ECC CFO and more than one year as the school’s interim president. He has a complete grasp of how the college operates, its finances, and its personnel.

Reuter’s first order of business will be to size up where enrollment may stand for the coming year and how deep a financial hole the school is in with revenues, which were declining up through March, now made worse by the pandemic. ECC is not alone in facing a myriad of operational and financial problems. Every other college in the nation is looking at similar problems.

As former Chicago Mayor and Barack Obama Chief of Staff Rahm Emanuel once noted, “never let a serious crisis go to waste. And what I mean by that is that it’s an opportunity to do things you think you could not do before.” That is good advice for the ECC Board and Interim President Reuter.

ECC’s three campus model is probably not sustainable. Resources are stretched too thin. Under the best of circumstances demographics in Western New York mean that ECC and all other colleges and universities will have fewer students for the foreseeable future.

While Reuter is working to right the ship he should look for time to explore all available avenues to make the school a successful institution for years to come. This means providing the College Board with information and a range of options that can help guide them to that future.  Options to consider include:

• Looking to close and dispose of the land and property of at least one of the three campuses that are presently operated. Each of the campuses could use a great deal of updating. Opportunities for course offering consolidations in one location should be explored. This will not be an easy decision because each of the campuses has its own constituencies and whether anyone wants to admit it or not, political considerations could easily creep into such discussions.

• The community colleges in Western New York (Niagara, Genesee and Jamestown) are all dealing with enrollment and financial problems. If the schools can find a way to consolidate some management activities and course offerings of all the colleges, their students and their county sponsors can benefit.

The pandemic has focused attention on all sorts of community resources that have for many years been struggling financially and therefore have suffered operationally. Higher education is not immune to such forces.

SUNY Erie provides good educational opportunities for both traditional and occasional part-time students looking to enhance their careers and educational opportunities. There are many talented, hardworking faculty and staff at ECC. The school, however, has struggled to maintain enrollment levels.

County governments sponsor community colleges. They have a vested financial interest in seeing the schools well managed. Legislators and executives must help promote the idea that the colleges need to figure out a better way to operate in the future. Likewise the State University of New York should actively encourage creative adjustments in the state’s community college system, perhaps offering financial incentives to do things differently.

The SUNY Erie Board has chosen well in bringing Bill Reuter back to deal with its financial challenges but after Reuter’s service is completed and a permanent new president is selected things will not be going back to whatever was considered “normal” just a few years ago. They need to take advantage of the crisis at hand to refocus ECC for the future.

2 thoughts on “SUNY Erie’s crisis

  1. ECC, NCC, GCC are commuter colleges with a lot of duplicate courses and duplicate curricula and duplicate degree programs. It would be an interesting study to compare the 3 campus’s of ECC (Williamsville, Downtown and Southtowns) with replacing 3 campus’s in Erie County with 3 regional campus’s. I dont think its possible to eliminate all duplication with regional campus’s but 1 option is to:
    1) Consolidate ECC campus’s to 1 campus and make the other 2 distance learning campus’s.
    2) Encourage each of the regional campus’s to focus on a particular specialty. This would allow a large enough population of students to support programs and certifications that they cannot offer right now, as well as, expand their trade skills programs (construction, plumbing, electrical, HVAC, etc)
    3) Allow high school students to take their advanced placement / college level courses at community colleges in lieu of high schools but since they are seniors in high school tuition would be transferred from high schools to community colleges. There are a lot of students that want to start their trade apprentice programs and certifications…this would allow them to start this process at a community college while a senior in high school. It would be helpful if this partnership counted towards an actual high school or regents diploma instead of a GED which many colleges and employers do not equate as being of the same quality…and it is a trigger that this potential student or employee had a serious problem in high school when one may not have existed.

    The last point is a way to finance community colleges which are inexpensive and needed by the poor and working class seeking an inexpensive means to gain education and training. Trump is 100% on the right track when Trump placed a small tax on college and university endowments. These colleges use tuition and state/federal aid, plus they are non-profits and pay no taxes (property, income, public school, etc). They use this money before for new buildings, maintenance, expanding enrollment, expanding their administrative layers, etc. The endowments wind up being an untaxed investment vehicle for the college or university. If a college or university has over 500,000 in their endowment…they could satisfy all operating costs and pay tuition of all students for 5-10 years but they dont…they take the state and federal taxes and keep the endowment for their own personal slush fund. Its time that the nonprofit investment vehicles and profit centers endowments provide be taxed 100% and removed from being under the non-profit umbrella of the college/university. The taxes from endowments could be used to pay 100% of the operating costs of community colleges.. . ,

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  2. Messana’s comments and solutions make loads of sense. Consolidation should have happened years ago. The buildings at all campuses esp. South now are under-utilized with huge amounts of tax money going up in energy costs. Duplication continues to be a problem. The main reason is the threat of loss of jobs – faculty, staff, administration- tied to union intransigence. The COVID 19 event can lead to much needed reforms…but i would not bank on it. Not quite yet.

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