Traverse City Record-Eagle

July 25, 2013

NMC millage vote coming right up

BY ANNE STANTON astanton@record-eagle.com
Traverse City Record-Eagle

---- — TRAVERSE CITY — Grand Traverse County residents soon will decide whether to pay an additional .4 mills for 15 years to support Northwestern Michigan College.

Friends of Northwestern Michigan College, a group of about 15 volunteers, has been spreading the word about the Aug. 6 election, but only a few people interviewed recently knew details of the millage that’s intended to generate $1.7 million in additional taxes to support college operations.

“I’d look before I voted, but the college helps a lot of people — kids, adults— to further their education,” said Amy Cyr, whose West Senior High School child took two NMC classes. “As far as how I’d vote, I don’t know what they’re asking, but I’d support the college in doing something that’s beneficial to the community.”

Carol Bennett, a bank worker, said hard times might make it hard for some to approve the request.

“However, I do feel NMC is important to the community, so I’ll probably vote ‘yes,’” she said.

Bob Reamer, 75, said he’s voting “no.”

“I’m retired and on a fixed income. It’s a problem with the extra money,” he said. “Taxes are already pretty high, and I know with our assessment, our property taxes are going to go up.”

The .4-mill increase would restore the college’s operating millage to the 2.5742 level approved back in 1995. The Headlee amendment reduced the rate to 2.1700 mills since then. The Headlee amendment and Proposal A work together to ensure property tax revenues — based on taxable values — don’t exceed the rate of inflation. If they do, the Headlee rolls back the millage to adjust dollars.

The proposed increase would add $1.7 million to NMC’s coffers the first year. That’s on top of an anticipated $1.8 million increase in tuition and fees due to a higher tuition rate, fees, and enrollment.

NMC President Tim Nelson said state law doesn’t allow him to specifically state how the money would be spent, other than it would support operations. He added that the millage increase is a way to invest in NMC’s future. The community college, he said, will continue its efforts to build out specialty programs, such as water studies and robotics, work closely with regional employers, and to provide academic support for higher student retention. The college has also stepped up its marketing efforts, including an international outreach.

“NMC has always been a leader,” Nelson said. “We’re not the first, but the second university center, and still the largest. With the museum, the Maritime Academy, you look at the history of the college,and it’s always invested the operating fund money not just in meeting the current need, but in preparing for the future.”

Bill Marsh, Jr., co-chair of Friends of NMC, said his message to voters is that students are now bearing too much of the college’s financial burden.

“NMC’s budget was originally based on a third, a third, a third, a third—state, local and students. Today students bear nearly 50 percent of the cost of education,” Marsh said. “And the other biggest reason I share with people (to vote yes) is that I firmly believe that if NMC isn’t the best-led community college in the country, it’s darn close.”

 

Northwestern Michigan College: A Financial Snapshot

- Actual revenues for the past 2012-13 school year totaled $41.3 million. That's projected to increase to $43.1 million next school year. A "yes" vote on the .4 millage increase would increase revenues by another $1.7 million in 2013.

- The sum of tuition and fees projected for next school year is $23.5 million — $1.8 million higher than the total tuition and fees collected this past school year, an 8.3 percent increase. That's due to tuition increases ranging from 2 percent for Grand Traverse County residents to about 32 percent for students enrolled in specialty programs, such as nursing, automotive, and audio-tech programs. The college also increased its facility fee from $4 to $6 per contact hour for out-of-district students. The projected tuition revenue increase also comes from a projected bump in student enrollment — from 4,847 this past year to 4,947 projected for next year.

- Despite the increase in tuition revenues, the college's bottom line is expected to decline from about $98,000 to $36,398. That's due to a 2.7 percent increase for salaries, five new positions, and higher health care costs. NMC had expected to pay benefits for 20 more employees due to the Affordable Health Care Act's upcoming requirement to pay benefits to employees who work 30 hours or more. That's an extra expense of $80,000 (for half year). But now there appears to be a one-year delay in the 30-hour requirement. The college hasn't decided what action it will take.

- Next year's tuition and fees are expected to comprise 55 percent of the college's total revenue. NMC also receives money from state and federal governments, as well as investments and private sources.

- The special election in August is expected to cost between $60,000 and $80,000, based on previous elections. NMC officials said they won't know the cost until they receive a bill.

- Property taxes have steadily declined as a percentage of NMC's total revenues — from 25.2 percent in the 2008-09 fiscal year to 21 percent this year.

- NMC officials predict that property tax revenue will increase next year, but stay nearly flat in future years, increasing from $9,105,051 million in 2012-13 to $9,458,822 million in 2017-18 — a 3.8 percent increase over five years. The Grand Traverse County Equalization Department predicts the county's property taxes will increase by roughly 2.578 percent from 2012 to 2013, based on rising taxable values.

- The college's projections for state revenue show no increase over the next four years.

- The above assumptions would mean six-figure deficits for the college starting in the 2014-15 school year.

- Out-of-district students pay about double the tuition rate of in-district students living in Grand Traverse County. Last year, in-district students made up about 55 percent of the total student body of 4,734 students.

- As of June 30, 2012, NMC's fund balance was $16.1 million, nearly 38.9 percent of the college's $41.3 million operating budget.