By Lauren Ebben/ Senior Reporter
A new budget is in effect at Amarillo College. The more than $78 million budget represents a nearly $6 million increase from last year’s budget. On Aug. 27, the board of regents approved the budget for the 2020 fiscal year, which began Sept. 1.
“I’m really pleased with this budget,” Dr. Russell Lowery-Hart, AC president, said, noting that AC received an increase in state appropriations for the first time since he started working at the college.
The budget, totaling $78,245,864, is the fund the college will pull from for the entire year. The majority of the revenue for the budget comes from three different sources: tuition and fees, state appropriations and property taxes, with the third providing the most funds.
This year’s budget is larger than the budget from the 2019 fiscal year. Steve Smith, vice president of business affairs, attributed the majority of this growth to an increase in local property taxes, which is split into two parts: maintenance and operations (M&O) and interest and sinking fund (I&S).
An increase in M&O means that “the taxable value of property in Amarillo increased due to new property growth in the city, as well as appreciation of existing property values,” according to Smith. This simply means Amarillo has grown. Additionally, maintenance tax contracts used to support the Hereford and Moore County campuses saw an increase of $45,000, meaning those areas also saw new property growth.
The I&S fund portion of the property taxes services the bond debt. Back in May, citizens voted on an $89.4 million bond that the college will use to fund what is known as the master plan, a series of projects and renovations for each of AC’s seven campuses. Think of the master plan as a facelift for AC.
In early August, the college issued the first portion of bonds, valuing $27.5 million. With this issuance, I&S taxes were increased by $0.0204 per $100 of “taxable valuation,” the value on which property taxes are calculated. This means that a house valued at $100,000, for example, will see an annual increase of $20.40. This rise in rates supports a $3 million increase in debt service payments brought on by the bond.
The second largest source of revenue for the AC budget is tuition and fees. Overall enrollment for 2019 was down, which means the college did not receive its projected revenue for tuition and fees for the year. Because of this, the college budgeted more than $300,000 less for the 2020 fiscal year. Due to strong enrollment this fall, however, officials were able to increase the original budget figure.
“The amount budgeted for 2020 is still higher than the amount we actually received in 2019,” Smith said.
Another main source of revenue for the budget is state appropriations, money given to the college by the state of Texas.
“For the first time in the nine years I’ve been a part of the college, we didn’t get a decrease in state funding, we got an increase in state funding,” Lowery-Hart said.
The increase in appropriations was “$1.3 million for each year in the 2020 and 2021 biennium,” according to Smith. A biennium is a specified period of two years, which is how the state handles college and university funding.
“This increase came from an increase in contact hours taught since the last legislative biennium,” continued Smith. The term ‘contact hours’ refers to the time when a student receives active instruction as part of a course of study. Part of state funding is based on the college’s total number of contact hours.
“The college also received increased funding per success points, and had an increase in success points in this biennium compared to the previous biennium. The increase in success points comes from students being more successful in classes at Amarillo College and in their paths towards graduation,” Smith said.
Property taxes, tuition and fees and state appropriations are not the only sources of revenue for the school budget.
“We also have projected increases in investments, auxiliaries and other miscellaneous income by $1.15 million as compared to the 2019 budget,” said Smith.
To determine the amount for the budget, the college uses a process called zero-based budgeting, meaning the budget starts at zero and the college adds expenditures it plans on spending.
“Every year a department requests the amount they need to operate. They fill out a budget report letting us know things that they need for their departments. They let us know what equipment they need, if they requested any travel, how much they need in supplies, what their employee salaries are,” said Smith
After all requests are in, decisions are then made to determine the budget amount.
“We look at each department request based on what their average spending is. So if someone spends an average of $4,000 a year in supplies and they asked for $10,000, they’re probably not getting $10,000, they’re getting something close to what they average actually using,” Smith said.
“I feel like the budget clearly demonstrates people’s commitment to financial effectiveness,” Lowery-Hart said. “People are asking for what they need, not just what they want.”
Vice presidents of AC submit budget requests for their respective divisions. Vice President of Student Affairs Denese Skinner, for example, submits a request for areas like advising services, student life, disability services and similar departments.
According to Skinner, department heads submit their own budget requests to her “based on the previous 5 year’s actual expenses and their anticipated unmet needs for the upcoming year. If they have a new initiative that they need funding to implement, justification is given along with the costs associated with the activity.”
“Throughout the year department heads and I communicate about how their budgets are supporting their activity and what new initiatives they think will enhance the effectiveness of their mission,” Skinner continued. “When it is time to request funding for the next year, we all know basically what new things will be requested and why.”