NWC grapples with further cuts to state support

Posted 11/24/20

Northwest College President Stefani Hicswa likely didn’t want to be the bearer of bad news at her last board of trustees meeting, but she had to inform the board that Gov. Mark Gordon has …

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NWC grapples with further cuts to state support


Northwest College President Stefani Hicswa likely didn’t want to be the bearer of bad news at her last board of trustees meeting, but she had to inform the board that Gov. Mark Gordon has warned community colleges to expect a 15% cut to their state support.

The governor had initially warned of a 10% cut, but then annouced last week that cuts to state agencies would be as high as 15%.

Speaking after the meeting, NWC Interim President Lisa Watson said community colleges have received other funding line reductions, leaving the college with projected state general fund reductions of approximately 17%.

Community colleges are also closely monitoring and concerned about local mill valuations, Watson said. Several counties are expecting reductions in their local mill valuations which would result in lower local levy tax revenue. This tax levy revenue is also included in the funding formula and could result in additional reductions.

Northwest College was already facing a $2.9 million budget shortfall, which included the expected 10% cut, and now it’s faced with an even greater hit.

At the Nov. 9 meeting, the trustees also heard a presentation on NWC’s audit findings, as well as information about funding from the CARES Act, which will help with some pandemic-related expenses.


Devastating cuts

A legislative select committee was formed earlier this year to figure out what to do as Wyoming’s community colleges grappled with steep declines in funding from the state.

“They have been very good to listen to the community college ideas that we brought forward,” said Hicswa, who is leaving NWC to become chancellor at Montana State University — Billings.

While good ideas came out of the committee, Hicswa said, some relied on increased tax support. With this month’s election bringing more conservatives into the Legislature, Hicswa warned it could possibly mean more challenges to proposals that increase taxes.

“Generally speaking, those who are further to the right oppose taxation,” Hicswa said, stressing that she was speaking generally.

She said one possible way to address the impact of the govenor’s recommended cut is for the state to reduce it by half by using funding from the State Loan and Investment Board, or possibly the Legislative Stabilization Reserve Account — also known as the state’s “rainy day” fund.

At a recent Joint Appropriations Committee meeting, community college representatives were asked what Gordon’s recommended cuts would mean to the institutions’ operations.

“All of the community college presidents that were in attendance testified that it would be devastating,” Hicswa said.

She said the meeting occurred right after a big snowstorm in October, and she told the committee that the cuts presented a safety concern.

“We don’t even have the staff to shovel the sidewalks,” Hicswa told the legislators.

Unfortunately, the legislators’ hands were tied. Though they said they found the presidents’ concerns compelling, they said to expect to have budgets cut at least to the level the governor recommends. 

NWC Board President Dusty Spomer said the news highlights the ineffectiveness of the college’s current funding. Often referred to by board members as the three-legged stool, it includes fees and tuition, local support and state support. 

Spomer said the third leg is broken and demands “serious attention” going forward.

“These cuts we are facing now are extreme, and to think that next whack is coming down the road,” Spomer said.


Audit and CARES

Hicswa said the school estimates that $4.7 million will come down the pipeline from the federal CARES Act, which will help with some expenses. Federal restrictions on how the money can be spent, however, will not allow it to be used to close budget shortfalls.

The college has spent $1.6 million of CARES funding, and another $1.8 million is outstanding, Hicswa said.

Among the expenses the school incurred was purchasing equipment to support online learning. This includes “Meeting Owl” cameras, which are designed for Zoom meetings. They allow remote participants to have a 360-degree view of the classroom and rotate the focus toward who is talking. 

Federal restrictions require the CARES money to be spent by Dec. 31, and there’s some ongoing confusion over what is an eligible expense.

During the meeting, the trustees heard a presentation on the college’s audit from Wayne Herr, certified public accountant with MHP, LLC. He said there were no findings and the school was in compliance with all accounting standards and grant requirements.

Herr also told the board that NWC had been very conservative in its spending of CARES Act funds, which would greatly minimize its exposure to risk.

In light of the poor guidance from the feds, other institutions have run into problems. Herr said one institution gave grants to students who aren’t U.S. citizens, and the school is having to use other funding to pay the money back. He said the expenditures at this school weren’t necessarily wrong, but with so much ambiguity in the guidance, NWC was wise to act with caution.

Spomer asked about the NWC Foundation’s support of the school, stressing that he wasn’t suggesting it was lacking and only wanted Herr to talk to the board about it.

MHP also audited the foundation, and Herr explained the foundation has a dual role, which is not only supporting NWC’s mission but also managing the endowment. In that balancing act, he said it had provided as much support to the school as it could.

“I think the foundation is very open to flexibility and determining how they can best support the college,” Herr said.

Hicswa complimented the college’s staff on the audit, especially Watson and Brad Bowen, finance director. She said the college has not had an audit with any findings since 2014.

“That is no accident,” Hicswa said. “That requires a ton of work and diligence on the part of administrative services and the budget office.”