arra-sfsf-spending-plan_finalAttached please find the approved ARRA spending for NECC.

fy10_budget_pg11The FY10 budget was approved by the Board of Trustees on June 3, 2009. Here is the approved budget, by department.

To: All NECC Employees

From: Steve Fabbrucci, Dean of Human Resources

Subject: Results of FY2010 Requests for Voluntary Cost Savings Options

Date: April 27, 2009

As many of you are aware during the past several months the College has offered a variety of voluntary cost savings options to our employees for FY2010 (7/1/09 - 6/30/10).  These included voluntary sabbatical leaves for full-time MTA faculty, voluntary cost saving leaves without pay, reduced work weeks, and contracts of less than twelve (12) months for MTA unit professional staff, non-unit professionals and AFSCME unit members, and a waiver of the one year notice requirement for purposes of the early retirement bonus payment for MTA unit faculty and professional staff and non-unit professionals.

Based on the above I am pleased to report the following:

1.    There were three (3) full-time MTA faculty who applied for a cost savings sabbatical.

2.    There were twenty-one (21) employees who applied for a leave without pay, reduced work week or a contract less than twelve (12) months (3 MTA unit professional staff, 11 non-unit professionals, and 7 AFSCME unit members).

3.    No employees elected to take the waiver of the one year notice requirement in order to receive the bonus and retire.

All of the above proposals have been approved by the employee’s supervisor and the appropriate Dean or Vice President.

I thought many of you might be interested in the results of the College’s efforts in this regard.

MEMORANDUM

TO:    College Community

FROM:    David Hartleb

RE:    FY2010 Budget update

DATE:    April 17, 2009

Yesterday the House Ways and Means (HWM) Committee released its FY10 budget recommendation.  The funding to the state and community colleges was consistent with the Governor’s budget issued earlier this year (House 1).  The proposed budget for Northern Essex is $16.0 million, which is $3.1 million below our FY09 original budget.  Members of the Cabinet are now preparing proposed budgets for their units which must reflect this drastic reduction.

One very important change made by HWM was the allocation of funds to individual colleges. The Governor’s budget had a single roll-up number which included all of public higher education.  For the first time, we now know what is being planned for us as a college.

The next step in the budget process is the release next month of the Senate Ways and Means budget recommendation.  However given the current fiscal climate, it is a reasonable assumption that their budget will be the same as the House and Governor’s proposed budgets for the colleges.

In addition to state budget, the House Ways and Means Committee also released their expectation for the distribution of federal stimulus funds to the colleges.  These are also very consistent with the Governor’s recommendation given several weeks ago.  Under this plan, Northern Essex will receive approximately $3.1 million in federal stimulus funds.  There is a good news and bad news quality to the federal stimulus money.  It is good to receive so much and at first blush to make up the huge cut in state subsidy.  However that is deceiving.  The stimulus money will be treated as a federal grant and is funding for one year, only.  There is no promise of funds for a second year and clearly no money for a third year.  The grant status of the funding comes with strings attached, including significant restrictions on the use of the money, significant accounting requirements and outcomes reporting, a large indirect overhead charge, and  the requirement to charge full fringe benefits (26.1%) on all personnel costs.  This means that we will need to think carefully about how we use this stimulus money.  The Cabinet and I are considering one time expenditures for a large portion of this funding.  We are going to limit putting personnel on the grant, since it is one-time only funding.  It is great to receive so much stimulus money and we are grateful.  But we need to be careful how we spend it.

I know this is a challenging time for all of us.  I appreciate your understanding and support as we try to find ways to continue to deliver the excellent education we provide in an environment with decreasing resources.  If you have questions or want to offer your comments please feel free to comment on this post.

Patrick trims an extra 750 jobs
By Matt Viser, Globe Staff | April 15, 2009

Governor Deval Patrick cut an additional 750 jobs from state government yesterday and said he will furlough 5,000 executive branch employees for up to five days, a response to relentlessly plunging state revenues that have forced the governor to make an unprecedented series of spending reductions.

It was the third time in seven months Patrick has announced emergency budget cuts, and there was no indication it is over. Patrick’s actions yesterday are part of a plan to close a $156 million deficit, but he said that gap could grow by another $400 million before July 1.
“The economic downturn is hitting state government especially hard, leaving us with tough choices among miserable options,” Patrick said during a State House press conference.
The 750 positions he eliminated yesterday are in addition to 1,000 positions already cut this year. They will come through layoffs, attrition, and hiring freezes.

All managers in the executive branch, from the governor on down, will be required to take the unpaid furloughs. Patrick, Lieutenant Governor Timothy P. Murray, and most members of Patrick’s staff said they would still come to the office and work for free, rather than take the days off.

Patrick has also asked Leslie Kirwan, secretary of administration and finance, to begin negotiations with the state’s unions over a range of concessions. Patrick would not disclose the concessions, and union representatives declined to comment.
Patrick’s grim demeanor yesterday presaged more bad news today, when the House unveils a budget for fiscal 2010 that is expected to reduce spending even further. The House budget is not expected to include any new revenue, relying instead on deep cuts, the Globe reported last week. It is expected to include cuts to local aid that go beyond what the governor proposed, according to a State House source briefed on the budget.

The Legislature has still not acted on Patrick’s requests for a range of new revenue, including sales taxes on alcohol and candy and higher fees at the Registry of Motor Vehicles. Some lawmakers outside of leadership say tax increases need to be seriously considered, including a sales tax increase, but there does not appear to be any momentum.
Increasing the sales tax by 1 percentage point could raise about $750 million, according to some estimates.

“We’ve talked about [a sales tax increase] in individual groups,” said Representative Cory Atkins, Democrat of Concord. “Given the options, where would you go? A sales tax is a decent choice.”
The House budget has been shrouded in secrecy, with conflicting rumors spreading about how deep the budget cuts will be. House Speaker Robert A. DeLeo and Representative Charles Murphy, chairman of the House Committee on Ways and Means, have declined multiple requests for comment.
“I’ve heard more about the New York state budget than the Massachusetts House budget,” said Senator Benjamin Downing, Democrat of Pittsfield and chairman of the Senate Committee on Revenue.
As they formulate their spending plans, the lawmakers have also been raising campaign money, a Beacon Hill tradition at budget season. Murphy hosted a fund-raiser last week at the Liberty Hotel ballroom, complete with meatball sliders and lamb chops. DeLeo held a fund-raiser last night at Tecce’s, and House lawmakers were rushing to wrap up debate on pension reform to trek over to the North End restaurant.
Patrick has been displaying increasing frustration with legislative leaders, which recalls 2008, when he butted heads with former House speaker Salvatore F. DiMasi over casino gambling and the pace of lawmakers’ deliberations.
This time, Patrick has waited until later in the budget-writing season before expressing his impatience, but he vented on Monday over what he sees as inadequate attempts at transportation reform. He was also critical of top lawmakers who have not yet acted on some of his emergency measures to fill the growing budget gap.
The governor laid out a series of tax proposals in January, but House and Senate lawmakers have avoided them entirely.
“There’s clearly an urgency on his part,” said Paul Watanabe, a political science professor at the University of Massachusetts. “The idea is, presumably, that by deflecting some of the heat that’s been coming his way over the last couple of weeks he can emerge a bit stronger.”
The announcement yesterday was the third time the state has had to adjust to financial shortfalls. With residents earning less and spending less and business profits falling, the state is collecting less in taxes on income, sales, and business. Patrick was forced to close a $1.4 billion shortfall in the state’s $28.1 billion budget in October and an additional $1.1 billion shortfall in January.
Most of the budget gap the governor moved to close yesterday will be plugged using $128 million in federal stimulus funds that were part of the package set aside for Massachusetts.
Yesterday’s job cuts will save $7.5 million this year, but will save $40 million in the next fiscal year. In addition to layoffs and furloughs, which combined will save $12 million, there will be $16 million in cuts to programs and other departments. The mandatory furloughs will affect about 5,000 executive branch managers.
Those whose salaries are above $75,000 will be required to take five unpaid days off, while those who make less will take three days off.
Administration officials would not disclose contingency plans for an additional $400 million deficit for the remainder of the fiscal year, saying only that it would come through a variety of proposals that need legislative approval.
Patrick also said it could involve further withdrawals from the state’s reserve account.
The Massachusetts Republican Party criticized the governor yesterday, accusing him of failing to implement broad changes during good fiscal times and relying on tax proposals during bad times.
“Sadly, under the current Beacon Hill leadership, the only way we will see smaller, more efficient government is when the flow of tax dollars is reduced either through a tough economy or tax cuts,” Jennifer Nassour, the state GOP chairwoman, said in a statement.
Matt Viser can be reached at maviser@globe.com.

MEMORANDUM

TO: College Community

FROM: David Hartleb

RE: FY2010 Budget Update

DATE: March 25, 2009

I am writing to share some potentially good news regarding the college’s budget.
Yesterday Governor Patrick announced that public higher education in this state would receive approximately $162 million in federal stimulus money for FY2010.  The Governor has expressed his intent to use this stimulus money to bring funding of public higher education back to the original FY2009 budget level before the two rounds of 9-C cuts were made in the fall and winter.  Right now, the possibility of level funding is positive news since I had feared we would be facing a 16.5% cut.

While this news is potentially good, it is still too early to celebrate since the stimulus money will be in addition to the college’s normal state subsidy for FY2010 which has not yet been determined.  The state budget is now being considered by the House of Representatives and subsequently will be considered by the Senate.  Since this budget forms the base of our state funding we cannot, yet, project what our total budget will be.  We hope that the legislature will support the Governor’s goals, but we won’t know for sure until all final budget decisions have been made.

Because we must go forward with our college budget planning for FY2010, I have asked members of the Cabinet to prepare recommendations for two budget scenarios:  one assumes a modest cut in funding and a the other plans for a potential deep reduction.  In my judgment, either of these options is possible.  The revenue we will receive from the state is so uncertain that we must be prepared for both possibilities.

Also, we need to remember that the federal stimulus money announced by the Governor is only for FY2010.  It is possible that a similar amount would be allocated the next year, FY2011, but we do know that will be the end of it since the stimulus plan is for two years only. When the stimulus money ends, it is highly unlikely that the state will be in a position to replace it.  This means that the stimulus money is only a temporary source of funding that could help us transition to a significantly lower level of support from the state.  At the very best it would level fund us for one or two years (which does not pay for ordinary inflationary expenses nor salary increases).  Clearly, it will not solve all of our budget cutting problems.

In order to maintain the high quality of our college educational experiences we must restructure, create efficiencies and find new ways to work together.  We will look and act differently three to five years from now.  It is essential that we maintain our vision, core values and strategic focus as we move forward into this new era of reduced resources.  I thank all of you for working together to make this happen and I promise to keep you posted as new information becomes available to me.

Senate budget leader, fiscal group sound alarm

By Frank Phillips, Globe Staff | March 12, 2009

As tax revenue continues to dwindle, Beacon Hill leaders are confronting an additional budget gap of as much as $1 billion this year, forcing lawmakers to choose between deep spending cuts and broad-based tax increases.

The new estimate by a Senate budget leader, which was confirmed by a state fiscal watchdog group, is the latest in a cascading series of grim revenue forecasts, which has already compelled Governor Deval Patrick to close a $1.4 billion shortfall in the state’s $28 billion budget in October and an additional $1.1 billion little more than a month ago.

Senator Steven C. Panagiotakos, chairman of the Ways and Means Committee, said that tax revenues have fallen well below expectations for the first few months of the year and that the fall-off could be a harbinger of a major slump between now and June 30, the end of the state’s fiscal year.  “We have a potential $700 million to $800 million deficit facing us,” said the Lowell Democrat. “It’s a real possibility. It has the potential to come close to $1 billion.”

His estimate is nearly twice as high as the current figure circulating around the State House. It also augurs for an almost unmanageable deficit in the next three years that can only be closed with a combination of painful spending reductions and new sources of revenue, primarily from broad-based taxes such as income and sales levies, said legislative leaders and budget specialists. The local aid account, which Patrick has already trimmed, could face even deeper cuts next year than proposed as part of his budget.

Panagiotakos said he was prompted to revise his estimate of the deficit because he was alarmed over the February slump in revenue, which came in $86 million lower than predicted. He said he feared it could foreshadow an equally poor showing for March and April, when the state depends on a large influx of tax revenue.  Outside budget analysts agreed.

“It’s a free fall,” said Michael Widmer, the president of the Massachusetts Taxpayers Foundation. “The world economy is tanking faster than we can comprehend.”  Both he and Panagiotakos said that the Legislature’s only option at this point is to pull more money out of the stabilization fund to deal with the deficit in the current budget because most state accounts are close to depletion as the fiscal year draws to a close.

That fund, which held $2.62 billion eight months ago, will probably be less than $1 billion by the end of June if the decline in state tax revenue continues. In addition, Massachusetts is expected to get another $247 million in federal stimulus money that can be used to help cover the gap. Already $533 million in stimulus funds has been factored into the budget plans.

Panagiotakos and other legislative leaders are also predicting that the gap between expenses and revenues in the next fiscal year could exceed $4 billion, a level that can only be dealt with by finding new revenues sources and use of the state’s dwindling rainy day fund if Draconian cutbacks in state service are to be avoided.

“The Legislature faces a huge dilemma,” Widmer said. “With no new taxes, they would have to decimate state programs. Even with a major tax increase, there will be major cuts.”  Patrick’s fiscal aides, while acknowledging that the fiscal outlook is becoming increasingly dire, said they are undertaking a mid-year budget review and will not come to any firm conclusions until the end of this month..

“We know already that we have some deficiencies that will likely require additional budget solutions this year, thanks in part to faster-than-expected deterioration of the economy,” said Cyndi Roy, a spokeswoman for Patrick’s budget office.

Representative Charles A. Murphy, chairman of the House Ways and Means Committee, cautioned that the predictions coming out of the Senate are just projections and said he is waiting for March and April revenue figures before revising budget estimates.

By Frank Phillips, Globe Staff | March 12, 2009

“It is all about trying to predict the future, and no one can at this point,” said Murphy, a Burlington Democrat. “I can’t say if it is understated or overstated. We just at this point differ on projections.”

Following a caucus where House lawmakers listened to economists and other fiscal specialists outline a bleak fiscal future for the state, House Speaker Robert A. DeLeo, who this week pegged the current budget deficit at $50 million to $500 million would not rule out a major tax hike to help balance next year’s fiscal plan. He said lawmakers must first cut as much as they can from state programs.  “In light of the situation, I don’t think you can consider anything off the table,” DeLeo said when asked whether a broad-based tax increase will be necessary.  But it would be extremely difficult to persuade lawmakers to back a tax package, particularly one that includes an income tax hike, he added. “We’re caught between a rock and a hard place.”

DeLeo said there is little support among House members for an income tax hike, particularly after voters had called for cutting the rate from 5.5 percent to 5 percent in a 2000 referendum. Despite continued pressure from activists, the Legislature has not dropped the rate below 5.3 percent. Some legislators have suggested raising it to 5.4 percent, a hike that could raise $1.5 billion to $2 billion annually.

Panagiotakos said that winning political support for an income tax increase would be nearly impossible. He said cutting spending is the first alternative, but was not sure it would be enough to solve the problem without devastating state programs.

He suggested that a one percentage point hike in the 5 percent state sales tax could be preferable to an income tax hike. That would produce about an extra $750 million in state revenue.

We have just completed the 11 budget meetings for faculty, staff and administrators.  Over 90 people attended and I thank all who came and offered a large array of suggestions.  The tone of these meetings was positive.  In the typical Northern Essex fashion we are approaching this budget with a “can do” attitude.  The commitment to student success is clearly paramount and will guide us as we develop our budget plan for FY2010.

While the full picture about our revenue for FY2010 is still unclear due to the unknown effect of the federal stimulus act and the still undecided student fee charges, we must begin to assemble a budget plan now.  This is challenging, amidst the uncertainty, but necessary.  Within the next week directions will be sent to the Cabinet members to formally develop budgets for the various divisions and departments in our college.  These directions will be based on very modest assumptions about fee increases and help from the federal stimulus act.  We just cannot wait until we know all of the answers so we are making assumptions for planning purposes.  This will be the beginning of th e budget planning process; not the end.  As we learn more, we will make modifications.  Our goal is to complete the budget in time for recommendation to our Board of Trustees by the June 3rd, regularly scheduled meeting.

At the same time there will be Cabinet members, Leadership Team members and others who will meet and go over all suggestions from the 11 budget meetings.  These are all listed on the Budget Blog.  As each is explored some will be adopted and will alter our budget plan.

You probably know, that it is my philosophy to made budget decisions that are not across the board.  By the time the plan is finished, the various divisions and departments will be treated differently, based on our core values, strategic plan and vision statement.  These will guide us through this difficult process to maintain and grow our excellence with fewer resources.

Also I commend all of you who are actively finding ways to do work more efficiently and to be entrepreneurial to raise funds in other ways.  These efforts are also vital to our budget plan.

Finally I encourage anyone with ideas or suggestions to post them here on the Budget Blog.  You may do so anonymously, if you wish.  General directions and how to post anonymously are located in this blog . The blog is also accessible on our website via Quick Links and in the For Faculty and Staff section (under Vision and Planning).

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March 9, 2009 – 9:00

1.    Do a financial analysis of our student’s ability to pay higher fees

2.    Look around to ask if there are things that are not being utilized; not truly needed.  Talk to staff and ask.  Pay attention to high and low times for needed services; e.g. manage our cycles.

3.    Explore more flexible course scheduling, especially hybrid courses.

4.    Change budget timeline earlier in spring.

5.    Consider voluntary furloughs for NUP’s

6.    Keep our work with our local communities – first and best resource

7.    Keep student support services to improve retention…

8.    Keep commitment to access; do not raise fees too much….

9.    Have a shuttle fee.

10.    Keep professional growth and development….

11.    Increase class sizes, especially in high demand programs, so that more students can achieve their dream.

March 9, 2009 – 2:30

•    Students here already at risk  compared to others, so keep fees lower
•    Everyone needs to be responsible and accountable across board
•    Everyone should participate in solution but should be all top (President) down
•    Furloughs only possible for NUP’s
•    Voluntary actions possible (i.e. unpaid sabbatical etc)
•    Close on Saturdays?  cost savings?
•    Close Friday’s in summer?  June & July
Close during spring break?
•    CPAC close evening hours during non peek periods
•    North Andover facility
o    1 year left on lease
o    Looking at options (long term option less $)
•    Need to think creatively at process, people etc
•    Need to use process management across dept/div boundaries to solve issues with less $
•    Need cooperation across lines….
•    Need to think of new revenue sources as well as cuts
•    Where are areas of new business?
•    Be entrepreneurial
•    Can we connect with business in area to fill their needs by offering courses?
•    Grants which pay off (lights in wellness center)
•    Go green!
•    Green tip of the day/week
o    Print versus copy
o    Upload meeting min/handouts etc
o    Recycle paper (can made pads)
o    Shut off computers at night
•    Charge for shuttle $
•    Fee for parking
•    Car pool spots (advertise)
•    Charge for printing
•    Higher fee for application
•    Buying bulk
o    Items
o    Memberships
•    Barter everything
•    Advertise college
o    On shuttle bus
o    On seats…etc…
•    Rent space on campus to generate revenue
•    Be careful with commitments for security, maintenance deaf services costs other departments when booking activities
•    Work with faculty on books to lower cost of text for students
•    Assess need for all printing and mailings