CHEYENNE – Laramie County Community College had to “adjust its sails” since first drafting a budget in May.
That’s the phrase Rick Johnson, vice president of administration and finance for the college, used to describe what it was like balancing the final budget he presented during the LCCC Board of Trustees meeting Wednesday night. The board passed the $93,330,212 total operating budget for fiscal year 2021, but it had to tap one-time state money and freeze planned employee raises to make it happen.
It could be a sign of what is left to come this year for Wyoming, which has already seen major economic downturns related to both COVID-19 and flailing coal, oil and gas markets.
“We might actually need to change our sailboat,” Johnson told the board. “This has been quite the challenging time since May 15. Perhaps the challenging times will continue.”
It was around then the state told all agencies to rewrite their annual budgets in anticipation of a 10% cut to state funding. State money makes up around half of LCCC’s total budget.
The 10% cuts, along with unexpected shortfalls in the state employee health care system, forced the college to grapple with around $2.7 million in additional deficits.
It’s also possible the Wyoming Legislature could vote to cut funding for state agencies by up to 20% in the near future, which means LCCC would have to look for more places to save.
While figuring out how to balance the budget over the past two months, Johnson said he kept four goals in mind: continuing investment in people; tightening operating expenses; accumulating resources for the future; and preparing for sudden impacts and changes.
The Wyoming Legislature appropriated $816,000 in one-time funding to LCCC during the past budget session. The college had originally only planned to use half of that money and save the rest, but now it’s spending it all. The college also captured about $1 million in unspent funds, has offered new hires lower salaries and frozen the three-phase employee compensation plan it started a few years ago. Phases one and two had already been implemented, and phase three was set to go into effect this year. Pausing the compensation plan saves $656,000.
It’s unclear if or when that pay scale plan – which is intended to put all employee salaries in the 50th percentile for their positions – will resume.
Since employee salaries and benefits make up roughly 71% of the college’s budget, Johnson told the Wyoming Tribune Eagle last week that when it inevitably comes time for further cuts, “it would be very hard to find that much money without impacting employees.”
“We balanced the budget with one-time funds. Those aren’t funds that are recurring. The fact that few balanced the budget this way – which was really our only option in the short period of time – we’ve got to replicate that in year two of the biennium,” Johnson said.
To do that, the college will have to find a way to reduce the budget by another $2.8 million, “but will probably have to plan for more.”
President Joe Schaffer and his cabinet have plans to attend a retreat next week, where LCCC leadership will start preliminary discussions about further cuts, which Johnson said would need to be implemented this year.
“We need to get ahead of this cash-flow issue,” Johnson said at the meeting Wednesday night. He anticipates updating the board in November about the need for further cuts.
A copy of the final budget for fiscal year 2021 is available on LCCC’s website at a link found on the agenda for Wednesday’s meeting, https://tinyurl.com/lcccboard7-15-20.