Tyler McNeil
Campus News
Traveling across county lines to get to school in the morning actually makes a difference in the way community colleges and counties operate, for better or worse.
Recently, many two-year schools and counties across New York State have been anticipating the arrival of a new system of funding, replacing a nearly half-century-old system, starting in the 2016-17 academic year.
The new methodology in the way counties pay for residents attending community colleges outside of their home county or “chargebacks” is projected to cause a $6.3 million total loss of SUNY chargeback revenue (based on information from the 2014-15 fiscal year) for a five-year phase-in period, hitting 20 community colleges with a $15.9 million chargeback revenue loss.
Despite negative implications for two-thirds of SUNY two-year schools, 10 community colleges could see a combined $9.3 million increase in chargeback revenue by the 2021-22 academic year. One of those schools, Nassau Community College is projected to have a $335,674 total gain in chargeback revenue by the 2021-22 academic year.
The need for reform was a result of large chargeback shifts during the Great Recession when enrollment shot up. “In the past system, colleges were consistently overcharged or forced to undercharge resulting from the formula,” said James Corra, director of communications for the SUNY Student Assembly. in a statement.
In 2012, by order of the legislature, SUNY and CUNY submitted a study on capital chargeback and reform for a uniform chargeback rate landed the following year in the 2013-14 New York State Enacted Budget. “We were asked to prepare a document to reevaluate and make changes to the chargeback process,” said President of the Community College Business Officers Association Hezekiah Simmons.
In the most recent SUNY report, submitted to the state legislature on June 1, a college’s chargeback rate would be determined by dividing county sponsorship by the number of full-time equivalent students to determine a college’s chargeback rate, based off of the current CUNY model.
Nassau, Rockland, Suffolk and other counties across the state have charged local cities and towns with millions in chargeback fees. The Town of Hempstead was hit with over $1.6 million in chargebacks a year after Nassau County started charging local governments for FIT in 2010. As a result, the county won the battle last year with FIT being considered eligible for chargebacks under state law despite having four-year programs.
Putnam County paid $3 million for chargebacks for the 2014-15 fiscal year with the majority of fees for FIT. “I would be in favor of [chargeback reform] as long as it takes pressure off the county and taxpayers,” said Putnam County Commissioner of Finance William Carlin.
Along with FIT, Orange County has been hit by neighboring community colleges such as Rockland County Community College and Dutchess County Community College. According to Orange County Legislator Jeff Berkman, Orange County chargeback fees have been greatly impacted by neighboring community colleges with accommodations such as student housing. “Some community colleges survive on the aid of other counties and that becomes a money drain on some counties to the benefit of others,” he said.
Chargeback fees for Erie County rose when Niagara County Community College constructed student housing in 2008 and a new building for its culinary arts, hospitality and tourism programs four years later. “The current formula for chargeback fees has burdened Erie County’s towns and any revisions that even the playing field would be a benefit locally,” said Erie County Legislator Edward A. Rath, III in an email.
The report includes a suggestion for legislation to subsidize counties impacted by chargeback costs. Suffolk County Legislator Tom Cilmi hopes finalized legislation will include county subsidies due to an increased chargeback rate from colleges such as FIT. “It’s like me trying to part the Atlantic Ocean because of the political nature but nonetheless, it’s something that we’re going to fight for, for sure,” said Cilmi.
Since 1992, New York State has fallen below its established one-third share funding for community colleges (the other sources of revenue are tuition and local support). “I watch the debate about chargebacks and how they’re going to throw a few more crumbs to the counties and people miss the entire issue. The issue is that the State of New York is throwing it to counties when it comes to funding community colleges,” said Rockland County Executive Ed Day.
Chargeback reform has led Hudson Valley Community College to work with Rensselaer County to increase sponsor contributions for the college over five years. “The change in state legislation with regard to chargeback caused us to really sit down with the county and problem solve,” HVCC President Drew Matonak said.
HVCC has been projected to receive the greatest losses in chargeback revenue with an 8.5 percent loss ($7.6 million). Possible changes were suggested in the report to give schools like HVCC and heavily impacted counties a longer phase-in period to adjust to the change.
The report also suggests making it clear that “regional community colleges” such as Jamestown Community College and Corning Community College are exempt from the phase-in process. “They want to make that more explicit so there’s no confusion in the future,” said Assemblyman Chad Lupinacci (R, C, I – South Huntington).
Revisions to chargeback reform are expected to be finalized before the legislation goes into effect less than a year from now.