Story by Aimee De Luna, Giovanni Vallido and Matthew Villapando
As Palomar works to solve a budget crisis that left the school assigned to a fiscal officer, the budget for the future is more important than ever.
Palomar’s multi-year expenditure projections for the next 5 years show promising growth topping off around a 10% increase.
The multi-year surplus (deficit) projections would include a consistent reduction of $1.1 million per year that will occur by 2022-23. During the next three years, the cause of reduction we have a $3.3 million reduction and down 13.03%.
The projected budget reserve 2024-25 is at low of -9.10%, compared to the 2020-21 projected actual reserve of 21.91%. The resolve for the multi-year projections is to increase revenue allowing to inflate the reserves to cover any deficits that fall into place.
The budget plans to artificially inflate reserve percentages and fund balances in order to account for a future cliff year in 2024-25, when the full harmless funding stops.
Palomar College is currently trying to work past a $12 million deficit. One constraint on the budget comes from the percentage used on salaries and wages. In December of 2019, the college used 96.2% of its funds on wages and think a decrease to between 80-85% will help relieve the deficit.
The budget also presented the savings that Palomar has been able to make. From 2020-21, Palomar has saved around $5 million made up in savings from materials and supplies, as well as services and other operating expenditures.
There are hopes to continue balancing the budget by looking into enhancing revenue.
Presented with a multi-year expenditure plan, Palomar is looking at the issue from a conservative standpoint, not wanting to factor in money that they do not know will be there or not.
In a State of the Budget meeting, Interim President Dr. Jack Kahn said: “I do believe that in year five in your six, we will be close to that, but I think the idea that we were going to be at center status in a year or two from now is extremely unrealistic.”
This means the school does not want to rely on a center status if it is not guaranteed. A focus on money that is guaranteed is more responsible for fixing the problem than hoping for money that might not come at all.