Create Flexibility for Workforce Development and Address Expenditure Limit Crisis

Short-Term Changes to Arizona’s Community Colleges Expenditure Limitation

COVID-19 compressed the effects of an outdated formula that fails to reflect the nature of contemporary community colleges. While this challenge has been increasing over the past 10-years, the pandemic has sped up this crisis in two ways:

  • Expenditure Limitation only limits “local revenues” and excludes items like tuition, Prop 301 revenues, auxiliary revenues (food, dorm fees, facility rental, etc.), training/retraining of business partners’ employees, done under contract, and investment income.
  • All categories of excludable revenues are the very revenue categories that have been hit the hardest by the statewide shut down and will continue to perform poorly until all limitations are lifted and the economy recovers.

The Legislature can address these challenges in session law that recognizes the extraordinary economic challenges related to COVID-19 and grant college districts the ability to exceed their expenditure limits for the next two fiscal years with negligible consequence.

Structural Changes to Arizona’s Community Colleges Expenditure Limitation

The legislature can change the definition of Full-Time Student Equivalent (FTSE) for expenditure limits purposes and do so without changing the use of the existing FTSE definition for funding. Currently, statute defines Full-Time Student Equivalent as the completion of 15 credit hours per semester, 30 credit hours per year. This definition, put into place decades ago, fails to recognize the shorter-term nature of workforce certifications and credentials that do not require students to earn a two-year degree. It also fails to recognize that the majority of  students attending community colleges attend part-time.

For expenditure limitation purposes only (non-funding), the legislature can address this crisis by passing measures that recognizes:

  • short-term programs aimed at training Arizona’s workforce
  • additional expenses required to provide high-cost sophisticated workforce programs
  • the large percentage of community college students attending part-time.

Remove Dual Enrollment Cap for High School Students

Removing the existing statutory cap that limits a community college to admit up to 25% of high school freshman and sophomore students enrolled in dual enrollment programs will allow more students to earn credits that will apply toward a two-year degree in high school, or even toward a four-year degree, for credits that transfer fully to the four-year school of choice.

Hold Harmless for Community College Budget

Arizona’s community colleges are seeking a “hold harmless” provision in the state budget to pre-COVID numbers. Holding the colleges harmless for both Expenditure Limitation and funding purposes recognizes that in addition to the losses associated with the pandemic, the colleges have dedicated significant resources to ensure that students can continue to progress, while contributing to their communities’ response to the healthcare crisis.

Additional Support for Community Colleges Providing Adult Basic Education

Arizona’s community colleges are the largest and most economical provider of adult basic education in the state. The community colleges favor increasing support and resources to bolster our adult education system. Adult basic education is an important tool that ensures individuals can keep up with today’s quickly changing technological world. Whether continuing education means improving English, completing a GED or learning a new skill, it helps adults gain the skills they need to be successful.

Support for a Statewide Scholarship Program

The community colleges support funding efforts for a state provided scholarship program that benefit resident community college students who meet program requirements.