SNOW HILL – A decline in enrollment and the rising cost of medical benefits forced Wor-Wic Community College to seek financial help from Worcester and Wicomico counties this week.
On Tuesday Murray Hoy, president of Wor-Wic, approached both the Worcester County Commissioners and the Wicomico County Council to ask for funding to help cover a budgetary shortfall. Worcester County agreed to contribute $175,200 while Wicomico County agreed to fund $212,400. Hoy is expected to return to Wicomico County in May to seek an additional transfer.
“I’m coming to you with hat in hand asking you to help offset a $600,000 shortfall,” Hoy said.
In a presentation Tuesday morning, Hoy told Worcester County officials the community college was close to $1.3 million in the hole this year. He said the shortfall was attributable to two things — a decline in enrollment and higher than expected medical benefits costs. Hoy said the decline in enrollment was a trend community colleges nationwide were experiencing. While last year half of Maryland community colleges saw declines, this year they’ve all seen declines, Hoy said. He said nationally, there was a 9 percent reduction in community college enrollment since the end of the country’s recession.
At Wor-Wic, plenty of young adults are still registering for classes. The school has, however, lost a large portion of its students above the age of 27. The college has also seen a number of students dropping from full-time to part-time status.
Hoy said those decreases left the college with a $700,000 tuition revenue shortfall. Meanwhile, the cost of medical benefits has gone up. Though Wor-Wic officials noticed a surge in medical costs last year, they thought it was a short-lived spike. “That short-term issue has become a trend,” Hoy said.
He pointed out that the average age of a Wor-Wic employee was 51 (eight years higher than the national average) and that as people aged their health care costs went up.
To combat the increased medical expenses and the declining enrollment, the school has started strategically freezing positions, instituted a travel freeze, eliminated the plan to contract with the Wicomico County Sheriff’s Department for a deputy, and removed 14 credit program options. Officials are also looking for school-wide budget reductions.
Hoy expects the changes to make up for roughly half of the $1.3 million deficit. He said he was asking Worcester and Wicomico to cover the rest.
Worcester County Commissioner Chip Bertino said as the county’s liaison to the college, he knew its leaders had done all they could to cut costs. He made a motion to approve the funding request.
“I believe it’s money well spent for an institution that means so much to us,” he said.
Commissioner Ted Elder said $175,200 was a significant amount of funding and asked what Hoy saw in the institution’s financial future.
“Some of these things are stopgap measures,” Hoy said. “They’re not long-term measures obviously.”
He said the college was still in the process of developing the coming year’s budget but that its challenges weren’t going away.
“We’re not projecting an enrollment increase for next fall,” he said.
In addition to the lag in student registrations, he expects medical expenses to continue to increase. He said a compensation analysis had recently uncovered a third issue facing the school, the fact that the salaries it offered weren’t competitive. He said many of Wor-Wic’s educators had master’s degrees and were being paid less than public school teachers with bachelor’s degrees.
Though the coming year’s spending plan is still being developed Hoy said he was projecting a $1.2 million increase in the college’s annual budget request to Worcester County.
According to a facts and figures pamphlet on Wor-Wic’s website, the community college had a $24.6 million budget for fiscal year 2016. The budget is derived from tuition, 40 percent; state funding, 32 percent; Wicomico, 17 percent; Worcester, 7 percent; and other, 4 percent.
For fiscal year 2016, the school had 4,277 students enrolled in credit classes and 6,156 in non-credit (continuing education) courses. Sixty percent of the student body comes from Wicomico County, while 25 percent reside in Worcester County and 8 percent in Somerset.
Examples of credit programs offered at the community college include business, chemical dependency counseling, criminal justice, hotel-motel-restaurant management, nursing, occupational therapy assistant and radiologic technology.
Non-credit offerings include adult basic education, business and leadership, child care, floristry and landscaping, real estate and transportation.