NMC sees $700K projected deficit this fiscal year

Northern Marianas College president Dr. Sharon Y. Hart disclosed Friday that the institution expects to see a sizeable shortfall this fiscal year to the tune of $700,000. This shortfall, according to Hart, is due to the insufficient government appropriation received this fiscal year, as in recent fiscal years.

While the college’s budget request to the governor was $9.42 million in fiscal year 2014, it only received $4.1 million in direct appropriations (excluding $86,000 in Compact Impact funds and $500,000 for Commonwealth Worker funding, which is federal pass-through funding).

In fiscal year 2013, NMC asked for $9.5 million from the central government but got only $4 million. 

“This shortfall exists despite the college’s efforts to reduce personnel costs, including eliminating and consolidating FTEs over the years as well as deferring hiring,” said the president.

With the college expecting to see its enrollment numbers spike this fall semester, Hart said this makes it even more difficult to fund positions in order to support student demand for classes and services.

The CNMI’s budget cycle, which runs from Oct. 1 to Sept. 30 each year, is extremely challenging for NMC, according to Bobbi Merfalen, dean of Academic Programs and Services.  

“With fall semester starting in August, which falls in the final quarter of this cycle, this often impacts the hiring of both full-time and adjunct faculty,” she said.

Leo Pangelinan, dean of Student Services, said that students expect the college to support their needs with services typically made available at other higher education institutions.

“Students have a choice on where to attend college. Maintaining a high quality institution helps ensure that residents who choose to pursue a college degree can do so without leaving the CNMI.  Those who choose to stay will continue to contribute to the economy while in school and will likely stay on in the long run to meet the CNMI’s workforce needs. Unfortunately, many of our residents who choose to attend college on the U.S. mainland immediately after high school do not return upon earning a degree,” he said.

Based on a study commissioned by NMC, the CNMI has the lowest rate when it comes to expenditures for higher education, at only 5 percent of the government’s total expenses. It was also found out that the CNMI had also the lowest allocation of state per college student at $3,988 per student.

Records from the college released to Saipan Tribune indicated that for the past eight fiscal years, NMC’s budget has been declining—from $4.8 million in fiscal year 2007 to $4.1 million in fiscal year 2014.

With its limited appropriation from the government, NMC said it had done much to live within its means. Among these is making realistic revenue projections, regular budget monitoring and reductions as needed, and increased revenues by aggressively seeking federal grant funding and expanding community program offerings.

NMC said it had also done prudent management of working capital and careful timing of cash flows, internal reapportionment and reallocation of existing resources to fund strategic initiatives.

Hart also enumerated cost cuts that included energy and utility conservation and retrofitting measures resulting in utilities savings of over 33 percent since 2010; deferral of maintenance; and deferral of hiring resulting in $125,000 in savings in fiscal year 2014 alone.

NMC also eliminated positions from a peak of 218 in 2006 to 117 in 2014. Cost sharing FTEs through grant funding resulting in a savings of $330,000 in fiscal year 2014.