NEWS

Anticipating state cuts, OTC offers buyouts to eligible employees, mulls tuition hike

Claudette Riley
CRILEY@NEWS-LEADER.COM

If state funding for Ozarks Technical Community College is slashed for next year, Chancellor Hal Higdon said he'll have no choice but to propose a dramatic tuition increase.

How dramatic? The $98 credit hour cost could jump by as little as $5 or as much as $12.

"Things do not look good in Jefferson City, budget-wise, for anybody," said Higdon, after returning from meetings at the state capitol. "If the budget cut that we get is equal to the one we got this year, it will mean that every four-year and two-year public (college or university) will have substantial increases in tuition."

Ozarks Technical Community College braces for the possibility of state funding cuts.

Gov. Eric Greitens plans to unveil his proposed budget for the 2018 fiscal year this week. The Missouri General Assembly is required to approve a state spending plan by early May.

"We didn't raise tuition this year on the promise of the legislature, that they would get us that money," Higdon said. "But, it's gone."

Missouri's public colleges and universities, including OTC, were hit with substantial mid-year budget reductions.

Higdon said the OTC system was able to weather the hefty cut — $1.1 million or nearly 8 percent of its state funding — by taking a conservative, even pessimistic, view of the state budget.

He said as far back as the summer the college believed the state revenue estimates, upon which the budget was built, were unrealistic, and took steps to cushion the impact.

Students walk between classes in the Norman K. Myers building at OTC on Tuesday, Jan. 31, 2017.

OTC chose not to allocate all the state funding it had been promised for this fiscal year. It curbed spending, postponed equipment purchases, instituted a hiring freeze on nonessential positions and offered a buyout option to 70 employees eligible to retire due to age or experience.

"This was a hedge to help us out a little bit," he said, noting the salary for a 25-year employee is more expensive than a new employee. "We'll replace 90 percent of the people who retire."

As of last week, 14 employees had accepted the buyout. Six of those left in December, one exited Tuesday and the rest are expected to work until June. The deadline for the buyout offer is still weeks away.

Higdon said said the initial steps paid off.

"Between buyouts and freezes, we've more than covered the cuts from the governor this year," he said. "We are not going to have to do layoffs."

OTC and other higher education institutions must now turn their attention to building budgets for the 2017-18 year. Higdon said Greitens' proposed spending plan, and the possibility of a funding drop, will loom large in that process.

"If the cuts are 7 percent or more, you're talking about a substantial increase in tuition," Higdon said.

OTC student Joshua Jones, who hopes to eventually earn an engineering degree at Missouri S&T, said he has paid attention to state funding cuts. He qualified for the A+ scholarship program, which pays for tuition at numerous in-state, public two-year colleges.

"After next semester, I'm running out of A+," he said. "After that, I'll have to find some more scholarships."

Joshua Jones studies in the Norman K. Myers building at OTC on Tuesday, Jan. 31, 2017.  He still has scholarships to pay for tuition.

Jones said he has friends and classmates who must rely on student loans and work study programs to pay for college. He described OTC as "pretty affordable" and said he'd be able to survive a slight bump in tuition.

"If they kept on going up, it would be more concerning," he said.

Higdon said if the OTC Board of Trustees decides to raise tuition, he probably won't suggest they also adjust fees. He prefers to adjust one or the other, but not both, in a given year.

Asked if a pay increase is out of the question for the more than 500 full-time employees, Higdon said no. There are two ways the college typically raises pay, either as a cost-of-living increase or a "step" increase that rewards employees who gain education or experience.

"In 26 years, OTC has never not done a step raise for employees and I don't anticipate that changing," he said. "That is not a very big raise but it will be something to offset the increased cost for health care and inflation."