AWC: Tax increase will help in long run

School president calls plan an investment in the community

The property tax rate increase Arizona Western College is proposing in its preliminary 2017-2018 budget is an investment in Yuma and La Paz county’s future, the college’s president said.

“We are investing in this community. It will pay dividends to the college if increasing number of students attend here. It will pay off for the community when they earn baccalaureate degrees and contribute to this community,” said Dr. Daniel Corr, who is completing his first year in the top spot at AWC.

“I think it’s an investment in technology, and investment in facilities, it’s an investment in the early college (experience) — these really are investments,” Corr said of the priorities he and AWC’s top leaders have set.

The college is asking taxpayers for about $600,000 above what it gets in levies from property taxes, according to the district’s budget paperwork available on the college’s website, due to a reduction in enrollment revenue, state aid, investment income and other areas.

The reduction in enrollment revenue comes partially from the initiation of the early college experience. That’s the reduction in tuition the college is offering to students 17 and younger from $82 per credit hour to $25. The tuition reduction for these students is expected to reduce the college’s revenue by about $330,000, Corr said, but the benefit for the community will pay off in the long run.

Interim Chief Financial Officer Diana Doucette said at the April 17 board meeting that the college is estimating how many students will take advantage of the program, and that AWC

will make up the cost difference between the two classifications of students.

But if there is a giant “influx,” of early college students enrolling, the college may find itself in some difficulty because the state does not allow it to increase its budget after June 20, Doucette cautioned.

Corr’s priorities include updating the college’s aging technology structures, establishing a set-aside fund for the college’s aging buildings; strategic planning innovation; increasing the savings fund; salary and benefits; and absorbing several positions that are now grant-funded but have been essential to the college.

“First and foremost technology, it is expensive, but it is expected (by students and faculty),” Corr said, explaining that the broadcasting equipment which sends telecourses and internet access to San Luis’ and other outlying campus’s is outdated and often fails. “It is an integral part to the study experience, and right now we are failing our students. We need to make additional investments in technology.”

One of the reason’s why the college is expecting a reduction in tuition revenue is that it is basing its enrollment projections on a smaller number of full-time student equivalents, Corr said.

In the past, Doucette explained at the board meeting, the college used an FTSE number of 5,500 students.

Corr said that the college’s enrollment has never hit that “aspirational” number, and coming into the end of the school year, he felt a 2 percent increase in what the FTSE is expected to be would be more fiscally prudent.

“That’s what we need,” he said, noting that prior administrations didn’t “just pull it out of a hat, but it was aspirational, it got embedded and it just built on and it just stayed there. So, let’s just do a reset.”

And the college must adjust to that lower enrollment projection, Corr said.

“I just want to be real up front and transparent,” he said, of needing to raise the property tax levy.

“I don’t like to pay more taxes. No one wants to. But I stand behind the fiscal stewardship we have demonstrated in what that $1 per $100,000 will buy this community.”

Corr said the college is actually returning money to the community through the refinancing of its general obligation bonds from 2006, which have gone through a series of financial wrangling in 2014 and last fall, reducing the cost of the original outlay by about $3.6 million.

The primary tax rate the college is asking for is $2.6210 in primary and secondary rates for 2018. The rate for 2017 was $2.6255, which is slightly higher. The secondary tax rate is dropping 2.7 percent from 2017 due to the bond refinancing. The new rate for 2018 would cost taxpayers about $1 for every $100,000 in assessed value.

Taxpayers might see their property tax bills go up, Corr said, due to the jump in the counties’ assessments. The 20172018 primary assessed valuation for both counties is estimated to be $1,358,691,468.

The AWC governing board is taking comments on the preliminary budget until its next board meeting in May, when the next step, a “proposed budget” is presented to taxpayers. Taxpayers will then have another 30-day period to comment before the board votes June 12.