By EMILY BEHLMANN

ebehlmann@gctelegram.com

Garden City Community College administrators are reworking a proposed budget for fiscal year 2008-09 that would incorporate a local tax increase of 1.5 mills, after college trustees expressed concerns Wednesday night that a 2-mill increase would be too much.

But GCCC President Carol Ballantyne said trimming a half-mill out of her $16,142,479 general fund proposal could require her to use some one-time cash reserves, which likely would put the college in the position of raising taxes again next year.

Finney County taxpayers currently pay 19.201 mills toward the college, enough to bring in a local tax revenue of $9,122,827. That levy costs the owner of a $100,000 home $220.81 in taxes.

A 1.5-mill increase would add $17.25 to that homeowner's annual bill, and a 2-mill increase would add $23.

Building the budget

In building the budget proposal Ballantyne presented to trustees Wednesday night, she said staff started with last year's general fund budget of $15,591,533 and added what it felt was necessary additional expenses.

That's a budget that already had been slimmed down, after trustees decided to keep the mill levy on the downward slope it had followed since the 2003-04 fiscal year, when it was 21.52 mills.

To keep it on that downward slope during last summer's budgeting process, trustees had to make up for a drop in the county's assessed valuation and a slight decrease in state funds because of lower enrollment. Therefore, they approved some budget cuts and a dip into the college's reserve funds.

But costs are rising:

n "Uncontrollable costs," like electricity, gasoline and postage, are up by $328,000, Ballantyne said.

n There are $48,002 worth of new money requests because of expanding programs and expenses from a new physical therapy assistant program approved Wednesday, with the rest of the program's costs covered by a federal grant.

n As part of the last year of a three-year agreement, 72 faculty members are receiving $157,244 in raises.

n With Ballantyne proposing a 2.5-percent raise for the 123 staff, they would receive an additional $179,000.

n Ballantyne also said she'd like to cover a full individual health insurance policy for staff, instead of the $367.88 per month the college now pays, according to Cathy McKinley, director of human resources. That currently leaves staff with $61.21 to $81.51 to pay each month, but Blue Cross Blue Shield said rates would be increasing by 28 percent in October, Ballantyne said.

She plans to bid out the insurance, but in the worst case scenario of sticking with that company, GCCC's costs would rise by $259,240 if it covered full individual policies. Part of the costs would be covered by cash carryover from last year, not from the general budget.

Despite the insurance expense, trustee Ron Schwartz said he thinks it would be an important step.

"Without faculty and staff, we have nothing," he said. "I definitely feel like we have to do what it takes to take care of them."

Revenues uncertain

Ballantyne was looking to bring in $16,142,479 -- or less than that if trustees opt to approve on Saturday a trimmed budget -- but it's still uncertain how many mills that would take.

The amount each mill would bring into the college for 2008-09 depends on Finney County's assessed valuation, and that's still an unknown, Mark Low, the county's appraiser, said this morning.

The Finney County Clerk's Office released preliminary figures that showed the county would have a valuation of $488,591,128 -- about a 3.6 percent increase over last year -- but that includes Conestoga's Bonanza BioEnergy plant, which could be granted an exemption and abatement from the state Board of Tax Appeals.

Ballantyne said she's therefore building the budget on the assumption that valuation will decline slightly to $471,591,128.

Trustee Terri Worf said it's a "huge struggle" to consider raising the mill levy, noting that the city has already proposed a 3-mill increase for in-town taxpayers, but it might be necessary if assessed valuation continues to decline.

"This is where economic development is so important," she said. "Our tax base is going to continue to erode unless we have big businesses."

What would, in effect, be a lower assessed valuation hits at a time when GCCC and other Kansas colleges and universities could see 1 to 2 percent less in the funds they had expected to receive from the state.

A letter from Gov. Kathleen Sebelius, provided to trustees Wednesday, states that because state revenues were down in May and June, agencies are being asked to look at how they could decrease their budgets by 1 to 2 percent. Ballantyne said she expects the budget cuts to affect GCCC.

The college expected to get $2,831,491 from the state in 2008-09. However each 1-percent recision would result in a $28,314.91 decrease in that amount.

Reducing the mill

In spite of revenue concerns, trustee Bill Clifford said he thinks GCCC should consider relying on some of its higher-than-expected reserves, rather than approving a 2-mill tax increase.

GCCC was $861,063 under budget for the 2007-08 fiscal year because of more out-of-state tuition and interest than expected, plus the fact that purchase of a bus, a boiler and some property were delayed, according to Ballantyne.

The bus and boiler still are necessary, but were pushed back because GCCC instead had to focus on hail damage repairs that ultimately are covered by insurance, she said.

The property purchase was delayed because it was to be used for a construction trades training facility that GCCC would have used to train workers building new Sunflower Electric Power Co. plants in Holcomb. The plants' permits are tied up in court, so the college still hasn't seen any of the grant money.

But with or without the grant, Ballantyne said she'd like to continue exploring the option of purchasing property, saying "there are things we need to do in the way of building trades in this community, and we don't really have a place to do it."

A 1.5-mill proposal is possible, Ballantyne said, but the reserves are a one-time money source instead of a steady revenue stream. She said that if assessed valuation isn't up next year, she could be asking trustees to increase taxes again next year unless they go with the 2-mill increase now.

"I think we ought to be real conservative, because we don't know what's going to happen," she said. "It looks like a recession."

Clifford also raised the idea of eliminating programs, noting that earlier in the meeting, the board had done just the opposite by approving addition the physical therapy assistant program.

Program cuts will be something to consider, Ballantyne said, but the decision would be tough.

She said that normally, low enrollment might prompt closure of a program, but currently, only two areas fall in that low-enrollment category -- industrial maintenance and welding. Both were established because of local industries' need for trained workers, and the college expects numbers in the programs to increase, she said.