Deep Impact Reasons why we should all care about the LCC deficit BY DENNIS SHINE Lane Community College is faced with a major budget deficit for the 2006/2007 fiscal year. The problem is that revenues in the forms of property taxes, student tuition and fees plus state funding have not kept up with expenses and, as a result, the college may be forced to cut programs. The question for some people may be "So what? I don't work there; I am not a student there and I have no children who so there, so why should I care?" The answer to that question is vital if the college is to avoid cutting the services it offers to those of us who live in Lane County. Therefore, I will give you some reasons why you should care. • LCC is a major employer in Lane County and pays about $60 million a year in direct faculty and staff wages. This income is used to purchase goods and services from Lane County businesses. Since the majority of LCC staff and faculty, just like most Americans, spend about 95 percent of their income, there is what economists call the multiplier effect of 20. This means that a person or business who received the money from an employee of LCC will in turn spend a similar percentage of that money locally, which in turn becomes income to a third party and so on. The original wages and salaries paid to LCC employees of $60 million a year has a total impact on Lane County of about $1.2 billion. • Students who attend LCC will receive a major return on the tuition and fees they pay for their education. A study done on this shows that for every dollar a student pays in fees and tuition at LCC, they will get a $4.99 return due to the higher wages and salaries they earn over their employment lifetime of 30 years. This higher income to the student also means that LCC graduates will pay higher taxes and will have higher purchasing power. • The taxpayers of Oregon benefit since the state, counties and cities will pay less in welfare, unemployment and health care if its population is better educated and has marketable skills. Crime also costs a lot of taxpayer money. According to a study done by ECO Northwest for Springfield, about $5 million a year's worth of property is stolen from the 20,514 households in Springfield, or about $250 per household every year. A number of studies have shown that the number of property crimes committed is inversely related to the education level in the community. As the population of Springfield acquires more marketable skills as a result of the education they receive at LCC, the cost of property crime goes down because more people will be employed. If we lump together all the benefits of having LCC, it is an impressive list of benefits that we receive. A cost benefit study done by the firm of CC Benefits, Inc. estimates that the total return on each dollar of state and local tax money invested in LCC is about $8.80 over the next 30 years. I don't know about you, but this sounds like a good investment to me. So what we can do to help alleviate this impending 2006/2007 deficit? One person who does have a suggestion is Lane County Commissioner Peter Sorenson who is very familiar with both community colleges and with LCC. He received his first degree from a community college; his father taught at a community college and he served as a member of the LCC Budget Committee and later as the chair of the LCC Board of Education prior to serving as a state senator and being elected to his present position. According to Sorenson, the 17-member community college system in Oregon has shown a drop of 75,000 in enrollment, due largely to decline in state support. Sorenson has proposed that the state discontinue the tax kicker for Chapter C category corporations which employ more than 75 employees and which are incorporated outside of Oregon. This change, if enacted, would provide about $70 million more a year to community colleges. To do this would require a change in Oregon law, and as long as the Republican party controls the House where tax legislation must originate, such a change in the law seems unlikely, no matter how logical and desirable such a change would be from an economic point of view. Dennis Shine of Springfield is a retired economics instructor, a former LCC board member and presently serves on the LCC Budget Committee. For more information on Sorenson's proposal, e-mal info@petesorenson.com. For more information on LCC's situation, e-mail President Spilde at spildem@lancecc.edu
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