Governmental Budgeting Process
Budgeting in the public sector is typically performed with the culmination of many departments. It combines planning and budgeting to assist individual departments in developing their budget to be consistent with specific objectives as well as strategic goals. Revenues can be particularly challenging to forecast due to unknowns such as enrollment and state funding. “Black Hawk College relies on three primary sources of revenue: tuition and fees, property taxes including Corporate Personal Property Replacement Tax (CCPRT), and state funding” (Black Hawk College, 2009). In addition to these revenue sources, the college receives revenue by way of interest income, facilities rental, federal sources, customized training, and contingency funding.
Tuition and fees comprise 42 percent of overall revenue received. During the process of budget building the Chief Financial Officer is charged with determining an appropriate increase to tuition and fees which is then voted upon at the February board meeting. Fees included are instructional materials fee, auxiliary fee, and technology fee.
Property taxes from the nine (9) counties the college serves are levied each year for all taxable real property in the district on the basis of the equalized assessed property values (EAV). The assessed values are established by each of the respective counties. CPPRT is classified as local source revenue.
State funding is received through two primary sources: Illinois Community College Board (ICCB) Equalization Grant and ICCB Credit Hour Grant. “The equalization grant attempts to reduce the disparity in local funds available per student among each district” (Black Hawk College, 2009). The credit hour grant is based on credit hours earned during the two years prior to the current year, multiplied by the current year reimbursement rate. In lieu of previous years’ drop in state funding, projection for both grants is between 79 and 92 percent respectively.
As of 2004, the college implemented a strategy of issuing funding bonds to fund technology and other capital needs periodically. The facilities, information technology systems, and instructional departments work together to prioritize facility related projects, and funding for approved projects is included in the operations and maintenance restricted funds budget under general funds. Two other funding sources have been historically used for capital funding projects are the resource allocation and management plan and state capital renewal grants. Due to the financial condition of the State of Illinois, these funds have not been available for several years.
Funds are classified in two types: governmental and proprietary. Government funds at the college include general funds (education and operations and maintenance), special revenue funds (working cash, audit, restricted purposes, and liability, protection, and settlement), debt service fund (bond and interest), and...