The cost of learning

COEUR d'ALENE - North Idaho College trustees approved a $40.8 million general fund operating budget for the next fiscal year.

The budget, passed after the second reading at Wednesday's monthly board meeting, is $3.2 million more than the current year's budget.

The gap will be filled with new revenue from a 4 percent tuition hike approved by the board at its April meeting, and a 2 percent property tax increase. The hike will garner an estimated additional $591,602 in local property taxes for NIC, and is expected to cost the owner of a $200,000 home, after the homeowner's exemption is applied, $2.91 per year.

Prior to approving the budget, Trustee Ken Howard made a motion requesting that trustees reduce the college's tax levy from 2 percent to 1 percent, without changing any of the expenditures detailed in the budget.

"I've struggled with this since we started the budget process," Howard said.

He suggested the funds needed to keep the projected budget intact, roughly $137,000, be taken from the college's capital investment reserve which is part of its $3.6 million plant fund budget.

Howard said NIC staff and faculty work hard and deserve the 2 percent salary increase also built into the budget. But, he is "always reminded" that Kootenai County's unemployment rate is still hovering at 11 percent, that there are many retirees in the county who are living on fixed incomes, that the average household income in Idaho is $11,000 less than in surrounding states, and that gas prices are high and food prices are going up.

"That all affects the people who pay taxes," he said.

Howard said the funds can be recaptured by trustees later when the economy is better. Taxing districts in Idaho can levy 3 percent of their budget each year. Any taxing authority unused, can be exercised later through the collection of foregone taxes.

Trustee Christie Wood said the plant fund budget money being considered is in place to be used for the board's long-term plans to develop a building on the Kootenai Technical Education Campus in Rathdrum, and for the education corridor.

Without state funding available for these projects, Wood said spending those dollars on other items presents a dilemma for the board.

She also said the amount saved by taxpayers would be nominal.

"I don't want it to be an empty gesture," Wood said. "It just comes down to a momentary feel-good thing."

Howard said: "I suspect that if we can make people feel good we should do it."

Trustee Judy Meyer said she couldn't support Howard's motion because she recalled being on the board in the '90s when they delayed taking taxes and fell behind. It was difficult to get caught up again, she said.

Chair Mic Armon said the plant fund budget's $2.4 million capital investment reserve was created by an earlier NIC board, and it was decided those funds would not be used for general fund purposes.

He said he did not think it was right to waiver from that commitment.

Armon did not think it would be in the college's best interest to take the funds from a $300,000 property development contingency fund in the plant fund budget either.

He said as they move forward with developing the infrastructure on the education corridor site, expenses come up regularly, and must be paid for by the city of Coeur d'Alene, the Lake City Development Corp., or the college.

Trustee Ron Vieselmeyer voted with Howard in favor of reducing the tax levy.

The motion failed by a vote of 3-2.

The budget was then approved unanimously by all five members of the board.

The additional revenue from tuition and local property taxes is needed, NIC budget planners say, to cover rising expenses due to increased enrollment while support from the state has decreased. Budget planners say the increase is needed to counter the effects of skyrocketing enrollment and diminished state funding.

From 2007 to 2010, the number of credit-seeking students on campus went up by 37 percent. Funding from the state has dropped to the same level it was in 2000.

The college's state allocation for 2012 was slashed by $354,500 for its general fund, and $71,000 for professional-technical education.