The City Colleges of Chicago could be more than $40 million in the red by 2012 as state funding sags and expenses keep mounting, according to officials and budget documents.
To keep that from happening, district leaders say they're working on a plan to cut costs and expect it to be presented to the Board of Trustees at a public meeting next month.
"These aren't going to be easy to address," says Kenneth Gotsch, the district's chief financial officer.
He said it was too early to say how the district would fill the funding gap, calling the plan "a work in progress right now."
The district's $465 million budget for 2008-09 was approved in July and officials are now trying to figure out how to deal with projected future shortfalls. Whether that involves adjusting the current-year budget to use less of its surplus is unknown, officials say
The potential shortfall isn't the only money problem the district must confront in the coming years. It also has more than $100 million worth of deferred maintenance at its four campuses. And so far there is funding for less than 20 percent of a five year, $1-billion plan to build new facilities.
District officials are blaming the shortfall on state funding that has remained relatively unchanged in recent years, as well as the decrease or loss of a number of state grants to cover everything from new technology to tuition for veterans.
Ralph Moore, a 14-year member of the district board, said trimming the budget will require "sacrifices" all around.
"Hopefully we'll be able to equally spread the pain through the system," he said.
Moore added it was important to "get the fat out of the system" to make the district as efficient as possible.
Gotsch said officials would meet with student groups, teachers and administrators as they consider how to fix the budget. At a minimum, students and the public would have a chance to comment on the proposed cuts at the board's November meeting, scheduled to begin at at 9 a.m. at 226 W. Jackson Blvd.
The 2008-09 budget covers the costs of running seven community colleges in the city with a combined enrollment of more than 113,000 students. It also includes $76.5 million for a variety of capital projects this year, including a new parking garage and student center at one college and repaving sidewalks at all seven.
The district finished the last fiscal year, which ended June 30, with a $13.7 million surplus. The current year's budget will eat up more than half that, leaving just $6.1 million to carry into the 2009-2010 fiscal year, officials said.
Officials predict ending that year with a budget deficit of $5.3 million. Then, because of rising payrolls, benefits and contracted services, the shortfall is predicted to quadruple to $21 million in the 2010-2011 fiscal year. In the year after that, it is expected to double again, with the district operating $41 million in the red by mid-2012 unless changes are made.
"Obviously we've got to move quickly," Moore said.
Payroll is the city colleges' largest expense, accounting for nearly three quarters of the unrestricted budget.
With most employees assured modest raises each year to adjust for inflation, payroll expenses will continue to increase, according to the budget.
The prospect of budget cuts had some students at Truman College on the north side worried.
"That's kind of scary," said Maisha Estes, 18, who just started taking classes at Truman College. "I wouldn't want it to be classes (that get cut)."
Truman College student Julian Irwin, 20, was confident the district would fix the budget without impacting academic programs.
"As long as they just keep everything up and running that should be up and running," he said. "Don't just cut things left and right."
Moore said the city colleges aren't alone in tackling budget problems.
"We're similar to every other body of government in the state of Illinois, if not in the country," he said. "We're dealing with revenue shortfalls, which will cause us to tighten our belts."
Peter Sachs is a Chicago-based journalist. He covers higher education for the Daily News.