Maricopa County Community College District Calls for Tax and Tuition Increases while Blocking Cost-Cutting Reforms

Posted on June 09, 2011 | Type: Press Release
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PHOENIX—On June 14, 2011, the Maricopa County Community College District board will decide whether or not to hike property tax rates on all homeowners by 3 percent. In March, the board agreed to raise tuition and other student fees. With state budget reductions in many areas of government, it isn’t surprising that MCCCD is looking for more revenue. But a Goldwater Institute investigation finds that the district has refused to cut administrative bloat or to implement recommendations that could save taxpayers tens of millions of dollars each year.

This year, MCCCD, which consists of 10 community colleges and a district office, will spend about $1.6 billion, but less than 44 percent of the district’s operating budget will go toward instruction. When the district’s board grew concerned about overspending and waste, it hired an outside consultant that identified $48 million in savings and new revenue. But administrators fought the recommendations, and to date, few have been implemented.

In Schooled in Obstruction: Maricopa Community College Staff Blocks Cost-Cutting Reforms while Pushing Tax and Tuition Hikes, award-winning Goldwater Institute investigative reporter Mark Flatten found that district management publicly embraced and pledged to consider money-saving reforms recommended by the independent consultant, but privately they refused to implement most of them. In fact, Chancellor Rufus Glasper often lectured the district’s voter-elected oversight board on the limits of their power when they asked him to reduce administrative waste. He even went so far as putting together a task force to investigate the board.

MCCCD general fund spending has increased by about 30 percent since 2006, even though full-time student enrollment declined during some of those years. A recent study by the Center for College Affordability and Productivity found that the district’s spending on things that do not benefit students averaged 29 percent, compared to just 4 percent at community college districts nationally. Average three-year completion rates for full time students enrolled in a MCCCD school are also below the national average at 19 percent.

“Institutionally they are paying more than is typical for lower than typical completion rates,” said Jonathan Robe, a research associate with the Center for College Affordability and Productivity. “So they are overspending and underperforming from the student and taxpayer point of view. You would normally think if they are going to bring in more than is typical in terms of revenue, at least they’d have something to show for it.”    

Much of the money MCCCD does not spend on instruction goes toward:

Salaries: 460 district employees make more than $100,000 a year. Chancellor Glasper’s salary is over $258,000.

Perks: Top district officials receive car allowances and cell phones in addition to their salaries.

Raises: Between 2008 and 2010, 38 of the district’s highest paid employees received raises of $10,000 or more. Four of them got a pay hike of more than $38,000.

Lobbying: The district spends about $387,000 per year on outside lobbyists.

Travel: The district and its colleges spent more than $5.3 million on travel last fiscal year.

Advertising: MCCCD spends almost $3.7 million a year on advertising.

In 2009, concerned that not enough money was being directed to the classroom, the MCCCD board hired consulting firm Alvarez and Marsal to identify ways to cut costs and increase revenues. Alvarez’s final report showed cost-cutting measures and new revenue sources the district could implement to save $48 million a year, including standardizing purchasing and procurement and outsourcing some non-teaching functions like custodial work and grounds-keeping. To date, Chancellor Glasper has implemented only two of the significant cost-cutting measures.

In conjunction with the investigative report, the Goldwater Institute has developed recommendations for reducing costs to taxpayers and increasing completion rates at Arizona community colleges. The Institute recommends that the MCCCD governing board reject the current tax increase proposal, institute a multi-year moratorium on tax and tuition increases, and require district administrators to implement the Alvarez recommendations, among other measures.  

Click here to read Schooled in Obstruction: Maricopa Community College Staff Blocks Cost-Cutting Reforms while Pushing Tax and Tuition Hikes.

The Goldwater Institute is an independent government watchdog that develops innovative, principled solutions to issues facing the states and whose work is made possible by the generosity of its supporters.

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