Quick Take
Cabrillo College faces a roughly $2 million structural budget deficit as it works to cut costs and boost enrollment. President Jenn Capps said she is “cautiously optimistic” about the college’s path to financial stability.
As Cabrillo College enters a third year of managing a moderate structural budget deficit, its president says she’s “cautiously optimistic” about their strategy to stabilize the school’s finances.
Cabrillo President Jenn Capps told Lookout this week that despite the unstable higher education environment for federal funding, enrollment fluctuations and the region’s affordability challenges, she doesn’t think the budget is in a “horrible position.” She said the college roughly estimates a $2 million structural deficit this fiscal year.
“I think it’s a tough time in higher ed,” she said. “I think Cabrillo’s had a little bit harder of a time because of some of the enrollment challenges, because it’s expensive to live here.”
A structural budget deficit occurs when an organization’s regular, ongoing expenses exceed its expected revenue.
In prior years, former president Matt Wetstein told Lookout that the college had structural deficits between $4 and $5 million and lowered costs primarily through eliminating vacant positions, early retirement incentives and reducing operating expenses. Capps said the college is using many of the same measures and that Cabrillo officials, with the help of a consultant, are continuing to evaluate what’s causing the deficit, exactly how big it is and how to best address it going forward.
Cabrillo College isn’t the only public education institution facing budget issues. After pandemic-era funding dried out, K-12 schools, colleges and universities across California encountered financial crises – some that had preceded the COVID-19 pandemic due to overspending despite declining enrollment and rising labor costs.
On Monday evening, the Cabrillo College governing board approved the school’s $98.5 million budget. Capps told trustees she’s calling this year the “year of planning,” and will be working with a budget committee to implement cost-saving measures.
In the meantime, the college has already started an early retirement incentive program, during which it hopes to achieve about $469,000 in savings annually. Capps added that many retirements are positions that it plans to refill, but in future years the school is figuring out how to not fill all the positions. Overall, it projects it can save about $2 million through the retirement incentive program.
Capps added that the college is also looking at improving the system for collecting payments. She said while some students do face financial challenges and struggle to pay bills on time, she said Cabrillo is focused on the people with means who haven’t paid their bills. She estimates that with some changes, the college could save about $500,000 by improving how it collects payments. With the retirement program, that comes to about $2.5 million in savings.
However, there are several factors that could complicate the budget outlook.
For several years, the college has been funded for a higher number of students than have been enrolled in light of the loss of potential and enrolled students who were affected by local disasters, including the 2020 CZU Lightning Complex fire and the 2023 Pajaro River levee flood. The college’s enrollment this year is at about 8,695, but the state has been funding it at the higher enrollment level of 9,911, bolstering its budget.
Over the next three years, that funding will be gradually scaled back to lower levels, starting with funding for 9,470.33 students next year. Capps said Cabrillo officials have been working to increase their enrollment as close as they can to those higher levels.
“We have to climb, and then the resources are going to step down,” she said. “So we kind of meet in the middle.”
Another factor that can potentially affect the budget this year is the ongoing contract negotiations with the college’s faculty union. During the board meeting Monday, five faculty members spoke during the public comment portion to advocate for higher salaries.
Greg Hanle, union president, said that faculty members are committed to reaching a fair agreement with the district as they move into the mediation phase in early October.
“While we are disappointed that we have not yet been able to resolve the outstanding issues at the bargaining table, we view mediation as an opportunity to make meaningful progress,” he said. “Our faculty care deeply about Cabrillo and our students, and we believe that supporting and retaining excellent faculty is essential to the college’s long-term success. “
Capps told Lookout she is looking forward to reaching an agreement with the union.
“I think asking for help and getting somebody that can help us to compromise and reach an agreement is a positive thing,” she said. “I truly am optimistic. I don’t think it’s a bad thing.”
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