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Pima Community College set to raise property taxes, hikes tuition to cover salaries & student services

Pima Community College plans to increase property taxes and has bumped up tuition rates as the school tries to make up for lost revenue due to a low state support and declining enrollment. The college hopes to use increased revenues to raise employee wages and continue free services for students.

The PCC Governing Board voted unanimously on May 11 to propose a 4-percent increase in property taxes as part of the 2022-2023 budget. The board will have a public hearing on the increase and proposed budget on June 8, before they sign off on the plan.

PCC's board also voted unanimously in March to increase tuition by $2 per credit hour for in-state students. Tuition at PCC is now $89 per credit hour. The increases are the first such hikes by PCC in two years, and college officials said they haven’t received day-to-day operating funds from the state since 2015.

Even as the number of students attending the college has dropped, PCC's budget has been growing. For the 2023 budget, PCC is planning $306 million in expenditures, with the equivalent of about 14,000 full-time students. In 2018, the college spent $193 million on about 15,000 full-time students.

The moves are needed to pay for free services for students that were covered by COVID relief funds, such as lending them tablets and computers, PCC spokeswoman Libby Howell said. The extra revenue will also fund an across-the-board pay raise for college staffers.

“It looks like the economy is a little bit on the upswing in spite of inflation, and we at some point have to look out for the needs of the college,” Howell said.

PCC had intended to increase tuition and taxes sooner, Howell said, but couldn’t during the pandemic as “we were trying really hard to be sensitive to what our community was going through and what our students were going through.”

The property tax hike is expected to bring in $5 million for PCC. The tuition increase will allow PCC to offer free support courses that teach career options and critical thinking and study skills, to keep lending computers and wifi hotspots to students, and to replace equipment.

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Many of PCC’s students are low-income and first-generation college students, Howell said, making the “digital divide really present” and access to free technology vital. “We chose to spend a lot of our COVID relief dollars to provide them with those devices,” she said.

Pima County homeowners will have to pay PCC about .05 cents extra per $100 of net assessed home value for a new tax rate of $1.2878 per $100 of net assessed value. It would be about a $12.50 increase per year for a home worth $250,000.

PCC's tax rate without the 4-percent increase would be $1.2383 for every $100 of assessed value. Pima County’s tax base increased since last year, however, after assessed valuations increased along with housing prices. That will will add $2 million to PCC’s budget along with revenue from the tax hike.

According to PCC’s proposed 2023 budget, the college expects $130 million in tax revenue. That's a $7 million increase from $123 million collected in 2022, with $5 million from the tax hike and $2 million from the increase in the overall tax base.

PCC’s tax revenue has grown every year since 2018, when it brought in about $112 million. The college has the option to levy a second property tax, but hasn’t used it because they have no outstanding debt.

The $5 million revenue from the hike is “really important,” David Bea, PCC’s executive vice chancellor of finance and administration, told the Governing Board on May 11, saying it would allow them to increase salaries. PCC has set aside $9 million in their proposed budget to raise wages and anticipate an average raise of 7 percent in individual yearly wages.

The college anticipates spending $142 million on employee salaries and benefits, which would be more than a $5.4 million increase from the $136 million spent last year. PCC spent $125 million on employee salaries and benefits in 2019.

PCC has to draw on tuition, taxes and grants for their revenue as Arizona hasn’t funded their operating budget, which includes salaries, since 2015. The state has funded PCC in other ways, however, including $15 million to expand their aviation program. The state Legislature is expected to approve STEM funding for certain courses, which is included in the college’s upcoming budget.

Cannabis tax revenue from Prop. 207 also goes to PCC. By the end of 2021, PCC had received two allocations worth $4 million.

Tuition revenue has been decreasing as the number of students has dropped. PCC's 2023 budget forecasts $37 million from tuition with the increase, which is still less than the 2019 student-payment revenue of $39 million.

Howell said that community colleges used to see their funding sources as a three-legged stool made of tuition, taxes and state contributions.

“When you remove state funding, that means the other two legs have to take more responsibility,” she said.

Federal funds for PCC are also “shrinking dramatically,” Bea said. This is more so the issue as COVID relief that gave direct aid to students and institutional support for college comes to an end.

The college is currently doing a salary study of more than 1,000 positions, looking at comparative wages at other community colleges across the country. For the academic year that just came to a close this month, all regular employees received a temporary $1,000 salary bump.

Most of the $9 million will cover raises, but some will also be used to cover benefits.

PCC Governing Board member Demion Clinco called the across-the-board pay raise “enormous” when it was presented on May 11 but that he was glad to see it in the proposed budget.

“The board has articulated very clearly this year that this was a high priority, and we’ve definitely heard from our employees it’s a high priority,” Clinco said. “This really goes a long way, and when you add this to our very rich benefits, this is a significant increase. I’m really appreciative.”

Bea said “it’s a good time” to increase salaries and “recognize the work that our employees have been doing.” 

The 4 percent tax increase would bring PCC halfway to the maximum tax they can levy. Bea recommended the board consider raising the tax again in 2024.

Correction: An earlier version of this article misstated the amount received for the aviation program and which PCC employees earned the temporary $1,000 salary bump.

Bennito L. Kelty is TucsonSentinel.com’s IDEA reporter, focusing on Inclusion, Diversity, Equity and Access stories, and a Report for America corps member supported by readers like you.

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