Inflation and budget Confession of the Dean of a Community College

Everyone likes sound problems …

(Duck)

So here’s a good one.

“State funding has been flat for years. Local funds are also flat. Tuition growth is limited to 2 percent. The name is registered. Inflation is at 6 percent. How do you prevent a catastrophic decline in the salaries of your employees after inflation? Show me your work. “

It’s not easy.

Of course, this is not the best word problem. I was always more partial with the trick embedded in them. (“A train traveling 45 miles per hour north from Chicago. How long before the train sank in Lake Michigan?”) But it’s a stamper in its own right.

Multi-year contracts can make inflation particularly difficult if the timing is wrong. But even if the expiration date is correct, it is difficult to allocate money to the legislature to keep pace with inflation. They don’t want to risk the political collapse of a potential tax hike.

Most community colleges do not earn significant endowment in their operating budget. (Even if they do, the market is having a rough year.) Typically, the lion’s share of the operating budget comes from a combination of student tuition / fees and state / local / public aids. The exact process varies from state to state – some are taxed, some are “district”, some have no local funds – but the basic mix of tuition plus public aid is ideal.

So I will draw the combined knowledge of my wise and worldly readers for this.

Is there a reasonably realistic and elegant solution to the word problem? I can be contacted via email at Twitter (@deandad) or deandad (at) gmail (dot) com.

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