A change in how community colleges are funded, as well as anticipated enrollment growth, will provide a boost to Southeast Community College's budget next year.

On Tuesday, SCC administrators told the Board of Governors the college was expecting 6.6% growth to its operating revenues for the 2024-25 year.

A preliminary budget shared with the board put SCC's total funding at more than $112.3 million for the fiscal year starting in July.

The increase will come as property owners across SCC's 15-county service area will see the amount paid to support the college plummet as part of a law (LB243) passed by the Legislature in 2023.

In an effort to reduce property tax burdens across the state, senators created the Community College Future Fund to replace local property taxes with state funding equal to a 7.5 cent per $100 of valuation levy.

Because SCC's general fund levy for 2023-24 was maintained at 7.37 cents — college leaders backed away from a plan to raise the levy to the maximum 9.25 cents allowed under the previous law — the college will see an automatic boost when the state moves its funding to the baseline set by lawmakers, said Amy Jorgens, SCC's chief financial officer.

SCC also expects to receive more in state dollars through an allowance created for enrollment growth in certain educational areas, Jorgens told the board.

The college reported a 9% enrollment increase for the spring semester, and Jorgens anticipates similar growth in the upcoming school year.

That could result in SCC receiving as much as $64.7 million from the Community College Future Fund this year, which is more than the $58.3 million it collected in property taxes for the 2023-24 year.

The new state funding is in addition to the $30.3 million it expects to receive through standard state appropriations.

SCC also expects to generate $16.3 million in tuition revenue next year.

Homeowners will still likely see a line item for SCC on their property tax statements in the coming year, however.

The college plans to keep the 2-cent levy for capital improvement projects as it continues an ambitious plan to remake its campuses in Lincoln, Beatrice and Milford, as well as expand into other communities in Southeast Nebraska.

While the college expects larger revenues than in previous years, SCC — like other higher education systems in Nebraska — is also projecting increased costs in the coming year.

Total expenditures for 2023-24 reached $103.7 million, according to a budget document shared with the Board of Governors.

The proposed expenses in the coming year would top $118 million, which include a pay increase for SCC employees, as well as health insurance premiums expected to be 20%-25% higher.

Jorgens said SCC is currently expecting a $5.7 million budget shortfall under the current projections, but added the college will close that gap before it brings a final budget to the board in August.

Most of the gap will be closed by putting off one-time expenses such as equipment purchases or hiring for vacant positions currently included in the budget, she said.

In other business:

* The board unanimously approved a five-year contract extension with President Paul Illich that will keep the college’s top administrator at SCC through June 30, 2029.

The new contract increases Illich’s total compensation and benefits by 4.6%, including raising his base salary from $303,900 to $318,954.

Illich will also receive an annual retirement contribution of $28,706, which is equal to 9% of his salary, a $12,000 vehicle stipend, a $2,100 technology stipend, as well as standard SCC fringe benefits.

With the board’s approval, Illich will become the second-highest compensated community college president in Nebraska, which also reflects SCC’s size among the state’s six community colleges.

“Dr. Illich’s leadership has resulted in improvements that have been amazing and transformational,” said board member Neal Stenberg. “He deserves to be fairly compensated for his achievements.”

Stenberg, who led the board’s negotiations with Illich, said the total compensation in the new contract was “less than we would need to hire an equally qualified successor.”

* SCC also approved a series of construction projects for its Lincoln campus located at 8800 O St.

The first is a $149,382 replacement of part of the roof of the main building at the Lincoln campus awarded to Stonebrook Roofing of Lincoln.

The board also authorized $58,100 of work with Macintosh Concrete to add a temporary gravel parking lot on the northeast part of campus near Woodhaven Hall, the first residence hall for students at SCC-Lincoln.

The gravel will be recycled and used at a different area of the campus once a permanent parking lot is finished, SCC said.

Macintosh Concrete was also awarded a $68,450 bid to lay a sidewalk from Woodhaven Hall to the parking lot and O Street.

Finally, the board approved a $373,465 contract with Commonwealth Electric Company of the Midwest to complete a fiber optic loop on the Lincoln campus.