BUDGET IMPROVES, BUT DEFICIT REMAINS
Higher enrollment and reduced spending have improved MHCC's financial outlook, but projections indicate that the college's structural budget imbalance remains unresolved.
By Lee Delay
The Advocate
Mt. Hood Community College’s operating deficit is smaller than anticipated, but the college continues to face a structural imbalance that could deplete its reserves in less than five years if left unaddressed, according to a financial report presented to the MHCC Board of Education during its Oct. 14 meeting.
The college reported a $2.1 million operating deficit for the 2025-26 fiscal year, smaller than anticipated. As a result of stronger-than-budgeted revenue and lower expenditures, projected reserve use was reduced from $3.5 million to $2 million.
Higher-than-expected enrollment helped improve the college’s financial position. Tuition-bearing enrollment grew 4.5%, with 183 additional full-time equivalent students above budget, generating more tuition and fee revenue than anticipated.
The college also reported spending approximately 14% less than budgeted on materials and services, with departments actively saving money where they could and fewer registrations in apprenticeship programs that cost the college more in student support expenses than they generate in student fees.
Changes to how MHCC manages student staffing this school year also contributed to the additional savings, with hourly and student staffing expenditures coming in 37% under budget. Under the revised process, departments must submit requests for employees and justify their staffing needs rather than automatically carrying positions forward from previous years. The change requires departments to reevaluate their staffing needs each year.
Despite these improvements, the college’s financial challenges remain unresolved. Without corrective action, MHCC projects its reserves could be depleted by fiscal year 2029, according to financial projections presented to the board. The college’s ending fund balance is projected to fall from $13.5 million in fiscal year 2027 to a negative $200,000 in fiscal year 2029.
The board is expected to receive updated financial projections in January, with more concrete information about what the school can expect to see from state funding and other revenue sources.
FY2029
MHCC projects its reserves could turn negative by fiscal year 2029 without corrective action.
37%
UNDER BUDGET
Hourly and student staffing expenditures came in below budget, reflecting spending controls and conservative budget requests.
183 ADDITIONAL FTE
Tuition-bearing enrollment exceeded budget by 183 full-time equivalent students, helping increase tuition and fee revenue.
14%
UNDER BUDGET
Materials and services spending came in below projections, in part due to lower apprenticeship registration pass-through.
Meanwhile, college officials have begun preparing the next fiscal year’s budget and have expressed a commitment to greater transparency throughout the process.
The college plans to offer students and employees opportunities to review and comment on the budget proposals through online and in-person information sessions beginning in winter term.
The upcoming budget process will allow the MHCC community to weigh in on spending priorities as the college works to address its structural deficit and preserve its financial reserves.
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