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County paying millions in ‘chargebacks’ for community college students

More Erie County tax dollars have been spent on community college education in recent years. But Erie Community College hasn’t been the beneficiary of any of that additional spending.

Instead, those dollars increasingly are flowing into the coffers of other community colleges in New York.

In 2013-14 alone, community colleges other than ECC received $5.4 million in fees charged to Erie County for the costs of county residents enrolled in their programs. That’s a 28 percent increase over the $4.2 million Erie County taxpayers paid in 2008-09 and a 150 percent increase over $2.2 million paid in 2002-03.

State law allows fees known as “chargebacks” to be assessed to counties when their residents attend a community college outside their home county.

“The county is still getting slammed by chargebacks,” said William D. Reuter, ECC’s chief financial officer.

In a recent memo to members of the college’s board, Reuter included a chart showing the county paid more than $46 million in chargebacks since 2002.

“Especially in a period of declining enrollment and a decrease in high school graduates, it makes no logical sense to have to subsidize the operations of other community colleges,” Reuter wrote in the memo.

Erie County had nearly 2,000 full-time-equivalent students who attended community colleges other than ECC in 2013-14. More than half of them – 1,376 – went to nearby Niagara County Community College in Sanborn. NCCC received $3.4 million in Erie County taxpayer money in 2013-14.

Genesee Community College had the second-most Erie County students, with 280, costing the county $667,364 in chargebacks.

Reuter noted that most of the Erie County residents taking courses at NCCC were enrolled in programs that are currently offered at ECC. In fact, eight of the top 10 programs for Erie County residents at NCCC were available at ECC’s North Campus in Amherst, the town from which NCCC draws most of its Erie County students, he said.

“Students virtually down the street from the North Campus are choosing to go to Niagara,” said Reuter, who noted that chargebacks spiked upward after NCCC built a new dormitory in 2008 and a new facility for its culinary arts, hospitality and tourism programs in 2012.

ECC and county officials are banking on a new $30 million academic facility planned for the Amherst campus to help stem the tide of county residents choosing NCCC or GCC over ECC.

ECC does receive chargebacks of its own from other counties. But the number of out-of-county students at ECC is relatively small compared with the number of Erie County residents who enroll elsewhere. Also, ECC has one of the lowest chargeback rates in the state.

Those rates are calculated using a formula that takes into account the sponsoring county’s contribution to a college, the number of residents served by the college and the resident full-time enrollment.

Erie County’s contribution to ECC has stayed flat at $17.4 million annually since 2008, while the percentage of enrollment that are residents remained high – a combination that produces a chargeback rate of $1,580 per full-time student, 46 percent lower than the state average of $2,932.

ECC officials have been trying to get the law on chargebacks changed for years, but there has been little political interest outside of Erie County in reforming the current system.

“In my view, in the view of the college, chargebacks should go away. But that’s not going to happen,” said Reuter, who provided an update on the chargeback issue during a recent meeting of the ECC’s board of trustees. “We’re one of the few counties that are negatively impacted by chargebacks. Most counties relish chargebacks. They gain from them.”

In 2012, the State University of New York issued a report recommending a uniform chargeback rate, instead of the complicated formula that results in a wide range of rates. The recommendations were not adopted by the State Legislature. SUNY officials said they are in the midst of another review of chargebacks.

Erie County is one of the few counties in the state that redistributes the cost of the chargebacks to local municipalities by directly taxing residents of the communities.

Amherst and Williamsville taxpayers in 2013-14 paid $910,670 in chargeback fees – the most in Erie County.

Next highest was the Town of Tonawanda and Kenmore with $846,204 in chargebacks.

Buffalo was third, with $835,124.