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'Chargebacks' increasingly costing Erie County as students head elsewhere

Chris Catuzza lives in Amherst, home of Erie Community College’s largest campus. But instead of enrolling at ECC after graduating from Sweet Home High School in June, Catuzza, 18, chose Niagara County Community College in Sanborn. He plans to stay at NCCC for two years and transfer into SUNY Buffalo State College or the University at Buffalo – a route many students take to a less expensive bachelor’s degree.

But while Catuzza saves money, Erie County taxpayers take a big hit because of students like him. He’s one of 1,900 Erie County residents enrolled this fall at a community college outside of the county, an outflow that costs taxpayers millions of dollars each year and contributes to ECC’s recent financial woes. The loss of students to NCCC, in particular, also highlights the poor condition of ECC’s Amherst facilities.

Last year, Erie County paid $6.9 million in chargebacks – fees imposed on counties when their residents attend a community college outside of their home county. It was more than double the cost of chargebacks in 2005. About $4.6 million went to NCCC, where about 1,300 Erie County residents make up nearly a third of the college’s student body.

“Niagara County Community College is eating our lunch,” said Erie County Legislator Kevin R. Hardwick, R-City of Tonawanda. “We pay for our own community college, and we pay for a significant portion of theirs, too.”

Erie County passes on the cost of the chargebacks to the municipalities where students reside. Buffalo taxpayers handed over $1.2 million in chargebacks in 2015, nearly three times what they paid a decade earlier. Taxpayers in the Town of Tonawanda paid $982,297, and in Grand Island the cost of chargebacks was $534,703.

In Amherst, the cost of chargebacks over 10 years almost doubled to $1.1 million, even though the town has no control over the college or its budget, Town Supervisor Barry Weinstein said.

“It’s really crazy,” Weinstein said. “It’s a New York State-created problem. This is an unfunded mandate as far as the towns are concerned.”

Growing gap

The state created the chargeback system more than 50 years ago. Community colleges are funded primarily through a combination of state aid, tuition and money provided by sponsoring counties. Chargebacks are designed to cover the sponsoring-county portion of that funding equation for non-resident students. The rates, set annually by the State University of New York, vary by college, based on how much a sponsoring county contributes to the college, divided by how many county residents are enrolled.

So ECC also benefits from chargebacks – to the tune of $1 million last year.

But the gap between ECC’s chargeback revenue and what local municipalities pay out to other community colleges has grown dramatically and could widen further. The number of Erie County residents enrolled at NCCC remains much larger than the number of Niagara County residents attending ECC. But those numbers haven’t changed much in recent years.

Instead, the gap between NCCC’s chargeback rate and ECC’s rate has been widening. This year, ECC’s rate is $2,230, one of the lowest in the state, while NCCC’s rate is $3,580, slightly above the state average. ECC’s rate traditionally is lower because it operates within one of the state’s largest counties and has a large population of resident students. At the same time, Erie County’s contribution to the college is small relative to other community colleges.

ECC and county officials have railed for years against the chargeback system. They believe the dollars coming from Erie County have allowed NCCC to invest more heavily in programs and facilities, at the expense of ECC, which has received the same operational funding from Erie County for years, except for a modest increase in 2015.

“The whole logic of chargebacks makes no sense,” said William D. Reuter, ECC’s chief administrative and financial officer. “We don’t subsidize when Erie County kids go to Albany or Binghamton. Why should we for a community college education? If they want to go to Niagara County Community College or Genesee or the Fashion Institute, God bless them. But why should we be subsidizing them?”

Chargebacks make even less sense in an era of shrinking enrollments and rising college costs, said Hardwick.

“There is a perverse incentive to have duplicative offerings in neighboring colleges, and that costs everybody,” he said.

Gov. Andrew M. Cuomo and other state leaders have been calling upon the state’s public colleges to streamline operations and work more closely together in weeding out inefficiencies and duplication of programs. In 2015, Cuomo established a series of regional community college planning councils to set “program development, enrollment and transfer goals on a regional basis” in an effort to “limit competition by colleges for students within a region, better align education and training program offerings to regional economic development goals and activities and improve student outcomes.”

Those are worthy goals, said Dennis Murphy, chairman of the board of trustees for ECC, which is part of a regional council for Western New York, along with NCCC and Jamestown Community College. But the chargeback issue makes them hard to achieve. “The reason why there is a perceived competition is really built around chargebacks,” said Murphy. “If the chargebacks were removed from the table, I think you would see a lot more cooperation.”

Nonetheless, chargebacks are popular among many community colleges, and any movement to get rid of them has yet to gain political traction in Albany.

Dr. James P. Klyczek, president of Niagara Community College, said the college has come to rely on chargebacks from Erie County students as “part of our income base.” (Harry Scull Jr./News file photo)

NCCC President JamesP.  Klyczek acknowledged that chargebacks are a controversial topic, but he maintained that the system makes plenty of sense. If the roughly 1,300 Erie County students who come to NCCC went to ECC, there would be an associated cost for ECC with that influx of students, such as additional personnel. As it is now, NCCC bears those costs and thus deserves to be compensated, Klyczek said.

NCCC has come to rely on chargebacks from Erie County students as “part of our income base,” just as it has historically relied on popular programs such as nursing and criminal justice to attract students, he added.

Campus feel in Sanborn

But the college doesn’t do anything specifically to market to Erie County students. It relies instead mostly on word of mouth. About five years ago, when the college asked Erie County students in a survey how they heard about NCCC, three-quarters said someone they knew had recommended it, Klyczek said.

That was the case for Chris Catuzza.

“I heard that the business program was better here,” he said, while relaxing on a couch in NCCC’s art building between classes.

The drive to the Niagara County campus turned out to be a little quicker for Catuzza, and when he didn’t hear from ECC about his application, it made the decision to go to NCCC that much easier. And, now, with his first semester nearly complete, he said: “I do like the place.”

Erie County students generally have no idea that their opting for NCCC comes with an added cost, because they don’t end up seeing the chargeback bill. In fact, NCCC charges $600 less in tuition than ECC.

First-year NCCC student Emily McCarthy of West Seneca never considered ECC because she wanted to live on campus and have a full college experience. None of ECC’s campuses has student housing.

“I love dorming. I made so many good friends,” McCarthy said.

The lack of housing at ECC does have an impact, because dormitories give the campus more of a collegiate atmosphere, even if most Erie County residents don’t choose to live in them, Reuter said.

Students at Niagara County Community College cited several benefits of that college's campus: on-campus housing, ample parking, shorter commute time. (Derek Gee/News file photo)

Some NCCC students familiar with ECC said the Sanborn campus has much more of a college feel to it than ECC.

“ECC is like a glorified high school,” said Conor Brinkworth, an Amherst High School graduate who is studying criminal justice at NCCC.

Marquise Grasty of Buffalo left ECC to come to NCCC, even though he now has a 40-minute drive instead of 10 minutes.

“I don’t know what it was, but I just couldn’t focus there,” said Grasty, a nursing student. “ECC – I feel like it’s unorganized, and I feel that a lot of students that go there don’t take school seriously. Here, it’s more of a college environment.”

Other students interviewed recently at the Sanborn campus cited practical things such as travel time and ample parking as reasons for choosing NCCC over ECC. Specific academic programs, though, are rarely the reason. The top 10 programs Erie County residents study at NCCC are all available at ECC.

Johnny Savoy, who is studying audio-visual engineering at NCCC, takes a bus from Grand Island to campus. The ride is usually 90 minutes, but it would be even longer to get to ECC’s Amherst campus, he said.

Nate Smith, who graduated from Grand Island High School in 2013, considered ECC before ending up in Sanborn.

“There was a lot of deliberation there for a while,” he said. “I know a lot of kids from Grand Island who come here.”

Talking up ECC

Hardwick, the county legislator who is chairman of the committee that oversees county funding for ECC, knows plenty of young people from the City of Tonawanda who ended up at NCCC. His own son wanted to go to there.

“It was a matter of everyone else is doing it,” Hardwick said. “It was there. It was convenient. All of his friends were going there. I said, ‘No, you can’t do that.’ ”

Hardwick has been harping on chargebacks for years. In the absence of any political change in Albany, he thinks a good place to start changing the trend is in area high schools, where counselors could help steer those students who are interested in community college toward ECC and away from NCCC.

“If the same program is offered at ECC, I would hope the school district counselors would push ECC. It’s in their enlightened self-interest,” he said.

Hardwick argues that if the primary way for taxpayers to vent their frustration with higher taxes is by voting against local school budgets, keeping municipal taxes in check – by decreasing chargebacks – will help school districts pass their budgets.

Chargebacks also have bothered Chris Aronica, a Grand Island town councilman who is a graduate of ECC and formerly served as chairman of its foundation board.

“It’s really not a level playing field,” he said.

Aronica, who also graduated from Grand Island High School, has tried to help turn the tide by bringing ECC faculty to the high school once or twice a year to meet with students, teachers and counselors.

“There’s a lot of great programs there,” Aronica said. “The best thing I can do is try to go into the school and educate on what’s available.”

Hardwick believes the county and the state can do more to assist ECC, as well.

College officials are banking on a $30 million Science, Technology, Engineering and Mathematics building, now under construction, to help spruce up an aging Amherst campus, attract new students and free up space for ECC’s popular nursing program to be able to accept more students. The building is set to open in December 2017.

Not to be outdone, NCCC is spending $25 million to renovate and modernize 100,000 square feet of building space into a new “Learning Commons” center that will feature a glass atrium and courtyard. The college has targeted September 2017 to complete the project.


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