NMC Talks ‘Tightening The Belt’ For 2027 Budget

Despite a budget surplus for 2026 and a record year of fundraising for the NMC Foundation, Northwestern Michigan College (NMC) is eyeing a “belt-tightening” as it finalizes its 2027 budget.

During a report to NMC trustees Monday, VP of Finance and Administration Troy Kierczynski highlighted numerous budgeting challenges facing the college, including millage rollbacks, rampant inflation, stagnant funding at the state level, and demographic forecasts pointing to “20 percent decline or so in Michigan high school graduates” in the next 15 years.

To counter those headwinds, Kierczynski urged the NMC board to consider “maxing out” its tuition increase capability with a 4 percent hike for both in-district and out-of-district students. Trustees will make that decision, among others, in the coming month ahead of their final approval of the 2027 budget at the June board meeting.

NMC’s fiscal year ends on June 30, and the college is projecting a $1.5 million net surplus, “driven by higher than expected enrollment and stronger than expected investment income.” The college has touted enrollment growth repeatedly over the past year, and continued to do so at this week’s meeting, with President Nick Nissley noting in his board report that “NMC’s class of 2026 increased by 10 percent and the number of degrees and certificates those graduates earned rose nearly 12 percent over 2025.”

Despite the growth, Nissley said arriving at a balanced budget for FY 2027 had been “a little bit of a belt-tightening” – not surprising, he added, due to trying times for higher education in general.

“You all read that last weekend was the final graduation, after 105 years, at Siena Heights,” Nissley said, referring to a private Catholic university in Adrian, Michigan which recently closed due to debt. 

NMC’s FY 2027 budget projects $60.25 million in revenues (up from $58.7 million last year), $38.58 million in labor costs (up from $36.4 million), and $57.96 million in total operational expenditures (up from $55.47 million) – as well is $2.294 million in “other transfers” – for a balanced budget.

Those numbers are based on a 3 percent tuition increase, though Kierczynski made a pitch for trustees to consider a 4 percent raise as a chess move to plan for future budget years. Under Michigan’s “tuition restraint” laws, which restrict how much public colleges and universities can increase undergraduate tuition and fees each year, 4 percent is the maximum annual increase. Kierczynski acknowledged the extra hike wasn’t necessary this year, but argued maximum increases each year would give NMC more financial freedom if/when other funding sources dry up.

“I am concerned about, looking forward, only being able to increase 3 percent if we’re needing something more than that,” Kierczynski explained. “I think there is a good theory out there to say that you should look at maxing out the tuition restraint each year... But I also understand that there’s a difficult perception with that.”

Tuition increases could be one defense for stagnant state-level funding for community colleges like NMC, which Kierczynski said is expected based on 2027 budget proposals from both the Michigan House of Representatives and the State Senate.  

“It’s not a pretty picture, necessarily, from the state side,” Kierczynski said, noting NMC is “budgeting for…a zero increase from the current year” in terms of state funding.

Local funding is a different story, thanks to “tremendous growth” in Grand Traverse County taxable values.

“You have $8.7 billion in taxable values in Grand Traverse County,” Kierczynski told trustees – up 6.3 percent from $8.2 billion a year ago. NMC’s millage pulls $17.2 million from that tax base, equating to a total local tax revenue of $16,513,776 after abatements from programs like TIF and Brownfield.

“On the flip side, what we’re also experiencing is a 1.5 percent decline in our millage rate, due to the Headlee Amendment, which will decrease to 1.9788 at the start of this next tax year,” Kierczynski added.

The Headlee Amendment requires local governments to reduce millage rates when annual growth of property tax revenues exceeds the inflation rate. NMC has not levied its full millage rate of 2.17 since fiscal year 2017. Kierczynski said the money NMC is leaving on the table each year because of those rollbacks has become “difficult to ignore,” and suggested pursuing a Headlee override in a future election as a “lever” to “make a meaningful impact on the budget.”

But NMC is actually in the midst of an unexpectedly robust year financially.

In addition to the college’s strong enrollment, NMC also recently pocketed $27 million from the sale of the Boardman Lake Campus and another $9 million from a federal pandemic-era tax credit program. Those dollars have already enabled NMC to pursue a long-gestating geothermal energy project and close a funding gap for the Freshwater Research and Innovation Center. Kierczynski added that the extra cash could help the college move forward with another long-discussed project: the conversion of the Osterlin Building into a student services hub.

Also booming is the NMC Foundation, which Nissley noted is in the midst of “the best fundraising year in its history.” The foundation raised nearly $6.2 million in gifts and pledges as of May 6 – 144 percent of its $4.3 million goal for the whole fiscal year. “Total fundraising activity, which along with cash and pledges includes newly documented planned gift intentions and in-kind gifts, totals $15,722,082,” Nissley wrote. “This exceeds even the best Be What’s Possible campaign year, which saw total fundraising activity at more than $10,000,000.”

Be What’s Possible, NMC’s last capital campaign, wrapped in 2021 with $40.3 million raised. Now the NMC Foundation is gearing up for a follow-up campaign. Trustees voted last month to enter into a contract with the Winkler Group “for professional campaign-specific fundraising counsel regarding a $45 million comprehensive campaign.” On Monday, the board also approved another $500,000 for the campaign, for 1.5 additional FTEs (full-time equivalent employees) to aid in fundraising.