College towns fear long-term ramifications of online education

This story was initially published at Debtwire.com.

Officials from college cities and towns nationwide still don’t know the full impact the new coronavirus (COVID-19) will have on their communities, but say that they are anxious about colleges and universities transitioning coursework online and potential results for their bottom line.

“Our worst-case economic scenario is the continued transition to online,” said Greg McDanel, city manager of Maryville, Missouri, home to Northwestern Missouri State University, Northwest Technical School and the Missouri Academy of Science, Mathematics and Computing.

McDanel and other panelists made their remarks today during a presentation by the National League of Cities entitled, “University and College Towns Facing Economic Crisis of COVID-19.”

Northwestern Missouri State University is responsible for 36% of the area’s population, McDanel said. Online educational offerings mean that there’s a possibility fewer students and faculty members remain in the area and help drive economic activity in the region, and could result in service cuts and jeopardizing the rural community’s economic momentum, he said.

“We sink or swim with Penn(sylvania) State (University),” said Ronald Filippelli, mayor of State College, Pennsylvania. “No one knows where higher education is going in the next few years for sure, including presidents and deans of universities, they just don’t know either, and we’re all in this game together and looking at long-term problems, not just getting over the hump.”

Penn State has furloughed a large number of employees but has not implemented mass layoffs yet, but it’s unlikely any of those decisions will be made or clear until spring 2021, Filippelli said. The result is a high level of uncertainty, with long-term concerns, he said.

“If the university does have to close again, or if the university continues to decline in terms of the number of students studying at State College, I’m worried a number of property owners will make appeals on property taxes, and if that happens, largely from our commercial property owners, we could have a tremendous hit to our income,” Filippelli said.

College cities and towns have taken a hit to their utility revenues, both from water and sewer and electric power as a result of the transition online, said Councilwoman Gloria Betcher of Ames, Iowa, home to Iowa State University. Ames recorded a USD 9.1m shortfall in FY20 (ended 30 June 2020) stemming from lost revenue as a result of the pandemic, and its electric utility recorded a USD 4.5m loss in FY20.

Area hotels and convention centers have also experienced tremendous losses as a result of canceled athletics, events and graduation ceremonies, Betcher said.

Municipalities nationwide require immediate direct federal aid to help manage their losses and prevent further erosion to ensure they can maintain their obligations, Filippelli said.

“We need flexible money, we had to shut down parking, and (experienced) losses there of USD 750,000 already, we have a USD 2m debt payment due in fall,” Filippelli said. “I would emphasize (that we need) flexibility – direct money to the municipalities, not through the states if that’s possible.”

by Maria Amante

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