The College of New Caledonia is looking for answers to yet another million-dollar question.

How will it deal with a budget deficit expected to run close to $1 million?

Students are likely to feel the pinch, now that college administration has asked CNC's board of governors to approve a two per cent tuition hike for the second straight year.

“While it is still very early in the process, the current draft 2013-14 budget would result in an operating fund deficit of about $1 million -- if nothing were changed,” Penny Fahlman told the board Friday. “Once again the college is facing unavoidable higher costs due to the impact of inflation and increases in costs for building and equipment maintenance, software, utilities, and more.”

Colleges are limited to annual tuition hikes of no more than two per cent and are required to have balanced budgets every year. A budget development report provided to CNC administration outlines that costs have not kept pace with sources of funding.

“I will present preliminary options and recommendations for addressing the projected shortfall at the February 22 board meeting,” said CNC president John Bowman.

“These options will include a combination of reduced expenditures, reallocations of unused budgets, and inclusion of deferred and other revenues in the budget as well as a limited number of early retirement incentives and voluntary severance packages.”

Faced with a $2.3 million projected deficit heading into the 2012-13 school year, as cost-cutting measures, CNC did not fill several vacant administration positions and offered early-retirement incentives and voluntary severance packages to full-time employees, some of whom were not replaced or whose jobs were filled by part-time staff.

Combined with a two per cent tuition hike, which added about $100,000 to the budget, CNC was able to balance its books with a $48 million operating budget.

n The board also approved a contract agreement for 325 support staff in CUPE Local 4951, which is now subject to final approval by the Post Secondary Employers' Association. Supported by 90 per cent of the union membership, the deal gives support staff four per cent wages increases over two years.