Last Thursday, the Virginia House of Delegates and Senate adopted their amendments to the "caboose bill" for the current, year ending June 2008, and the 2008-2010 biennial budget.

As is customary, each house will reject the amendments of the opposite chamber and send the amendments into a conference committee for development of a conference report.

The budget discussions have been dominated by the current and projected budget deficits. For fiscal year 2007-2008, the deficit is projected to be $339 million while forecasts estimate a shortfall of $1 billion for the 2008-2010 biennium.

For higher education funding, the two bodies took different approaches to handling the deficit and projected shortfalls. For Virginia Tech, the House maintained an increase in operating support of $3.5 million each year that was provided in the Governor’s Budget in December. The Senate reduced this funding in half. With regard to the Commonwealth Research Initiative, the Senate reduced the funding by 50 percent in the first year and an additional 25 percent in the second year of the biennium, while the House provided full funding of $7 million for the first year of the biennium only.

The House also proposed a Tuition Moderation Incentive Fund to provide incentives to the institutions to moderate tuition increases. The Senate did not propose any restrictions on tuition increases. Both reports maintained an increase in financial aid funding of $400,000 for undergraduate financial aid at Virginia Tech.

Neither House nor Senate budget proposals recommended further budget reductions to higher education for the remainder of this fiscal year or for the 2008-2010 biennium, despite the governor’s recommendation of a 2 percent reduction announced on Feb. 12.

Even though the money committees differed on their operating support for higher education, they have developed similar capital proposals. Appropriations Committee Chairman Lacey Putney introduced HB1547, the 21st Century Capital Improvement Program, which provides a six year capital construction plan for higher education, museums, corrections, parks and recreation, and mental health facilities. It also creates a new process for project pre-planning, approval and funding. In 2008-2009, the university would receive funding for the Virginia Tech-Carilion Clinic medical school and research institute and pre-planning funds for the Sciences Research Laboratory I, the Engineering Signature Building, and the Human and Agricultural Bioscience Facility, Phase I. In the second year of the biennium, the legislation provides pre-planning funding for the deteriorated section of Davidson Hall.

Senate Finance Committee Chairman Charles Colgan introduced SB795, which also creates a six-year capital funding plan. Virginia Tech projects in the Senate plan include full funding for the medical school and research institute and planning money for the deteriorated section of Davidson Hall, Signature Engineering Building, a chiller plant, and the Sciences Research Laboratory I. Both bills will be referred to a conference committee to resolve their differences in planning and funding mechanisms.

Both House and Senate reports addressed pay increases for faculty and staff. The House proposed a 2 percent pay increase effective Nov. 25, 2008, and also created a reserve fund for a pay increase in 2009 should revenues meet or exceed projections. The Senate proposed a 2.5 percent pay increase in December 2009.

The university submitted a number of important budget amendments including safety and security enhancements as a result of April 16, funding to start the performing arts initiative, reimbursement for the expenses incurred during the quarantine at the Equine Medical Center last spring, a request for additional unique military activities funds to cover new uniform expenses, and two research initiatives: one for a food, fiber, and health initiative for Cooperative Extension and the Agricultural Experiment Stations, and one for enhanced research in bioinformatics and genomics. Unfortunately, the budget deficit and upcoming shortfalls eliminated any chance of funding for these amendments. However, the Senate budget does include $200,000, a portion of the request for the recovery efforts at the Equine Medical Center.

Budget conferees began negotiations on the budget the week of Feb. 25. A conference report is due on Tuesday, March 4, and the session is scheduled to adjourn on Saturday, March 8.

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