Message to the university community concerning the 2008-10 state budget
February 12, 2008
Many of you have undoubtedly heard news reports concerning the decline in state revenues due to the economic slowdown. The Virginia General Assembly faces difficult choices in balancing the state budget for the 2008-10 biennium.
As you may be aware, on Feb. 4, 2008, the governor issued a memorandum to state agency heads that set out mandatory steps for the agencies to hold down spending for the rest of the year. We have worked with the Virginia Secretary of Education during prior periods of budget uncertainty to achieve an understanding of the inefficiencies and administrative costs that arise from such operating restrictions for higher education.
As a result, the administration has again exempted higher education from these restrictions; the Feb. 4, 2008 memorandum does not apply to Virginia Tech. However, we should all exercise caution in our spending and commitments of future financial resources. At this time, we do not know what additional measures the Commonwealth may take to reconcile the state budget with the decline in revenues.
Virginia Tech President Charles W. Steger has been in Richmond a great deal since the General Assembly convened on Jan. 9. In our discussions with assembly members, they are aware that higher education bore the brunt of the agency budget reductions assigned in October 2007, and we have received repeated assurances that this will be taken into account in the decision process for any additional actions required to balance the state budget.
The impact of the October reduction is reflected in State Council of Higher Education for Virginia’s (SCHEV) current assessment of each institution's budget adequacy. On Monday, SCHEV published a revised base budget adequacy calculation that shows that Virginia Tech has the largest dollar and percentage need of any four-year institution in Virginia. Virginia Tech’s Educational and General Budget is $65 million below the state’s target funding level; the university currently is at 87 percent of the state’s funding guidelines. President Steger and other staff members have worked with state representatives and officials to ensure that they are aware of the significance and impact of our base adequacy shortfall.
The higher education community and our supporters are actively seeking to stave off additional budget reductions. For example, on Feb. 6 more than 100 Virginia Tech students and alumni were in Richmond to express their concern about the situation and support for the university.
The Virginia Secretary of Finance will issue revised revenue projections on Feb. 15. On Feb. 17, the House Appropriations Committee and the Senate Finance Committee are scheduled to report on their proposals for the 2008-10 state budget, which will then need to be reconciled by a conference committee. Thus, the University should have a much better understanding of the potential impact of the state revenue shortfalls on the university’s 2008-10 budget at that time. While speculation about the budget is already occurring across the state, we are not likely to have much new information until after Feb. 17.
We will continue to keep the university community apprised of these developments as they happen.