The Virginia General Assembly reconciled the House and Senate budget proposals in February including modifications to the second year of 2008-10 biennial budget. Unfortunately, uncertainty remains.

The reductions in ongoing state appropriations to the university’s educational and general (E&G) program slated by the governor’s introduced budget were continued by the General Assembly. One-time federal stimulus monies were also provided to mitigate tuition increases.

But, “a complete understanding of the appropriate use of federal monies is still under review. Moreover, the volatility of the economy and those implications on the state budget as well as expected amendments to the budget mean we have too many questions yet to complete the budget,” said M. Dwight Shelton, Virginia Tech’s chief financial officer.

The General Assembly returns for the reconvene session Wednesday, April 8 and it is expected that adjustments will be made to the state budget.

Still, at this time “we have some sense of the budget,” said Tim Hodge, university budget director. The state budget calls for an ongoing reduction of $29.3 million in state aid for Agency 208 (University Division) and Agency 229 (Cooperative Extension/AES Division) in FY09-10.

This brings total reductions to $42.1 million in annual state support since the state started reducing the university base budget in FY 07-08.

“It’s hard to believe, but we will receive more than $30 million less in state funding next year than eight years ago. And we now have 2,100 more Virginia undergraduate students than just five years ago. That means there is $4,000 less state support for each Virginia undergraduate today than at the beginning of this decade after considering inflation,” said Shelton.

The General Assembly recommended one-time federal stimulus funds of $17.3 million flowing through the state to Virginia Tech in FY09-10 and FY10-11. However, Shelton cautions that these are one-time monies and will not replace state losses in out-years.

Under this budget proposal, the state has reduced appropriations for Eminent Scholars. For Virginia Tech this translates to a loss of $193,000. (The Eminent Scholars Fund seeks to attract leading scholars to campus. The state provides matching funds to endowment earnings that supplement eminent scholars’ salaries.) The proposal would also increase its contributions to Virginia Tech’s student financial assistance by $510,000.

The General Assembly approved funding for planning the new “Engineering Signature Building,” a major new facility planned for the north side of campus.

The General Assembly also proposed an increase in the out-of-state student capital fee. The commonwealth would assess non-Virginia students a fee to support the cost of buildings on state university campuses. Out-of-state students could see this fee rise (estimated to be $220 per student) to cover a $1.8 million cost requirement from the state.

Shelton and Hodge note that because of uncertainty about the state budget, federal requirements, the fixed cost increases, and because the university is looking to make structural changes based on the loss of state funding over the long term, it is too early to determine the necessary tuition funding for FY09-10. The university board of visitors has deferred action until after the General Assembly passes a final budget.

The university is examining strategies to comply with the federal requirement to mitigate the need for increasing tuition while remaining within the budget planning parameters previously developed.