The Virginia General Assembly adjourned Feb. 27 by unanimously approving appropriations for state government for the upcoming 2011-12 fiscal year.

This year the assembly considered a difficult legislative agenda including transportation, Virginia Retirement System reform, government reform, and major higher education legislation. Increased General Fund revenues in February created a more positive attitude towards budgetary matters this year; however, state revenues are still below fiscal year 2007 levels.

Amendments to the governor’s proposed 2010-2012 budget, which had made substantial changes to the Virginia Retirement System (VRS), now require all employees enrolled in VRS and hired before July 1, 2010, to pay a 5 percent employee contribution and to receive a 5 percent salary increase. These actions will take place on June 25, 2011.

The state's contribution to the Optional Retirement Plan (ORP), which is widely used by faculty in higher education, was continued at 10.4 percent of salary instead of the 8.4 percent recommended by the governor. However, since ORP participants will not be required to make a contribution, they will also not receive a salary increase.

Virginia Tech received an additional $311,000 to support operations and maintenance of new facilities, and the budget included approximately $1.3 million for base operating support.

Virginia Tech also received $500,000 for 50 additional in-state undergraduate seats to contribute to the governor’s goal of adding an additional 100,000 undergraduate degrees over the next 15 years. Furthermore, the university received $733,000 to supplement in-state undergraduate financial aid.

Virginia Cooperative Extension was directed by the 2010 General Assembly to prepare a plan for restructuring due to budget reductions. However, the restructuring plan that was developed caused concern among Extension stakeholders and local governments around the state. In response to their constituents, the General Assembly required that the current restructuring plan not go forward and directed Extension to solicit further input from stakeholders, local governments and Extension employees in developing a new plan.

A separate amendment also directs the Secretary of Education to conduct a study of Extension’s organizational structure. The General Assembly restored $1 million of the $4.5 million budget reduction imposed last year, and ratified an additional $494,000 recommended in the governor’s budget to help support new agent positions.

Virginia Tech was one of four universities to receive $850,000 each to participate in a public-private partnership among George Mason University, James Madison University, the University of Virginia, and Cisco Systems, Inc. This partnership is intended to develop new approaches to increase access and reduce graduation time and unit costs through the utilization of emerging technologies. To enhance the delivery of programs in foreign languages and science, technology, engineering and mathematics (STEM), the partnership will leverage institutional resources across all four institutions.

The 2011 General Assembly considered 2,688 bills, most of which failed to pass. In particular, legislation to restrict the percentage of out-of-state students that attend Virginia institutions was not adopted. Instead, the Governor’s Commission on Higher Education Reform, Innovation and Investment suggests that institutions focus on increasing access and affordability overall.

Also, legislation that would have prohibited institutions of higher education from adopting policies to prevent the carrying of guns on campus was defeated in the Senate Rules Committee.

The major development for higher education was the adopting of sweeping legislation that resulted from the Governor’s Higher Education Commission. The Virginia Higher Education Opportunity Act of 2011, commonly referred to as “TJ21,” marked a serious commitment from the General Assembly and Gov. McDonnell to increase Virginia undergraduate enrollment and degree production, promote university based research to stimulate the economy, and provide a sustained funding policy for higher education.

TJ21’s most significant component is the creation of a Higher Education Advisory Committee that will include representation from a number of four-year institutions, the Secretary of Education and Secretary of Finance, the Department of Planning and Budget, and other central agency representatives. Some of their tasks will include establishing a definition for low and middle-income families, outlining performance criteria for measuring financial incentives offered to institutions through the new funding policy, and determining appropriate benefits and consequences for incentives in an institution’s six year plan.

TJ21’s new funding policy will establish a formula to calculate institutional cost to conduct basic operations and instruction. Targeted incentives, such as improving retention and graduation rates, will allow institutions to receive additional funding.

To encourage Virginia undergraduate enrollment, the funding model will incorporate a per-student appropriation for Virginia students. Also, the intent is that by utilizing six-year plans, the governor and General Assembly can better plan for the future in terms of institutional funding and operations. For example, institutions will be expected to incorporate plans for year-round use of facilities for instruction and resource sharing programs.

Finally, the legislation creates a public-private partnership to develop a plan to produce more degrees in the high-demand, high-impact fields of science, technology, engineering, mathematics, and medicine. This organization will also attempt to incentivize greater coordination, innovation, and private collaboration between higher education and public schools. The STEM Partnership will consist of leaders from both the public and private sectors, with representation from the scientific community, relevant state and local government officials, and educational experts.

For additional information, contact Elizabeth Hooper, Virginia Tech state legislative liaison, at ehooper@vt.edu or (804) 786-1604.

Written by Elizabeth Hooper.