Letter to University Community on Impact of New State Budget Cuts on U.Va.

December 19, 2008

The following message was e-mailed to the University of Virginia community on Dec. 18, 2008, by Executive Vice President and Chief Operating Officer Leonard Sandridge.

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To members of the University community:

As you may have read in this morning's news, Governor Kaine announced yesterday additional statewide budget cuts of $2.9 billion. Included in those cuts was a 15 percent cut for all four-year colleges and universities. That translates to a reduction of $12.4 million from the state appropriation to the University's 2009-2010 budget, which is in addition to the $10.6 million permanent reduction that was taken in October.

While we anticipated this news and have been planning for these reductions, we still face numerous difficulties ahead. We are examining every aspect of what we do and have already taken significant steps to curtail spending.

When the University has faced funding difficulties in the past, a primary goal has been to avoid layoffs. To reduce the likelihood of future layoffs and continue to protect our workforce, we will leave some positions open, reduce our numbers through attrition and look for ways to consolidate the work of units where appropriate. In some cases, we will be asking staff to take on different and expanded duties.

The points below are a preliminary assessment of how the Governor's budget cuts will impact the University. As more information becomes available we will post it on a new University Web site where you will be able to find detailed and updated information on the budget. http://www.virginia.edu/budgetimpact/ In the next few weeks, we will add a place for you to ask questions and suggest cost-saving strategies.

* Recall that for 2008-2009 the University's state budget cut totaled $10.6 million, 7 percent of our general fund appropriation and equivalent to an average 3 percent cut on U.Va. school and unit budgets.

* The 2009-2010 state budget reduction announced by the Governor yesterday cuts another $12.4 million, or 8 percent, of the general fund appropriation in addition to the $10.6 million cut in the current fiscal year.

* The total reduction in 2009-2010 is 15 percent of the University's general fund appropriation or $23 million (equivalent to approximately 6.2 percent of U.Va. school and unit budgets).

* The state match on the Eminent Scholars program was completely eliminated. This is the first time since the inception of the program in the 1960s that the state has provided no matching funds. This represents a reduction of approximately $2.8 million, which is in addition to the $23 million described above.

* Two U.Va. capital projects will be delayed: New Cabell Hall Renovation and Ruffner Hall Renovation. We are advised that this is related to concerns about the state's debt capacity and is not a reflection on the merits of the projects or the long-term likelihood of approval. Other U.Va. capital projects do not appear to have been affected by the Governor's budget.

* The Governor's proposal calls for no salary increases for the Commonwealth's college and university faculty and staff in 2009-2010, making two fiscal years in which there are no salary increases.

* The Equipment Trust Fund remains at approximately $10 million.

* Maintenance Reserve funding remains at nearly $7.5 million in 2009-2010 ($15 million for the biennium).

* Research funding was reduced by 8 percent.

* The Governor's budget includes proposals to limit the cost of Medicaid, which could reduce U.Va. Health System revenues by as much as $7.2 million.

* The University of Virginia's College at Wise will also receive a 15 percent budget cut for 2009-2010. Combined with permanent reductions already received, this brings the College's total budget reduction for this biennium to approximately $3.3 million.

It is important to remember that the Governor's budget will now go to the General Assembly, where it could be adjusted. The resulting budget that comes out of the session for the University could be more than, less than or the same as recommended by the Governor.

The following link includes University comments to the media yesterday about the Governor's proposed budget and what we are doing to manage our finances in response to the most recent information. http://www.virginia.edu/uvatoday/newsRelease.php?id=7340

In addition, there is an audio tape of complete comments that you might find helpful. http://www.virginia.edu/budgetimpact/

We are confident that the University efforts to address these budget cuts will position the institution to emerge from the economic downturn stronger and more efficient. We are grateful, as always, for your dedication and support for the University and wish you and your families a peaceful and joyous holiday.

-- Leonard Sandridge