U.Va. Anticipated, Planned for State Budget Cut

September 09, 2009

September 10, 2009 — Awaiting details of how budget cuts announced Tuesday by Gov. Timothy M. Kaine will affect higher education, the University will stay the course by implementing reductions already planned as the economy worsened and tax revenues dropped.

Academic departments, including schools and libraries, will be asked to reduce state expenditures by 2.5 percent on average in the current fiscal year, Leonard W. Sandridge, executive vice president and chief operating officer, said Wednesday. All other administrative units will be asked to reduce state expenditure budgets by 3 percent on average.

The General Fund budget reduction assigned to U.Va. is $19.25 million, or 15 percent, said Colette Sheehy, vice president for management and budget. The cut will be cushioned somewhat by federal stimulus money intended for 2010-11, but added to the 2009-2010 budget by the governor. The federal funds will reduce the impact to $10.3 million, or an 8 percent cut.

While that helps the current budget, it eliminates the stimulus money that would have been available next year.

When tuition is added to the General Fund in the Academic Division budget the effective reduction is 3 percent overall.

State agencies earlier had been asked to plan for 5, 10 and 15 percent cuts. "It's not surprising that it was at the high end of the range, given the $1.3 billion that the state is short in revenues this year," Sheehy said.

On Wednesday morning Sandridge reminded vice presidents and deans in an e-mail that the University had included a $1.8 million reserve in the budget for this year in anticipation of additional budget cuts. "We will apply the $1.8 million to further reduce the new budget cuts that must be passed on to schools and operating units," Sandridge said.

"We realize how difficult these reductions are and the serious impact they have on programs and operations," Sandridge said. "At the same time, we are grateful that, at least for the current fiscal year, the actual cuts are less than half of what the governor said we should plan to accommodate."

Deans and vice presidents should continue to plan for the already-requested 6 percent budget cut for the next fiscal year, 2011-12, he added.

The governor also called for a one-day furlough for state workers on May 28, 2010, the Friday before Memorial Day. Higher education will have some leeway on how to implement the furlough and, Sandridge said, "We have many unanswered questions about the implementation of this action.".

In addition to operating budget reductions, the cuts include another hit to the Eminent Scholar matching appropriation, this time by 15 percent. Sandridge estimated the U.Va. share of that reduction to be $282,000. "As we have done in the past, we will not reduce the Eminent Scholar budgets this year but will make the permanent reduction in 2010-11," he wrote in his e-mail.

The Eminent Scholar program provides funds for professorships throughout the University.

Kaine also announced Tuesday that the state would cut its contribution to the Virginia Retirement System for the fourth quarter. Because the system is a defined benefit program, that cut will not affect benefits, Sheehy said.

Kaine called for 593 layoffs across the state, but the University will continue to do everything possible to manage the cuts without layoffs, Sandridge said. The University has held some jobs open and eliminated others through attrition.

In his talk to first-year students and parents on Move-In Day Aug. 22, President John T. Casteen III stressed that the University will preserve services to students and will maintain financial aid programs. The University launched a private fundraising campaign for AccessUVa on Tuesday.