Sam Jones' memorandum to the president and the provost regarding state budget

MEMORANDUM

TO:                  W. Taylor Reveley, III

                        P. Geoffrey Feiss

FROM:            Samuel E. Jones

SUBJECT:      General Assembly Budget Actions:  Conferees Report

On Saturday, February 28, the House of Delegates and Senate approved amendments to the Commonwealth's 2008-10 operating and capital budgets as recommended by the budget conferees.  While the Commonwealth's revenue picture continues to deteriorate, the availability of federal stimulus funds allows the state to defer much of the impact of a reduced revenue base until next biennium.  As a result, the General Assembly is able to offset for a limited time a number of the FY 2010 budget reductions initially recommended by Governor Kaine.

Key elements of the General Assembly's budget recommendations include the following:

  • Faculty and Staff Salaries-No funds are included to support faculty and staff salary increases in this biennium.
  • Restoration of Budget Reductions-While the College will have to permanently absorb the $3.4 million reduction in state support announced last October, federal stimulus funds are used to offset $3.8 million of the $3.9 million in additional state funding reductions originally recommended for the main campus in FY 2010. An additional $660,000 in federal stimulus funds are used to offset reduced state support for the Virginia Institute of Marine Science. State funds are used to restore two thirds of the Eminent Scholars reduction. The College's share of this restoration is estimated to be $847,000. While the General Assembly was able to use one-time federal stimulus funds to offset a good portion of the additional FY 2010 budget reductions recommended by the Governor, these funds are one-time dollars and should be seen only as bridge funding to help us better manage FY 2010.
  • Student Financial Aid-The General Assembly allocates $10 million in incremental need-based undergraduate student financial aid across the higher education system. The College's share of this allocation is $109,355. While Governor Kaine initially recommended an additional $26 million in student aid, the Assembly now expects that with the infusion of federal stimulus funds it will preclude the need for large tuition increases, and thus the larger increases in financial aid.
  • Tuition Policy-While there do not appear to be specific restrictions placed on tuition action that may be taken by the Board of Visitors, the conferees report does state that "Federal funds are expected to mitigate the need for tuition and fee increases on in-state students". As a result, the State Council of Higher Education is to report to the General Assembly on FY 2010 tuition and fee actions in fall, 2009.
  • Percentage of In-State/Out-of-State Undergraduates-There does not appear to be any new language relating to the percentage of in-state/out-of-state undergraduates that the College must admit.
  • Capital Projects-The General Assembly authorizes the College to use $2.05 million of our own funds and $2.2 million in federal funds to support planning of Integrated Science Center 3. Language is included allowing the College to be reimbursed for any nongeneral funds it may commit to the planning process.
  • Capital Fee for Out-of-State Students-The General Assembly increases the per credit hour capital fee charged to out-of-state students. This fee is intended to recognize the benefit that out-of-state students receive from new or renovated academic facilities supported through state issued debt. Revenue generated from this fee is used to offset a portion of the debt service incurred by the Commonwealth for these projects.

The General Assembly's budget actions will now be forwarded to the Governor for his approval or amendment.  The General Assembly will return in early April to consider any changes proposed by the Governor.

I will keep you informed as we learn more.  Please contact me if you have any questions regarding this summary.