BOV approves mid-year budget reduction plan

The William & Mary Board of Visitors approved a plan Friday to re-balance the College’s budget for the current fiscal year using a combination of budget cuts, federal stimulus funds, and additional tuition revenue.  The actions are in response to a 15%, or $6.2 million, reduction in state support, announced in September 2009 for the current fiscal year ending in June 2010.  This was the most recent in a series of state reductions in operating support for the College as the state wrestles with balancing its own budget.  Since April 2008, William & Mary has seen its state support permanently reduced by a total of $16.7 million, or 32%.

“We find ourselves having to deal once again with a mid-year reduction in state support,” said William & Mary President Taylor Reveley. “To this point we have been able to protect our students and employees from feeling a major impact with reductions in expenses and funding in programs.  This is no longer the case, to our great regret.”

The Board approved a plan to re-balance the College’s budget using a combination of budget cuts and reduction in staff, federal stimulus funds, and additional tuition revenue.  The College will use a one-time infusion of $2.8 million in federal stimulus funds to offset a portion of the newest cuts. These stimulus dollars were originally intended to help with next year’s operating budget.

To close the remaining $3.4 million shortfall, the College will cut its operating budgets by $1.5 million.  This includes $700,000 in cuts from the College’s maintenance and operations budget and another $800,000 in savings that result from eliminating 18 positions, including 12 layoffs. This is in addition to the 13 vacant positions eliminated prior to September’s most recent cuts.

“Although we have been able to avoid layoffs until now, the bulk of our operating budget goes to people, and we are sadly no longer able to retain everyone,” said Reveley, adding that layoffs will not begin until January 2010.

In order to close the remaining budget gap by June 2010, the Board also approved a $300 mid-year tuition increase applicable to all undergraduate, graduate business, and law students.  Henry C. Wolf, Rector of the College, said a mid-year tuition increase comes as a reluctant last option, but is necessary in order to maintain quality of the instructional programs available to our students at William and Mary.

“We will do our best to mitigate the impact to the campus community and the families who, like the College, are being adversely affected by a flagging economy,” Wolf said. “Recognizing the impact on students with financial need and their families who may have prepared their budgets months ago, we will provide more than $300,000 in need based financial aid to support these students.”

The decline in state funding is not a new trend. In 1980, the Commonwealth provided 43 percent of the College’s operating budget. In 2009, that figure is less than 14 percent. Since April 2008, the College has seen its state support reduced by $16.7 million, or by roughly a third.  It has addressed this loss of funding with $7.2 million in staff and operating cuts, $6.6 million in one-time federal stimulus funds, and $2.9 in additional tuition revenue.

Even with Friday’s actions, Vice President for Finance Sam Jones cautioned that the College will likely be faced with more challenges as it prepares for next year’s budget. All federal stimulus funds are one-time allocations, allowing the College to lessen the immediate impact of state reductions while buying time until the economy has an opportunity to recover. The base cuts, however, remain permanent.

 “Without another infusion of stimulus dollars or a significant rebound in the economy, we can expect more difficult decisions in 2010-11,” Jones said.  

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