President Reveley's March 15 budget message
Dear William & Mary Community,
I come with yet another budget report. The Virginia Legislature has left William & Mary alone for the rest of this fiscal year. That’s good.
Yesterday the General Assembly did adopt a budget for the next biennium (FY 2011 and FY 2012). It does little damage to William & Mary beyond (1) cuts previously imposed (the 32% reduction in operating support since April 2008) and (2) a one-day employee furlough required before June 30, 2010 (not clear that W&M will meet this requirement by an actual furlough as opposed to some other way of getting the state the cash it demands). Since much additional damage had been proposed during the budget negotiations (for instance, employee furloughs in each year of the upcoming biennium, retirement contributions by current employees, and a levy on student fees paid for auxiliary services), the budget is much better for higher education than it might have been.
Also on the plus side, the General Assembly approved a 3% bonus for state employees in December of this year if state revenues recover sufficiently to fund it. The most the state would contribute toward a bonus, however, would be about 30%. The rest of the cost would have to come from W&M’s own resources.
The Governor may propose amendments to the General Assembly’s budget. There are not likely to be many, since the Governor made his views known during the legislative process. The final act will come in April, when the General Assembly reconvenes to consider the Governor’s recommendations.
For more details, see the memo from Sam Jones, below. He and Fran Bradford have been stalwart advocates for William & Mary in the General Assembly. We owe them our thanks, along with members of the General Assembly and their staff who went to bat for higher education.
Taylor Reveley
MEMORANDUM
TO: W. Taylor Reveley, III
Michael R. Halleran
FROM: Samuel E. Jones
SUBJECT: General Assembly Final Budget Actions
Yesterday the Virginia General Assembly approved amendments to the Commonwealth’s 2010-12 operating and capital budgets as introduced by out-going Governor Timothy Kaine. Key elements of the committees’ respective budget recommendations relating to the College include the following:
• Faculty and Staff Salaries—Subject to available funds, a salary bonus of up to 3% would be provided for faculty and staff in December, 2010. FY 2012 salaries are not addressed at this time. Note that the College will be expected to provide its share (now roughly 70%) of any salary action.
• Furlough Day—The budget as passed by the General Assembly requires that all state employees take a single furlough date prior to June 30, 2010 as part of the actions necessary to balance the Commonwealth’s budget for this year. However, institutions of higher education may achieve the necessary savings “through alternative means”. No furloughs are required during the 20010-12 biennium.
• Retirement and Other Benefits—The General Assembly eliminates Governor Kaine’s proposal that current state employees contribute 1%/2% to the Virginia Retirement System and optional retirement plans. The Assembly also fully restores funding for the cash match retirement program by FY 2012. Note that these recommendations apply to current state employees only.
New employees, those hired after July 1, 2010, will be required to pay a 5% employee contribution toward their retirement. The contribution rate for new employees choosing to participate in the State’s optional retirement program rather than VRS is also reduced. Please note that we are still trying to sort out the changes in contribution rates and employee contribution requirements for faculty participants in ORP’s hired after July 1, 2010. We may need to talk with legislative staff to be sure that our interpretation is correct.
• Operating Budget Reductions—The General Assembly recommends no further institution level reductions beyond those included in the Governor’s budget as introduced (for the College an additional $6.9 million reduction in FY 2012). However, the budget as passed does include a $10 million reduction in higher education funding in FY 2012 that has yet to be allocated among the institutions. The distribution of this reduction is likely to occur during the 2011 General Assembly session.
• Federal Stimulus Funds—The Assembly recommends a one-time allocation of $6.9 million in federal stimulus funds to the main campus in FY 2011. In addition to these funds, VIMS would receive $3.1 million in federal stimulus funds. These funds are “intended to mitigate the general fund reductions to the institution, moderate the level of tuition and fee increases, encourage increased student access, and allow the institution to manage its total funding across the biennium.”
• Eminent Scholars—The Assembly cuts in half state matching funds associated with the eminent scholars program. For the College this represents a loss of approximately $400,000. Since these funds are built into the College’s salary pool, this loss of state support will have to be offset with other revenues.
• Auxiliary Fund Balances—The Assembly rejects Governor Kaine’s recommended 5% transfer of each institution’s auxiliary enterprise fund balance to the state general fund.
• Tuition and Fee Policy—The General Assembly places no limits on Board of Visitors authority to set tuition as necessary. This action recognizes the need for institutions to have maximum flexibility in responding to reduced state support. The Assembly does increase the per credit hour capital fee charged to out-of-state students from $10 to $15 to partially support the state’s debt service on academic facilities.
• Student Financial Aid— The General Assembly recommends no institution level reductions in student financial aid. However, the budget as passed does include a $10 million reduction in FY 2012 that has yet to be allocated among the institutions pending a statewide review of this issue.
• Percentage of In-State/Out-of-State Undergraduates—No recommended changes to existing policy.
• Capital Projects—The General Assembly funds the renovation of Tucker Hall using funds saved from previously authorized capital projects across the Commonwealth. It also approves the requested scope change for the College’s utility infrastructure project and authorizes the College’s share of this project, allowing it to remain on schedule. Some funding for maintenance reserve projects is also provided. It appears that funding for the Integrated Science Center 3 project remains subject to the state identifying sufficient debt capacity to support the project.
Additional detail regarding General Assembly actions will be available over the next few days.
From this point, the budget as passed by the General Assembly goes to the Governor for review and approval. The General Assembly will consider any final amendments requested by the Governor at the “veto session” on April 21.
S.E.J.
