University President John T. Casteen III addressed the Faculty Senate yesterday regarding the impact of state revenue shortfalls on the University.
With the current economic slump exacerbated by the Sept. 11 terrorist attacks, state revenue is behind by about 2.4 percent - approximately $100 million - for the first quarter of the budget year.
This large shortfall could have significant consequences for the University, already struggling through the repercussions of the state budget freeze that prevented University faculty from receiving salary increases this year.
The state legally is required to operate under a balanced budget every month. Higher education funding cuts, like the 2 percent salary cut made by former Gov. Douglas Wilder in 1991, are one method the state has at its disposal to deal with shortfalls.
"We may ride through this one without a crisis, but all the signs of 11 years ago are there," Casteen said.
Other methods that may be used to offset the shortfall in funds are state withdrawals from its "rainy day fund" and potential economic aid provided by the federal government.
Although the state has not yet called for any cuts in higher education funding, Casteen said the University must prepare by carefully considering only essential priorities for discretionary spending and by working with University deans on contingency plans in case cuts become necessary.
University officials need to have "some idea of what to do if an emergency happens" like in the early '90s, he said.
The University, however, is much stronger financially than it was a decade ago, and relies much less on unpredictable state support, Casteen said.
The long-term solution to dependency on state funding is to aggressively cultivate private donations and grants. The ultimate ideal would be a "self-endowed" University.
With that goal in mind, Casteen said that, despite the economic slump, there has not been a decline in philanthropic giving to the University.
But Casteen stressed that nothing can be known for certain yet.
"With a new governor, a new House of Delegates, and a new economy, we're all going to have to learn fast," he said in reference to the upcoming Nov. 6 state election.
Another factor contributing to financial woes is a possible increase in in-state enrollment.
"We anticipate being asked to be able to take in more state students," Casteen said. "We are delighted to see more students, but we want to have the money" to support them, he added.
Of particular concern to Faculty Senate members is the lack of University salary increases this year following the state budget freeze. The freeze withheld approximately $125 million from higher education faculty and staff salary increases statewide.
"I'd like to see that problem solved," Casteen said.
The lack of salary increases already has had harmful affects on the retention and recruitment of new faculty, Faculty Senate Chairman Robert Grainger said.
Faculty did express optimism that the Senate could play a role in seeing a positive resolution to the state's financial situation.
"Unlike during the recession 10 years ago, the legislature seems to be much more understanding that faculty are a vital part of the state economy," Grainger said.
Faculty Senate members also expressed concern for proposed capital projects, including the ambitious new Arts & Sciences proposals for the replacement of New Cabell Hall and the construction of a new building across Jefferson Park Avenue from New Cabell.
The new Arts and Sciences proposal is a relatively high priority and most likely will be unaffected by funding cuts, but "if we go into a recession, this could change, but I can't see that happening," Casteen said.
Read More
Severe flooding cancels classes, trips for U.Va. in Valencia study abroad program
By Bertie Azqueta | 49 minutes agoAdministrators canceled classes for students studying abroad in Valencia beginning Oct. 29 due to transportation concerns. Classes resumed Monday.
Remembering a tragedy: A look at the aftermath of Nov. 13 over the past year
By Grace Thrush | 23 hours agoOver the past year, several developments in the aftermath of the shooting, from an independent review of the University’s response to a settlement for the victims’ families, have transpired.
Out-of-state students endured a series of obstacles in obtaining absentee ballots
By Bennett Galper and Jackie Bond | YesterdayFour states — Missouri, Mississippi, Oklahoma and South Dakota — require notarization to either receive an absentee ballot or have it be officially counted.
