Most news in Virginia's public colleges and universities this year has not been about the real work here and in other colleges. Newspapers across the state have written little about brilliant scholars who reshape our world and conceive new ways to live in it. Instead, this is the year of the most serious budget crisis in Virginia's history. Tomorrow, we can vote to take a first step toward changing that news.
Virginia's budget problems predate the technology collapse or the recession that followed Sept. 11. First, Virginia took on financing much of local government in 1998 when it began phasing out an unpopular local car tax. At first, the massive surplus that former Rep. Gov. George Allen left behind disguised the cost of this buy-out. Then, as the surplus dwindled and tax revenues shrank, this new cost (approaching $1 billion per year) became a massive, unfunded state obligation. Sooner or later (sooner, in fact) the state had to hit the wall.
Second, Virginia withheld news of its revenue shortfalls for so long that by late 2001 it had an unrecognized deficit. Gov. Mark R. Warner and the General Assembly addressed the then-known problems earlier this year, when state agencies absorbed budget cuts. Our first cut was $4.8 million on the former General Fund (i.e., tax) appropriation of $166.3 million.
Third, as the recession cut state revenues, the state could not predict tax income accurately. Quarter after quarter the state had to reduce spending. The shortfall for the biennium is now some $6 billion or 27 percent of the predicted tax revenue. For the University and for our local economy, where we are the largest employer, this means losing (by June 2004) some $98.2 million since 2001-02 ($51.6 million in 2003-04 alone).
Local blue-collar families know already more than they ever wanted to know about this recession. No fewer than 1,000 non-University jobs have already disappeared. The closing of Technicolor's local plant will cost no fewer than 1,250 more. This is deadly serious. By the end of the fiscal year, the state will cut 31 percent of the original 2001-02 appropriation. Yearly tax support for the University will fall to $116.4 million from $166.3 million. This year's reduced tax appropriation of $125.9 million is only 9 percent of our total budget. No other state furnishes so little of its flagship university's budget. Private universities with large hospitals often get more from their states.
In 2001-02, the University of North Carolina-Chapel Hill had $24,178 in state money for each in-state student. The University of Michigan had $17,082 per in-state student. The University of California had $22,309 at Berkeley and $21,888 at Los Angeles. Our state appropriation per in-state student for 2001-02 was $12,695. It is now no more than $9,711, and it will drop to $8,860 next year.
The General Obligation Bond proposal on tomorrow's ballot matters to anyone who studies, works or lives in central Virginia because it triggers one mechanism (among several) to get us back on our feet. Since the GOB of 1992, the state has not provided regular support for new buildings, remodeling or even maintenance. This year's GOB proposal passed by huge margins in both the House and the Senate. All three state-wide elected officials have campaigned for it.
The GOB matters here because it provides $68 million for infrastructure (heating and cooling facilities, restoring decaying buildings) and new construction for medical research, for nanotechnology and for the College. It meets critical needs at Piedmont Virginia Community College. Donors have been generous to the University since 1990. Yet certain obligations, including upkeep of state buildings, really do belong to the state.
State bonds are now marked at rates below predicted inflation. These bonds make especially good sense. Even assuming no growth in the state's economy, the estimated pay-back cost amounts to only .08 percent of the state's future tax revenue. Anyone who has refinanced a mortgage or consolidated student loans will recognize this as a good deal.
So I ask you to vote, and to urge your friends to do so also. If you live in Virginia, call home and make sure that your family and friends understand that every community in Virginia needs this GOB.
Very few votes may be decisive this year. In a time that has seen the worst of human nature, a vote for education is a vote for the best -- for knowledge, self-determination and human freedom. Help us pass it.
(John T. Casteen III is president of the University.)
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