Gov. Timothy Kaine issued an executive spending reduction plan yesterday to compensate for the projected $973.6 million 2009 fiscal year shortfall, and the University will feel the effect of any approved budget cuts across the board, University officials said. A significant portion of the cuts, however, will not be implemented unless approved by the commonwealth’s General Assembly when that body reconvenes in January.
The announced cuts add to the previous reduction of $1.7 billion in the commonwealth budget since last October. Kaine stated in the executive report that the new plan seeks to reduce costs by making government operations more efficient while protecting important state services such as K-12 education. Kaine plans to balance the budget by reducing state spending by $348 million, withdrawing $400 million from the Revenue Stabilization Fund and reducing agency spending by $323 million, among other things. Changes will also include about 570 state job layoffs, the elimination of 800 unfilled positions, and a freeze on new hiring, according to the report.
The University, meanwhile, will see a 7-percent reduction of general funds, which amounts to about $10.6 million, according to the executive report. Leonard Sandridge, executive vice president and chief operating officer, said the University has been anticipating these cuts for several months and previously was asked to prepare for budget cuts ranging from five 15 percent.
The budget cuts will be “felt across the institution,” said Colette Sheehy, vice president for management and budget.
Sandridge noted, though, that any budget cuts within the University as a result of the reduced state funding will be made responsibly. He added that departments and schools within the University have already been looking into ways to cut spending without disrupting instructional services. Overall, he said, most students will likely not see any changes or losses because of the reduction plan.
In addition to the budget cuts, the previously proposed 2.4-percent raise for state employees will not occur, Sheehy said, noting, however, that Kaine will likely reevaluate the salary increase in the future. University Board of Visitors members deferred salary increase discussions last week in anticipation of this decision.
Sandridge, meanwhile, acknowledged that the cuts will be disruptive to management teams and employees at the University, since “two-thirds of the budget is people.” There are no plans for layoffs, he said, but existing vacancies will not be filled.
To cope with the cuts, the University will also reduce expenditures on equipment and defer costs to the future, Sheehy said. Changes within each department and school will vary across the University.
Because of the current condition of the economy, Sandridge said he expects additional cuts in the future, and added that the current ones are permanent.
“Even moving some of those 2009 reductions forward, we are looking at [a] shortfall of more than a billion dollars in 2010,” Kaine spokesperson Gordon Hickey said.
Hickey added that Kaine will begin evaluating the 2010 fiscal year shortfall immediately. The recommendations for 2010 fiscal year will be released in mid-December, Hickey added.
University spokesperson Carol Wood said she does not know exactly what is in store for the University in terms of any 2010 fiscal year budget cuts. Those decisions, she said, would be dependent on Kaine’s budget.
“Everyone expects that there will be additional cuts,” Wood said.
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