Q&A about the Federal Stimulus and U.Va.
Almost as soon as President Obama signed the $787 billion American Recovery and Reinvestment Act (ARRA), an ad hoc committee of University of Virginia faculty and administrators from research, academics and the health system went to work on maximizing U.Va.'s share.
Led by Leonard W. Sandridge, executive vice president and chief operating officer, the committee developed guidelines and procedures for submission of requests to Gov. Timothy M. Kaine for state-administered stimulus funds and to a variety of federal agencies for competitive research grants – no easy task when state and federal governments had not yet established their processes.
By March 25, 2009, Colette Sheehy, vice president for management and budget, and her colleagues had forwarded 20 infrastructure requests to the governor for his review and approval. Subsequently, the governor decided to hold back funds for year two of the stimulus program, so none of those will be funded under ARRA. Instead, the University is raising money through a $250 million bond issue, which was offered on April 15, 2009.
What do you want to know about the University's response to the federal stimulus? Here are some questions and answers to get you started. Send additional questions to UVA Today. New answers will be posted on the Budget Impact/ Federal Stimulus Web site.
Q: When will the University start receiving stimulus funds?
A: The stimulus funds are segregated into a number of different buckets. Some of the funds are allocated on a formula basis; for example, 81.8 percent of the state economic stabilization fund of $983.9 million must be allocated to K-12 and higher education. Of this amount, $126.7 million is included in the revised 2008-10 budget for higher education. The University will receive $10.7 million in fiscal year 2009-10 for general operating budget purposes.
The remaining 18.2 percent of the state funding can be used for education, public safety and other government services. The state may use this money for modernization, renovation or repair of public schools and public or private college facilities. The budget approved by the General Assembly in February allocated $109 million of the $219 million available from this portion of the fund. The University received $1.1 million from this pool to fund the detailed planning for the renovation of Ruffner Hall.
Gov. Kaine is holding the remaining $109 million as a reserve in case economic conditions worsen over the next fiscal year. He chose not to amend the General Assembly-approved budget, which will take effect on July 1, 2009.
Q: How much money will the Commonwealth receive directly?
A: Direct allocations to the Commonwealth of Virginia from the $787 billion American Recovery and Reinvestment Act total $4.8 billion. State agencies like colleges and universities could also benefit from competitive grants awarded directly through federal agencies.
Q: What is U.Va.'s share of that $4.8 billion?
A: The University will receive $10.7 million for 2009-10 and expects a similar amount the following year. The money is intended to hold down tuition increases and make up for some of the state budget cuts from the last couple of years, but it won't make up entirely for the $32 million that's been removed from the state's portion of the University's budget.
Q: What does this money mean for pay raises and tuition?
A: Tuition first: The expectation is that the stimulus money will be used to
help mitigate tuition increases for the next two years. On April 14, the
Board of Visitors approved a 4 percent increase in tuition and fees for
in-state students for 2009-10. This translates to a $372 increase over last
year for an annual cost of $9,672. The fees include: required state E&G
fees; the student activity fee, which actually decreased by $3; and
auxiliary fees, which stayed flat. Without the stimulus funds the
increase would have been twice that amount.
Out-of-state students will see a 7 percent increase of $2,072 to $31,672 for tuition and fees.
If the country continues in a deep recession beyond the two years, however, and state funding continues to decline, we will need to revisit the cost of tuition and look at increases for much-needed revenue. Remember, the University uses tuition revenue to help fund Access UVa -- in fact, 30 percent of the coming year's tuition increase will go toward AccessUVa -- and to pay for basic needs of the institution, including utilities, employee benefits, maintenance and security for buildings. Costs for these basics are rising for the University just as they are for households.
As for raises, the General Assembly did not include a 2009-10 faculty or staff salary increase in its budget. University-funded increases for faculty and/or University staff generally come from tuition funds. Classified staff increases must be authorized by the General Assembly.
Q: This is a federal program. Why does the University have to go through the governor?
A: A portion of the federal stimulus money has been allocated to the state and expects the state to allocate the funding based on federal guidelines. The state is also ultimately responsible for reporting back to the federal government on how the money is spent.
The stimulus model is about job creation, and the governors are accountable for how the money is spent and how many jobs are created and saved. The federal government is trying to come up with a straightforward methodology to track the number of jobs created and retained, so there will be common reporting standards among all funding recipients.
Q: So what does that mean for hiring at the University?
A: It's too early to know the answer to that.
Q: Is U.Va. pursuing stimulus funding directly through federal sources as well?
A: Yes. Competitive federal research grants proposals are currently being submitted directly to individual agencies, and reported after-the-fact to the state on a weekly basis. Competitive non-research related grants are first submitted to the state for approval and then to the appropriate federal agencies for review.
Q: Are there any additional guidelines or rules associated with federal stimulus funding?
A: Yes. Since these funds are designed to jumpstart the economy over a short period of time, the federal agencies are requiring recipients to track the number of jobs created and retained using these funds. The details of how to track those numbers will be forthcoming from the federal government. If you are interested in the requirements of any specific program you can find the available details on the federal website.
Q: President Obama has demanded transparency and accountability for the stimulus funds. How is the University keeping track of everything?
A: Stimulus funds must be tracked separately from regular sources of funding, so submitters are asked to tag their proposals as "stimulus" on the front page. However, there will be additional tracking issues to address after funds are received.