Impact of Latest State Budget Cuts on University
September 11, 2009
To members of the University community:
On Tuesday, Governor Kaine announced additional statewide budget reductions totaling $1.3 billion. The tax funds appropriated for all four-year colleges and universities were reduced by 15 percent. This translates to a $19 million reduction for U.Va. in 2009-2010 in addition to the $32 million already cut over the past three years.
The Governor plans to use ARRA stimulus funds he had reserved for fiscal year 2010-2011 to partially offset the reduction in the current year, bringing the current reduction to $10.3 million, or 8 percent.
Yesterday, I wrote to our vice presidents and deans reminding them that the University had included a $1.8 million reserve in the budget for this year in anticipation of additional budget cuts. We will apply the $1.8 million to further reduce the new budget cuts that must be passed on to schools and operating units.
When tuition is added to the General Fund in the Academic Division budget, the overall reduction in the current year will be less than 3 percent.
In order to meet the required state budget reduction, schools and libraries will be asked to reduce state expenditures by 2.5 percent on average in the current fiscal year. Administrative units will be asked to reduce state expenditure budgets by 3 percent on average.
The Governor has proposed a one-day furlough for all state employees in the current fiscal year. We have many unanswered questions and are seeking more information about how the furlough day will be implemented. We are advised that it may be several weeks before we receive detailed guidance, which we will communicate to you once we receive it.
In his announcement, the Governor also proposed that the state reduce the contribution rate to the Virginia Retirement System for the fourth quarter. Because the system is a defined benefit program, the cut will not affect the benefits of those who are in the VRS.
When the University has faced funding difficulties in the past, a primary goal has been to avoid layoffs. Our goal has not changed. To reduce the likelihood of future layoffs and protect our workforce, we will continue to leave some positions open, reduce our employment levels through attrition and look for ways to consolidate the work of units where appropriate.
We always place priority on protecting the quality of the University's academic and health care programs. Even in tough times, we intend to fully meet the needs of our students and patients. We know all of you are working harder than ever. We are extremely proud of the effort everyone is making to help us get through this difficult period. Please know that your dedication and commitment to the University are greatly appreciated.
As always, we welcome your suggestions and questions.
Leonard Sandridge
Executive Vice President and Chief Operating Officer