Budget deal allows BOV
to set tuition
By Matt Kelly
University will have more control over tuition increases under
budget approved by the General Assembly.
two-year, $50.5 billion spending plan also contains a one-time
bonus for classified state employees for fiscal year 2002-03 and
sets aside money for a pay raise in the second year.
the plan, which Warner must approve or modify, the Board
of Visitors will be authorized to set in- and out-of-state
undergraduate tuition rates, ending the state-imposed tuition
freeze introduced by George Allen in 1996. Colette Sheehy, vice
president for management and budget, said the state recommends
capping tuition hikes at 9 percent a year. Her office will likely
recommend increases of between 5 and 9 percent to the Board of
Visitors at its April 4-6 meetings. This week, Virginia Tech was
the first of the states universities to implement a tuition
increase 9 percent for both in-state and out-of-state students.
the coming fiscal year, classified state employees will have a
choice of a 2.5 percent bonus, payable Dec. 1, or two weeks off
with pay. The bonus would be taxed at 40.4 percent. Bonuses are
taxed at a federally required flat rate, as supplemental income,
since they cannot be taxed in a specific pay period. The federal
rate is 27 percent, while state withholding is 5.75 percent and
FICA withholding is 7.65 percent. There is no additional tax implication
on the time off, which would have to be used by Dec. 31, 2003.
Employees would have to elect their option in writing.
plan also provides a pool of money equivalent to 2.5 percent of
faculty salaries to be used for one-time bonuses or other incentive
programs to retain faculty.
the budgets second year, $101 million has been designated
for pay increases for state employees. This would increase employees
base salaries, but would not take effect until December 2003,
for the last six months of the biennium.
University also must absorb a $25.4 million cut in state operating-fund
support in the first year and $33.3 million the second year. Even
with a tuition hike, Sheehy estimated that the Universitys
administrative support departments would have to cut their budgets
by 4.6 percent and the schools by 4.3 percent.
In addition to the base cuts, there are reductions in maintenance
and equipment money.
bad enough that we have a $25 million [operating] cut, but when
you add up the other things, they become real money, too,
funds are divided between funds to operate new buildings and reserve
money to maintain other structures. New building maintenance money
for U.Va. was reduced by nearly $1 million, to $2.4 million, meaning
that there may not be any state funds to maintain new buildings
at the Darden and
schools. Sheehy noted that the schools of Medicine and Engineering
and Applied Science are already paying some money toward the maintenance
of MR5, a recently opened medical research building.
maintenance reserve fund for U.Va. has been more than halved,
from $13.4 million for the current biennium to $6.2 million for
will do the highest-priority projects first, said Sheehy,
noting that the University currently has a $110 million backlog
in maintenance projects. We have to maintain the buildings.
We will have to find the money somewhere else.
Among the projects deferred is refurbishing two corners of the
deck around the Rotunda. Sheehy said that two corners have already
the economy improves, I hope this is one place that they add money,
for the Universitys equipment fund has been reduced from
$15.2 million in the current biennium to $10.9 million in the
state has also changed its approach to interest income. The state
has been returning interest income from fees paid in advance,
such as dorm deposits. Under the new plan, the state would keep
the interest money from the last quarter of the current fiscal
year and the first year of the new biennium, returning the money
the following fiscal year if state revenues permit.
the first time, the Medical Center will be allowed to keep its
interest income. For the next two years, however, it has to turn
over to the state $2.5 million or its actual interest income,
whichever is less.
Medical Center also received a $1.2 million cut in indigent care
aid in the second year of the biennium. During the first year,
there is a general reduction in Medicaid allocations, with no
indication yet on how this will affect the Medical Center. In
the last fiscal year, the Medical Center received $35 million
in indigent care aid from the state.
state legislature also approved a bill authorizing the state to
issue bonds to pay for capital projects, including $68 million
in state funds for construction projects at U.Va. If Warner approves,
it will go to a statewide referendum in November. Among the U.Va.
projects are MR6, a Materials Science and Nanotechnology building,
an upgrade to the Cavalier electrical substation, the South Lawn
Project, renovations to Fayerweather Hall and Gilmer Hall teaching
labs, and new chiller plants.
state also increased student financial aid by $133,892.
Why cant faculty members whose salaries are funded
entirely by private funds receive pay increases?
Colette Sheehy, vice
president for management and budget, responds: It has
been the Universitys policy to treat all employees,
faculty or classified staff, in the same manner in areas
of compensation, regardless of what source pays their salary.
Since in many cases an employee doesnt choose from
which fund source he or she gets paid, it seems inappropriate
in hard economic times to penalize those who are paid from
state funds while granting pay raises to those who are fortunate
enough to be paid from private money. In the end we are
all state employees.
of the University community are invited to send questions
about the impact cuts in state money will have on U.Va.
to Inside UVA at email@example.com.