Warner: no more higher ed cuts

By Matt Kelly and Lee Graves

If the General Assembly follows Gov. Mark Warner’s lead, the shadow of deeper budget cuts in higher education this year will pass.

In his address to the General Assembly on its opening day Jan. 8, Warner vowed to veto any budget that cuts funding for education.

He also asked for a renewed commitment to higher education.

“I ask you to join me in working together to strengthen our worldwide reputation for excellence in higher education,” Warner told legislators. “Education is the centerpiece of our plans to grow the economy and open new opportunities for the people of Virginia, no matter where they live.”

In December, well before the Assembly convened, Warner announced budget proposals that spared higher education from another round of reductions. But that good news was tempered.

“The governor’s budget is one in which nothing was given to higher education and nothing was taken away,” said Colette Sheehy, U.Va.’s vice president for management and budget.

Photo by Peggy Harrison

U.Va. employees posed questions to President John T. Casteen III (standing at podium) and state legislators (seated at panel, left to right) Del. Rob B. Bell III (R-58th district), Sen. Creigh Deeds (D-Bath County) and Del. Mitch VanYahres (D-57th district).

For more than a year, state officials have been grappling with a gap in revenue that amounts to nearly $6 billion over two years. Repeated rounds of reductions have led to layoffs at some agencies.

The toll on U.Va. over the two-year budget is $91.5 million in reduced state support, with $51.6 million of that projected in 2003-04. By the end of the biennium, it is projected that the percentage of state funds that support the academic division will have shrunk to about

13 percent of total revenue. Five years ago, in 1997-98, state support accounted for more than 23 percent of academic division revenues.

Creating revenue was the rallying cry at a forum held with area legislators in Newcomb Hall on Jan. 3.

Several people called for increased taxes, including reinstating the car tax, hiking the fees on vanity license plates and raising the income tax. Others cautioned that continued cuts would hurt the University. John Knapp, professor of business and economics and research director at the Weldon Cooper Center for Public Service, said the average U.Va. faculty salary ranked in the 48th percentile when compared with peer institutions in 1999-2000, had fallen to the 35th percentile in 2002 and was projected to drop to the 24th percentile by 2004.

“I think our institutions of higher learning are the crown jewels of the Commonwealth, so we should be careful what we do with them,” he said.

Del. Mitch Van Yahres, D-57th, acknowledged that “the budget is a mess, and we are going to make cuts to programs that should not be cut.”

But he warned that any tax hikes would be rejected by the legislators in an election year.

Van Yahres has proposed a complete return of the car tax, a 5 percent surcharge on corporate and personal income and a phased reduction of the senior citizens’ deduction for incomes over $50,000. If the state does not meet its obligations, the localities will have to pick them up, which could mean increased property taxes, Van Yahres said. He added that he is not optimistic that any of his tax proposals will pass.

He also described tuition hikes as tax increases on students and their families.
Sen. Creigh Deeds, D-Bath County, said Virginia is experiencing a 3.8 percent revenue decline at the same time it’s looking at $500 million in mandated spending increases. And he cautioned that since there’s no money in the budget for programs, legislators will spend most of the session grandstanding on other issues.

Del. Rob B. Bell III, R-58th district, a U.Va. alumnus representing Thomas Jefferson’s old district, joked that he is regarded as the representative from U.Va. He said there is hostility toward the University in the legislature.

The Assembly meets for 46 days this year, and during that time U.Va. officials will seek amendments to its capital plans. Given the state’s financial condition, the University has chosen not to request any additional tax support for operating or capital needs. Requests include lifting constraints on increases in some mandatory student fees and authorizing supplements to several capital projects, including MR-6, the Commerce School and hospital expansion.

“We hope the General Assembly will support the governor and exclude higher education from further reductions,” Sheehy said.