Collegiate Times

Steger center

Correction: This story has been modified from its original version. — Editor's note: Because of production issues, this article was cut off prior to its terminus in today's print edition. The full text may be found below. The Collegiate Times regrets this error.

The university administration has asked departments to plan scenarios to deal with 3 percent or 5 percent reductions in their budgets as Virginia Tech readies itself for a $42 million cut in state appropriations from its general fund.

President Charles Steger, accompanied by Provost Mark McNamee and Chief Financial Officer Dwight Shelton, held two "town hall" meetings Tuesday and Wednesday in Burruss Auditorium to inform the university community about measures the university will take to cope with state cuts for higher education.

"The state is working on its projected shortfall with a budget deficit of nearly $2.9 billion.  The economy is much worse than we thought," Steger said.

As a result, Tech suffers.  In the 2000-01 academic year, the University Division -- which covers all instruction costs -- received $190.1 million in state support.  Based on Gov. Tim Kaine's introduced budget, that number is expected to fall to $159.1 million for the next academic year.  

"I was telling somebody the other day, I felt like I was running around Squires checking the sofas for spare change that might be under the cushions," Steger said.

"Often when I'm talking to people, they say, 'Well, you've got this huge university ... any business organization can take a 10 percent cut.'  You know, if we were fully funded, I'd agree with you," Steger said. "But we haven't been fully funded for a long time."

For example, in 2002, Tech lost 26 percent of its entire state support, or $72 million.  "We have really not recovered from that.  So you have to look at this from the context of cuts after cut after cut, to the point where there's not much left to cut," Steger said.

The University Division alone faces a cumulative general fund reduction of 20.9 percent. Around 37 percent of the instructional budget comes from the state.  In 1990, that number was 70 percent.

"When a business finds that they have a revenue decline, what's the reason?  It's because their business is down.  Well, our business is up," Steger said.  "We have tremendous demand for what we're offering, and we are being expected to do it with fewer and fewer dollars."

Tech has steadily taken on more graduating high school students to accommodate increased demand.  In the last four years, 2,000 additional in-state, undergraduate students were admitted without ever receiving any state support for the effort.

"So when people are talking about 'we want to reward growth in the future,' our point is going to be, what about growth in the past?" Steger said.  "The capacity to take additional students beyond that is simply not there, and we're not going to do it.  We can't do it; it's not fair to the existing students that we have who are here to get a first-rate education."

At the same time, fund appropriations per student are set to fall 40 percent, to $5,929 in 2009-10, from $9,915 in the 2000-01 academic year.  Steger explained how tuition costs must rise to offset the loss.  

Despite all this, the university has done much to streamline programs and manage costs.  In fact, over the last nine years, Tech has actually lowered the average cost of instruction per student from $10,424 to $9,849, adjusted for inflation.  "There are not many companies that could show that level of efficiency," Steger said.

At this stage, there are plenty of unknowns.  Despite the passage of the federal stimulus bill, the rules for the distribution of stimulus money are still in formulation.  "A lot of it we do not know.  It changes every hour or two," Steger said.  

Besides that, since Kaine's last budget projection, Virginia has revealed $800 million more in shortfalls than previously expected.  The state revenue forecast will have to be revised, and any change will likely be for the worse.  "Even if everything works, the economy is going to go downhill before it goes uphill," Steger said.

University Senior Vice President and Provost Mark McNamee outlined several actions the university has taken to address the state's budget cuts.  For the 2009-10 academic year, Tech is planning for permanent general fund reductions of 5 percent of internal allocated budgets.  

In terms of the university's strategy for positioning itself in the long-term, McNamee emphasized the need to evaluate permanent changes in the size and scope of all programs; any administrative activity not essential to fulfilling core missions "could be evaluated for reductions in scale or even elimination," McNamee said.  "You have to think long-term."

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