In an attempt to expunge a $1.35 billion shortfall for the fiscal year ending June 30, Gov. Tim Kaine is eliminating $21.8 million of state support from Virginia Tech's general fund.
Kaine moved $10.1 million in stimulus funds earmarked for the year 2011 one year earlier to 2010 in an effort to cushion the impact on Tech. Accelerating the use of these funds allowed Kaine to lessen this fiscal year's cuts to all state institutions of higher education by as much as 50 percent.
"By doing that, he's able to mitigate the impact of the higher education institutions so that the total cuts to all the higher education institutions just average 7.7 percent," said Gordon Hickey, press secretary for the governor.
However, the shift means that Tech will not be able to count on the expected 2011 stimulus allocation to shore up already-existing cuts.
"They're reducing our base budget by $21.8 million but they're offsetting it with ... monies that were supposed to be given to us in the next fiscal year," said Larry Hincker, university spokesman. "The net effect is that it's just going to make the hole that we have to fill the next fiscal year that much larger."
The $21.8 million cut amounts to a 15 percent reduction in Tech's general fund. Including the 2011 stimulus funds, the net reduction for Tech is approximately 8 percent. Cuts to public universities ranged from 5 percent to 14 percent.
No layoffs for state universities have been mandated in the latest cuts. However, a one-day furlough, or unpaid leave of absence, is also being mandated for all university employees in the latest plan from the governor.
The mandate eliminates 0.4 percent of the university payroll, netting between $1.2 million and $1.5 million on top of the general fund reduction. "We're not exactly sure how that's going to be effectuated," Hincker said. "All we know is that the plan is to reduce your salary by ... 1/260."
In restructuring their budgets to accommodate the latest loss of state support, universities are advised in the budget reduction plan to "give consideration to preserving the core mission" of the university.
In 2008, $8.9 million was cut from the university's academic budget, a 4.4 percent reduction. After having $42 million cut from the general fund earlier this year, the university was asked to prepare 5, 10 and 15 percent budget reduction scenarios for an additional cut.
"This is the worst-case scenario," Hincker said. "We've got a 15 percent budget reduction."
Across three fiscal years, Tech's base budget has been reduced by $68.5 million. The university experienced $72 million cuts over four years earlier in the decade.
"This is very significant reduction to higher education, and frankly it's a very significant loss of revenue for the state. The total shortfall for the biennium is $7 billion. That's a lot of money," Hincker said.
It is the fourth time Kaine has cut parts of Virginia's two-year budget. As early as next week, Kaine will be looking forward to the next biennial budget.
"We know that the economy isn't doing all that well, and while it seems to have bottomed out, it isn't exactly racing to the top," Hickey said. "We're going to have to look at some serious budget considerations as we go into the next biennium."