PRESIDENT RUNTE SHARES BUDGET NEWS WITH CAMPUS
Old Dominion University President Roseann Runte sent the following letter to faculty and staff on Dec. 21, 2001.
Dear Colleague:
Governor Gilmore presented his proposed 2002-2004 Biennial Budget to the members of the General Assembly on Wednesday, Dec. 19. It reflected the current economic downturn within the Commonwealth and our country, and very conservative revenue projections for the next several years. As a consequence, all agencies, including institutions of higher education, will be faced with the necessity of making budget reductions.
The proposed budget is not welcome news, and it will necessitate significant reductions and impacts upon our programs and services. The current fiscal situation in the Commonwealth is bleak, thus we must bear some of this budget reduction burden until the economy improves. Keep in mind that this is the first phase of the process, and both Governor-elect Warner and the General Assembly will have the opportunity to amend the budget.
The University will be working diligently with our legislators and Governor-elect Warner's transition team to ensure that Old Dominion's issues are heard. You may wish to contact your legislators and express your concerns about the budget. I am hopeful that our collective efforts and an upturn in the economy will improve the institution's fiscal situation in the future.
The following summary provides the major components outlined in Governor Gilmore's proposed operating and capital budgets:
OPERATING BUDGET (FY2002-2004)
Faculty and Staff Salary Increases
The budget provides for a 2 percent compensation increase for faculty and staff, which would be effective November 25, 2002.
Other New or Increased Funding
Additional funding would be provided to improve access to higher education through increased need-based financial aid for in-state undergraduate students. For Old Dominion University, these allocations would increase our total financial aid allotment by $794,126 and $984,716 over the next two years and soften the impact of tuition increases for our neediest students.
A portion of the request for the Virginia Microelectronics Consortium would be funded to support a four-year phase-in of a comprehensive undergraduate microelectronics program statewide. This is a joint endeavor among institutions, and Old Dominion's share would be $96,347 in FY2003 and $187,713 in FY2004.
Budget Reductions - Current Year
Governor Gilmore's budget proposed a 2 percent reduction ($1.7 million) for the current fiscal year 2002. The revenue generated by our enrollment increases this year, which we planned to use for retention and research, will be used to offset the reductions and soften their impact this current fiscal year. The remaining shortfall of approximately $750,000 will be distributed among the operating budgets; your Vice Presidents have provided you with your targets for this year.
Budget Reductions - Next Biennium (FY2003 and FY2004)
The proposed budget reductions increase an additional 4 percent for each of the next two fiscal years. These base-budget reductions will total 6 percent ($5.1 million) of the University's general fund budget. After the holiday break, you will receive specific guidance on your budget reduction targets and the institution's budget reduction process.
Tuition Increases
Governor Gilmore has proposed lifting the current freeze on tuition increases for in-state undergraduate students. However, his proposed budget assumes a minimum 6 percent, across-the-board increase for our students, and this additional revenue ($2.7 million) would be used to fund the projected revenue shortfall of the Commonwealth. Further tuition increases could help to offset a portion of the budget reductions, but tuition increases for in-state undergraduate students could not exceed $100 per semester or $200 for the year. The proposed budget allows little flexibility for institutions to use the additional revenue to offset budget reductions or to fund initiatives that could directly benefit students.
Other Reductions
The University's share of the Equipment Trust Fund would be reduced from $2.9 million per year to $1.7 million per year.
CAPITAL BUDGET
Engineering and Computational Sciences Building and Equipment
In October, Governor Gilmore restored the general funds to construct the new Engineering and Computational Sciences Building. This proposed budget would substitute these general funds with debt financing through revenue bonds, which do not require voter approval. In addition, these funds could provide new funding of $6.56 million to pay for the projects' equipment needs.
Other Capital Projects - General Obligation Bond
The proposed budget has identified our highest capital priorities for inclusion in a large General Obligation Bond package. Pending voter approval, funding for the following projects would be available in FY2004:
- Renovation of the Technology Building $10.8 million
- Renovation of the Batten Arts and Letters Building $11.4 million
Other Capital Projects
Governor Gilmore's budget includes non-general funding authority for additional land acquisition ($1 million) and authority to finance $7.8 million of renovations to our current student residence facilities through a 9(c) bond program.
Maintenance Reserve
The University receives funding for major repairs to our existing buildings through the Maintenance Reserve Program. In the current biennium, we originally received $2.9 million, which was subsequently reduced. The proposed budget would provide $1.5 million for Maintenance Reserve projects for the next biennium, a roughly 50 percent reduction.
This is not the news that I would like to share with you at this time of the year, but I wanted to keep you informed and knowledgeable of the impact this proposed budget would have upon the University.
CONCLUSION
I will provide frequent information over the next several months regarding the budget process. In the meantime, all hiring, equipment purchase and travel are frozen immediately. Each request for exemption will be considered on a case-by-case basis by a committee of the Vice Presidents and President.
I hope you will have a nice holiday despite the gloomy news. We will all work together to mitigate the effects of the financial cutbacks and to obtain better treatment in the final version of the budget, which will be approved by the General Assembly next year.
Sincerely yours,
Roseann Runte
President