VCU’s financial state support will be reduced by $25.2 million with $11.8 million to be offset by federal stimulus funds, leaving a net reduction of $13.4 million, stated university President Michael Rao in an online announcement.
According to John Bennett, the senior vice president for Finance and Administration, Gov. Tim Kaine stated in June that state revenues were not going to be enough to meet the forecast for the 2009 fiscal year. Shortly after the fiscal year closed on June 30, Kaine asked all state agencies and institutions to submit plans to reduce state support by five percent ($8.4 million), 10 percent ($16.8 million) and 15 percent ($25.2 million).
“We saw this coming some time ago,” Bennett said. “We’ve been saving money wherever we could, leaving positions vacant. We’ve been reducing travel; We’ve been doing simple things like deferring equipment purchases. Basically everyone has been doing everything they could.”
The cut of about $13 million will be absorbed without raising tuition in the interim. In other words, there will not be a tuition increase for the current academic year.
Rao issued two online periodic updates on VCU’s financial state. The first update was released July 31 after Kaine announced there was insufficient funding for Virginia state schools. The second update was issued Tuesday after Kaine’s most recent statement regarding the $25.2 million reduction.
“Over the coming days and weeks, VCU will be considering carefully how to absorb these additional reductions in state support without compromising VCU’s core mission, while simultaneously planning for the loss of federal stimulus funds in fiscal year 2012,” Rao stated.
Charles Pyle, the communications director for the Virginia Department of Education, said some of the economic downturn’s effects have been lessened for school divisions because Kaine and the General Assembly have used stimulus money from the federal government.
“The stimulus money has allowed school divisions to avoid layoffs and continue programs,” Pyle said. “Without the funding, we would have seen more losses in school divisions and we would have seen the curtailment of programs.”
According to Bennett, the cuts VCU is projected to experience and the exact dollar amount are still in flux because budget information is based on the budget cuts and stimulus funds the governor proposed Tuesday.
Bennett said the Office of Budget and Resource Analysis will continue its efforts to save money.
In the short term, students are not expected to see an immediate impact, Bennett said. Students might experience difficulties enrolling in high volume classes but not in the short term.
Bennett said he also projects that in the long term the budget cuts will transcribe into a serious situation because the federal money is only going to be available this year. He said he is skeptical about federal money being available next year.
“When the federal money expires, we’re going to have to deal with the overall effect of the total cut, which is masked partly by the federal money,” Bennett said. “We’ve got that situation not just for the cuts that were announced yesterday but for the cuts that were announced several months ago.”