University President John T. Casteen III addressed the Faculty Senate yesterday regarding the impact of state revenue shortfalls on the University.
With the current economic slump exacerbated by the Sept. 11 terrorist attacks, state revenue is behind by about 2.4 percent - approximately $100 million - for the first quarter of the budget year.
This large shortfall could have significant consequences for the University, already struggling through the repercussions of the state budget freeze that prevented University faculty from receiving salary increases this year.
The state legally is required to operate under a balanced budget every month. Higher education funding cuts, like the 2 percent salary cut made by former Gov. Douglas Wilder in 1991, are one method the state has at its disposal to deal with shortfalls.
"We may ride through this one without a crisis, but all the signs of 11 years ago are there," Casteen said.
Other methods that may be used to offset the shortfall in funds are state withdrawals from its "rainy day fund" and potential economic aid provided by the federal government.
Although the state has not yet called for any cuts in higher education funding, Casteen said the University must prepare by carefully considering only essential priorities for discretionary spending and by working with University deans on contingency plans in case cuts become necessary.
University officials need to have "some idea of what to do if an emergency happens" like in the early '90s, he said.
The University, however, is much stronger financially than it was a decade ago, and relies much less on unpredictable state support, Casteen said.
The long-term solution to dependency on state funding is to aggressively cultivate private donations and grants. The ultimate ideal would be a "self-endowed" University.
With that goal in mind, Casteen said that, despite the economic slump, there has not been a decline in philanthropic giving to the University.
But Casteen stressed that nothing can be known for certain yet.
"With a new governor, a new House of Delegates, and a new economy, we're all going to have to learn fast," he said in reference to the upcoming Nov. 6 state election.
Another factor contributing to financial woes is a possible increase in in-state enrollment.
"We anticipate being asked to be able to take in more state students," Casteen said. "We are delighted to see more students, but we want to have the money" to support them, he added.
Of particular concern to Faculty Senate members is the lack of University salary increases this year following the state budget freeze. The freeze withheld approximately $125 million from higher education faculty and staff salary increases statewide.
"I'd like to see that problem solved," Casteen said.
The lack of salary increases already has had harmful affects on the retention and recruitment of new faculty, Faculty Senate Chairman Robert Grainger said.
Faculty did express optimism that the Senate could play a role in seeing a positive resolution to the state's financial situation.
"Unlike during the recession 10 years ago, the legislature seems to be much more understanding that faculty are a vital part of the state economy," Grainger said.
Faculty Senate members also expressed concern for proposed capital projects, including the ambitious new Arts & Sciences proposals for the replacement of New Cabell Hall and the construction of a new building across Jefferson Park Avenue from New Cabell.
The new Arts and Sciences proposal is a relatively high priority and most likely will be unaffected by funding cuts, but "if we go into a recession, this could change, but I can't see that happening," Casteen said.
Read More
Administrators and faculty paint conflicting pictures of May 4 encampment clearing
By Cecilia Mould | 20 hours agoThe details contested between the town halls included the clarity of the University’s tent policy and the presence of suspicious individuals at the encampment.
Faculty Senate calls for an external review of May 4 clearing of encampment
By Priya Kommu | 20 hours agoSenators had questions about the lack of direct communication between University administrators and the students and faculty present at the encampment.
University's last minute update to EHS tent regulations document creates confusion, frustration
By Arshiya Pant | 21 hours agoRyan said that he did not believe there was confusion among protesters about the permissibility of tents due to warnings from University officials on several occasions to remove tents.
