THE UNIVERSITY has found itself to be in even graver financial straits than it had been in recent times. In late December, former Gov. James Gilmore III (R) recommended a 2 percent budget cut for the University, which would result in a total $3.2 million of lost state revenue. The newly elected Governor Mark R. Warner (D) recently upped the cuts to 3 percent and also revised the estimates for future budget cuts to 7 percent in 2003, and 8 percent in 2004 as opposed to Gilmore's recommended 6 percent for both years. This spells great trouble for the University, which will have to find a way to preserve its quality as a top public institution with far fewer resources to work with. Something will have to be done to supplement the University's budget. That something is raising tuition for everyone.
The Commonwealth's budget cut does not exactly come as a shock to the University. The Virginia budget has been terribly imbalanced in previous years, and financial analysts predict a $5 billion deficit if the budget remains similar to that of the past few years. Warner believes that he is doing the right thing by trimming the budget in an effort to balance it. Perhaps he is correct, and the University's impending financial problems are more to blame from previous years of budgetary mismanagement. Only time will tell as the results of Warner's policies will not be known for several years.
Also, according to the University's Budget Office, since the end of the 1980s, the University has been consistently getting less money from the Commonwealth of Virginia each year, as they have regularly reduced the amount going to the University by a few parts of a percent yearly.
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The University has seen that to survive, it somehow will have to come up with more money to try to offset the budget cuts as well as it can. It cannot rely on the Commonwealth for adequate funds, particularly in the present state of budgetary crisis. The University should be applauded for its effort in garnering external donations. The Capital Campaign ending in 2000 was able to raise over a billion dollars and almost rivaled the University of California-Berkeley for the greatest sum ever raised by a public university. The University currently is engaged in attracting more donations for academic and athletic endeavors.
However, the University cannot rely on donations to be the sole supplement for operating budget needs. Many times, donors put conditions on their donations that require them to be used in a certain department, for the renovation or construction of a certain building, or for the creation of a new department. In short, donations do not necessarily provide a general fund for the University to be able to use in areas where its operating budget is being stretched thin. Additionally, the frequency and amount of revenue generated in contributions is unreliable and subject to yearly change.
As hard as it is to suggest, the only way to remedy the current budget situation is to raise tuition rates. Now, although this might be accompanied by uproar from students, there is no other viable solution. Private universities get the bulk of their funding from tuition, and though we are lucky enough to be students in a public institution where our education is subsidized, this reliance on the government also has limited the University's ability to maintain the quality of its programs. Many students chose the University instead of other schools because it was a much better deal than other institutions of comparable academic stature. However, even if the University raises tuition, it will remain far cheaper than other private universities.
Theoretically, for instance, if tuition is raised $1,000 across the board for all 18,000 students at the University, that would result in approximately $18 million of revenue, which would more than fix the current deficiencies in the budget. With such outstanding figures, the tuition hike would be subtler to cover the University's budget problems, but the fact remains that the most realistic way to mend the problem is to raise tuition. In-state tuition should be unfrozen by the state senate, whose obstinacy threatens the feasibility of such a plan. The University can use the additional revenue to supplement its budgetary shortcomings.
Although tuition increases are extremely undesirable, the University must maintain its high quality. This past year, the University fell to number two in overall public universities according to U.S. News and World Report. Some blame the budget deficiencies for the fall in rankings. Unless the University can maintain itself, it is possible that it will continue to slide in the rankings, threatening the prestige of its alumni and educational quality of its students.
(Alex Rosemblat's column appears Wednesdays in The Cavalier Daily. He can be reached at arosemblat@cavalierdaily.com.)
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