The state of Virginia's total budget has increased by 59 percent during the past 10 years, according to a report released Monday by the General Assembly's Joint Legislative Audit and Review Commission. Of this increase, the University's budget ranked in the top four areas that saw the biggest growth.
When adjusted for inflation, however, the report showed that the overall increase in Virginia's budget was 19 percent, the same average rate of spending growth as that of the other 49 states.
The draft of the report showed that there was a "20 percent growth in general funds and a 103 percent growth in non-general funds" during the entire period. General funds represent the revenue obtained from income and sales tax, and non-general represents the revenue obtained by other methods, including federal funds.
After being adjusted for population increase and inflation, the general funds actually seemed to have declined by 10 percent during the same fiscal period of 2001-10. This decline - although difficult to perceive because of the 51 percent inflation-adjusted increase in non-general funds - corresponds with the 13 percent decrease in the general fund during the more recent years of 2008-10.
Consequently, the state's general fund is contributing less and less to the University's budget, cutting a total $36.8 million since the 2007-08 academic year, University spokesperson Carol Wood said. Only 6 percent of the University's operating budget is comprised of state funding currently, and 10 percent of the academic division's budget.
Nevertheless, education was one of the three areas of state government - along with health care and transporation - that saw the majority of the $13.8 billion budget growth. As a result, 53 percent of the state budget growth occurred in four agencies, namely the Department of Medical Assistance Services, Department of Education, the University of Virginia - including departments such as the Medical Center - and the Department of Social Services, the report stated.
Charles Pyle, director of communications for the Virginia Department of Education - said the tendency for budget to focus on education arguably is justified given that the state is obligated to meet certain standards of learning to receive funding from the federal government. Thus, Pyle said, "because the cost of providing that program is borne by the state," more money must be spent on educating the 1.2 million K-12 schoolchildren in Virginia.
The budget increase in health care also was predictable, as the federal government continues assessing and increasing the number of people eligible for Medicaid, said Del. David Albo, R-Fairfax County, a member of the audit commission of JLARC.
Steve Ford, the director of Policy and Research at the Department of Medical Assistance Services, agreed with this reasoning.
"I'm not surprised that the Medicaid program would have high growth rate because the Medicaid program is driven by utilization and enrollment, so as people enroll, it goes up," Ford said.
These financial distributions may have potentially harmful positive results, in Albo's opinion.
"Medicaid is going to bankrupt the state, and when people wonder why we don't have money for roads and why we don't have money to get in-state kids into universities, it's because a large portion of it [the budget] is going to Medicaid," Albo said.
JLARC's next meeting is scheduled for December, when updates on the state budget situation will be provided with the presentation of the spending report and semi-annual VRS investment report, according to the JLARC website.
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