General Assembly approves money committee reports

The Senate Finance and House Appropriations Committee met last Sunday to announce their budget amendments to the "caboose bill" for the fiscal year ending June 2010 and the Introduced Budget Bill for the 2010-2012 biennium.

As reported in The Roanoke Times, higher education did not receive any additional reductions. The members of the General Assembly and Gov. Robert McDonnell believe that higher education, having lost over 25 percent of its state support since the fall of 2007, should not be reduced further.

Both committees also recommended eliminating former governor Timothy Kaine’s proposal to transfer to the state’s General Fund up to 5 percent of auxiliary reserve fund balances (non-general fund). Institutions and students throughout the commonwealth, including many at Virginia Tech through the Student Government Association, recommended against the transfer of these funds to the state general fund. Such funds are obtained through student fees intended to support very specific program areas such as parking services, athletics, and residence or dining halls that do not receive state support.

The House amendments, while not reducing support to the system of higher education, reallocated funds across the institutions. The House provided an additional $6.8 million in additional stimulus funds for Fiscal Year 2011-2012 for Virginia Tech and removed general funds of $4.5 million for Fiscal Year 2012-2013. The House bill creates a new allocation each year of the biennium for research equipment including $2.2 million for Virginia Tech.

No changes in the allocation to individual institutions were made by the Senate Finance Committee for operating support. However, the Senate created a $2.50 per credit hour capital fee for Virginia students similar to the capital fee paid by nonresident students. This would cost a resident student carrying the average course load of 14 credit hours per semester an additional $70 annually.

A most welcome development included a recommendation from both committees for a three percent bonus for state employees in December 2011.

Virginia Tech President Charles W. Steger thanked the House and Senate stating that “We understand the severity of the state’s fiscal situation and appreciate the General Assembly’s attention to this important issue. Our dedicated faculty and staff are long overdue for salary increases. We hope that the revenue situation will improve over the next year so that this bonus can be made a permanent increase.”

In other areas of employee compensation, the House Appropriations Committee removed the one day furlough proposed for this fiscal year and does not include any additional furlough days in the 2010-2012 biennial budget. The House also restored the deferred cash match program (valued at $480 a year to employees who participate) and eliminated the proposal for current employees to contribute to their retirement costs.

Del. Lacey E. Putney, chairman of the House Appropriations Committee, commended state employees in his remarks to the committee members, stating that state employees had done more with less during this financial crisis, have continued to work hard, and have been partners in helping to find ways to reduce costs and deliver services more efficiently for the people of Virginia.

Unfortunately, the Senate Finance Committee budget continued the Kaine administration proposal where employees contribute to retirement. Employees in the Virginia Retirement System or the optional retirement systems would contribute one percent of base salary in Fiscal Year 2011 and two percent in Fiscal Year 2012. The senate also included three furlough days in each year of the biennium. Steger and other university officials have conveyed to legislators the problematic difficulty enacting furloughs in the university environment when most of the salary budget comes from sources other than state taxpayers.

Budgets from both chambers proposed a number of benefit changes for employees hired after July 1, 2010, including employee retirement contributions.

The continuing dire budget situation has forced painful cuts in all areas of state government. In an effort to solve a $4.5 billion revenue shortfall, legislators and the money committees have proposed eliminating numerous state services, programs, and agencies.

In addition to the severe budget reductions already taken by the university and the Virginia Cooperative Extension the past two years, the House budget includes language mandating the reorganization of cooperative extension by “eliminating programming in family and consumer services, community viability, and lawn and garden programs statewide. “ Further the language requires the closure of urban offices and the consolidation of 13 rural offices in western and central Virginia with an estimated budget impact of $2.5 million in Fiscal Year 2012. The elimination of this language and the associated budget reduction will be a major priority for the university with the budget conferees.

Other areas of university operations would also be hit. Under the House plan the state match for the Eminent Scholars Program would be eliminated including $385,000 for Virginia Tech. The House recommends elimination of all community service grants for Virginia public broadcasting operations including more than $103,000 for Virginia Tech’s WVTF public radio station.

On Thursday, these budget amendments were adopted by their respective houses. As is customary, each house will reject the amendments of the opposite chamber and send them into a conference committee for development of a conference report.

The conference committee must complete its work by midnight on Tuesday, March 9. Until then, the university will be focusing its efforts on urging with the conferees and their staffs to restore the cuts to cooperative extension, maintain no further reductions to higher education, continue to fully support state employee retirement contributions, the 3 percent employee bonus, cash match program, and eliminate all furlough days.

The session is scheduled to adjourn on Saturday, March 13.

Fornash is director of state government relations at Virginia Tech.