President’s Posts

How the commonwealth’s budget affects VCU

The Virginia General Assembly last week passed a $96 billion budget for 2014-16 biennium that, for the most part, held steady current state spending levels. However, an unexpected $1.5 billion shortfall in state revenue means the commonwealth’s budget will be much leaner than was expected earlier in the year.

This affects Virginia Commonwealth University — one of the state’s largest entities — in several important ways.

In May, our Board of Visitors adopted a university budget that strategically allocated VCU-controlled revenues while including contingent language for any state funds. Therefore, the core of our budget, including our educational and general program funds, remained largely unaffected by the last-minute changes to the state’s budget.

However, we anticipated receiving several additional appropriations, designed to boost specific areas of need within VCU, which were not included in the state’s final budget.

Among them:

No funds were dedicated for employee raises, and funding for certain post-employment benefits was reduced from 100 percent funded to 90 percent.

Expected inflation updates to hospitals, including those comprising the VCU Health System, were removed. Similarly, fiscal year 2016 indigent care payments to the two state teaching hospitals were also reduced. In addition, Medicaid was not expanded, leaving 400,000 uninsured patients ineligible for the program. This could result in a $300 million loss in federal funds over a five-year period for the VCU Medical Center, beginning in 2017.

Proposed appropriations for the VCU Massey Cancer Center, the VCU Parkinson’s and Movement Disorder Center, and the Commonwealth Center for Advanced Logistics were omitted in the final budget.

Also omitted were anticipated funds tied to enrollment and graduation performance, funds for student financial support, and funds to develop a research infrastructure network.

All told, the $15 million in additional state appropriations that we anticipated was trimmed to about $4 million. In addition, the state is withholding interest earnings and the transfer of credit card rebates that VCU and other institutions of higher education are entitled to receive. Fortunately, given the uncertainty of the state budget, VCU’s fiscal year 2015 budget did not assume the use of those funds.

Though this is a disappointing end to the long budget season, our mission and our rapid progress as one of America’s premier urban, public research universities remains unchanged. The innovation, dedication and expertise of my colleagues will continue to elevate VCU in profound ways, and we will not miss a beat.

Meanwhile, I will continue to leverage this presidency, use my podium and work with my partners inside and outside the university to help secure the resources that VCU needs.

My thanks to Vice President Bill Decatur and his team in Finance and Administration, and Executive Director Mark Rubin and his team in Government Relations for their leadership and advocacy during the state’s historic budget session.

I look forward to continuing to work with the entire VCU community to realize our ambitions in the final three years of Quest for Distinction and to continue to elevate our university nationally.

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