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COR discusses '96-'98 budget

By Susan Trulove

Spectrum Volume 18 Issue 26 - April 4, 1996

Discussion of the 1996-98 budget was the only item on the agenda at the Commission on Research (COR) meeting March 27. Although much of the information has already been reported (Spectrum, March 21), Dwight Shelton, director of the Office of Budget and Financial Planning, did answer questions and explain the process.

In addition to the budget news, Shelton said the hiring freeze will be lifted for higher education by July, and maybe by April. In response to a question, he said, "We got all the money back for the WTA's and most of the positions."

Regarding the budget, Virginia Tech only presented one amendment to the governor's operating budget, and had one amendment presented on behalf of the university, Shelton said. The other amendments were presented by a council of Virginia college and university presidents. The salary increases, technology operating funds, and even the "institution-specific initiative" of funding for programs and staff at the Northern Virginia Graduate Center, all came through the presidents' unified amendment.

Ernie Stout asked whether the $15.3 million approved for 208 and 229 faculty salaries includes general funds and non-general funds. The state provides general funds. The university has to find money to pay for non-General-Fund expenditures. Shelton said 100 percent of the 208 raises-or $12.5 million-comes from general funds, but there is a split in covering the 229 raises. "We have to come up with some non-general funds."

Shelton explained that the technology operating funds are used to pay for local-area networks, wide-area networks, client-server projects, and computers for individual faculty members. He pointed out that Virginia Tech is further along in these efforts than the state's other institutions and the $1,009,000 per year will go into the university's base budget.

He said the state's rationale for turning down the request for student financial aid, which did include graduate-student aid, is that since tuition increases are frozen, costs are not going up. That was also the rationale for not approving tuition contracts, Shelton said. According to the handout, "The tuition policy for Virginia undergraduates shall be established in the Appropriations Act of 1996-98." A tuition increase may be authorized in the second year for students other than Virginia undergraduates.

The university received $1.5 million for enrollment growth and $1.6 million for inflationary changes for nonpersonal services costs. It is the first time since 1982 the university has received funds for inflationary changes, Shelton said

(To be continued)

The $960,464 received for operation and maintenance of new facilities includes the Northern Virginia Center, that will open in December, and the new engineering and architecture building. "It's not enough, but it will address a significant portion of the cost," he said.

The $2 million for the Agricultural Research Stations comes as a result of an amendment presented on behalf of the university, Shelton reported. He said 22 new positions at the stations have also been authorized, although, he added, "I'm not sure they can fund 22 positions."

Virginia Tech's administration "fought hard" to keep the Equipment Trust Fund, Shelton reported. "We almost lost it." The governor's budget only recommended $4.9 million. Virginia Tech submitted an amendment for $18.5 million and received $15.1 million.

"It's a very important program," he said. A large portion of the funds must be spent on technology, "which is how we spend ours," Shelton said.

Several commissioners asked about the "Unique Military Activities" category, for which Virginia Tech received $178,600.

"As part of the court settlement in the VMI lawsuit, a Virginia Cadet Program was established. It includes VMI, Virginia Tech's Corps, and the Mary Baldwin program," Shelton said. "All have to be funded equally-$1,900 per student. The state approved some growth but not as much as we requested." He said the funds are not available to the educational and general fund, but are in a separate category.

In the capital budget, the most significant item is funding for the Advanced Communications and Information Technology Center, Shelton said. In the governor's budget, the source of funding was contingent upon the sale of surplus property, but the presidents' council pushed to make a more solid source of revenue and a bond fund was established. In addition to the $10 million from the state, $5 million in private gifts is in hand, another $3 million in gifts is expected, and $10 million is anticipated from the federal government, Shelton said.

In response to questions, he said that $3-million instruction-and-research blanket authority allows borrowing the money. "It allows us to take care of unforeseen things," such as an opportunity to build a facility that will be reimbursed by a research sponsor.

He also said the $376,000 for the biotechnology infill is the final amount for the Fralin building, anticipated but not covered in the previous appropriation.

And the $6.8 million for maintenance reserve is for repairs, such as to roofs and sidewalks.

Asked where the lottery money goes, Shelton said lottery proceeds go into the General Fund, although they were originally going to pay for capital construction for higher education. "We paid for the Wallace Hall expansion that way. But the lottery has helped the General Fund, and the General Fund has helped us."

Shelton said there is no indication that Allen will veto any part of the budget bill.

There was also discussion of the payday shift.

The alternative to shifting pay dates through the next two years to effect a 4.35-percent increase for the staff and an average 6-percent increase for the faculty in the first year and 2 percent in the second year was to have no raise, Shelton said. "What they have done is figured out how to pay in 23 pay dates what would have been earned in 24 pay dates."

What about the hope to have raises of more than two percent next year? "There is a general acknowledgment that more revenue is needed to meet all the pressures," Shelton said.

Lenwood McCoy, university controller, expressed concern that there will be an education problem in preparing people for the payday shift. "If I have a mortgage payment due on the fifth, next March I will have to pay it on the fifth, then again on March 21 because the next payday will not be until April 7.

Stout said, "By October 1997, we'll be back on schedule, but will have dropped a payday." Joe Schetz said, "But you'll get a check for two more weeks when you leave."

Regarding other legislative actions, Shelton said there will be additional decentralization, giving the university freedom in more administrative areas.

He concluded, "The budget process is ongoing. We are gathering information on unavoidable costs and then how additional funds will be used."