Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, April 14, 1995 TAG: 9504140003
SECTION: CURRENT PAGE: NRV-1 EDITION: NEW RIVER VALLEY
SOURCE:
DATELINE: BLACKSBURG LENGTH: Medium
Right now, Tech - the New River Valley's largest employer and Blacksburg's reason for being - is squirming. Trying to combat a deficit caused by too few out-of-state, higher-tuition-paying students; unfunded mandates passed down by the state; and a continuing loss of state funds, the university isn't sure what it will do. Possible solutions range from closing the school over Christmas break to furloughing or laying off employees.
The latter would be a "worst case scenario," one which would have a definite impact on Blacksburg, said Town Manager Ron Secrist.
Were Tech to pose layoffs, "those dollars [spent by staff and faculty] would not be available in the local economy," Secrist said. Such a tactic would have a gradual impact on the town's economy, affecting retail sales, real estate fortunes and restaurant success.
Secrist points to Tech's grappling with budget cuts over the past five years as an example of how the school's problems have outside effects. Town revenues have remained fairly flat for several years. Four years ago, when Montgomery County reassessed the value of property and land countywide, property values rose about 20 percent. When the county did its reassessment last year, values went up only 8 percent.
"There clearly has been an impact," Secrist said. Of course, in the early '90s the whole economy in general was in recession, "but Virginia Tech is the engine that drives the local economy."
Just three weeks ago, Tech executive vice president Minnis Ridenour sat on a panel along with Secrist, discussing the Blacksburg economy. Ridenour quoted Tech statistics: 12,465 employees, including faculty, staffers, student wage earners and graduate students who receive stipends; $261 million in payroll expenses.
Last year, a loss of 19 faculty members equated to a loss of more than $1 million in money that could have gone into the Blacksburg economy, Ridenour's notes showed.
How Tech copes will impact the economy in different ways.
Dave Chapman, owner of Arnold's restaurant, which caters largely to a student clientele, hopes Tech won't try to make up its deficit by trying to compete more with the merchants in its hometown.
The past few years have seen several restaurants open up on-campus; that hurts off-campus restaurant owners by keeping students on Tech grounds, Chapman said.
"The business that I'm in demands a lot of foot-traffic," Chapman said. "Hopefully they don't look further to make their own ends meet [by] offering more services on-campus."
Bill Ellenbogen, owner of Bogen's restaurant, said it isn't just restaurant owners who feel the pinch secondhand. Instead of buying a book, a student might go to the library, he said. He might wear his jeans with holes in them a little longer, or share a CD with a roommate instead of buying it.
Higher tuition rates would likely mean less pocket money for students, both men said. If furloughs occur, the economy would lose even bigger chunks of money.
"My wife's in the real estate business. I know that's a big concern of hers," Chapman said.
"I'm sure it would hurt the whole New River Valley," said Jean Simmons, president of the New River Valley Association of Realtors and an associate at ERA Townside Inc. Realtors in Blacksburg. "That's where so much of our business comes from."
Ellenbogen said local business owners - particularly those located close to the school - have sympathized with Tech's people all during the budget cutting process, and the shortfall news is just another reason to pay attention.
"This isn't new; this is a continuation of a pattern," he said. "When we read the newspapers, we're all distressed as the faculty and staff are."
by CNB