Spectrum - Volume 19 Issue 25 March 27, 1997 - Ridenour outlines budget issues at forum

A non-profit publication of the Office of the University Relations of Virginia Tech,
including The Conductor , a special section of the Spectrum printed 4 times a year

Ridenour outlines budget issues at forum

By Netta S. Smith

Spectrum Volume 19 Issue 25 - March 27, 1997

Executive Vice President Minnis Ridenour discussed funding and other financial issues at the March Faculty and Staff Senates Open Forum. (Editor's note: Ridenour addressed many of these issues at the March Faculty Senate meeting.)

"Most problems with funding started at the end of 1989," Ridenour said. At that time, Virginia ranked 28th in the nation in state funding support. "Last year, we were 43rd in the country," he said. "But in 1997, we should start moving back. We're already up to 39th."

Over the five-year period that began in 1989, Virginia Tech lost $46.5 million in General Fund revenues. "We offset $16 million from tuition and fees," Ridenour said. "But we couldn't offset it all."

In 1989, all students combined paid 38.5 percent of their education. In 1995-96, they paid 56 percent. "This represents a significant shift in funding," Ridenour said, "from the state to the students."

New funding will allow the university to move the student portion of tuition down to 51 percent. Out-of-state students have been hardest hit. During this period, the university has raised out-of-state tuition by 91 percent.

Virginia Tech is near the top in tuition, but has the lowest comprehensive fee in the state of Virginia. "We also have the lowest room and board, "Ridenour said. "We use low fees and room and board as a way to make Virginia Tech attractive."

Since 1989, Virginia Tech has taken 51 percent of all the enrollment growth in higher education in the commonwealth. "That means there's about $10.8 million that we should have that we don't have," Ridenour said.

Ridenour said that the university has no control over staff salaries, which are set by the General Assembly in response to recommendations in the governor's budget. The university is working to get faculty salaries, over which they have more control, up to the 60th percentile of salaries when compared with a group of 20 benchmark institutions.

"In 1989, we were at the 42nd percentile, striving to get to the 60th," Ridenour said. At that time, Virginia Tech ranked eleventh out of the group of 20. By 1995-96, the university had fallen to number 17, and to the 20th percentile.

Ridenour cited the lack of growth in the General Fund over recent years. In 1960, General Fund growth was 15.4 percent. In the 1970s, it was 11.6 percent, In the 1980s, it still was 10 percent. "But from 1990-95, we had a real drop in the growth at the state level," Ridenour said. One year, there was even an actual decline in the General Fund. "Now, we're in the range of 4-6 percent growth in state-taxpayer dollars, with the projection being an average growth of 4 percent."

The gap between General Fund revenue and needs has been addressed by "one-time fixes," Ridenour said. This has included using lottery monies and rebates from Trigon. There is a "major funding need at the state level that has to be addressed in the future."

Ridenour credits the Business Higher Education Council (BHEC), a corporate group from across the state, with recent turn-arounds in increase in faculty and staff salaries. "The group has become very powerful," Ridenour said. "In 1995, they helped turn around a further General Fund reduction."

The BHEC proposed a $400-million increase in funding for state education for the 1996-98 biennium. "We [all state higher-education institutions] got $200 million in the 1996 session and $30 million in the 1997 session," Ridenour said. The BHEC "has established in the minds of the legislature the importance of getting to the 60th percentile for faculty salaries." If the current patterns continue, Virginia Tech will be at the 60th percentile in two years.

He predicted that the state will continue to see growth in the General Fund, "but nothing like the '70s and '80s." He thinks that, at some point, the tuition freeze will be lifted and "we will get some relief on tuition." But, he added, "we will have to be a lot more dependent on external funds, like the Capital Campaign. We have to focus on raising private monies, find self-generating revenues, and be cost conscious--to be wise about how we spend monies."

When asked about the "brain drain"-loss of faculty members to institutions that can offer higher salaries-Ridenour said "we're working hard to get the salary average moving up again." He said under new guidelines colleges and administrators will have more freedom to negotiate salaries when hiring new faculty members.

In response to a question about tuition waivers for the families of faculty and staff members, Ridenour said it would be hard to oppose such a program. But, he added, "In a time of serious budget constraints, to waive fees has a serious price tag. How would it be paid for? I wouldn't be very optimistic that we will get this as a state program."

The change in funding patterns will require us to administer the university differently from in the past, Ridenour said. "We will have a lot less flexibility. I think we will have a bright future, but we're going to have to work at that to make it happen."