State Council of Higher Education in Virginia proposes additional funding, prospects look bleak


In 1980, the state of Virginia supported 42 percent of the College of William and Mary’s operating budget. State support has decreased recently, with state funding only constituting less than 13 percent of the operating budget in 2012, and both local lawmakers and school officials are not too optimistic about prospects for increased funding.

The State Council of Higher Education in Virginia released its budget recommendations to the General Assembly in November, stating that public universities and colleges need an additional $109 million for fiscal year 2014.

Higher education in Virginia did see an increase of $258 million in funding for fiscal year 2013. The suggested additional increase in funding by SCHEV comes in an attempt to hold down tuition increases, raise faculty salaries, and fund parts of the 2011 Higher Education Opportunity Act.

But College Vice President of Finance Sam Jones is not planning the school’s budget with any expectations of increased state support.

“It is unlikely that the Commonwealth will have sufficient funds to address all of these areas given the state need to support K-12 education, Medicaid, and transportation,” Jones said in an email. “While we expect to get some funds from the state, the College’s success will continue to depend on its ability to become more productive — reallocating funds to higher priorities, raise private funds, and increase tuition.”

Tuition increases have become a staple of budget announcements for the College. In 2012, in-state tuition and fees increased by 3.3 percent; this was the lowest tuition increase at the College in more than a decade. The tuition increases will likely continue to counteract the decrease in state funding.

“While both endowments and state funding will improve, funding lost during the ‘Great Recession’ [is] not likely to be restored,” Jones said. “We do expect that institutions will raise tuition, though the rate of increase is likely to be lower than in the recent past.”

The 2011 Higher Education Opportunity Act supported increasing in-state student enrollment at state universities and colleges. In addition to that Act, the College agreed to enroll an additional 150 in-state students over a four-year period. As of yet, the increase in students has not significantly increased costs.

“At this point, revenue generated by these additional students have covered the cost associated with these students,” Jones said. “While this works on the margins, it would not hold true if we had a major increase in enrollment.”

Over the summer, College President Taylor Reveley wrote op-eds in the Richmond Times-Dispatch and the Virginian Pilot discussing funding options for higher education. One option he proposed was the recognition that out-of-state students are essential for state universities and colleges.

“…for some state schools, I see no realistic substitute for political acceptance of (a) out-of-state undergraduates (who pay market value and are vital to operating budgets), (b) meaningful in-state tuition increases for financially able families, and (c) affordability through need-based aid, funded partly by tuition, for less financially able families, including some well into the middle class,” Reveley wrote in the editorial.

But with a 65-35 ratio of in-state to out-of-state students, the College is limited in its reliance on out-of-state students and the tuition they provide.

Del. Mike Watson, R-93, has met with Reveley to discuss his ideas.

“There may be some merit to the idea of allowing the universities to increase the number of out-of-state students to bring additional revenue, but for me, personally, in order to support that, I would like to see an expansion of the articulation agreements between the community college system and the four-year universities. … I can’t say, just across the board, that I support increasing the number of out-of-state, because after all, it’s a state college, but I understand that funding has been restricted,” Watson said.

The articulation agreements allow students to attend a community college for two years and then transfer to a state university or college with guaranteed admission, granted that the student meets certain requirements.

But for now, ratios of in-state and out-of-state students remain the same and the prospect of gathering more revenue from additional out-of-state students appears to be slim in the next few years.

The additional $109 million recommended by SCHEV for fiscal year 2014 would send $71.5 million toward instructional support and to create incentives for colleges to increase in-state enrollment and encourage science, technology and health programs. $10.8 million would go toward pay raises for faculty, $10.2 million for the maintenance of buildings and $27 million for undergraduate financial aid.

Watson stressed the importance of SCHEV’s recommendations but questioned whether the state could secure funding for all of the proposals. Watson noted that, if funds become available, he would support initiatives to help reduce tuition increases and to support programs for majors demanded in the job market.

But Watson noted that potential mandates from the federal government and an increase in Medicaid spending might threaten the potential for increased funding to higher education.

“Our ability to make additional investments is going to depend on a number of things,” Watson said. “Obviously, the economy and any budget surplus is important. As a result of the election, and this isn’t a partisan thing, it’s realistic, but we now know we’re going to have to deal in some with the mandates placed on the state by the Affordable Care Act.”

Additionally, Watson stated that proposed cuts to defense spending could hurt Virginia’s budget even more.

SCHEV also recommended that the state should continue to allow higher education institutions to use tuition revenue for financial aid, but the proposal has drawn some critics.

Gov. Bob McDonnell has questioned the use of tuition revenue for financial aid, saying that using tuition revenue for financial aid may reduce the financial burden on some families but places the burden of tuition increases onto others.

The College of William and Mary used $18,505,170 of tuition revenue for financial aid in fiscal year 2012, with $11,474,657 going to undergraduate financial aid and $7,030,513 to graduate and professional students at the College. Director of Financial Aid Ed Irish supported the use of tuition revenue for financial aid since other sources for funding tend to be less reliable or readily available.

“We have had to rely increasingly on tuition revenue to offset higher costs, as the General Assembly allocation for student aid has grown slowly,” Irish said in an email. “Financial aid continues to be a priority with Development, but the money from that source is usually more long-term, rather than being immediately available.”

McDonnell will consider SCHEV’s recommendations for a proposed amendment to the second year of the budget, but Watson noted that the question of funds for higher education remains in the air.

“Until we see the answers from those kind of things, we’re not really going to know what our budget situation is going to be like,” Watson said. “I would like to see improvements in those two key areas, but it’s just a matter of seeing if we’re going to have enough money.”