Budget reductions risk pursuit of quality

by Charles Steger '69

As I prepare these remarks, senior management here and at other Virginia state colleges and universities are preparing scenarios to accommodate major reductions in state appropriations. At Virginia Tech we are looking at losses in base funding of 13 percent in the coming fiscal year and about 17 percent in the following year. Adding in the other losses in building repair and equipment budgets, that translates into losses of more than $40 million by the second year of the biennial budget.

Cuts like these represent a lot of money no matter how you count. Putting the cuts in perspective, consider this: the base operating budgets for our two largest colleges, the College of Arts and Sciences and the College of Engineering, are $57 million and $36 million, respectively.

The state of Virginia is currently experiencing historic revenue shortfalls and we will do our part to make do with less. But the current policies harken back to a similar situation in the early 1990s when the state balanced the budget by using higher education. At that time higher education comprised about 12 percent of the state budget but absorbed about 40 percent of the reductions. Now state agencies are cutting from 4 to 8 percent from operations, but colleges must cough up more. While we can raise tuition (which no one likes to do), there are both ethical and market limits. Even after the tuition increase of nine percent (for both in- and out-of-state students) approved by the Virginia Tech Board of Visitors on March 18, we still must carve about $25 million from operating and other budgets.

Our current governor did not create this problem. Governor Mark Warner has said that Virginia's government has structural problems with revenue collection and taxation. We certainly hope that our elected leaders will finally address these fundamental issues. But other fundamentals need attention.

First, Virginia must come to grips with the old axiom you can't get something for nothing. We have a denial of reality in this state. The state's own analysis showed that Virginia colleges and universities are underfunded by $240 million annuallyeven before this most recent carving. Understanding the nature of investment and concomitant return, business leaders have been for years urging the commonwealth to increase its support of higher education.

It hurts to know that we will lose millions and millions in base funding next year, when the state already has said that we are underfunded by $24 million annually (Tech's share of the aforementioned $240 million shortfall). The state will never have anything more than merely adequate colleges and universities if it continues to fund schools at a level less than 80 percent of other states. (The former director of the state's higher education board noted that, based on quality and performance, Virginia has much better colleges than it deserves.) With the latest round of reductions, we likely will rank among the 10 lowest states in per capita appropriations. That won't buy excellence.

The timeline for institution building or the slide into mediocrity is measured in decades, not years. The doors will not fall off next year by the loss of funding. Students still will apply for admission. But over the long term, chronic underfunding erodes the foundation of quality and excellence. It will have an effect on the kind of student attracted to Virginia Tech, the quality of faculty, or, indeed, whether the doors get repaired.

I know that about half of you reading these words reside outside Virginia. However, the message is the same for all of us. No matter where you live, give some thought to how and whether your state talks the talkwhether there is a commitment to funding quality schools and universities ... or whether there is the resolve to invest in the physical infrastructure or the human capital of tomorrow's America.