Friday, May 20, 2022

Public universities on the Peninsula gear up for budget cuts, state funding during the coronavirus

The Sir Christopher Wren Building sits at the head of the W&M campus, just before you cross into Colonial Wililamsburg. (WYDaily/Courtesy of William & Mary)
The Sir Christopher Wren Building sits at the head of the W&M campus, just before you cross into Colonial Wililamsburg. (WYDaily/Courtesy of William & Mary)

As Virginia reconsiders its budget with impacts from the coronavirus pandemic, public universities brace for the potential millions in lost funding.

Wendy Kang, director of finance policy and innovation for the State Council of Higher Education for Virginia, said the potential budget changes mean approximately $340 million to $370 million of additional money the General Assembly had originally planned to allot to higher education will most likely be removed from the budget.

Kang said that’s different from cutting funds from the budget because it would’ve been additional money. If the pandemic were happening on a timeline after the funds had been appropriated following July 1, then they would be cuts.

How much

But even with that in mind, many publicly funded universities are preparing for a large percentage of unstable revenue support coming from state funding.

“It’s going to have a big impact,” said David Tandberg, senior vice president for policy research and strategic initiatives for the State Higher Education Executive Officers. “But it will vary significantly by institutions and the extent of state appropriations cut they receive.”

The College of William & Mary receives about 11 percent of its operating support from the state. The consolidated budget was just under $500 million in fiscal year 2020, with $55 million coming from state support, said Amy Sebring, W&M’s vice president of finance and technology.

At Christopher Newport University, state funding makes up approximately 22 percent of the university’s budget, said Jim Hanchett, spokesman for the institution.

But there isn’t a definitive idea of how much state funding will be cut from these institutions’ budgets and changes are having to be made to mitigate other financial impacts.

“It’s a huge issue,” Tandberg said. “So this crisis we’re facing is even more difficult than what institutions experienced under the great recession and the reason is not only can they anticipate endowment reductions and cuts to state appropriations, but they’re being hit with other budgetary challenges, like revenue from events than have been canceled and enrollment reductions.”

William & Mary has already started preparing its community for the different ways it will try to cut costs for the upcoming school year. In an email to students on April 24, W&M President Katherine Rowe said the school is projecting a $13 million to $32 million loss in revenue through August 2020.

The losses come from areas such as summer programs, athletics and study abroad.

Those losses come even without the reduction in funding from the state.

“This week [of April 24], the General Assembly reconvened to finalize legislation passed this year, including the state budget,” Rowe wrote in the email. “At present, all new expenditures have been unallocated. We will have a clearer picture of this impact when the state closes the books for this fiscal year and revises its revenue forecast later this summer.”

Community college impact

Budget cuts have already taken place at Thomas Nelson Community College

For fiscal year 2021, the college previously reduced its payroll expenses by more than $4 million because of the “new reality of reduced enrollment” and “uncertain state funding,” Steven Carpenter, vice president of finance and administration for TNCC, wrote in an email.

He said the TNCC’s 2021 budget had also considered the reduced enrollment rates and the slight reductions in state funding.

“Because we had already planned for reductions in both areas, we are in a decent position to weather this disruption with limited additional reductions,” he wrote. “Unless the state makes drastic reductions from the budget just passed in May; or if enrollment is significantly down from current year, we are set to begin FY21 with no further reductions.”

Carpenter said they anticipate higher expenses for personal protective equipment and other safety equipment but feels the CARES Act will cover the costs.

Steven Felker, director of institutional research and effectiveness at TNCC, said the coronavirus has impacted enrollment in two major shifts.

“The first is an increase in unemployment, which would typically lead to increased demand for short-term workforce training programs offered by community colleges,” he wrote in an email. “The second is a shift to essentially all online education, which can be a barrier to some students who may not have access to a computer and/or reliable high-speed internet service.”

He said there’s a lot of uncertainty regarding unemployment such as how long the situation will last and how much the unemployment rates will continue to rise and when TNCC can return to in-person classroom instruction.

“Given these uncertainties, Thomas Nelson is considering several different enrollment scenarios for this upcoming year, and is planning in such a way as to be prepared for whichever one actually occurs,” he said. “Thomas Nelson has confidence that its low cost and high quality of online instruction will appeal to many prospective students during this challenging time, and is well prepared to serve an increasing number of students in the coming months if that enhanced demand occurs.”

An uncertain future

For 4-year public universities, the funding changes impact how they plan for a long-term budget as well and how much they depend on public funding in the future.

Kang said one aspect that complicates state funding is that there is nothing in the constitution or code that mandates the state to fund higher education.

“So it can change prioritization for higher education,” Kang said. “So some things that are required amounts, the state must prioritize such as Medicaid…sometimes that can impact the considerations for funding, especially knowing an area that can be cut has additional revenue sources such as tuition and fees.”

When funds are so uncertain, like they are now, institutions have to reassess how to plan for future funding. For example at William & Mary, staff have adopted a “Mission-Critical Budget Review” that analyzes which university activities have the most significant effect.

So as Virginia continues to analyze its budget and funding for higher education, public universities are bracing for impact.

“It’s a painful time all the way around for public higher education,” Tandberg said.

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Julia Marsiglianohttp://wydaily.com
Julia Marsigliano is a multimedia reporter for WYDaily. She covers everything on the Peninsula from local government and law enforcement agencies to family-run businesses and weather updates. Before WYDaily, she covered Hampton and Newport News for WYDaily’s sister publication, HNNDaily before both publications merged in December 2018. Julia was born in Tokyo, Japan and moved to Long Island, New York in 2001. A true New Yorker, she loves pizza, bagels and good Chinese food. Send comments, tips and other tidbits to julia@localvoicemedia.com. You can follow her on Twitter at @jmarsigliano

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