School Short $2.3 Million

BY KATY BURNELL

The University of Mary Washington has begun slashing its operating expenses, eliminating one-time projects, and freezing most new hires in order to cushion the blow of a $2.3-million budget cut.

Acting President Rick Hurley said he was forced to pursue these cost-cutting measures after Gov. Tim Kaine announced a 5 percent budget reduction for all state agencies in an Aug. 20 address to members of the Virginia General Assembly.  The cuts were deemed necessary when a $234 million shortfall in tax revenue left the state unable to meet its current budget.

Although Kaine asked several public higher-learning institutions comparable to UMW for a 5 percent budget reduction, university officials said an “out-dated formula” used by the State Council of Higher Education in Virginia placed UMW in a 7.5 percent reduction bracket alongside larger schools such as U. Va. and Virginia Tech.
Hurley said that he found the original 5 percent rate “manageable” but said that the 7.5 percent rate was “causing some heartburn.”
“It’s distressing,” Hurley said. “We’re going to have to make some very tough decisions.”

Few final decisions have been made to date, but the school submitted contingency plans for managing the 7.5 percent budget shortfall to Richmond last Friday, according to Rick Pearce, a senior administrator who oversees budget and finance. Hurley will release details of the budget cuts to the UMW Board of Visitors, and the public, this weekend.

Hurley said that the University’s budget crunch was compounded by internal enrollment projections that anticipated higher numbers of out-of-state students. This year the school brought in 50-60 fewer out-of-state students than projected, which follows a three-year trend documented in annual admissions reports.

Pearce said that the loss of anticipated out-of-state tuition dollars resulted in a $530,000 budget reduction in addition to the $1,755,881 re-claimed by the state.

Hurley said that this is the worst of four state budget reductions that he’s faced during his 22-year career in higher education, mostly because the school just finished the best two budgetary years that it has ever had.

“We’ve had two big steps forward with back to back great budget years,” Hurley said. “Now we’re taking one giant step back.”
Damage control for the $2.3 million shortfall requires immediate action by the school, and both Hurley and Pearce said that ultimately, there are only two ways to address the problem.

“You can either raise tuition or you can cut operating budgets,” Pearce said. “Usually, we have to do both.”

Although Hurley acknowledged that tuition and fees will rise again this spring he does not intend to rely on cost hikes to fill the $ 2.3 million void.

“I can’t pass this all off on the students,” Hurley said.
Pearce said that they are considering passing the buck onto individual departments with a flat 7.5 percent reduction in school-wide operating budgets but says he is concerned about the impact that could have on certain areas.

“Our budgets are already lean,” Pearce said. “Some budgets are so tight that they couldn’t take a reduction and still function effectively.”
Decisions about how to manage the budget shortfall will be discretionary on the part of seven senior administrators who call themselves the Core Group of vice presidents.  The Core Group, assembled last year by former President William J. Frawley, will ground their decisions on principles that prioritize expenditures based on their relevance to the school’s mission, according to Acting President Hurley.

Hurley said that he will protect any program that rewards employees for performance. He will also protect certain staff positions, such as those related to campus security, from the hiring freeze. Ongoing searches for faculty members will continue, but Pearce said that any unadvertised openings, especially for non-essential staff positions, will be sidelined for now.

Hurley said that one option he won’t consider is withholding employee’s yearly wage increases.

“I’m not touching them,” Hurley said. “That’d be suicidal.”