President Kyle's budget update to RU faculty and staff
August 29, 2014
Dear RU Faculty and Staff,
I am writing to update you on the Commonwealth of Virginia’s current fiscal status and the planning that Radford University will be undertaking in order to respond to the situation that we are facing.
As has been reported across Virginia media, and as I discussed during our 2014 Fall Convocation last week, the Commonwealth of Virginia is facing a significant shortfall in revenue. During Governor McAuliffe’s August 15th address to the Joint Money Committees of the General Assembly, he announced that the Commonwealth projects a shortfall of nearly $2.4 billion over the next biennium. According to the Governor and state financial experts, these shortfalls are mostly the result of cutbacks in federal spending, namely by the Department of Defense, which in turn significantly impact Virginia.
On August 27th the Governor’s office directed that the state’s public institutions of higher education prepare savings plans for FY 2015 equal to 5% of our adjusted legislative general fund appropriation and 7% for FY 2016. All other executive branch agencies have also been directed to prepare similarly sized savings plans. The Commonwealth's budget savings plans are to ensure the state operates within a balanced budget as it is required to do.
Accordingly, Radford University is preparing savings strategies equating to $2.3 million for FY 2015 and $3.2 million for FY 2016. The University will be required to submit these plans to the Secretary of Education and the Department of Planning and Budget (DPB) by September 19th.
The Governor’s office has stated that it is the Governor’s expectation that mid-year tuition increases for FY 2015 will not be used as a strategy to offset funding shortfalls and further that the Commonwealth’s institutions of higher education are encouraged to look to alternatives to tuition increases to address the FY 2016 adjustments as much as possible. State support will amount to approximately 40% of Radford University’s FY 2015 E&G budget.
We are also examining the potential fiscal impact of this year’s enrollment results. Enrollment and resulting tuition are critical components of the fiscal vitality of our institution. We will not have final numbers until the September 8th census. Although I am pleased to say that as of today we did very well in enrolling 2,036 new freshmen for the fall semester, we anticipate there has been a decline in enrollments in some other key categories.
Thursday morning I met with the vice presidents to discuss our plan to respond to the Governor’s directives. With the assistance of Richard Alvarez, each vice president was given guidance on how to develop budget savings plans within their respective divisions so that we may submit the university’s plans based on the directions from DPB.
The seriousness of the state’s financial situation and directives from the Governor necessitate that we examine and, where feasible, curtail expenditures in areas such as non-essential travel and currently vacant positions. Each of these measures will be analyzed on a case-by-case basis as we determine what is deemed to be essential to fulfill our mission and until we ascertain more details from the forthcoming savings plans. I believe these decisions are prudent given the circumstances.
The budget situation our state faces is unprecedented in its modern history. The Commonwealth’s fiscal outlook does not mirror the cyclical economic trends experienced throughout many areas of the nation. While several other states are benefitting from an improving economy, the Commonwealth of Virginia is being disproportionately impacted by the federal government’s spending reductions. Until the magnitude of these changes are more fully realized, we should anticipate that this downturn is very likely to be structural and long-term.
I pledge to you that we will continue to work diligently during the coming days and months to minimize as much as possible any disruption to our students, faculty and staff and to the long-range goals for which Radford University’s future success rests. Radford has withstood such challenges before in its 100+ years of service to Virginia, and I am confident that we will persevere once more.
The university’s leadership team and I will keep you informed as additional details develop. Thank you for your support, patience and understanding.