UVA President John Casteen announced last week that the University will need to provide the Commonwealth with plans to cut an additional 5 to15 percent from the University’s state general fund tax appropriations—$19 million at most—by July 22. These cuts will come in addition to the $32 million that has already been cut in the past three years.
Some of those recent cuts show in the $2.25 billion budget the Board of Visitors approved for the upcoming fiscal year. In that budget, the state contribution to the University set a record for an all-time low—6.9 percent. The Academic Division’s budget is smaller than last year for the first time in “recent history.” Also in that budget, the University is moving into its second year of a general freeze on faculty and staff salaries as well as new hires.
Last year, the UVA administration used retirements, routine turnover and transfers to remove more than 100 positions. Layoffs, however, are still being avoided.
Casteen explained that he would only resort to layoffs “after all rational and all other remedies have failed,” because, in Casteen’s opinion, they are “bad logic” for higher education institutions and end up costing universities more money than they might save.
In order to put some cost-reducing plans into action, Executive Vice President and Chief Operating Officer Leonard Sandridge met with University vice presidents to explain the steps that need to be taken immediately.
First, the University must avoid new hires. Though Casteen said the University is committed to its core academic and support functions among others, UVA must use reassignments and consolidations of duties as much as possible.
“Every new vacancy is now an opportunity to find innovative ways to do the work without filling the vacancy,” Casteen said.
Second, the University must identify non-core services that can be eliminated.
Third, UVA must defer discretionary spending, eliminate non-essential travel, and encourage conference calls in place of meetings that would require travel.
Though it will not be clear exactly how much money these immediate plans will save until July 22, with these steps along with a search for gifts throughout the summer and fall, Casteen believes UVA will be better able than most to deal with these cuts for two reasons: First, UVA’s administration has been careful to invest in only what it thinks it can get the best return from and by predicting and controlling downturns before they are announced.
Second, UVA uses its tuition funds, state funds, patient fees that cover the entire cost of care, endowment and ticket sales, among other sources of revenue, to pay for the cost of running the University.
In the long-term, Casteen believes these cuts with make the University work to self-sufficient and efficient, but until that time, University officials are focused on attracting non-state revenue and curtailing spending in every possible way.
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