The following excerpts come from the Governor’s prepared remarks, which you can see by clicking here:
In higher education, our October actions reduced schools’ 2009 base budgets by 5 to 7%. For 2010, I have increased the reductions to 15% for all schools, except the community colleges and Richard Bland, which will have the reduction level increased to 10%.
My introduced budget includes nearly $26 million in additional money for need-based financial aid. This money will bring every institution up to at least 65 percent of the target financial aid level that has been recommended by SCHEV. My introduced budget also includes increases in the Community College Transfer Grant program, helping more students begin their higher educations at a two-year college and then transfer to a four-year institution to get their degree at a lower cost to their families…
While there are many challenges ahead of us, we can look forward with hope. Even in this atmosphere, our excellent schools, colleges and universities produce the ideas and graduates that will keep driving our economy. The advances we have made in career and technical education and our restructuring of workforce efforts under the community college system enable us to better prepare our dedicated workforce. Our international connections through the Port of Virginia and Dulles Airport give us a unique ability to be a leader in global commerce. These strengths and many others of our beloved Commonwealth continue to be our ticket to a prosperous future.
The snow flurries that appeared yesterday in parts of the commonwealth were not the only indication that Virginia’s winter may be long, dark and bitter.
According to a report from AP reporter Bob Lewis, General Assembly leaders are beginning to learn some of the grim details that confront Virginia’s budget.
…budget writers got their fullest look Tuesday at a darkening fiscal crisis that will soon force them to cut government priorities once held harmless.
“You are at the juncture where all the low-hanging fruit is gone,” members of the House Appropriations Committee learned from the chief of the committee staff, Robert Vaughn.
Virginia’s Community Colleges have already absorbed two different 5% cuts this year – a reduction of $40 million – despite the fact it is continuing to shatter previous enrollment records.
It is hard, however, to find much of a silver lining in the information being presented to law makers:
In the hard-hit real estate sector, Virginia in October saw a tenfold increase in the number of home foreclosures since 2004. People who held onto their homes have seen their equity wither the past two years. One telling measure from the Washington, D.C., market is that the percentage of people who forfeited deposits they had put down on contract to buy a house increased from 4 percent in 2005 to spike at 66 percent in August, largely a measure of buyers who could not secure financing, according to a George Mason University analysis.
Legislators were told to expect a grim 2009, expect a recovery late that year or early 2010, then a more robust economic expansion in 2011. Other glimmers of hope:
_Fuel prices continue to fall as the nation enters the winter heating season.
_There are signs that the worst of the housing slump may be over. And homes are more affordable now than they have been in three years.
_Military spending continues to buttress Virginia’s economy with an 18 percent increase in the past quarter. Virginia is second only to California in military spending.
We will learn more December 17 when Governor Kaine offers his budget amendments to a joint meeting of the General Assembly money committees.
Posted by Jeff Kraus
At the General Assembly, the House of Delegates and State Senate have each introduced their own versions of the state budget. Considering that there are billions of dollars at stake, there are a lot of details to consider.
Funding for Virginia’s colleges and universities remains a point of disagreement between the governor and the two houses. Today’s Washington Post story on the budgets highlights the difference:
Last week, Kaine proposed to close the shortfall by reducing money for school construction by more than $100 million, cutting aid to local governments by 5.4 percent and reducing grants to public colleges and universities by 2 percent.
The Democrats on the Senate Finance Committee largely agreed with Kaine, approving a budget that calls for cuts to higher education and a significant transfer from the reserve fund.
The House Appropriations Committee decided instead to balance the budget through other spending cuts and a series of accounting maneuvers. With those savings, the House proposal restores most of the money for higher education and local governments that Kaine had proposed cutting.
It’s not too late to be heard on this issue. If you feel strongly about the issue of cutting college budgets, you should contact your delegate and state senator and tell them.
Posted by Jeff Kraus
The dust has settled from Tuesday’s election of all 140 seats in the Virginia House of Delegates and the Senate. So what does it mean for higher education in Virginia?
The Democrats won four seats in the Senate, increasing their majority membership in that body to 21-19. The Democratic majority in the Senate bodes well for Governor Tim Kaine and his legislative agenda including the biennial budget and public pre-school for 4-year old children. Kaine is slated to introduce his 2008-2010 budget on December 17.
J. Chapman “Chap” Petersen (D) defeated Sen. Jeannemarie Devolites Davis (R). George Barker (D) won in the race against incumbent Jay O’Brien (R). John Miller (D) defeated Patricia Stall (R) in the 1st District’s seat currently held by Sen. Marty Williams (R). Sen. Nick Rerras (R) lost to political newcomer and pediatric neurologist Dr. Ralph Northam (D).
Two retiring Republican Senators, John Chichester and Russ Potts, chaired powerful committees in the Senate. Chair of Senate Finance Chichester will likely be succeeded by the senior Democratic member of that committee, Charles Colgan. The chairmanship of Senate Education and Health, formerly held by Sen. Potts, could go to either Sen. Richard Saslaw (who should become Senate majority leader and is supposedly interested instead in the chairmanship of Senate Commerce and Labor) or Sen. Edward Houck.
The House now has a 54-44-2 Republican majority. Prior to the election, the numbers were 58-40-2. One of the key committee chairmanships that will soon be determined is that of chairman of the House Appropriations Committee, currently occupied by retiring Delegate Vincent Callahan. Contenders for the job of HAC chairman are rumored to include Independent Lacey Putney from Bedford and Republican Phil Hamilton of Newport News.
Posted by Ellen Davenport
Over the last few days, members of the Senate Finance Committee and the House Appropriations Committee have come to Richmond to be briefed on the September revenue report and receive an overview of the Governor’s budget reduction plan. During the House Appropriations Committee meeting on Oct. 15, a spirited exchange occurred over the Governor’s plans to close the $641 million budget shortfall in the current biennium with $300.3 million in budget reductions and other measures including up to $303 million from the Revenue Stabilization or “Rainy Day Fund.”
Any use of the “Rainy Day Fund” must be approved by the General Assembly. Speaker of the House William Howell and House Appropriations Committee Chair Vincent Callahan had issued a joint press release last week regarding a letter written by Callahan to the Governor and a memorandum from Appropriations staff director Robert Vaughn to Appropriations Committee members. The correspondence questioned why $170 million in carry forward dollars had not been used to balance the budget shortfall, and suggested that it could be used to reduce potential reliance on the “Rainy Day Fund.” Coverage of the meetings is contained in stories from the Times-Dispatch, Daily Press, and Washington Post.
The $170 million carryforward list includes projects and commitments by many of Virginia’s higher education institutions, as legally allowed under the higher education restructuring act which passed the General Assembly in 2005.
The Senate Finance Committee met today and Senate members had few questions about the Governor’s budget reductions and the September revenue report.
Reconciling the budget shortfall will be done via the Governor’s “caboose” bill for 2006-2008, which will be released at the same time as the Governor’s biennial budget for 2008-2010, on December 17. State agencies and higher education institutions are currently completing budget submissions for the next biennium. Meanwhile, the Governor’s Advisory Board of Economists will be meeting this month to put together the economic forecast upon which 2008-2010 biennial budget revenues will be based.
Posted by Ellen Davenport