State of the budget
VCU’s greatest challenge — and perhaps the greatest challenge in public higher education today — is achieving a sustainable financial model. While a two-year trend of increased state funding is positive, VCU’s current financial picture is heavily impacted by the fiscal realities of the budgets from FY 2007-08 to FY 2011-12.
The FY 2013-14 budget, for only the second time in seven years, contains additional state funding. This change in funding sources puts VCU at a significant disadvantage. VCU is unique among our peers in that we serve the largest in-state student population, are most dependent on state appropriations, do not have a large out-of-state tuition buffer and are historically low in tuition, especially for a major research university.
The university continues to creatively leverage our resources to maintain our status as one of the nation’s premier urban, public research universities.
The University Budget Advisory Committee process was established to address the challenge of funding Quest for Distinction and prioritizing needs across campus. UBAC oversees the management of the annual operating budget and reviews resource issues of the university within the context of the strategic plan and annual and multi-year goals. The process resulted in a 2013-14 budget that includes significant efficiencies, among them the outsourcing of some services and the unifying of other services within the university, which allowed the realignment of funds for academic support.
“The university continues to creatively leverage our resources to maintain our status as one of the nation’s premier urban, public research universities.”
The university’s FY 2013-14 budget is stronger than in recent years, with a 5.6 percent growth in revenue projected in appropriations from the commonwealth. That increase represents more than $6 million in additional funding to cover a portion of faculty and classified staff salary increases and associated benefits, and additional funding for base operations, research and undergraduate financial aid.
New tuition model
We strategically positioned VCU for the future by instituting a new per-credit-hour tuition structure for incoming undergraduate students in FY 2013-14. At this point, the new tuition model has not affected enrollment and seems to be positively influencing students to register for higher credit-hour loads moving into the fall semester. More than 75 percent of incoming freshmen have signed up for 15 or more credit hours compared to 63 percent in prior years. This should positively impact time to degree. We will continue to monitor the impact of the new tuition model.
Operational efficiencies to enhance allocation to the academic enterprise
- Creating a financially self-sustaining parking operation (within five years)
- Unifying all utility management across VCU (including auxiliaries)
- Outsourcing all housekeeping operations
- Unifying all maintenance activities
- Focusing on shared service centers (financial/administrative)
- Mandating a single travel service provider for the institution
- Ethnography study of disbursements, collections and treasury services processes
VCU senior leadership has identified cost reduction and reallocation as a continued priority for FY14. The university is addressing many factors leading to higher costs and student debt, including those that support four-year graduation. On the financial side, we will continue a multipronged effort to reduce costs, reallocate funding for Quest priorities and generate new revenues through fundraising and entrepreneurship.