Dear Colleagues,

As I noted in my letter of October 10, our state appropriations have been reduced by 5 percent for this fiscal year. The University Division has lost $8.9 million, and the Virginia Cooperative Extension & Agricultural Experiment Station (229) Division lost $2.3 million. These will impact significantly how we do business over the long term.

For the current year, the university can minimize the impact on operating units by absorbing some costs centrally. Accordingly, we have asked deans and vice-presidents to develop plans to reduce current year operating budgets on a one-time basis by 1.5 percent. This action applies to both the University Division and the CE/AES Division. We have made this a one-time action in fiscal year 2008-09 in order to give our deans and vice presidents the maximum time available to plan for the upcoming fiscal year. Other than recognizing the need to protect core operations, we are not directing how this is to be accomplished.

Furthermore, because of the shortfall already forecasted for the state, we fully expect further reductions for the fiscal year 2009-10. We don’t know an exact amount, but state government leadership has indicated it will be significant. Accordingly, I have directed deans and vice presidents to prepare permanent budget reductions plans for the University Division of 3 percent and 5 percent. For the CE/AES Division, these 2009-10 reduction contingency plans will be for 9 and 13 percent. These reductions will require serious consideration of permanent program elimination. We must and will be strategic in our focus.

I will be asking for very specific plans from deans and vice presidents during the first week of December. The governor normally releases his budget for the upcoming fiscal year in mid-December. We expect at that time to compare our plans with the actual targets recommended by the governor. This will provide ample opportunity for us to explain to the community, to students and families, and to the legislature the actual impact of reductions.

Our university has rebounded from the severe loss of state funding earlier in the decade, and we could not ask for better performance among our faculty and staff. You have done all that could be expected. Yet, the economy is depressed in all sectors impacting state revenue collections.

No organization can absorb cuts of this magnitude year after year without some impact. We have faced such challenges in the past and still maintained academic excellence. With your help, we will do so again.

Sincerely,

Charles W. Steger
President

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