RICHMOND, Va., April 30, 2012 – The Virginia General Assembly concluded its work on Wednesday, April 18, 2012, approving a two-year, $85 billion budget bill for 2012-14.
In a move to reduce future pension costs, the new budget includes significant reforms to the Virginia Retirement System, and increased funding for higher education. Currently Gov. Bob McDonnell says he is considering amendments to the new budget, but the university does not anticipate any major changes to the higher education budget.
The 2012 General Assembly approved a 3 percent bonus this December for all state employees, contingent on unspent balances and excess revenues in the current year. In addition, for the first time since 2007, the legislature approved a pay increase for state employees. Faculty and staff will receive a 2 percent pay increase on July 10, 2013.
With respect to modifications to the Virginia Retirement System (VRS), no changes were made to the current Optional Retirement Plan (ORP) or to vested employees in VRS (vesting occurs after five years of full-time service). However, the legislature did approve changes to retirement for employees not vested in VRS by Jan. 1, 2013.
Employees not vested in VRS will be subject to a lower retirement multiplier of 1.65 percent. Service earned, purchased, or granted before Jan. 1, 2013, will come under the current 1.7 percent multiplier in calculating the retirement benefit. An Average Final Compensation of 60 months, instead of the current 36 months average, will be used in the benefit calculation. The legislation does not require any additional employee contribution.
For all state employees hired after Jan. 1, 2014, the General Assembly approved a new mandatory “hybrid” retirement plan. This new retirement plan has both a defined benefit and defined contribution component. Compared to existing VRS plans, the hybrid plan has a smaller defined benefit component, and adds a defined contribution component under the employee’s control. Faculty hired after Jan. 1, 2014, will have the option to enroll in the current ORP or the new hybrid plan.
McDonnell and the legislature included additional funding in higher education in the upcoming biennial budget. Virginia Tech received $1.7 million in each year to support its base operations, faculty growth, operation and maintenance of new facilities coming online, and technology enhancements. This reinvestment is the first increase in general funds the university has seen since 2008. The commonwealth also included nearly $900,000 a year for Virginia Tech to implement new and expanded summer academic opportunities, and expand and enhance science, technology, engineering, and mathematics (STEM) degree production.
The commonwealth provided $686,000 a year to support new Virginia undergraduate enrollment growth at Virginia Tech. This funding continues a 2011 agreement between the commonwealth and James Madison University, The College of William & Mary, The University of Virginia, and Virginia Tech, to expand in-state undergraduate enrollment.
To further the governor’s goal of affordability in the Higher Education Opportunity Act of 2011, the legislature added $18.5 million for in-state undergraduate and graduate aid for all of Virginia’s two and four-year public institutions. Of this, the university received $445,000 each year to supplement in-state undergraduate financial aid, and $268,000 in the second year for graduate financial aid.
The General Assembly provided $150,000 a year to support Virginia Tech’s unique military activities in the Corps of Cadets. This funding will allow the corps to address critical staffing needs to handle their continuing growth, and help close the gap between the commonwealth’s support of cadets at Virginia Tech and the Virginia Military Institute.
Additionally, the university received $750,000 a year to support ongoing brain disorder research at the Virginia Tech Carilion Research Institute in Roanoke. This funding helps to expand the institute’s research team, which will result in significant advances on the diagnosis and treatment of Parkinson’s disease, brain injury, autism, PTSD, and other neurological disorders.
Virginia Tech received $296,000 to continue the Virginia Career Vital Information for Education and Work (VIEW) Program originally under the control of the Virginia Department of Education. The Virginia Career VIEW program, housed in the School of Education, works with students in kindergarten through 8th grade in the commonwealth providing students, parents, counselors, and teachers access to resources for career exploration, college and work force readiness, and STEM career preparation.
The General Assembly authorized the university to use non-general funds for the planning of two priority capital projects. The first project includes planning for a new general purpose classroom building. The second project authorizes planning for the renovation and renewal of Davidson Hall (front section), Sandy Hall, and the Performing Arts Building. By combining these renovations into one package, the university is able to achieve savings in overall construction costs.
The legislature’s Special Subcommittee on Extension Restructuring received the Secretary of Education’s report in December 2011, which analyzed the structure, funding trends, and research functions of the organization. Under the leadership of its new director, Edwin Jones, Extension continues to improve relationships with industry stakeholders and local governments.
Virginia Cooperative Extension received an additional $500,000 in each year of the budget to hire more agents in 4-H, agriculture, and family and consumer sciences. Legislation mandating Extension maintain a local office with at least one employee in each county in the commonwealth failed to pass, and language restricting the new funding to agriculture and 4-H agents only was not adopted.
This year the General Assembly included 22 new members, and considered more than 2,200 pieces of legislation. Once again, legislation to restrict the percentage of out-of-state students that attend Virginia institutions was introduced but failed to be adopted. Legislators also failed to pass a bill to allow faculty members on Virginia’s college campuses to conceal carry a firearm. Both pieces of legislation failed in subcommittee without advancing to a full committee hearing.
The legislature also failed to pass a bill which would allow a student to assert conscientious objection to any requirement of an academic degree program in an institution of higher education if it violated a sincerely held religious belief. This legislation was troubling to faculty statewide because of the fear that such policy would undermine full and open discussion of potentially controversial issues and subjects in the classroom.
The General Assembly adopted a joint resolution directing the Joint Legislative and Audit Review Commission (JLARC) to conduct a study on the cost efficiency of the commonwealth's institutions of higher education and to identify opportunities to reduce the cost of public higher education in Virginia. The three-year study will consider teaching loads and productivity of faculty, design and utilization of facilities, administrative staffing and costs, scholarships and other student aid programs, the impact of nonacademic activities and programs on tuition and fees, and opportunities to reduce the cost of public higher education in Virginia. JLARC expects to begin the study in mid-2012.
For additional information, contact Elizabeth Hooper, Virginia Tech state legislative liaison, at email@example.com or 804-786-1604.