SCHEV Wants $350 Million More for Higher Ed

SCHEV proposal would fund more for faculty recruitment and retention, financial aid, and building maintenance, among other priorities.

The State Council of Higher Education for Virginia (SCHEV) voted today to recommend a $352.4 million increase in state support for higher education in the next two years. Almost half the increase would be designated to faculty recruitment and retention, a top priority of Virginia’s higher-ed sector. Another $55 million would go to financial aid and student support programs.

To leaven the request, the council also recommended a tighter cap on student fee increases from 5% yearly to 3% yearly as well as a new mechanism to build up an institutional reserve fund.

“This is not a random request for more money,” said Marge Connelly, chair of SCHEV’s resources and planning committee. The budget is aligned with the strategic goals of the Virginia Plan for Higher Education, a blueprint for Virginia to attain the goal of best educated state in the nation by 2030.

The plan calls for extra funding of $112.9 million in fiscal 2018-19 and $186.2 million in fiscal 2020. Key spending categories include:

  • $84.3 million in General Fund money and $87.2 in non-general fund money (generated mostly by the institutions themselves) to promote faculty recruitment and retention.
  • $54.5 million for increased undergraduate and graduate financial aid.
  • $25.8 million for operation and maintenance of new facilities. As colleges and universities erect new buildings, SCHEV recommends setting aside 1% of the asset value for ongoing maintenance.
  • $21.6 million to comply with base adequacy guidelines for operating higher-ed institutions.
  • $16.2 million for the higher-ed trust fund relating to computers, lab equipment and research equipment.
  • $15.0 million for “student success” initiatives (to improve graduation rates).
  • $54.5 million in increased financial aid.

To address volatile state support, which is subject to cuts to offset budget shortfalls, some higher-ed officials had called for creation of something equivalent to the state’s “rainy day” fund that could be tapped to level spending. With the recommendations adopted today, SCHEV proposes allowing colleges and universities to create “institutional reserve funds” into which they could put unexpended appropriations. A SCHEV handout provides the justification:

By establishing an institutional reserve fund, an institution will be able to promote more efficient resource utilization, reduce sudden spikes in tuition, and foster more long-term planning, thereby increasing affordability for Virginia’s families.

SCHEV also urged the General Assembly to stick to its two-year budgets. In recent years, says the SCHEV handout, the “biennial budget exists in name only.”

A return to a two-year budget cycle could provide, at least minimally, for a more stable and predictable planning cycle for our public institutions. There is a clear and strong relationship between predictable state support and lower tuition increases. Affordable access to Virginia public higher education would be improved by returning to such a policy.

The only note of dissent during the budget discussions came from council members Minnis Ridenour and Stephen Moret. Ridenour said the measure would restrict the authority of boards of trustees. Moret suggested that the cap could lead to unintended consequences. Connelly defended the measure as needed to establish some “balance” against the council’s aggressive funding request.

Update: Michael Martz with the Richmond Times-Dispatch covered the SCHEV meeting as well, and his reporting contains detail that my posts did not.