UVa’s 20-Year Expenditure Explosion

by James A. Bacon

Tis the season for Virginia’s universities to announce how much they are raising tuition & fees for the upcoming academic year. Virginia Tech’s Board of Visitors has jacked up tuition by 4.9% and the College of William & Mary by 4.5%. Virginia Commonwealth University is considering an increase of 4% to 5%, George Mason University 3%. After a bout of inflation that peaked around 9% and is still running about 6%, putting both university and family budgets under stress, the pressure on governing boards is intense.

At the University of Virginia a tuition increase has been baked into the cake since November 2021 when the Board of Visitors approved a two-year increase of 4.7% in 2022-23 and 3.7% in 2023-24. Under pressure from Governor Glenn Youngkin to hold down charges, UVa issued a rebate to in-state undergraduate students to offset last year’s increase. But there has been no indication that the Board will reconsider a refund in 2023-24. In-state undergrads could well find themselves paying 8.4% more next year.

UVa officials, like their peers at the state’s other public universities, blame the failure of state support for higher education to keep pace with growing enrollment and the escalating Consumer Price Index. In the past, UVa’s board has rarely questioned that claim. But now some board members want to dig deeper into the numbers.

Former Rector James Murray, who was appointed by former Governor Ralph Northam, and Bert Ellis, a Youngkin appointee, have publicly expressed concerns about the university’s cost structure. Ellis has suggested that “administrative bloat” — a surge in the number of non-teaching administrators — has added millions of dollars in wasteful costs. Cutting administrative overhead by half to $634 million in 2022, he says, would allow the university to slash tuition, accounting for $669 million in revenue in 2022, to almost zero.

The Ryan administration has not responded to Ellis’ request for a detailed breakdown of payroll costs. But a Jefferson Council analysis of figures taken from 20 years of annual reports shows that salary costs for UVa’s academic division (excluding the UVA Health System) far exceeded the rate of inflation plus the increase in enrollment over the 20 years between fiscal 2002 and fiscal 2022. Indeed, salaries increased (148%) faster than total expenses (135%), suggesting that payroll expansion has been the primary driver in UVa’s cost structure.

To put those numbers in perspective, consider that the Consumer Price Index increased 59% over the same twenty years while enrollment increased 20%. If salaries had risen at the same rate as CPI + enrollment, they would have increased 79%. In other words, after adjusting for inflation and enrollment, expenditures increased about 56% and payroll about 69%.

While it is incontestable that the cost of salaries has increased, the top-level numbers do not answer important questions. Was the increase due mostly to the hiring of faculty, the hiring of administrators, or a mix of both? How much of the increase was due to an increase in pay levels? UVa adopted a $15-per-hour living wage that undoubtedly boosted pay for employees at the lower end of the pay scale. At the same time, older, higher-paid faculty members have been retiring in large numbers and have been replaced by junior faculty who, presumably, are paid less.

The Jefferson Council suspects that the steady increase in payroll cost was driven by the hiring of new staff in response to the university’s mission creep. Among the likely categories:

  • To implement its “Inclusive Excellence” program, the university has hired scores of Diversity, Equity & Inclusion staff. By the count of the Virginia Association of Scholars, the university employed 77 DEI administrators in 2021. Equity czar Kevin McDonald says the figure is 40. While the definition of who should be classified as a “DEI” employee is a matter of debate, it is clear that DEI has been a growth area for UVa employment.
  • As part of President Jim Ryan’s goal to be both “great and good,” UVa has committed to helping address “social justice” and environmental issues in the Charlottesville area and Virginia. Similarly, the new Karsh Institute for Democracy is dedicated to upholding democracy (primarily from perceived right-wing threats). No count of how many employees are involved in community engagement has been made publicly available.
  • UVa has invested in expanding its R&D portfolio, requiring growth in the number of staff devoted to writing and administering research grants. No count of how many employees are involved in research has been made publicly available.
  • Responding to the surge in mental illness among students in the past several years, UVa has increased resources for counseling and mental-health treatment. No count of how many employees are involved in student services has been made publicly available.

It is important to note that most of the increase in salary and expense occurred before Jim Ryan became president in 2018. Indeed, both salaries and total expenditures leveled off in 2021 and 2022 as the university came under increasing pressure to hold a lid on tuition hikes.

However, The Jefferson Council is disappointed that the administration has shown little interest in exploring the factors driving expenditures skyward. The cost savings over the past two or three years, we fear, reflect temporary belt-tightening measures, not a restructuring of costs. We worry that inflationary pressures will push tuition dramatically higher after 2023-24.

The Council has been assured that the University’s new financial information system can spit out large quantities of data at the push of a button. Either the administration doesn’t know the answers, which would be a shameful failure of management, or it doesn’t want to share the answers, which would be a shameful failure of governance. One way or the other, The Jefferson Council is determined to get to the truth.

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18 responses to “UVa’s 20-Year Expenditure Explosion”

  1. Lefty665 Avatar

    Wonder what happened 2013-2014 that caused a decrease in personnel expense? Can it be duplicated?

    One current useless personnel expense that could be both eliminated and make Virginia a better place would be to can Liz Cheney.

  2. James McCarthy Avatar
    James McCarthy

    The JC grievance about UVA finances kinda sounds like the GOP moan about the debt ceiling. The stated concern appears to focus on UVA’s Academic Division Expense as shown in the two graphs.

    Proportions matter. In 2002, AD Salary Expense was 60.5% of the Total Expense (of the entire U??) In 2005, that ratio increased to 67.8%. In 2022, the ratio was 63.7% reflecting a downward trend from 2020 which was 66.3%. No judgment is presented by JC as to the relationship between Academic Salary proportionate increases from 60.5% in 2002 to 63.7% in 2022.

    In the same breath as the JC offers criticism of (presumably) Academic Expense, it notes an increased investment in mental health services for students, a factor unlikely to be reflected in AD Salary expense. Too, the JC notes an increased investment in R&D, a necessary component of university prestige. No mention whether this component impacted AD Salary Expense.

    Finally, no mention is made concerning the number of academic departments which may have been added since 2002 or whether secretarial or other support personnel are included in AD Salary Expense. In short, the JC complaints appear to focus on increases without consideration of other factors.

    1. DJRippert Avatar

      “In short, the JC complaints appear to focus on increases without consideration of other factors.”

      That’s because the increases (for whatever reason) are what makes tuition unaffordable. And the increases are ridiculous. “In other words, after adjusting for inflation and enrollment, expenditures increased about 56% and payroll about 69%.”

      The point is that the leftists who have run UVa over the past 20 years have allowed spending to increase at an intolerable rate making an education at UVa unaffordable to the middle class.

      Neither The Imperial Clown Show in Richmond nor the sock puppets on the Board of Visitors seem to care.

    2. Nancy Naive Avatar
      Nancy Naive

      The GA wanted the universities to be more self-sustaining. They got their wish.

  3. Tallman Avatar

    These are the things I want to see when the numbers come out:

    — List of employees and their salaries if they are in any way part of the DEI staff.
    — Year by year increase of the staff and salaries of the above list
    — Year by year comparison of the size of the teaching faculty vs everyone else, aka ‘administration.’
    — Average salary or faculty vs administration

    My bet is the numbers will look alot like this:

    and this:

  4. Nancy Naive Avatar
    Nancy Naive

    OTOH, most of it (94%) is their money and that which their customers willingly pay.

    1. DJRippert Avatar

      “They” are an arm of the state, owned by the people of Virginia. “They”, as state employees, have a mission to educate the citizens of Virginia. “They” are failing.

      Dragas was right.

      1. Nancy Naive Avatar
        Nancy Naive

        There’s not enough information in this article to make any valid evaluation.

  5. StarboardLift Avatar

    A friend joined the UVA BOV in 2011, and that Board was stunned to find that non-wage compensation for UVA employees was running close to 50% of wage compensation–a proportion that no private enterprise would afford. The administration hadn’t shopped for health insurance, hadn’t used their leverage as one of the state’s largest employers to negotiate, they just kept spending other people’s money. There was some swift action to address this.

  6. Nancy Naive Avatar
    Nancy Naive

    “It is important to note that most of the increase in salary and expense occurred before Jim Ryan became president in 2018. Indeed, both salaries and total expenditures leveled off in 2021 and 2022 as the university came under increasing pressure to hold a lid on tuition hikes.”

    Or… or as Ryan did his job.

  7. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    Looking at the finances of any higher ed institution from the 10,000 ft. level, which this analyis is doing, does one little good. First of all, you need to know what those dollars are buying you. How much is for faculty salaries and which faculty–research, teaching, etc. How much of its for faculty staff support? How much is for central administration–president’s office, deans, finance office, etc.? How much is for buildings and grounds staff? How much is for utilities? How much is for materials and supplies? etc.

    Then, there is the question of the fund source of the expenditures. How much is state general fund? How much is from tuition? How much is from student fees? (Do the fees cover the areas associated with they? Should they?) How much is federal grant money? How much is from other sources?

    With that information, you need to look at what cannot be easily cut. For example, there is probably not much savings potential in expenditures for utilities. Do you really want to cut building maintenance staff? That would probably not be cost-beneficial.

    Then you can start digging into the departments and administration. Do we need Asst. Dean XYZ? Should we put a mortorium on tenure and get rid of some of those assistant professors and lecturers? If we do, what do we do about the classes they taught? Drop them from the curriculum? And on and on and on.

    Or, the Board could do what the Governor used to do. Tell each department to submit proposed budget savings (we did not call them cuts) equal to XX percent. From those proposals, the President and the Board could develop overall savings–rejecting some and accepting some.

    Good luck. Done right, this is about a year-long process. I suggest that the JC hire someone with expertise in Virginia higher ed finance to help go through this data if you want to come up with something meaningful.

    1. walter smith Avatar
      walter smith

      I would suggest a nice alternative measurement – the size of the course catalog and 5he number of departments. I guess a third of departments could be eliminated and maybe 40% of classes. Offer real courses with value. Not all the stupid “studies” departments.

  8. M. Purdy Avatar
    M. Purdy

    Time to let the school go private. It would solve all of this.

    1. StarboardLift Avatar

      It would solve nothing toward shoring up affordable access to higher ed for Virginians. The world needs not one more private American university. And if the U were to pay what the Commonwealth has invested since 1819 it would have to use up that +$3B slush I mean Strategic Investment Fund. And then some.

      1. M. Purdy Avatar
        M. Purdy

        If it’s merely affordability we’re concerned about as a state, then we have plenty of choices. UVa exists in its current form because the Commonwealth wants to have a top-tier research university. Well, that costs $, esp. when Richmond is covering such a small percentage of costs. If the costs of UVa are bloated, and we’re offended as taxpayers, then don’t. Let the school go private at a cost.

        1. StarboardLift Avatar

          This is the mission drift that needs redirecting. No place in the charter nor in the oath sworn by BOV members does the Commonwealth ask UVA to be a top-tier research school. Who is “the Commonwealth” if not its taxpayers with children to educate? Sometimes even when the fight to get back on track seems overwhelming, it’s worth fighting. Naturally, the Ivory Tower wants to elevate itself, and alums want their diplomas to be aggrandized. I want UVA to be its best self while remaining affordable to median income households. The needs of the poor and the rich are taken care of in higher ed generally, and at UVA specifically.

          1. M. Purdy Avatar
            M. Purdy

            I disagree. UVa’s mission statement calls for “excellence” as an institution of higher learning, i.e. to be elite. Princeton Review says it’s the No. 2 best value in the country. By all indications, it’s balancing affordability and excellence, though not to say that more examination isn’t warranted. It always is. But the notion that it’s become unaffordable is not accurate when balanced against the quality received. If this is intolerable for the taxpayers (who foot, again, less than 5% of the bill) allow it to go to private. There are plenty of affordable public options within the state. If the answer is that we want it even cheaper and just as elite is not realistic, pie in the sky stuff.

  9. One aspect not reported is the number of ‘adjunct’ professors who are paid about $2,000 a class to teach…. how many of these employees now teach at the colleges and how many students are they teaching compared to tenured, highly paid ‘professors’?
    That would be an interesting chart!!!!

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