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February 25, 2003

Dear Colleague:

This recently completed session of the General Assembly was a challenging one for the legislators, agencies and institutions, like Old Dominion. I want to compliment the work of Vice President Broderick and Elizabeth Wallace, in particular, for their excellent representation of the needs of the University. This was especially the case for the development of the tuition caps, which could have provided such limited authority for Old Dominion as to necessitate further base budget reductions. Through their efforts, the unique needs of the University were communicated and understood and the final outcomes are more favorable for the institution. In addition, I would like to thank the members of the Board of Visitors for their timely assistance, the legislative representatives of the Hampton Roads area for their steadfast support, and the conferees for their great understanding.

The Conference Committee Report prepared jointly by the House Appropriations Committee and the Senate Finance Committee was released Feb. 22. The following is the summary of the budget amendments relevant to higher education and to Old Dominion University, in particular.

The conferees provided for a second-year salary increase of 2.25 percent for state classified employees, faculty and hourly staff effective Nov. 25, 2003. However, in the event that the state revenues for fiscal year 2004 are revised downward, the governor may reduce the salary increase authorized by the General Assembly.

Spending and Restoration
The conferees included $385,000 in general funds to restore budget reductions for the TELETECHNET site at Paul D. Camp Community College and to finance the partial-year operation and maintenance of the Engineering and Computational Science Building, which will be completed in December 2003.

Cuts to Research and Public Service Centers
The Conference Committee included $290,103 in general fund reductions to the Commonwealth Center for Coastal Physical Oceanography ($44,731), Ports and Maritime Institute ($5,000), Applied Research Center ($106,272), Lamberts Point Program ($67,500) and the CHANCE Program ($66,600). At one time, however, our cuts proposed in the House budget exceeded $531,000.

Eminent Scholars Program
The House recommended reducing funding for this program from its current FY04 funding level. The conferees ultimately recommended that no reduction action be taken. The University's FY04 Eminent Scholar appropriation is $284,314.

The Senate and House budgets capped in-state, undergraduate tuition increases for the 2003-04 academic year at 5 and 9 percent, respectively, above the current tuition rates. After much deliberation and input from the colleges and universities, the conferees have agreed to cap increases at 5 percent after annualizing the current tuition rates based on the 2003 mid-year increases. The proposed policy would allow institutions to apply the spring 2003 increases to both semesters of the upcoming academic year and then raise tuition up to 5 percent above that level.

For Old Dominion, which held mid-year increases below $225, the policy permits us to increase our base tuition up to $225 per semester for the upcoming year, and then apply the 5 percent cap. In other words, Old Dominion University has much greater flexibility to increase in-state undergraduate tuition in response to the additional base budget reductions for FY04.

The policy further allows institutions to increase tuition above the cap to generate the nongeneral fund share of the salary and fringe benefit increases, which will require, on average, an additional 2 or 3 percent increase.

Mandatory Auxiliary Fees
The Conference Committee recommended raising the current cap on increases to mandatory auxiliary fees from the Consumer Price Index rate to 5 percent. These fees are used to support nonacademic activities, such as student activities and organizations, athletics, recreational sports, and the operation of Webb University Center.

Capital Fee
The conferees recommended instituting a capital fee for out-of-sate students to account for a portion of the capital costs associated with their education. The recommended fee of $50 per year for full-time students will generate approximately $112,000 for Old Dominion University, and these funds will be transferred to the state to pay a portion of the debt service on the University's facilities.

Student Financial Aid
The House and Senate budgets recommended $5.7 million and $3 million, respectively, for student financial aid in anticipation of additional tuition increases. The conferees compromised, providing $4.5 million for FY04. SCHEV will determine the amount to be allocated to each institution. We project Old Dominion's share to be approximately $130,000.

Maintenance Reserve
The Conference Committee took no action on proposals submitted by the House and Senate to increase maintenance reserve funding for the repair of deferred maintenance on facilities. The University's FY04 appropriation for maintenance reserve repairs is $318,672.

Please realize that the governor will have the opportunity to review the budget proposed by the Conference Committee of the General Assembly and make revisions; therefore, some of the proposed budget amendments noted above may change.

As we begin our budget planning and tuition setting for the upcoming fiscal year, the University must remain sensitive to the financial capabilities of our students and not impose tuition increases of any significant magnitude. However, we must also address the FY04 previously announced $3.9 million in budget reductions, additional reductions and new legislated increases as well as invest in the implementation of the 2000-05 Strategic Plan. Given the $17.6 million, or 20.7 percent reduction in general funds over the 2002-04 biennium, these resources will need to be generated by a combination of tuition dollars and further increased efficiencies in our ongoing operations.

In closing, I want to thank once again the budget conferees and the Hampton Roads delegation for their support of Old Dominion University. In particular, I am grateful for the assistance in maintaining the tax exemption status for the Research Foundation. I would also like to thank the faculty, staff and students for your hard work and continued confidence in our fine University. Together we will build a great future.

Sincerely yours,

Roseann Runte

This article was posted on: February 26, 2003

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Telephone: 757-683-3114

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