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FY 2019 Budget Update

Thursday, March 22, 2018

Dear VCU and VCU Health Communities,

FY 2019 marks a turning point for VCU. We will launch our new human resources and budget redesigns, and our Quest for Distinction strategic plan will have been realized. We will move forward with the infrastructure in place to launch our next strategic plan, Quest 2025: Together We Transform, including an updated master facilities plan for both downtown campuses.

We will achieve VCU’s vision as a nationally prominent urban research university with a world-class academic health center, and stand equal to our Tier 3 university colleagues, which include UVA, Virginia Tech, and William & Mary. Tier 3 universities are recognized by the State Council for Higher Education in Virginia as top-tier institutions.

With this goal in mind, we are developing a multi-year budget process that will support focused strategic initiatives that significantly advance our quality, access, and competitiveness as an “R-1” research and Tier 3 university.

These interrelated strategic priorities include:

· Investing in faculty, to recruit and retain talented educators and researchers who lead nationally prominent programs that attract students from Virginia and around the world. This includes more-competitive salaries, including for adjunct faculty.
· Investing in students, to ensure engaged learning and timely degree completion that will reduce student debt. This includes further investments in student advising, technology, and financial aid.
· Investing in education and research facilities to match the quality of our programs and the people we serve. This includes a substantial need for deferred maintenance and resources needed to prevent potential interruptions to programs or space.
· We must also address unavoidable costs such as safety, technology, transportation, utilities, compliance, and employee health insurance.  

These priorities must be achieved within the limits of our economic reality. Over the past four years, VCU has absorbed $34.3 million in state cuts and permanent internal cuts and reallocations, an average of $8.5 million removed from our budget every year. At the same time, the percentage increase of our tuition and mandatory fees has been the third-lowest of any Virginia public university.

Even as one of the leanest universities in the nation, we have continued to cut operating costs and implement efficiencies wherever we can, resulting in significant savings. For example, a new procurement system is expected to save $6 million over the next few years. We also continue to shift resources toward our highest-priority areas, including recruiting out-of-state and international students and online programs that will increase revenues by several million dollars beginning in FY 2020.

VCU’s largest and most comprehensive fundraising campaign is well underway, with a goal to fund critical initiatives that will become points of national prominence long into the future.

It is in this context that we have developed a FY 2019 budget.

Earlier today, we presented to the Board of Visitors, for their approval in May, a budget that is 3.7% larger than last year’s—approximately equal to last year’s Higher Education Price Index—so that we may advance the needs and priorities of our institution.

As the state’s budget is not yet finalized, we cannot predict state support for educational expenses or how that may affect our budget. We would acknowledge any increase in general fund support from the Commonwealth in our final tuition recommendation to the board.  No action was taken today.

In the absence of information about state support, the budget proposal includes for consideration a range of tuition and mandatory fees increase of 6.8%-8.1%, or $924-$1,098, for in-state undergraduate students. The lower ranges of this proposed increase would not generate enough revenue to cover all of the identified needs and strategic priorities for FY 2019.

This budget, while conservative, is appropriate and necessary to operate as a national “R-1” public research university and Virginia Tier 3 institution and in support of our priorities and our public mission.

More specific details about this recommended FY 2019 budget are available here. Between now and May, we will continue to communicate about our recommended budget as often and as transparently as we can, including occasions for public comment. We will announce those opportunities soon.


Michael Rao
President, VCU and VCU Health