Virginia House and Senate Pass Initial Budget Plans

On Thursday, February 22, The Virginia General Assembly took the first major steps toward passage of a new state budget, including funding for higher education. The two legislative chambers adopted their separate spending blueprints for the 2018-20 Biennium.

Budget negotiators for the two houses next will meet to resolve differences in the spending plans, with final budget action due before the General Assembly adjourns March 10. Governor Northam then will have the opportunity to recommend amendments to the Assembly-approved budget for consideration at the April 18 reconvened session.

While the process is far from finished, here are some highlights on Growth4VA higher education priorities reflected in the initial House and Senate budget plans:

  • HIGH-DEMAND DEGREES: The House of Delegates approved $42.6 million in new funding for Virginia’s public colleges and universities linked to degree production in high-growth sectors, including data science and technology, science and engineering, healthcare and education.
  • INTERNSHIPS: Both the Senate and House supported initiatives to promote collaboration with business on internships for Virginia college students—a key Growth4VA priority. The Senate included $400,000 in funding for a new internship pilot program while the House authorized internship support through the newly created GO Virginia regional councils and through the higher education institutions’ financial aid allocations.
  • STUDENT FINANCIAL ASSISTANCE: In addition to the positive impact on affordability resulting from state reinvestment in college operations, both houses approved increases in financial aid for Virginia undergraduate students at public colleges. The House included $45.5 million for undergraduate need-based student financial aid (the funding level proposed in the outgoing governor’s introduced budget), while the Senate reduced the new investment to $22.7 million. As proposed in the introduced budget, the House and Senate both included a $1.8 million increase in funding for tuition assistance grants for Virginia students attending nonprofit private colleges in the Commonwealth.
  • “ECONOMIC OUTCOME AGREEMENTS”: Growth4VA advocates institutional agreements that will produce closer alignment between the Commonwealth and higher education institutions on key economic outcomes for the state and students and that will promote broad-based business-higher education partnerships to help achieve those outcomes. The Senate budget includes language authorizing the Joint Subcommittee on Higher Education to establish a process by which colleges may enter into institution-specific economic outcome agreements with the Commonwealth. The House budget includes a similar but more general Joint Subcommittee authorization stressing economic alignment and collaboration with business.
  • RESEARCH: The House budget plan includes a new $40 million initiative (called “Cyber X”) focused on cybersecurity research, research commercialization, and workforce preparation, and $4 million for focused ultrasound research. The House and Senate otherwise maintained the $16 million in level funding for the Virginia Research Investment Fund provided in the introduced budget.
  • REGIONAL COLLABORATION: Virginia’s colleges, universities and community colleges are actively participating in regional economic and workforce development efforts through the GO Virginia program. The House increased funding for GO Virginia grants by $15 million while the Senate maintained grant funding at the level in the introduced budget and slightly reduced funding for program administration.
  • WORKFORCE CREDENTIAL GRANTS: As recommended in the introduced budget, both the House and Senate approved an additional investment of $4 million in the New Economy Workforce Credential grant program commenced last year through the Virginia Community College System. The House linked the program with the GO Virginia regional councils’ workforce development priorities.
  • INNOVATION REVOLVING FUND: Growth4VA advocates a state revolving fund, supplemented by private investment, to facilitate higher education innovation and efficiency, including business process improvements, shared services, technology acquisition, distance learning, course redesign, affordable student pathways, and other cost-saving collaborations. Neither house provided new funding for this initiative. However, the House adopted a language amendment that adds collaboration with business and industry and efficiency initiatives to the purposes for which the existing Fund for Excellence and Innovation at the State Council of Higher Education for Virginia (SCHEV) may be used.
  • HIGHER EDUCATION RESERVE: Neither house expressly embraced Growth4VA’s call for a dedicated reserve fund for higher education, but both retained language in the introduced budget identifying higher education as one of the prospective uses of the state’s new cash reserve fund. In addition, the House’s charge to the Joint Subcommittee on Higher Education includes reference to “stabilization of state support of higher education” and incorporates Growth4VA’s reasons for recommending a reserve, including to “facilitate efficient planning and management by higher education institutions” and “protect [Virginia] students and families from unanticipated tuition spikes.”
  • TALENT RETENTION: Another Growth4VA priority is recruitment and retention of top talent in Virginia, including compensating outstanding research and instructional faculty at competitive levels, a key challenge that our higher education institutions face. The House budget plan accelerates to mid-year the 2 percent faculty salary increase for 2019 included in the introduced budget, and also adds a 2 percent bonus for faculty (and other state employees) in late 2018 contingent upon adequate balances at the end of the current fiscal year. The Senate plan eliminates the funding for faculty and staff salary increases and instead directs the governor to put into a reserve fund the equivalent of the amount needed to increase the salaries of faculty and other state employees by 2 percent effective in mid-2019.
  • OVERALL REINVESTMENT: Sustained reinvestment in Virginia’s higher education system has been a core business-higher education goal and bipartisan state commitment since 2011, when the General Assembly unanimously adopted the “Top Jobs Act” and committed the Commonwealth to awarding 100,000 more degrees, focused on high-demand sectors, by 2025. Altogether, the outgoing governor’s introduced budget recommended $144.4 million in additional state general fund investment in higher education for the 2018-20 Biennium. In comparison, the House plan provides total additional investment of $218.8 million, and the Senate budget plan provides additional investment of $94.7 million. (The House and Senate also approved approximately $125 million in bond-financed expenditures included in the introduced budget for maintenance reserve funding for facility improvements, equipment for previously authorized projects, and cost supplements for projects under construction.)

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