Higher Education Budget and Policy Recommendations for 2020-2022
The State Council of Higher Education, in its coordinating role of higher education in Virginia, annually provides budget and policy recommendations to the Governor and General Assembly. The following reports provide operating, financial aid and capital recommendations for the 2020-22 biennium.
Operating and Financial Aid Recommendations
In the 2018-20 biennium, the Governor and General Assembly invested over $285 million in Virginia higher education – a historical and notable reinvestment. General fund appropriations for Educational and General Programs (the primary operating funds for colleges and universities) increased 11.2% between FY 2018 and FY 2020. This increased investment also raised the percentage of state support for in-state undergraduates of calculated costs three percentage points, from 45% to 48%. While this remains below the 67% target, it marks an improvement from recent years. The estimated general fund cost to make up this difference is approximately $668 million.
For the 2020-22 biennium, the Council’s operating and financial budget and policy recommendations are informed by the following: analysis of national and state data trends related to costs, financial aid, access and completion; review of 6-year plans and performance pilot agreements submitted by institutions; an understanding of the current state budget environment; and ongoing discussions with state policymakers to identify key areas of interest for the state.
The Council recommendations total $212.4 million for the biennium from the general fund, excluding funding for the Tech Talent Investment Program. They continue to focus on enhancing access, affordability and quality. They also include efforts to support talent development, review efficiencies and effectiveness at our institutions and focus on improving equity for populations with traditionally low enrollment, completion and attainment rates in the Commonwealth. This includes low-income, minority race/ethnicity and adult students, as well areas of the state with low postsecondary attainment rates. The following includes a summary of the recommendations and detailed information is included in the full report.
Affordability and excellence: Recommendations focus on efforts to support growth in operational costs at the institutions with the expectation that additional support will lower the impact of tuition and fee increases; growing need-based financial aid for low- and middle-income students as identified in the Council's recent 2019 study of financial aid; and increasing the Tuition Assistance Grant program to students attending private, nonprofit institutions. The Council also requests statewide support for faculty and staff salaries and recommends modifications to existing budget language governing enrollment of out-of-state students.
Access and success: Recommendations focus on improving information and resources available to students; substantially increasing funding for Virginia’s community colleges; and investing in institutional efforts to improve access and completion.
Talent development: Recommendations focus on expanding the impact of the newly established statewide innovative internship program; supporting investment in instruction-related and research equipment; increasing funding to support the Tech Talent Investment Program; and establishing an ongoing review of supply and demand to improve the alignment between institutional programs and workforce shortages.
Efficiency, effectiveness and planning: Recommendations focus on opportunities to support more stable tuition and fees growth in the coming years. This includes a review of costs and funding models and considering options to allow institutions and the state to save for a potential economic downturn through reserve funding and other strategies.
Capital and Maintenance Reserve Recommendations
Commonwealth has provided strong support to higher education over the last several years for new capital construction, the Council recommends a continued focus to address deferred facility maintenance through the state’s Maintenance Reserve program. The Council also supports the new statewide facility database COVA Trax/M-R-Fix that is expected to be fully implemented by the end of this year to assist in prioritizing maintenance funding.
For additional capital outlay needs, the Council assigned priorities to the general fund capital outlay requests from our state-supported institutions. This analysis has long been regarded as an important source of analysis in the development of the Commonwealth’s fixed-asset planning for higher education. Based on the application of the Fixed Assets Guidelines for Educational and General Programs, SCHEV identified a total of 31 projects at an estimated cost of $824.8 million that fall into Priority 1 category to address space needs for instruction and research and critical maintenance such as life-safety issues, improving infrastructure for energy efficiency, and mechanical, electrical and plumbing systems.
In recognition of the estimated $1.5 billion of projects that the Commonwealth has for planning, including $783 million of projects for higher education institutions and the limited capacity to issue additional debt beyond 5%, SCHEV staff deferred the assessment 39 new construction project requests totaling $2.4 billion. The Council notes that of these new construction project requests, institutions placed several projects as a high priority in their six-year plans and through their requests to the Department of Planning and Budget. If the Governor and General Assembly wish to support projects beyond the Fixed Asset Guideline recommendations, Council recommends that these priority projects identified by institutions (ranking as one or two) be considered. A full list of projects and recommendations are included in the 2020-22 Capital Outlay Budget Recommendations.