by James A. Bacon
Brace yourselves for another blast of UVA-centric articles, Baconoids and Baconauts. The University of Virginia Board of Visitors meets this week, and I’ll be covering the deliberations. If you’re not interested in all things Wahoo, this might be a good time to take a vacation. On the other hand, if you regard UVA as a stand-in for all that is good and all that is profane about higher-ed generally, there might be some interesting developments.
Among the topics scheduled for discussion is the 2024-25 budget. According to documents posted on the Board of Visitors website, the administration has submitted proposed revenues and spending for the $5.8 billion budget. Given the Board’s long and illustrious tradition of applying the rubber stamp, the proposed budget is likely to be the budget.
Bottom line: while inflation is chugging along at a 3.4% rate and expected to decline in the year ahead, spending at UVA’s academic division (excluding the health system and campus at Wise), will increase 6.7%. The biggest source of revenue — net tuition and fees — will increase 4.9%.
The usual bogeyman blamed for tuition hikes is the shortfall of tuition and fees compared to the good ol’ days of state largesse. That won’t fly next year. State appropriations are budgeted to increase 11.6%.
The cost drivers are:
Faculty and staff salaries — +5.4%
Internal recoveries — +9.7% (Internal recoveries are defined as recovering of expenses already paid and then shared/reallocated between departments. This is a big number. It could bear explaining.)
Non-personnel expenses — +7.5%
Financial aid — +5.2%
Debt service, transfers, others — NMF
What kind of growth are we seeing on the revenue side?
Net tuition & fees — +4.9%
State appropriations — +11.6
Externally sponsored research — +7.3%
Endowment distribution — +7.5%
Expendable gifts — +3.7%
Sales, services, interest — +4.8%
The Board approved the increase in tuition & fees back in December.
Some of these numbers need context to evaluate. For example, salaries are the biggest cost component of any university. What does it mean when that line item increases 5.4%? Is compensation running way ahead of 3.4% inflation, is UVA adding employees, or is some combination of the two at work? Without the employee headcount, which UVA does not provide in its presentation materials, it’s difficult to know what to make of the increased spending on salaries.
As a general rule, the UVA administration supplies the numbers that make the administration look good and withholds the numbers that make them look bad. (Nothing unique to UVA; this is a universal bureaucratic phenomenon.) Will UVA’s BOV members take the trouble to understand the budget and ask tough questions?
The Board agenda has allocated 1.5 hours to the presentation and discussion of the budget, which includes not only the academic-division budget but the health-system budget, the Wise-campus budget, the capital-spending budget, a close-up look at the Strategic Investment Fund, and an update on Huron Consulting’s Efficiency and Effectiveness study.
I’m not optimistic. The Board’s job is to listen to the administration’s presentations and not to rock the boat in pursuit of “personal agendas.”
In addition to being publisher of Bacon’s Rebellion,James A. Bacon is contributing editor of The Jefferson Council.
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