Thank you Mr. Chairman.
James Madison wrote these words to W.T. Barry in August of 1822; "Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power which knowledge gives."
Education is Governor Gilmore’s first priority. He knows that Madison was correct; knowledge is power. Since the Governor took the oath of office in January of last year, he has advanced proposals that provide unprecedented support to our institutions of higher learning, ensuring that all Virginians have the opportunity to be prepared for the challenges of the 21st Century.
My office has worked very hard this session, which began on January 13th, to ensure that Governor Gilmore’s priorities become the priorities of the General Assembly. As you know, yesterday was crossover, and there were two days of marathon sessions, so that both houses could act on their legislation and send it to the other side of the Capitol.
There are numerous bills relating to higher education that have made their way through committee, and passed the house of origination. I have included a summary for all of the higher education legislation with your copy of my remarks. This can be found in Appendix I of your package.
For the purpose of this presentation, I would like to focus on the status of Governor Gilmore’s legislative and budget priorities.
Governor Gilmore’s top higher education priority for the 1999 Session of the General Assembly is to make a college education more affordable for all Virginians. As you may know, over the last 15 years, tuition and fees (adjusted for inflation) have more than doubled at our doctoral institutions, increased 78 percent at our comprehensive four-year institutions, and increased 53 percent at our two-year institutions.
The Governor’s budget proposes a 20% rollback of tuition and mandatory Educational and General (E&G) fees for in-state undergraduate students at Virginia’s public colleges and universities. Over 163,000 students will benefit from this tuition and fee rollback. To make up for reduced tuition and fee revenues at Virginia’s college and universities, the Commonwealth will increase its general fund support to higher education by almost $75 million.
Despite growth in financial aid programs, many Virginians are finding that the cost of a college education is out of their reach. SCHEV recently reported that existing financial aid programs meet only 34% of the estimated remaining need for financial assistance. With this rollback, the Commonwealth would meet 41% of the remaining need.
Virginia’s average tuition charges for 4-year institutions are currently 30% higher than the national average. With this rollback, that premium drops to 13 percent at the senior institutions, and tuition and fee charges for community colleges fall to 30% below the national average for two-year institutions.
The benefit to the 163,000 students and their parents will be just over $2,300 over four years at our senior institutions (doctoral and comprehensive) and nearly $600 over two years at the two-year colleges.
Included in your materials, as Appendix II, is a chart showing the impact of the tuition rollback on tuition and fee charges and a table showing the savings by institution, resulting from this rollback.
The Senate Finance Committee has adopted Governor Gilmore’s tuition rollback plan and Senator John Chichester introduced legislation, Senate Bill 1337, to codify the Governor’s plan. The House Appropriations Committee added $3 million to the tuition cut by adopting what has come to be known as Delegate Alan Diamonstein’s "75/25" percent of costs proposal. Delegate Diamonstein has also introduced legislation, House Bill 2038, that passed the house on Monday to codify his plan. Delegate Vince Callahan also introduced House Bill 2757 to mirror Governor Gilmore’s proposal. Delegate Callahan’s bill passed the house on Monday and is on its way to the Senate.
I must say that Governor Gilmore’s proposal stands head and shoulders above the competition for a number of reasons. House Bill 2038 calls for higher education boards of visitors to set tuition rates, subject to funds appropriated by the General Assembly, at no more than 20% at two-year schools and 25% at four-year schools of the educational cost.
Simply put, this plan is SMOKE AND MIRRORS. At a time when we are going to cut tuition by 20%, this bill would take with the left hand what it’s giving with the right hand.
In four years, tuition will be right back where it is today under HB 2038. If tuition rates are set at 20% and 25% of a university’s educational costs, the practical effect of this policy is to remove the tuition freeze that is currently in effect. The bill was amended on the floor Monday to include a freeze on tuition until 2002. But, there are other flaws in this bill.
The 75/25 policy does nothing to control total costs. Under this bill, student tuition will increase each year as college spending increases.
This formula permits the colleges to charge 25% of whatever the institutions decide to spend each year. When spending increases, the student is forced to pay 25% of the spending increase. Thus, university spending practices will drive the tuition costs charged to parents and students.
In the mid-1980s when Virginia had a similar policy for the percentage of costs paid by students, tuition and fees rose an average of 9.5% per year (adjusted for inflation). By 1991, tuition and fees at our comprehensive four-year institutions were the highest in the nation, those at doctoral institutions were 5th highest, and those at our community colleges were 15th highest.
Keeping the tuition freeze is important because even with the Governor’s 20% tuition and fee rollback, Virginia is still a high tuition state.
Even with the Governor’s proposed 20% rollback of tuition and fees, the average Virginia undergraduate will be paying 13% more than the average in-state student nationwide.
In the early 1990s, Virginia students and their parents were subjected to double-digit tuition increases as a result of the recession. For the past fifteen years, tuition and fees have increased 110% in real dollars at Virginia’s four-year doctoral institutions, 78% at our comprehensive institutions, and 53% at our two-year institutions.
The better alternative is Delegate Callahan’s HB 2757 and Senator Chichester’s SB 1337, an across the board 20% tuition rollback with a dollar-for-dollar reimbursement from the state’s general fund, and a continuing tuition freeze.
It makes little sense to adopt a cost sharing policy without first addressing college costs. There are two existing commissions underway to develop rational funding policies.
This Commission, and the General Assembly’s Joint Subcommittee on Higher Education Funding Policies, are both reviewing policy and funding issues affecting higher education. Before any cost-sharing policies are codified, both commissions should be allowed to complete their analyses and make recommendations that will provide valuable information for the best ways to improve quality, achieve accountability, provide an equitable funding methodology, and make higher education more affordable to the students.
Governor Gilmore remains committed to continuing the freeze on tuition, while rolling back tuition by 20%.
Another important initiative of Governor Gilmore’s is increased funding for distance learning. The Governor’s budget includes $1.5 million to support two pilot projects at the institutions of higher education.
The first pilot is to develop and implement a program on distance learning between two or more Virginia public institutions of higher education that share professors and academic courses in their normal course offerings to students via live satellite, video and/or the internet.
The second pilot is to implement a grant program that will provide funding to a consortium of higher education institutions that offer academic degree programs utilizing electronic distance learning technologies.
The purpose of the grants is to make degree programs more accessible through distance learning for citizens of Virginia who seek undergraduate and/or graduate degrees. The grants shall be available either to establish new distance learning programs or to augment existing distance learning programs.
In addition, a Distance Learning Steering Committee is created to act as project manager and to evaluate the pilot programs.
The purpose of the Steering Committee is:
The Steering Commission will submit a final report to the Governor and General Assembly by October 1, 2000.
The House Appropriations Committee reduced funding for this important initiative by one half. The Senate Finance Committee recommended that the initiative receive no funding.
Governor Gilmore also proposed increasing support for Virginia’s Historically Black Colleges and Universities. Specifically, he provided 5.5 million to Virginia State University and 4.9 million to Norfolk State University to support various operating and capital initiatives.
Included in VSU’s new funding is $583,000 to begin a three year phase-in to meet the federal law that requires a 50% state match for "1890" land grant programs by the year 2002. With the Governor’s proposed three year phase-in plan, Virginia will be the only state voluntarily providing a 100% match for federal funds.
The House Appropriations Committee provided an additional $600,000 to VSU for operating and maintenance deficiencies and an additional $700,000 to NSU to enhance technology.
The Senate Finance Committee provided and additional $265,800 for VSU and $398,700 for NSU to enhance instructional technology.
Finally, a subject that received a lot of attention during our last meeting, Tuition Assistance Grants, Governor Gilmore provided an additional $1.6 million to address revised enrollment projections at Virginia’s eligible, private and independent institutions. The House Appropriations Committee recommended increasing the grant from $2,600 to $2,800 per student. The Senate Finance Committee took projected TAG balances in FY1999 and applied them to FY2000.
Overall, the Governor’s budget initiative’s remained intact, with some changes around the edges. Of course, nothing in this process is static. Everything is fluid at this time, and we await the second half of the General Assembly to see how everything shakes out. In the end, the Governor will have the last word.
I believe I have some time remaining, and I will be happy to answer any questions you might have. Members of my staff are also here today and they have tracked many of these issues, as well as the bills contained in the summaries located in Appendix I. They are also available to answer any questions you might have.
Mr. Chairman, thank you again for your invitation to update the Commission on the Governor’s legislative initiatives.
Posted: February 12, 1999
By The
Educational Policy Institute of Virginia Tech
sjanosik@vt.edu
