How Much Have We Lost?

Monday, August 8, 2016

Weekly Column: Legislature Needs to Examine UVA’s $2 Billion Cash Reserve

The following is my column that will appear in the Mt. Vernon Gazette, The Mt. Vernon Voice and The Potomac-Stafford Local in the week of August 8, 2016.

Legislature Needs to Examine UVA’s $2 Billion Cash Reserve
In July, it was revealed that the University of Virginia had managed to retain over $2 billion of excess revenues – exclusive of their $5 billion endowment maintained by their foundation.  An outgoing member of the Board of Visitors called it a “slush fund.” 
This was very concerning to me for several reasons.  First, UVA has increased its tuition by nearly 100% in the last ten years.  UVA’s debt at graduation is up by over 50% in the last years to over $23,000.    Tuition has been exploding in Virginia while UVA has been pocketing over $2 billion of excess revenue. 
Second, while every school needs working capital and a modest financial reserve to operate, I do not believe any school needs to keep cash reserves on hand that amount to $50,000 per student.  UVA is a public school – not a private university.
Third, it is not clear to me that the decisions that led to this “reserve fund” were made with complete transparency.
In early August, I joined Fairfax Senator Chap Petersen to call for a tuition and fee freeze at UVA until the situation can be analyzed and the legislature has an opportunity to determine if we want our public institutions of higher education to have the discretion to earn profits or hoard large amounts of cash.   We also need to consider whether the executive session exemption in the Freedom of Information Act is too easily abused.
Our state also needs to take a look in the mirror about our commitment to higher education generally.  As a graduate of James Madison University and the UVA School of Law, the husband of a UVA graduate, and the child of two UVA-educated graduate students and a Longwood University graduate, I have first hand experience with the tremendous dividends our public higher education system pays to our Commonwealth.  However, a strong system requires funding and state government has not been meeting its end of that bargain.
Rising tuition is also a problem throughout Virginia.  Virginia’s schools now have the sixth highest average tuition in the United States.  Average tuition as a share of Virginia’s per capital disposable income has risen from around 32% in 2000 to 47.6% this year. 
Next session will bring a comprehensive discussion about the status, structure, and financing of state-supported higher education in Virginia.  I hope that it brings a renewed commitment to funding our universities, but our universities cannot plead poverty while making massive profits of large tuition increases. 
It is an honor to serve as your state senator.  If you have any feedback, please contact me at scott@scottsurovell.org.

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