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WVU budget presented to Legislature

CHARLESTON — West Virginia University officials, coming off a painful year of budget and personnel cuts, told lawmakers Wednesday the outlook for the coming year is stable with some financial headwinds.

“We have made difficult decisions at West Virginia University. Change is never easy,” President Gordon Gee told members of the House Finance Committee during a budget hearing Wednesday afternoon. “We are doing more with less.”

WVU took steps to address the likelihood that the university would face a $45 million gap during the current fiscal year. University leaders dealt with the shortfall with a tuition increase of about 3%, the use of some financial reserves and by cutting staff and programs.

Now it’s time to plan for the coming fiscal year.

University leaders described relative stability in front of the House Finance Committee. They will make a similar presentation to the Senate Finance Committee on this afternoon.

Paula Congelio, vice president and chief financial officer for the university, told delegates that WVU was able to trim $21 million last fiscal year. That left $24 million that the university was able to resolve through one-time use of reserves.

For the coming fiscal year, Congelio said, the university has been able to identify ways to meet the $24 million gap — but it’s not quite there yet.

“We have a balanced budget in the current year, and we will next year too even if we have to deploy one-time savings,” Congelio said.

The university has identified some factors that could complicate financial progress.

One is the increased costs through the Public Employees Insurance Agency of $7.5 million, reflecting costs for both the employer and employees for the most recent premium increase. Another is $1.268 million in increased costs through the state Board of Risk and Insurance Management. And another, generally, is because of persistent inflation rates.

“We ask the Legislature to consider investing in WVU and Marshall to help us with these increased costs,” WVU wrote in its budget presentation.

WVU officials said the university should have funds for a portion — but not all — of the average 5% pay raise for state employees proposed by Gov. Jim Justice.

That’s because the allocation for the pay raises would come from the state’s general fund. Colleges and agencies that have a mix of funding sources — such as federal funding, tuition or fees — have often had to find alternative ways to identify funding for raises publicly touted by the governor.

WVU says state appropriations of $156 million account for only 15% of the university’s total budget and only 20% of its benefits-eligible employees are funded through general appropriations.

So in this case, WVU says it’s in line for $3.5 million in state funding that would be used for employee pay raises on July 1. That is not the full amount necessary to give an across-the-board pay raise.

WVU says it would actually need an additional $16 million to provide an average 5% raise. With state officials aiming again for a relatively flat general fund budget, that additional amount seems unlikely.

Speaking on MetroNews’ “Talkline,” Gee said the university still needs state support.

“We’ve made the tough decisions now, we look to you to support us,” he said. “And by the way, we have every indication we’ll get strong support out of the Legislature.”

Marshall University also presented its budget to lawmakers on Wednesday and described its own financial challenges over the past few years.

Marshall officials described an enrollment peak in 2010 — and an enrollment drop of 22% from that year until 2021, when the trend finally leveled off. Marshall had also projected a deficit that, if left unchecked, could have trended toward $34 million by fiscal 2026.

At this point, Marshall President Brad Smith described the university’s structural deficit as $22 million, a reduction from what it could have been.

Marshall’s adjustments have included some employment positions and programs while identifying others that could be primed for growth. Smith said the university has focused on reducing waste and inefficiency while also aiming to recruit additional students from the region.

Like WVU, Marshall officials at the budget hearing pointed toward increased insurance costs for the coming year.

“We have a structural transformation going on,” Smith said on “Talkline.” “We’re controlling our costs and focusing on six areas the state has identified as highest priority.”

Smith added, “We need to be fiscal stewards, and we are working hard to do that.”