Casteen calls Kaine’s cuts tough, but fair strategy

RICHMOND — Colleges and universities must learn to offset current and future losses in state funding by creating other sources of revenue, University of Virginia President John T. Casteen III said Tuesday.

During remarks at a meeting of the State Council of Higher Education for Virginia, Casteen said that he considers Gov. Timothy M. Kaine’s statewide budget cut proposals “fair.” “It’s a tough strategy, but it’s a fair strategy,” Casteen said in Richmond.

Casteen emphasized that Kaine’s proposed 8 percent cut to state funding for four-year institutions will bring the total loss in state funding at those schools, over the last three months, to 15 percent — a 7 percent cut was already authorized by the governor in October.

At UVa that would mean a loss of $23 million that likely would be countered, in part, by a rise in tuition next year.

In urging colleges and universities to seek out other funding, Casteen said that alternate revenue sources such as endowments can, to some degree, act as safety nets. Nationwide, endowments have suffered billions in losses since July, with UVa’s endowment losing roughly $1.3 billion over the last five months, according to a recent report.

However, Casteen noted that year-end donations to UVa appear higher than last year, although final numbers were not available.

He also said any proposed economic stimulus package passed by Congress in the wake of the current recession should include money for infrastructure projects at colleges and universities.

Casteen was one of 40 high-ranking college and university officials nationwide to sign a letter released in December by Carnegie Corp. of New York calling for some of the stimulus money to be spent on higher-ed infrastructure.

“Crises can beget opportunities,” Casteen said, later adding, “The issues of the current year are about as hard as they can get.”