State budget gridlock is affecting more than just local government, it's also creating uncertainty for leaders at the University of Virginia.
UVA President Teresa Sullivan joined dozens of others at a public hearing in Richmond Tuesday, asking Senate lawmakers to find a timely compromise on the state's two-year, $97 billion budget. Continued stalemate, Sullivan said, could seriously impact the university's ability to stay competitive for years to come.
The university relies on the state for about 6 percent of its $2.7 billion operating budget. During her remarks Tuesday, Sullivan said the university is receiving fewer unrestricted funds from the state today than it did in back in 1990. If that trend continues, Sullivan believes it could have a negative impact on the university's ability to attract and retain talented faculty.
"Improving compensation is critical to increase the quality of UVA and enhance recruitment and retention," Sullivan said. "In short, we must be competitive in the marketplace to get the most talented faculty to come to UVA."
The House and Senate budgets are both expected to include a 2 percent raise for state and university employees. Sullivan says that would be critical for UVA as it seeks to hire hundreds of new employees.
Sixty-five percent of tenured faculty at UVA are 55 or older, Sullivan says, and the university expects many of them to retire within the next decade. UVA also anticipates it will have to hire more than 100 new faculty members as more students enroll at the university.
"We'll have 275 faculty retirements over the next six to eight years, and we also look to expand our faculty by about 140 members because of our continuing enrollment growth," Sullivan said.
The University of Virginia Health System - which accounts for half of the university's revenue and faculty - also faces potential liabilities, as lawmakers continue to disagree over Medicaid expansion under the Affordable Care Act (ACA).
Under the ACA, hospitals like UVA would no longer receive disproportionate share payments to help offset the costs of indigent care. Last year alone, UVA provided $228 million in indigent care.
"The university can't shoulder these costs without another postponement at the federal level or other mechanism to financially support this care," Sullivan said.
Supporters of Medicaid expansion say it will help offset the costs to hospitals like UVA by insuring the uninsured and reducing reliance on the existing safety net. But many say reforms to the commonwealth's healthcare delivery system are still needed.
Sullivan says providers like UVA are at the front lines of a long fight to reduce health care costs and increase efficiency.
"This is the long-term solution to improved health outcomes and reduced costs," she said. "We are willing to share these practices to help accelerate a long-term solution."
Senate lawmakers will return to Richmond next week to pass their version of the state budget. The House passed its budget last week without Medicaid expansion.