Virginia, business combine forces to push issue needed for burdened college system.

WASHINGTON - Virginia officials and concerned businessmen are sounding the alarm about an expected surge in student enrollment to gain voter approval of $472.41 million of general obligation bonds for state colleges and universities.

"This is very critical," said state Senate Majority Leader Hunter Andrews. "Virginia is one of the few sites on the Eastern Seaboard where college enrollment is expected to increase dramatically after 1995-96. We can't afford to get any further behind than we are."

State officials list roughly 100 essential projects that will be in jeopardy if the bonding initiative fails this November. Building plans would be scrapped, needed improvements shelved indefinitely, and enrollment possibly limited, they say.

But, if approved, the bonds would finance construction and expansion of classrooms, laboratories, and libraries at 18 state colleges and universities and 18 junior colleges. Proceeds would also pay for providing handicapped access at state schools and renovating three museums.

Sen. Andrews said a state budget gap has crimped capital spending "for several years," Profits from the state-run lottery, originally designated to fund capital projects, were turned over to the general fund two years ago to help tame a $1 billion budget gap.

Sen. Andrews said the state has not supported capital improvements at colleges and universities since 1986. But in that same time, enrollment has climbed by 40,000 students, and it is expected to gain another 65,000 by the year 2000.

The November ballot will also feature questions requesting approval of $45.2 million of bonds for construction of, and improvements to, mental health-care facilities, and $95.4 million of bonds for projects at state parks.

State officials are expressing guarded optimism that the bond plans will carry the day.

Taking no chances, Gov. Wilder in May set up a committee called the Virginians for Progress Foundation to bolster support for the bonds. No organized opposition to the bonding questions has surfaced, but the governor said the best time to prepare for war is in times of peace.

The panel's chairman. Larry Framme, stepped down as secretary of the state Economic Development Department early in July.

Noting support from business groups, Mr. Framme said the bonds campaign, as the effort is informally called, is "coming along fine." The effort is more than a project to gain the backing of Virginia voters, he said, calling its prospects "very critical" to the state's financial future.

State business leaders agree. Robert T. Skunda, president of the Virginia Chamber of Commerce, said in a letter to members that passage of the referenda is necessary to ensure adequate facilities and to lure new industry.

In addition, he said in the letter, passage of the bond issues would give the state an economic boost. "In the construction industry alone, these projects will generate approximately 3,600 new jobs and generate $22 million in additional tax revenues," Mr. Skunda said.

Sidney O. Dewberry, an honorary co-chairman of the bonds campaign, said the projects to be financed with the bond proceeds are essential.

"Without new facilities, we're just not going to be able to accommodate all the students." he said. "We'll be in really bad shape if this is not done. We won't be able to provide the high quality of education Virginia is known for." Mr. Dewberry is also co-founder and managing partner of Dewberry & Davis, a Fairfax, Va., architectural, engineering, planning, and surveying firm.

To get the facilities, supporters say, the bonding is crucial. "There's no way, in my humble opinion, that we could find money for these projects without the bonds, given the magnitude of these projects and other operating needs." Sen. Andrews said.

Mr. Framme concurred, saying that "we would be limited to just emergencies."

But supporters said they believe voters will give officials the required approval. "This is a good time to issue bonds," Sen. Andrews said, adding that the current interest rate environment is favorable and construction costs are down.

Moreover, a number of projects are ready to go, and voters could see the results in short order.

"There are some where they've already stuck a shovel in the ground, but they had to stop because of a lack of funds," Sen. Andrews said.

For example, officials at the University of Virginia held a ground-breaking ceremony or a new arts and sciences building in 1990 that was meant to be funded with lottery profits and private gifts. The structure, to be known as Bryan Hall, is supposed to provide needed classroom and faculty office space.

If the bond plan is approved, Bryan Hall will be built by early 1994. University officials say that no new buildings have been constructed for the arts and sciences department since 1969, when the faculty totaled 422. The faculty now numbers 641, and professors are crammed two and three to an office.

In addition to Bryan Hall, bonding would allow the university to get a new library storage facility, classroom renovations, new research laboratories for the chemistry department, improved electrical and sewer capacity, and additional space for medical science education.

A spokeswoman for the university said the school would not have to turn away students if the bond plan fails. "But we're going to be in deep trouble as far as these construction projects go," she said. An information sheet distributed by the university also warns that the current crowded conditions "hurt the chances of recruiting distinguished faculty and graduate students into programs which are otherwise superb."

While advocates are optimistic about bond approval, they remain wary because of Virginians' traditional reluctance to incur debt. That reluctance is reflected in the current state constitutions and its predecessors over the years.

Adopted in 1971, the constitution authorizes the issuance of four types of debt: short-term debt for cash flow, emergencies, and refundings; long-term revenue bonds; long-term revenue and GO bonds requiring two-thirds approval by the General Assembly; and long-term GO bonds requiring voter approval in a referendum.

Officials have asked voters to approve only one bond issue since 1971, worth $125 million. Those bonds, which were issued in 1978, received a voter go-ahead in 1977 and will be paid off by 1998.

Bond advocates take pains to distinguish the bond package from a pledge bond proposal the voters rejected in 1990. That plan, a proposed constitutional amendment, would have allowed transportation bonds to be issued at the pleasure of state officials, without a referendum and with no backing but the revenues of the state Transportation Trust Fund.

None of that applies to the new slate of initiatives, supporters say. "GO bonds are not the pledge bond proposals turned down last year," says pro-bond literature from the Virginians for Progress Foundation. "Each project is specifically identified. There are no blank checks."

Bond advocates have stressed that the issuance would not tarnish the state's gilt-edged triple-A's from Moody's Investors Service, Standard & Poor's Corp., and Fitch Investors Service. They said the bonds would not exceed conservative debt-to-revenue ratios.

Advocates say the question for Virginia voters boils down to whether they want improvements in higher education facilities.

"This is really a rather modest amount of money, as these things go." said Mr. Dewberry. "But I doubt if it would be funded if this [referendum] fails because of our serious budget problems."

He said he is confident the bonds will win. "I've talked to quite a few people," he said. "And so far, everything looks okay."

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