BLACKSBURG -- While some sectors of the economy are bouncing back from deep recession, in the short term Virginia Tech's budget won't, university officials told the board of visitors on Sunday.

Similarly, the university's endowment cannot meet the hoped-for $700 million target set for 2012, university treasurer Ray Smoot said.

The financial discussion was part of an information session given to the board in advance of its normal quarterly session set for 1:15 p.m. today in Torgersen Hall. A full agenda and resolutions under consideration are available at www.bov.vt.edu.

According to Smoot, endowment growth dropped from $574 million to $452 million over the summer.

But there is good news. By September, the endowment had crept up to $485 million. And, at just more than 9 percent, the current return on Tech's endowment investments is outperforming that of its peers in the Atlantic Coast Conference and the Big Ten universities, Smoot said.

Projections show that return could go as high as 10.5 percent over the next three years, Smoot said.

Still, it won't be enough to meet the $700 million target, he said.

Similarly, the state budget outlook remains grim, officials said.

State funding supports instruction and other basic university operations but has been cut drastically over the past decade.

The most recent $21.8 million cut announced by Gov. Tim Kaine will likely result in some work force reductions and tuition increases, university President Charles Steger has said.

The bleak budget outlook has depressed faculty morale to a low not seen since the 1980s, Faculty Senate President Gary Long told the board.

The board's quarterly meetings are scheduled over two days and include subcommittee meetings on such topics as finance and student affairs. Sunday's information session was a traditional part of the quarterly meeting and allows university officials to brief the board on items such as budget projections and progress on strategic goals.