Campus Budget UpdateJanuary 10, 2011
Dear Faculty, Staff and Students:
With a new semester under way, I want to give you a budget update. I know it’s not a happy subject, but I want to be sure that we keep you informed.
New Reductions, Hiring Freeze on State-Funded Positions
North Carolina still faces serious budget challenges, with a deficit estimated at $3.7 billion for 2011-2012. Governor Perdue and the Office of State Budget and Management recently directed state agencies to reduce spending state funds by an additional 2.5 percent in one-time cuts, to hold state-funded jobs vacant, and to limit purchase orders, travel and training. That’s on top of a 1 percent management flexibility reduction directed in August. (See here [PDF] and here [PDF]).While last month’s directive did not specify the UNC system, President Tom Ross and Erskine Bowles wisely endorsed adopting those same state cut targets and the hiring freeze on state-funded positions in a joint memo issued late last month. We announced how the freeze affects our permanent and temporary positions on Jan. 3. (See here [PDF] and here [PDF]).
Proactively Preparing for 2011-2012
State government and the UNC system have been working on 2011-2012 budget plans for several months. At the governor’s request, UNC campuses submitted permanent state funding cut scenarios of 5 percent and 10 percent to General Administration. We’ve also been asked to consider potential cuts of up to 15 percent. I have every hope that our cuts will not reach that level.
Even so, postponing inevitable cuts for next year until later this spring or summer will only make things worse later. For three years, we’ve been well served by taking proactive steps, and it’s more important than ever to do that again.
New 5% Permanent Cut
For those reasons, we are making cuts in programs, operations and staffing equal to a campus-wide 5 percent permanent state budget reduction – about $26 million – to be effective July 1. We’ll try to shield teaching and research and protect our ability to provide need-based financial aid. Admittedly, however, that will be harder to do moving forward because of the cumulative effects of the cuts we’ve taken so far.
The provost’s office will send instructions soon about specific reductions for each unit. We understand that you want to know now how this affects you. We’ll rely on the vice chancellors, deans and unit leaders to share information because they are making the decisions about how best to take the cuts. In some cases, units that rely most on state funding will be forced to eliminate positions and lay off or terminate staff. We don’t expect to eliminate tenured faculty, to cancel fixed-term contracts in the middle of terms, or to change tenure decisions because of budget cuts. Decisions about renewing contracts for fixed-term faculty after the current ones expire will be made by each dean.
Keeping Tuition Revenue on Campus Critical
Last year, the General Assembly permitted campuses to retain the revenue from the $750 tuition increase to help offset the impact of budget reductions. That made all the difference in protecting our instructional mission. Keeping the revenue on campus for any future tuition increase set by the General Assembly is critical, and we appreciate the support demonstrated by House and Senate leadership on this issue.
Carolina Counts plays a major role in our overall budget strategy, including reducing administrative costs and becoming more efficient. It’s helping us manage the budget cuts and achieve long-term, positive changes to campus operations. We’re making Carolina Counts, now in its second year, a point of emphasis in our discussions with vice chancellors and deans, and the initiative will help guide future decisions.
There is no painless way to get through this. I wish there were. As legislators begin a new state budget process this month, they face tough decisions about many competing needs. I believe they will continue to see the wisdom of investing in higher education. But we have to be realistic in assessing the choices they’re going to make for our state. We have to do our part.
For budget-related updates and background, see our website. We’re making improvements to the site that will launch soon.
Thanks to all of you for your dedication to Carolina.