State Budget UpdateMay 5, 2011
Dear Carolina Faculty and Staff:
This weekend, the greatest contribution Carolina makes will be proudly on display – smart and capable new graduates receiving hard-earned diplomas that you all helped make possible. With Commencement upon us, I wanted to share an update on the state budget process.
House Approves Budget Proposal
Yesterday, the House of Representatives gave final approval to its proposed budget for 2011-2013. The overall package mirrored fairly closely the targets set by the House Appropriations Subcommittee on Education several weeks ago.
This is just the next step in the budget process, following Governor Perdue’s initial proposal in February. Now the Senate will develop its own budget, and we’re optimistic that those reduction levels will be lower for the UNC system and education in general. Then both chambers will appoint a conference committee to negotiate over their differences before the Legislature votes on a final proposal to send to the governor.
Nevertheless, we remain very concerned, along with President Ross, about the disproportionate permanent cuts the House proposal would place on the UNC system – a net reduction of nearly $483 million (more than 17 percent) when factoring in proposed reductions to need-based financial aid.
At Carolina, our state dollars primarily support undergraduate instruction, so absorbing permanent cuts of this magnitude – more than $75 million – would mean long-term damage to how the faculty can teach students. We would have to make tough choices about dramatically increasing class sizes and reducing the number of sections we can offer. And there would be serious implications for the University’s ability to pay for teaching positions at all levels that are supported by state funding, along with additional key staff positions.
We’re thankful for the House’s recognition of the importance of keeping tuition revenue on campus, fully funding enrollment growth and protecting the federal dollars the faculty attract for research – more than $800 million last year. The House budget preserves the state’s contribution to the University Cancer Research Fund and provides for the possibility of some repair and renovation funding for buildings.
We’ve been consistent in asking the General Assembly to provide full flexibility in how we manage reductions, and that will be a very high priority moving forward.
Administrative Units Have Absorbed Major Cuts
We knew significant cuts were inevitable for this year. That’s why we chose to proactively put in play a campus-wide $26 million (five percent) permanent cut, effective July 1, back in January. That will help cushion the blow of additional cuts, but we know there will be more and that they’re going to be painful.
When the downturn began, we made a practical decision early on that administrative units would bear the heaviest burden to protect teaching and research. Finance and Administration, Information Technology Services and Human Resources have been hit particularly hard by cuts. Finance and Administration, for example, has absorbed reductions of more than 34 percent since 2008-2009, including permanent and one-time funding. That’s not just a number. It represents people who have lost jobs and reduced services in campus services, finance, and facilities planning and construction.
Final Budget Timetable Uncertain
We can’t make predictions about how long this year’s budget process will take. Typically, questions about revenue issues like tuition come up at the end, so it’s realistic to assume that, like last year, we won’t have answers for our students and their parents about the increase they’ll face next fall until the final budget has been approved.
When there are significant milestones to report, such as passage of a Senate version of a budget proposal, I plan to continue using University e-mail to keep the campus community informed. In the meantime, I’d also encourage you to visit our budget website, which is updated frequently.
It’s hard to face the prospects of such a large cut, but I pledge to you that we’ll keep making the strongest possible case for supporting our state universities. The commitment that President Ross has to higher education in North Carolina is incredibly important to us. His top priority is preserving the quality of the education we can provide to our students.
Please understand what a difficult challenge our legislative leaders have in coping with the state’s budget difficulties this year. We’re all hopeful that once we get through this budget cycle, future deliberations will be more positive as the state’s economic recovery strengthens.
Thanks for all you do for Carolina.