One Tough Budget
(July 1, 2010) The $19 billion budget for 2010-11 that N.C. legislators adopted this week makes cuts that hurt, but that offer the UNC system a measure of flexibility.
“There’s not enough money down here for anybody to be too proud of,” said Senate Majority Leader Martin Nesbitt. “When you’ve cut $800 million on top of $2 billion plus, which is what we did last time – we’re down to where we’re all having to do things we don’t want to do.”
The state’s budget picture is expected to worsen next year. Legislators adopted the 2010-11 budget amid warnings that more than $500 million in federal Medicaid assistance included in the plan might not materialize, and that $3 billion in temporary taxes and federal stimulus dollars will expire next year. The budget:
• Imposes $70 million in “management flexibility” cuts across the UNC system – on top of $100 million in cuts ordered last year – to be made by the chancellor at each campus. Despite its magnitude, the cut is less than half what the House recommended in its budget proposal.
• Repeals a $34.8 million tuition increase enacted last year that would have gone to the state’s General Fund rather than stay on campus.
• Leaves intact a tuition increase approved by the Board of Governors.
• Allows each campus to raise tuition as much as $750 in 2010-11 to offset budget cuts – after 20% of the funds raised go to financial aid.
• Eliminates $9.4 million to pay for scholarships for out-of-state athletes at in-state tuition rates. The action removes roughly $2.5 million for athletic scholarships at UNC-Chapel Hill. But it allows the University to continue paying for academic scholarships for out-of-state students at in-state rates. The policy allows the Morehead-Cain Foundation to bring at least 18 additional scholars to campus each year.
• Leaves intact a $50 million appropriation for the University Cancer Research Fund that legislators launched in 2007.
• Cuts a $44 million annual appropriation to UNC Hospitals by $8 million.
• Provides $5.6 million for additional enrollment growth system-wide and does not place a cap on enrollment as the House proposed.
• Provides $8.2 million for need-based aid to support 4,600 more students who now qualify. Combined with $26.7 million in lottery receipts, the budget includes $34.9 million in aid for UNC students.
• Includes $3.5 million to help reduce a backlog of 66 endowed professorships that are awaiting state matching funds.
• Restores $24 million that was cut last year to cover the operating costs of new or renovated buildings across the UNC system.
• Authorizes $60 million in debt for repairs and renovations to buildings across the UNC system.
• Authorizes $22 million in debt for new equipment across the system.
• Grants authority for the UNC system to order employee furloughs if necessary to respond to the state’s budget crisis.
