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University Gazette

The University of North Carolina at Chapel Hill

Board of Governors allocates UNC campuses’ share of state funding reductions

Carolina administrators now know the extent of state budget cuts they will have to manage for fiscal 2013–14.

Of the $66 million in management flexibility cuts for the UNC system approved last month by state lawmakers, Carolina’s portion is $14.98 million. Management flexibility gives the campuses discretion in how the cuts are imposed, with overall direction from the Board of Governors.

In allocating reductions for each UNC system campus, the BOG factored in eight measures including retention and graduation rates, degree efficiency and spending per degree, enrollments and number of Pell Grant recipients.

At its Aug. 9 meeting, the BOG also approved a $3.28 million reduction in instructional efficiencies and a $2.11 million reduction in operational efficiencies for Carolina. The total reductions for the UNC system in these areas were $15.8 million and $10 million, respectively. And to fund $3 million for BOG Strategic Directions investments, each campus received an additional cut; Carolina’s share was $632,163.

These cuts are in addition to reductions in state support lawmakers passed last month for Carolina’s School of Medicine and the University Cancer Research Fund (UCRF).

All direct funding to the medical school to support graduate medical education and help pay for uncompensated care has been eliminated (last year’s appropriation was $15 million, which at the time was designated as a recurring amount). And funding for the UCRF, which has received $50 million annually since 2009, will be cut by $8 million in 2013–14.

Permanent funding reductions for the UNC system totaled $115 million, or about 4.5 percent of the base operating budget, UNC President Tom Ross said in an Aug. 21 message to the campuses. After accounting for funding adjustments for enrollment changes and reserves for operating new buildings, the net funding reduction for the system is a little more than $64 million, or about 2.5 percent, he said.

“Absorbing these required reductions will be difficult and painful, but the General Assembly provided us with the flexibility to determine how many of the cuts will be implemented, enabling campus leaders to mitigate harm to the core mission of our institutions,” Ross said.

On the plus side, enrollment growth across the UNC system was fully funded, the legislature allocated $60 million for building repairs and renovations, and legislatively mandated tuition hikes for out-of-state students were confined to undergraduates.

Non-resident undergraduates will pay more tuition at 14 campuses in 2014–15, with that revenue allocated for the state’s general fund.

Lawmakers stipulated a 12.3 percent hike at four campuses, including Carolina. That means Carolina’s non-resident undergraduates will see their tuition increase by $3,469 – from $28,205 this academic year to $31,674 in 2014–15.

The remaining 10 campuses will impose a 6 percent increase in 2014–15 (N.C. State and UNC-Charlotte are not required to raise out-of-state tuition).

UNC President Tom Ross told the BOG’s Budget and Finance Committee that as members prepare to work on a new four-year tuition plan this fall, he will recommend no additional tuition increases for North Carolina residents for the 2014-15 academic year.

“We need to absorb the cuts we’ve had and see what comes out of that,” he said.

At Carolina, state appropriations account for slightly less than 20 percent of the University’s total operating budget. Since 2008, the University has had to absorb approximately $235 million in total state funding cuts (that amount does not account for additional funding including tuition revenue or enrollment growth funding).

In other BOG action, the board voted to ban campuses from allowing students of opposite genders to live in the same on-campus suites or apartments.

The action eliminates a new gender non-specific housing option Carolina’s Board of Trustees endorsed last November, which was set to take effect this academic year. The BOT and Chancellor Emeritus Holden Thorp supported gender-neutral housing as a means to protect the health, safety and well-being of all Carolina students.