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Today's date:
N.C. legislators’
commitment to
higher education is
evident in budget
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University officials are reacting positively to the newly approved $19 billion state budget that state legislators have hammered out for the 2009–11 biennium. They are relieved the final budget was not much worse.

“Considering the state’s revenue picture and this budget’s impact on other state agencies, our legislators have treated the UNC system very fairly overall,” said Chancellor Holden Thorp.

Dwayne Pinkney, assistant vice chancellor for finance and administration and the University’s state government liaison, said the General Assembly’s commitment to education and higher education was evident.

Good news for UNC includes:

* *$5 million in enrollment growth funding;

* *$2 million in need-based financial aid;

* *$50 million for the University Cancer Research Fund;

* *$223 million in debt financing for construction of the Biomedical Research Imaging Center; and

* *A portion of the $2 million in permanent funding systemwide for faculty recruitment and retention.

“Legislative leaders worked hard to minimize cuts and they have allowed some flexibility in how those cuts will be taken,” he said.

As the Gazette went to press, UNC General Administration had projected an overall 6 percent reduction in state appropriations for the UNC system’s base budget.

Even before the budget was approved, Chancellor Holden Thorp had issued two orders to cut spending levels for state appropriations by a total of 10 percent from the amount allocated last year.

The initial 5 percent cut went into effect in March; the second 5 percent cut went into effect in July in anticipation of budget cuts to come.

The budget, which the General Assembly approved last Wednesday and Gov. Beverly Perdue signed on Friday, filled an estimated $4.6 billion budget shortfall through a combination of spending cuts, federal stimulus money, higher fees and a much-debated $990 million revenue package that for a time had held up the deal.

Key components of the tax package include a 1-cent increase in the sales tax, tax increases on beer, wine and cigarettes, and new taxes on digital downloads and online purchases.

In addition, married couples filing jointly who report income of more than $250,000 a year will pay a 3 percent surcharge on their income tax liability, while married couples reporting between $100,000 and $250,000 will pay a 2 percent surcharge.

Perdue had also ordered a spending freeze on all state funds, including state receipts, effective July 24, to help balance the budget. Those emergency spending restrictions were still in effect when the Gazette went to press.

The good, the bad, the in-between
There are several items in the budget worth cheering about, Pinkney said.

High on that list is $44 million allocated to the UNC system for enrollment growth funding, including $5 million for Carolina, Pinkney said. Carolina will also get about $2 million of the $11 million in recurring need-based aid and $12.5 million in non-recurring need-based aid over the two years of the budget.

Sometimes, good news can be found in bad news averted. Such was the case with the University Cancer Research Fund. Legislators had been eyeing a portion of the $50 million fund as a possible source of revenue, but it was left unscathed. The fund supports basic interdisciplinary research across campus through the UNC Lineberger Comprehensive Cancer Center and the School of Medicine.

Finally, the legislature authorized debt financing of $223 million for the construction of the Biomedical Research Imaging Center, which will become a central resource for researchers across North Carolina for handling the acquisition, processing, analysis, storage and retrieval of images.

On the other hand, the University’s research centers and institutes will suffer in the new budget. Those reductions in available state funding will range from 17 percent to 26 percent, depending on whether the reporting lines are to the provost’s office or the vice chancellor for research and economic development, respectively. Some of those cuts will come with management flexibility.

Impact on employees
As it is, SPA employees (those subject to the State Personnel Act) will receive no pay increases, but neither will they be subject to additional unpaid furloughs based on the approved budget. Faculty and other EPA non-faculty employees (those exempt from the act) will receive no state pay increases or furloughs, either.

For fiscal 2008–09, which ended July 1, the University had eliminated the filled positions of 65 permanent SPA employees and ended the appointments of 184 EPA non-faculty permanent employees for a variety of reasons, including the end of contracts or grants, according to human resources officials. Of the larger number, 12 of the job cuts for EPA non-faculty employees were for budget-related reasons.

It is too soon to know how the 2009–10 budget could affect any future position cuts, said Brenda Richardson Malone, vice chancellor for human resources.

Throughout the budget crisis, Thorp emphasized the importance of protecting classrooms, and by extension, faculty positions despite cancelling dozens of faculty searches.

Under the new budget, General Administration will receive $2 million in permanent funding for faculty recruitment and retention. Historically, the University has fared well when the funds are distributed to the campuses.

Legislators did not alter the campus-based tuition increases already approved by the Board of Governors for system campuses including Carolina. However, lawmakers have indicated that campus-based tuition increases in 2010–11 will be on hold.

INSIDE THE PRINT EDITION: AUGUST 12, 2009

Aug. 12 issue
Click here to read the AUGUST 12 issue as a pdf

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