Budget cuts to affect N.C. higher education next year

It is too soon to know the scope of budget cuts for next fiscal year. But one thing is certain: With a projected shortfall of at least $2 billion in the state budget, cuts are inevitable.

And they are sure to have an impact on higher education in North Carolina.

So far, the UNC system is holding its own, although the 6 percent cuts the state’s public universities have taken this fiscal year (totaling $143.5 million) are damaging the quality of education. That was the message Rob Nelson, UNC system vice president for finance, sent State Budget Director Charles Perusse in a Feb. 5 memo.

Nelson said the UNC system could weather cuts of up to 5 percent during the next biennium “without inflicting significant damage to our academic core” as long as those cuts were not permanent.

“President [Erskine] Bowles wants to make it as clear as possible to you, the governor, and the legislature that imposing permanent cuts would be equivalent to sacrificing the future of North Carolina,” Nelson’s memo said.

At Bowles’ request, all UNC system campuses last month submitted planning scenarios for how cuts of 3 percent, 5 percent and 7 percent next fiscal year would affect their campuses.

To what degree cuts affect the quality of instruction and support services depends on the scope of those cuts.

In the extreme, a 7 percent budget cut would mean the loss of around 1,680 jobs, 660 of which are faculty positions, across the UNC system. For Carolina, that would mean a loss of around 230 faculty and 150 staff positions.

The number of courses offered, and the size of each class, also would be affected dramatically.

With a 7 percent cut, the University would have to eliminate almost 450 courses and reduce enrollment by 3,400 students – approximately the size of an incoming first-year class.

The number of undergraduate class sections with more than 100 students would reach an all-time high.

Even a 3 percent reduction would slow the implementation of the ERP (Enterprise Resource Planning), the University-wide effort to replace aging administrative software systems that manage student information, human resources, payroll and finance.

Five percent cuts would strain the Carolina Computing Initiative and affect the University’s commitment to meet the needs of all students. In addition, campus police would not be able to keep pace with increasing demands, and the University would see a reduction in housekeeping services, among other areas.

If cuts reached 7 percent, research grants and projects could be compromised because of reductions in research compliance and research computing funding.

Strategic approach
Chancellor Holden Thorp has reminded the campus community that the scenarios are strictly for planning purposes. Until North Carolina leaders have an accurate estimate of state revenue later this spring, the extent of budget cuts for fiscal year 2009–10 will not be determined.

The University needs to take a strategic approach to decision-making in these tough times, Thorp told faculty, staff and students in an e-mail message last week.

“The great institutions – the ones that will emerge from this economic crisis even stronger – will be those that are willing to look hard at what they do and then make really smart decisions. I intend for Carolina to be one of those great institutions,” he said.

So far, the vice chancellors and deans have identified cuts within their units.

“But what we haven’t done is take a good look at ourselves from the cross-University perspective to see if there are ways to improve operations and reduce costs,” Thorp said.

The University has asked Bain & Company, a global business consulting firm, to conduct a study to help identify ways to streamline operations so the University can try to become more effective and perhaps save money.

The UNC-Chapel Hill Foundation is funding the study, which is made possible through a restricted gift from a Carolina alumnus.

“I see this study as a great opportunity to bring in outside experts who can take an objective look at how the University currently operates to meet our campuswide goals and to fulfill our mission to educate students and serve the people of North Carolina and beyond,” Thorp’s message said.

Suggestions from campus
Last month, Thorp invited faculty, staff and students to propose ideas for reducing costs at Carolina. So far, around 175 people have submitted their ideas to budgetideas@unc.edu.

Frequently mentioned topics include energy savings and sustainability efforts, changes in using technology, pooling campus resources and using salary reductions or furloughs to avoid layoffs.

The Gazette is exploring some of these suggestions in an occasional series, beginning with the story below about energy savings across campus.