House passes budget including $784 million in new taxes

Even with $784 million in new taxes that the House passed over the weekend, the $18.6 billion House budget includes painful cuts for the UNC system in the next fiscal year.

How wide-ranging and deep those cuts are likely to be is largely a function of revenue availability and the upcoming negotiations between the House and Senate during the budget conference process, said Dwayne Pinkney, the University’s assistant vice chancellor for finance and administration.

Pinkney said the budget picture is mixed at this point, with both good and less desirable options in the House version.

The House budget includes enrollment growth funds for 2010 but not for 2011, and it provides funds for need-based financial aid.

On a more challenging note, Pinkney added, the House budget includes targeted reductions of $8.3 million for centers and institutes, no funds for Carolina’s Biomedical Research Imaging Center and a drop in support for the University Cancer Research Fund from $40 million to $25 million.

UNC President Erskine Bowles said he was grateful for the modest revenue package recommended by the House.

The package would restore about $75 million of the cuts previously assigned to the UNC system in the first year of the 2009–11 biennium, reducing the proposed cut from $338 million (11.2 percent) to $263 million (8.7 percent).

“Across our 17 campuses, this partial restoration of funding would save 600 jobs and enable us to teach 1,300 more class sections, helping our students get the courses they need to graduate on time,” Bowles said. “This vital funding would be applied directly to the (UNC system’s) academic core.”

Bowles characterized the revenue package proposed by the House as “an important step in the right direction,” but a step that by itself would not be enough to avoid what he described as “a severe and lasting negative impact” on student access and the quality of education being offered.

Bowles and the UNC Board of Governors submitted the UNC system’s budget request to the General Assembly in early spring. In April, the Senate and Gov. Beverly Perdue released their budget plans. Now that the House budget is finalized, the Senate and House will appoint members of a joint conference committee to negotiate a final state budget package.

“Education is the key to North Carolina’s economic recovery,” Bowles said. “We therefore ask and encourage our legislative leaders to consider all reasonable options for further increasing state revenues.”

Chancellor Holden Thorp said he, the trustees and the University administration are continuing to work with Bowles and the Board of Governors to advocate vigorously on the behalf of all UNC campuses.

Thorp has said he is particularly concerned about the scrutiny over research centers and institutes, not only at Carolina but across the UNC system. Faculty working in these centers study real-world problems that affect North Carolinians, Thorp said, even as they help boost the state’s economy by attracting millions of dollars in grant funding.

He emphasized the importance of safeguarding flexibility necessary for deans and vice chancellors to make decisions about how money is used, which would limit the inevitable harm to students’ classroom experiences and University operations.

Information about the University’s budget, including messages from Thorp and Bowles and emergency budget guidelines, is included on the Carolina Budget Information Web site, universityrelations.unc.edu/budget.