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Gov. Jim Hunt started the state budget process by submitting a proposed budget that left University leaders wanting more.
The main disappointment for the University was Hunt's proposal regarding faculty and staff salaries.
Those salaries would increase 3 percent with the opportunity for a 0.5 percent bonus, according to Hunt's proposal. In addition, Hunt wants to create a fund that would offer an additional 2 percent for faculty who demonstrate "excellence in the classroom." Hunt would have the Board of Governors establish criteria for that 2 percent excellence award.
Such raises are less than University leaders, starting with Chancellor Michael Hooker, had hoped for given that other states are giving faculty members bigger raises.
"I'm sad to say that this will push us further behind our peer institutions," Hooker said. "I've preached to the legislature, to the Board of Trustees and to the newspapers that faculty are crucial to our success. This is a crisis that simply can't continue if we want to stay in the top five among public universities."
Hunt also supports a proposed tuition increase that would generate $6.5 million for the UNC System budget.
The governor's proposal also includes $19.4 million to meet increasing enrollments in the UNC System and $7.5 million to address spending priorities identified by the Board of Governors.
This year's budget process is hampered by two big-ticket bills created by court decisions. One is a $399 million final payment to settle a lawsuit with government retirees who were wrongly taxed. The other is a $354 million repayment of the intangibles tax.
Hunt's plan actually has a multi-million-dollar hole that he said will be filled once he finds out if the state has to repay the intangibles tax money in one year or in installments.
If the state has to pay the entire intangibles tax refund this year, the state university system could lose $150 million for building repairs and renovations, according to Hunt's proposal.
That would be a terrible blow at a time UNC President Molly Broad has identified renovations and repairs as being a priority and a long underfunded element of the state system.
Hunt's budget is the first step in a long budget process that typically is not completed until the summer. Hooker pointed out that state legislators play the leading role in crafting the final budget.
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