Chancellor Michael Hooker warned the Faculty Council to brace for a tough session of the state legislature in which money for new projects will be tough to come by.
"This time of year everyone says they have no money," Hooker said of legislators' imminent return to Raleigh. "This year I believe them."
State Sen. Howard Lee, whose district includes the University, shares Hooker's assessment of the upcoming session.
"I think we can't expect much new money to be available to the University," Lee said. "I think we will be able to hold onto what has been obtained to this point."
That means the multi-year drive by Hooker and UNC President Molly Broad to increase faculty salaries to that of peer institutions will likely make no progress this year.
Lee said it was too early to know what kind of staff salary increases would occur, but that such increases will be one of his top concerns.
The tight budget stems from losing a lawsuit brought by retired state employees in which the state must pay $400 million to state, local and federal retirees whose pensions were illegally taxed. That payment comes on top of a $399 million payment made last year.
Lee said the lawsuit ruling came at the worst possible time, just after the legislature "went overboard cutting taxes."
"This situation is extremely frustrating because it didn't have to be this way," Lee said. "We cut the heart out of our ability to go forward, to build for the state's future."
As for raising taxes, Lee said that he didn't expect that to happen.
"I don't believe it would be prudent to talk about raising taxes," Lee said.
Hooker and Lee agree that if 1999 proves to be a tough budget year for Carolina, that it will be because of the tight budget and not any anti-University feelings among legislators.
On the contrary, legislators have a much more favorable view of the University than several years ago, Hooker said.
"We had a meeting with legislators (in early January) and got a sympathetic hearing from them," Hooker said. "We've seen a real seachange in the thinking of legislators in terms of their understanding of the importance of higher education in sustaining the economy of the state."
Lee credits Hooker and Broad, as well as other top administrators, with improving the opinion among legislators concerning both Carolina and the state system.
"They have worked hard to gain the confidence of legislators," Lee said. "They've shown that they are using wisely the money placed here."
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