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University Gazette

The University of North Carolina at Chapel Hill

State budget provides modest pay raise for employees

The $20.2 billion state budget for fiscal 2012–13 was passed just before the Fourth of July holiday as lawmakers worked late into the night to override Gov. Beverly Perdue’s veto from the previous week.

The approved 2012–13 budget does provide some stability for higher education budgets, and for the first time in four years, teachers and state employees will receive a pay raise.

All SPA employees (subject to the State Personnel Act) will receive a 1.2 percent increase, and the universities in the UNC system will receive the equivalent of a 1.2 percent increase for faculty and EPA non-faculty employees, to be allocated at each university’s discretion with guidance expected to come later from General Administration and the Board of Governors.

All employees also will see an additional five days of vacation, which must be used in 2013.

The new budget includes some funding for enrollment growth across the UNC system, fully funds operating reserves for new buildings, provides $13 million in repair and renovation funds ($2.84 million earmarked for Carolina) and includes $3 million to augment faculty recruitment and retention.

The total appropriation for need-based financial aid will be $24 million more than last year, with most of the new dollars coming from excess lottery receipts. In addition, all but $3 million of this year’s scheduled $9.18 million management flexibility cut, imposed by the N.C. General Assembly last year, will be restored. UNC campuses will see marginal cuts to meet that target.

“Given current economic realities, the 2012-13 state budget adopted by the N.C. General Assembly is fair to the University of North Carolina and supports our highest priority needs,” UNC President Tom Ross said in a statement last month after the legislature submitted its budget.

“We understand that resources are scarce in every part of state government and believe the legislature worked hard to address our most significant needs and assist us in protecting the quality of education we deliver to our students.”

At Carolina, state appropriations generally account for less than one-quarter of the University’s total revenues. This revenue is targeted to support instruction and key academic operations. Together, state appropriations and student tuition and fees make up about one-third of the total.

Details about the impact of the budget on Carolina are not yet known. It takes about a month for the approved budget to be certified, and General Administration will have to work through determining how to distribute the new funding and new cuts to the UNC system campuses.

“Our legislators had a difficult job, as they’ve had since the economic downturn began four years ago,” said Chancellor Holden Thorp. “I appreciate the stability this budget provides, and I am very happy that the hard work and numerous contributions of our faculty and staff have been recognized through a modest, but well-intentioned – and deserved – salary increase.

“I look forward to continuing our work with the General Assembly to preserve the quality of a Carolina education for thousands of current and future Tar Heels. Maintaining the strength of higher education in North Carolina, not only on our campus but throughout the UNC system, is absolutely vital to the economic future of our state.”

As details unfold, updated budget information will be posted on the Carolina Budget Information website.