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University Gazette

The University of North Carolina at Chapel Hill

McCrory budget proposal stresses efficiencies, responds to BOG priorities

Gov. Pat McCrory’s budget proposal for 2013-14, which he unveiled March 20, had both good news and bad news for higher education in the state.

The proposed budget would cut state appropriations to the UNC system by $138.5 million – a 5.4 percent reduction from the current year. The budget also responds to some of the Board of Governors’ highest priorities, UNC President Tom Ross said.

In fiscal year 2013-14, the system’s continuation budget for enrollment changes and building reserves would be adjusted by $50.4 million, and recommendations in the BOG’s five-year strategic plan, “Our Time, Our Future: the UNC Compact with North Carolina” would be partially funded – with $19.6 million in the coming fiscal year and another $43.6 million in fiscal 2014-15.

McCrory is also recommending a 1 percent pay increase for all state employees.

Heightened efficiencies sought

The biggest reductions –- $66.9 million in recurring and $43.8 million in non-recurring funding cuts – would fall under the category of “management flexibility.”

The budget proposal states: “Campuses shall consider reducing the number of senior and middle management positions, elimination of redundant programs, faculty workload adjustments, restructuring of research activities, implementation of span of control measures, use of alternative funding sources and other staff and operational efficiencies.”

Another $10 million would be cut through “instructional efficiencies” that could be accomplished through system-wide academic programming measures such as establishing uniform guidelines governing class (section) sizes and making it easier for students to transfer credits between UNC campuses.

Reductions in utility budgets at several campuses would amount to $8 million.

Tuition proposals

Under McCrory’s budget proposal, the 2013-14 tuition rates previously set by the BOG for in-state students would remain unchanged. System-wide, those increases range from 2 percent to 12 percent for undergraduates, and from 2 percent to 14.2 percent for graduate students.

The governor proposes raising the previously approved rates for all non-resident students by an additional 6 percent to 12.3 percent system-wide, reducing state appropriations to the UNC system by $54.1 million for both years of the biennium. Consequently, non-resident undergraduates would see increases of 6 percent to 19.2 percent, while non-resident graduate students would pay from 6 percent to 23.4 percent more.

The governor’s proposal would also cut an estimated $8.58 million by rescinding the state law allowing non-resident students who receive full academic scholarships to be considered in-state students for tuition purposes. This would adversely affect merit-based academic scholarships such as Carolina’s Morehead-Cain Scholars Program.

Magnitude of cuts

Ross said the UNC system remained committed to operating more efficiently and he understood the remaining fiscal challenges, but he was concerned about the magnitude of the new proposed cuts, particularly in light of the more than $400 million in permanent budget reductions the UNC system absorbed two years ago.

The proposed budget effectively reduces funding for need-based financial aid by $25 million. And the $50 million for building maintenance and repair, while very helpful, Ross said, represents a fraction of the deferred maintenance needs system-wide – now exceeding $2 billion. 

"We look forward to the next steps in the budget process and will work in partnership with the legislative leadership to identify targeted investments in the university that enlarge and strengthen North Carolina’s talent pool and improve the state’s competitive position,” Ross said.

See the governor’s budget proposal.