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University Gazette

The University of North Carolina at Chapel Hill

Budget cuts, tax cuts expected in upcoming state budget

UNC President Tom Ross told attendees at the Employee Forum spring meeting that the next two years would bring $200 million in cuts to the UNC system if the state Senate’s proposed budget remained unchanged.

Ross spoke during the May 21 meeting to give a brief overview of the proposed budget, which was expected to pass the Senate with few changes and continue on to the N.C. House of Representatives.

Projected cuts to the system in the Senate’s proposal for 2013-14 total nearly $75 million, with $110 million in cuts for 2014-15. The Senate’s version is kinder to the UNC system than the budget proposed by Gov. Pat McCrory, said Ross.

“Overall, the senate’s budget is better, but a $75 million cut is very difficult,” he said.

The good news is that the system would receive the requested enrollment growth funding and building reserve funding, Ross said. And the Senate’s proposal omitted the substantial 19 percent increase in tuition for out-of-state students that had been in the governor’s budget.

Worrisome, though, Ross said, are the dramatic tax cuts.

“A $250 million tax cut will mean dramatic reductions in state revenue, making it difficult to operate the universities as well as they should be,” he said.

Though it is too early to know details about the extent of the budget cuts, Ross said a raise for state employees was not expected. “In terms of raises for SPA employees, if there’s nothing in the budget, there’s nothing we can do,” he said. “It’s hard to have a tax cut and pay raises, so they’re making their choice.”

Financial aid will remain stable in terms of ongoing support, Ross said, although the revenue seen last year from lottery receipts will not continue. This puts the system somewhere between $80 million and $90 million behind the demand for need-based aid, something Ross called “a troubling trend.”

Ross said he continues to travel the state and speak often about how investments in higher education benefit North Carolina.

“We believe we can really kick-start the economy with new areas of growth for North Carolina in cutting-edge areas like big data and manufacturing, but we can’t do it without an investment,” he said. “So how much we’re able to accomplish is yet to be determined.”

Chancellor Holden Thorp also spoke at the meeting, his last with the Employee Forum before he leaves on June 30 for Washington University.

Thorp said his recent distinction as a lifetime delegate of the forum was one of the accomplishments from his five-year tenure as chancellor he held most dear.

“It’s been an honor to work with you,” he said. “You have all given so unselfishly for Carolina.”

Referencing Ross’ remarks on the budget, Thorp asked Carolina employees not to allow the bleak budget outlook to break their spirits.

“We are in a complex philosophical struggle for the soul of the state government in North Carolina and the future of higher education,” he said. “The way to survive is to do what you’re already doing: Support each other and believe in the mission of the University.”

Despite continued budget cuts, a lack of pay raises and challenging situations across campus, a recent employee satisfaction survey returned better results than the 2010 survey did. Thorp attributed this to employees’ deep belief in the promise of higher education and their inclination to take care of one another.

Thorp told the group that they could expect the new chancellor, Carol Folt, to be as engaged with staff issues as he’s been when she arrives July 1. So far, he said, there has not been a single topic they disagreed on.

“I’m very excited that Carol Folt is coming here to be chancellor. The quality of the work they do at Dartmouth is the same [as at Carolina], and she’s been a dean, a provost and a president,” he said.

Do for her what you’ve done for me, he said.

“Trust that she has the best interests of the University and students at heart, and that she’s going to do the best she can to make it easier,” he advised.