UNC budget cuts’ effect on Chapel Hill unknown

Chapel Hill and University officials have been working together to determine what effect UNC budget cuts will have on the town, but only one thing remains certain — they don’t know.

But as UNC parcels out cuts to individual schools and departments to make up for its 18 percent state funding reduction, town leaders are worried the budget crisis will significantly damage Chapel Hill industries.

Town Manager Roger Stancil said he thinks cuts could harm the town in the long run if they damage the University’s academic caliber and image as a research institution, a major draw to Chapel Hill.

“A big worry is to what extent those cuts affect the quality of the University,” he said.

Chapel Hill Mayor Mark Kleinschmidt said he has heard concerns from town business owners.

He said University students and faculty pour millions of dollars into the Chapel Hill economy each year by supporting local businesses and real estate and rental markets.

The University also contributes to the town by sharing costs on Halloween, paying property taxes and contributing funds to Chapel Hill Transit.

Construction ends, jobs go

Kleinschmidt said UNC is Chapel Hill’s main employer, a relationship credited with keeping the town’s unemployment rate below the national average.

Of the University’s more than 12,000 employees, about 4,300 live in Chapel Hill.

If the University lays off staff and faculty, Chancellor Holden Thorp said those residents might be forced to leave to find work elsewhere.

Thorp said UNC capital projects are also important to local employment, since they create jobs and fuel consumption.

And if the legislature doesn’t fund new projects as current ones end, jobs will disappear.

The construction of the University’s Imaging Research Building — which Thorp said was the last large capital project to get pushed through for state funding — employs between 200 and 300 people, said Eugene Bober, assistant dean for planning at the School of Medicine.

The nine-story building, set for completion next fall, will be one of UNC’s largest. Since the project began, it has created more than 1,000 jobs.

Rick Steinbacher, associate athletic director, said the Kenan Stadium expansion has also been a major employer, creating 800 jobs during its yearlong construction.

The town looks forward

Kleinschmidt said the cuts to UNC were larger than he anticipated, but he hopes the town’s increasing focus on economic development could mitigate their effect — and the effects of future cuts.

“We are continuing to work on a way to diversify our commercial base,” he said.

Thorp said working to increase economic development in the town could improve Chapel Hill’s future, which could help bring people to UNC despite the cuts.

“We want this to be a place where people want to come.”

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