The Daily Tar Heel

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Thursday December 1st

N.C. House Plan Absorbs Unused Salary Monies

The N.C. House Appropriations Committee approves the state budget, setting aside UNC-system salary funds to avoid taxation.

The N.C. House of Representatives Appropriations Committee approved their $14.4 billion budget Tuesday, leaving many higher education officials worried about the future of their reserves and research money.

Legislators have proposed tapping into money the UNC system has accumulated from past unspent salary money, which would provide $52 million for budget writers to use.

In the past, the UNC system has been given flexibility to use funds left over at the year's end, while most other state agencies are required to return the unspent salary money to the state's general fund. "(The money) is used for upgrading facilities like lab equipment, library acquisitions and classroom renovations," said UNC-system President Molly Broad.

But House representatives are saying they could use the money during this year's budget crisis. In the present plan, the House modifies the amount of money given to UNC each year, cutting 1.5 percent from their salary funds. So instead of giving UNC 100 percent of their salary funds, 98.5 percent would be given, since normally they have money left over that can be used by the UNC system.

"Normally, because of vacancies and such, they don't spend 100 percent of what they're given," said Rep. Joe Hackney, D-Orange. "That means they will have less money left over."

The House's proposal would also give less flexibility to university officials in deciding faculty salaries. Instead, the budget recommends a $625 across-the-board raise to apply to university professors as it does all other state employees.

But university officials say $625 is not enough to make a substantial difference. "We are only given a modest amount of money when we need to address other issues," Broad said. "Faculty are underpaid among our peers."

The House budget also proposes deeper cuts in non-teaching jobs. While the Senate's plan would cut 324 positions, the House's plan would cut 455 non-teaching jobs across the 16-campus UNC system, saving $3.1 million.

"That's a serious problem," Hackney said. "It's a big cut, but since we don't have the votes to raise the revenue, we'll have to do the best we can."

The House and Senate proposals both include a 5 percent tuition increase for UNC system students, which will come in addition to the 4 percent tuition increase approved by the UNC Board of Governors in February. Students will face increases ranging from $41 to $93 starting in the fall 2001 semester.

But the House has amended some of the severe cuts to the Department of Health and Human Services.

The Senate's plan would close the Dorothea Dix Psychiatric Hospital in January 2003, while the House budget keeps the hospital open. The House plan would also keep the Whitaker School, an institution for deeply troubled adolescents, at its Butner location.

But the House budget includes no tax increases, instead relying on tactics like accelerating tax payments by businesses and utilities.

House budget writers also looked in several places where money is not traditionally taken from.

"It was amazing to me the amount of money in various places that was not working for the people of North Carolina," said Rep. David Redwine, D-Brunswick. "We were able to identify lots of money that was not used for good and noble purposes."

House budget writers are confident with the budget they've put together and still think it will be well-received. "We have been able to present a balanced budget and we've been able to do it without raising taxes," Redwine said. "We actually think the Senate will like it a lot."

The full House will continue to debate the budget and their version should pass either today or Friday.

"Overall, it's a good budget," said Verla Insko, D-Orange. "It could be better. It could be a lot worse."

Matt Viser can be reached at


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