UNC-CH Provost Robert Shelton said the University levied the cuts to compensate for funding reductions originating in Gov. Mike Easley's office.
The governor's office also has directed the University to permanently cut $765,000 from its operating budget to compensate for unavailable revenue that was included in the 2002-03 fiscal year budget.
"Even when it was passed, the budget was out of whack," Shelton said, referring to the absent revenue for which UNC-CH now has to compensate.
Excluding the new cuts, the University's funding already has been reduced by 2.9 percent under this year's state appropriations.
Trimming an already sparse budget will be difficult, Shelton said. "How many small cuts do you take before you cry out in pain?" he asked.
But UNC-system President Molly Broad cautioned that the 2 percent reductions are not permanent and that the funds likely will be restored to the system when the state reassesses its budget in January. "This is a move that reflects an abundance of caution," she said.
Though Broad said the funds being withheld from the system probably will be released mid-fiscal year, UNC-CH officials are crafting a budget under the assumption that the University will never receive the promised money.
Shelton said with the state already anticipating a $1.7 billion shortfall next fiscal year, that there is no indication the economy will pick up and that University funding likely will be cut further, not restored. "I expect that we will have more nonrecurring cuts," he said. "That's what the case seems to be until the state gets its house in order fiscally."
State officials' past actions, not just next year's projected revenue shortfall, also indicate that UNC-CH and the system likely will not receive the promised money, Shelton said.