UNC Ready To Deal With Held Funding

But it seems campus officials are anything but surprised by their fiscal predicament.

Facing even more dismal state economic projections, Gov. Mike Easley has temporarily halted 2 percent of the UNC-system's funding -- roughly $8.2 million for UNC-Chapel Hill.

On top of the temporary, nonrecurring cuts, UNC-CH also must eliminate permanently an additional $765,000 from its operating budget to make up for unavailable revenue included in the 2002-03 fiscal year budget passed by the N.C. General Assembly earlier this year.

UNC-system officials have said the withheld funds likely will be returned mid-fiscal year, but Provost Robert Shelton said UNC-CH is handling the cuts assuming the University will never see that money -- even after the system already saw a 2.9 percent permanent budget reduction in October.

Still, UNC-CH has a solid strategy, Shelton said, in part because of the school's anticipation last May of cuts anywhere between 5 percent and 10 percent. "I don't think we were caught off guard," he said. "I think (midyear reversions) came sooner than we expected."

During the first stage of budget cuts this year, UNC-CH department chairmen and deans were given the flexibility to decide how to cut $12 million from the the University's expenses. Shelton said that this time, the nonrecurring cuts will be allocated across the board.

"They should be ready for that," he said. "I think the message has been clear that this was going to happen."

UNC's libraries were one such department to anticipate inevitable cuts. Although libraries were in the clear when the last cuts were made, they will not come out of this round unscathed.

Preparation for the initial 2.9 percent cuts to UNC-CH will help the situation, said Joe Hewitt, director of Academic Affairs libraries. "We had been preparing over the course of the year for a cut of 5 to 10 percent," he said. "So we are going to be able to absorb this cut without a lot of disruption."

Just like in many campus departments, dipping into lapsed salaries funds will give the libraries flexibility during this sequence of cuts, Hewitt said. That money is set aside to fund salaries for vacant positions and becomes a natural target when cuts must be made, he said. "We more or less have been doing this every year."

Officials have contended that although years of repeated budget shortfalls have proven detrimental, the damage to the UNC-CH classroom experience has been kept to a minimum.

But for Faculty Council Chairwoman Sue Estroff, the recent cuts paint a more alarming picture. "We are not, quote-unquote, protecting our classrooms the way we should be," she said. "We are creeping toward a real significant, qualitative change in the educational experience here."

In the meantime, system schools must have their individual reports outlining only the allocation of the 2.9 percent permanent cuts to the UNC-system Board of Governors by Friday so a BOG subcommittee can review them later in the month, said Jeff Davies, vice president for finance for the UNC-system.

As for the temporary cuts, "This is managed very differently," Davies said. "Each campus will have its own way of dealing with it."

And although he said it is too early to tell if the next fiscal year will bring more of the same, Davies said schools need to focus on the immediate budget problems at hand. "I think that for the governor to require the schools to have another nonrecurring reduction is an indication that ... the state's economy might not rebound like we all thought it would."

The University Editor can be reached at udesk@unc.edu.