Budget gives boost to UNC system

UNC-system schools got a boost from the governor this week with a budget proposal that promises to fully fund enrollment growth and financial aid needs.

But with an estimated $1.3 billion debt looming over the state, debate has just begun about how to allot the money.

Under Gov. Mike Easley’s proposal, system schools would get $73.6 million in enrollment growth funding — the amount requested by the Board of Governors — and another $11.8 million for financial aid. That number includes $3.2 million to cover cuts made last year to the federal Pell Grant by Congress.

Part of the aid money will come from the General Fund, while the rest will come from the state’s Escheats fund, said J.B. Buxton, Easley’s senior education adviser. The Escheats fund consists of the interest from unclaimed inheritances sitting in banks.

By the Numbers 1.3 In billions, state's likely shortfall. 73.6 In millions, enrollment growth funds. 11.8 In millions, financial aid funding. 1 Percent budget cut to UNC system.

The proposal also calls for tuition freezes for in-state students. But schools could face a 1 percent budget cut, which would make for some difficult decisions when added to previous cuts, said Jeff Davies, UNC-system vice president for finance.

The General Assembly reduced system schools’ budgets by 1.7 percent last year.

Easley’s proposal also includes $2.4 million for a joint partnership between system schools and N.C. community colleges that aids in teacher preparation, as well as $1 million for scholarship loans for prospective teachers.

The N.C. Teaching Fellows program will see a $330,000 boost to establish a new scholarship for college juniors and seniors.

Sen. Tony Rand, D-Cumberland, said Senate members are supportive of Easley’s budget proposal. “(Easley has) worked very hard to put a program together that will help the university without costing the students additional amounts of tuition.”

Officials say they are pleased with the numbers, but some say they wish other programs had made their way into the budget.

“I think it indicates the governor’s strong commitment to higher education, and (BOG members) were generally pleased with that level of support,” said Brad Wilson, BOG chairman.

But he said he had hoped for $4 million to aid the state’s nursing shortage, as well as equity funding for UNC-Wilmington and Appalachian State University.

Davies said he is concerned about a proposed 2 percent increase in state employee salaries, saying it’s a positive step forward but won’t be enough to address the need for competitive salaries for faculty and staff. The BOG originally asked for a 6 percent increase.

Buxton said that come March or April, legislators will have a better grasp of how much money the state will have. “We may see things loosen up a bit,” he said. “When you face a $1.3 billion shortfall, you’ve got a lot of work to do.”

And though the governor has thrown his support behind tuition freezes, officials say they know increases are possible.

“The fact of the matter is there is a … billion-dollar shortfall, and they are going to have to find revenue sources,” Wilson said.

Kevin FitzGerald, legislative liaison for UNC-Chapel Hill, said there are no plans to push further for tuition increases at UNC-CH. The school will try to work with legislators on salary increases, as well as graduate tuition remission.

Still, FitzGerald said, the budget is an indicator of where the governor’s priorities lie. “This is a really great start in that it includes real important issues, including enrollment and dealing with the access issues and student financial aid.”

Contact the State & National Editor at stntdesk@unc.edu.