System to feel budget crunch

University leaders learned Friday that they are facing severe reductions in state education funding — cuts they will have little power to influence under budget guidelines issued last week.

With North Carolina facing a fiscal shortfall of more than $1 billion, Senate leaders have asked the appropriations committee on education to trim almost $245 million in funding to public schools, community colleges and the UNC system.

“The target is for all of education, not just universities,” said Sen. Richard Stevens, R-Wake, a member of the committee.

But instructions issued Friday to the UNC-system Office of the President left little doubt that system schools will be feeling the strain.

“We have been asked to submit budget reductions on the magnitude of 4 percent, which is going to be exceedingly painful if it is implemented,” Molly Broad, president of the UNC system, said Friday to members of the UNC Association of Student Governments.

In a move troubling to university officials, the Senate Appropriations Committee issued guidelines that give legislators full discretion over how funding will be trimmed.

Last year, campus administrators were given much more leeway over required budget cuts.

“This year’s budget will reduce specific amounts in specific programs, as opposed to giving the chancellors options for reducing whatever they choose,” said Jeff Davies, UNC-system vice president for finance.

He said officials on each campus have been asked to submit a list of programs, in order of priority, to be considered for cuts.

The proposals are due to the state’s fiscal research office by Wednesday, leaving little time for discussion by university officials.

“It makes it virtually impossible to have any kind of substantive consultation with various campus committees and groups,” Broad said.

The Senate Appropriations Committee on Education will review each budget item and decide where to cut back.

“I think we’re going to go over it line by line,” said Sen. Bob Atwater, D-Chatham, a member of the committee. “It’ll be a matter of discussing how we can bring those budgets in line with the targets that have been set.”

Those spending targets are part of a plan to cover the state’s projected shortfall through a combination of tax increases and budget cuts.

“The chairman of the (Senate) appropriations committee announced that, over the whole state budget, there will be $500 million in cuts and $500 million in new taxes,” Stevens said.

Mark Fleming, UNC-system vice president for government relations, said the situation is similar to what occurred in 1991, when the legislature responded to a fiscal crunch with an even mix of spending reductions and tax hikes.

If accurate, this comparison could have sobering implications for the university system.

“These rules now are very similar to the rules back then, where you saw these line-item cuts that were devastating to the university,” Fleming said.

“What’s even more troubling is if you go back and look at the 1991 budget, they covered the full amount of enrollment increase with a 15 percent increase in tuition for undergraduate students and 20 percent for graduate students.”

The spending target for all state-funded education programs ­— set at around $9.2 billion — does not include any funding for university enrollment growth, projected near $77.9 million.

“After so many years of cuts and reversions, it really does hurt,” Atwater said. “But, you know, when you’ve got your back against the wall, you’ve got to constitutionally balance the budget.”

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