Stimulus money prevents larger budget cuts at UNC

While budget woes have been constant at UNC in the last year, the economic troubles of higher education could have been much worse.

The federal stimulus prevented the state legislature from needing to make even more drastic cuts to its appropriations for higher education.

The UNC system is receiving $137.8 million from the stimulus money for the 2010 fiscal year, said Rob Nelson, UNC-system vice president for finance.

But University officials said that if stimulus funding expires before the economy recovers, UNC-Chapel Hill and the rest of the UNC system could suffer more drastically.

Higher education received much more funding in state appropriations with the stimulus money than it would have without it, according to a recent study conducted by the Center for the Study of Education Policy at Illinois State University and State Higher Education Executive Officers.

Higher education appropriations across the country declined only 1.1 percent from the 2009 fiscal year to the 2010 fiscal year. Without stimulus funds, the study predicted that number as closer to 3.5 percent.

The federal stimulus money allowed the state to make fewer funding cuts, Nelson said.

Total state appropriations toward higher education, which include the stimulus funds, decreased from $2.89 billion in 2009 to $2.71 billion for the 2010 fiscal year, he said.

The study shows that N.C. high schools, community colleges and public universities received about $3.8 billion from the state for the 2009 fiscal year. It would have received only $3.66 billion otherwise.

Almost $4 billion is allotted for the 2010 fiscal year. Although the state would have liked to match that amount even without stimulus funds, it would have struggled to provide more than the $3.85 billion than it ultimately provided.

The stimulus funding prevented the state legislature from having to make larger cuts in education and other areas to keep the budget balanced, said N.C. Sen. Joe Sam Queen, D-Haywood, vice chairman of the appropriations on education and higher education committee.

Stimulus funds were essential in keeping appropriations relatively stable. According to unofficial economic indicators, the state education system was $5 billion short of its needed funds prior to the stimulus package, Queen said.

“We just didn’t have the revenue in North Carolina without substantial federal stimulus,” he said.

He said that the state could have had to take measures as drastic as closing institutions, particularly public schools, if legislators could not find another way to balance the budget.

On top of the stimulus money coming to the UNC system through the state appropriations, a significant amount came in to fund specific research projects.

Tony Waldrop, vice chancellor for research and economic development at UNC, said UNC expects to receive about $130 million total in stimulus grants and has received $89.7 million since last year.



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