The Daily Tar Heel

Serving the students and the University community since 1893

Saturday December 4th

Schools coping with budget shortfall

Thorp to seek maximum tuition increase

This story appeared as part of the 2010 Year In Review issue. The Daily Tar Heel resumes publication Jan. 10.

It appeared as though the University would be forced to swallow another round of cuts, to chip away at course offerings, jobs and even financial aid.

Then the lifeboat came.

Folded into the state budget was a provision that allowed campuses to increase tuition by up to $750, giving the University a chance to dull the 5 percent cuts Executive Vice Chancellor and Provost Bruce Carney said would have severely hampered the school’s ability to function after the devastating 10 percent cut from the year before.

That option came as a necessary evil to Chancellor Holden Thorp, who was looking to the rest of 2010 and beyond with uncertainty.

“We don’t know what the parameters of the tuition increase will be next year,” he said. “We did know we had a chance to get extra resources of $750 this year. So we went with the sure thing.”

And with Republicans taking control of the N.C. General Assembly for the first time since Reconstruction and the state facing a $3.5 billion shortfall, UNC and other schools in the system are bracing for even more uncertainty and another round of extensive cuts.

Bracing for more

Already the state has asked the UNC system to prepare for cuts between 5 and 10 percent, which could mean higher tuition and the elimination of between 800 and 1,700 jobs and thousands of course sections.

To offset the inevitable cuts, the University’s Board of Trustees decided in November to approve a tuition increase of 6.5 percent for in-and out-of-state students alike for the 2011-12 academic year. The proposed increase is the highest allowed for undergraduate residents by the UNC system.

In recommending the 6.5 percent hike to the board, Thorp turned down the 5.6 percent proposal Student Body President Hogan Medlin raised in a tuition task force meeting. Medlin, who asked that the board consult the student body president in the 2011 summer tuition discussions, was the only board member to vote against sending Thorp’s recommendation to the Board of Governors.

Attributing the absence of protestors at the board meeting to an understanding of the financial pressures confronting the University, Thorp said he would have pursued Medlin’s proposal had it not been for the bleak economic climate.

“In about any other year, I would have (supported Medlin’s proposal),” Thorp said in an interview after the meeting. “I’m really scared about financial aid.”

This year, the University was not alone in asking for the full 6.5 hike.

Even schools such as UNC-Pembroke, UNC-Greensboro and N.C. Agricultural & Technical State that typically ask for low increases have sent proposals with similar rates.

UNC

In the last three years, the system has already cut $575 million, 23 percent in expenses and nearly 900 administrative positions.

“We’ve done maybe too much on the administrative side,” said UNC-system President Erskine Bowles at the board’s November meeting. “The next cuts are all academic.”

The final decisions regarding cuts will be made by President-elect Thomas Ross, who will take over for Bowles on Jan. 1.

A bare minimum

The board approved an expansion budget proposal of $105 million in top priorities to send to the state legislature at its November meeting.

Bowles said asking for the bare minimum might be the best chance of getting the money.

Though the state is expected to maintain its commitment to affordable education, a Republican-dominated legislature could result in some targeted budget reductions, said Dwayne Pinkney, associate provost for finance and academic planning.

Board members also expressed some concern about the new leadership.

“We are going to have to be reasonable about what we ask for and it will be our responsibility to build relationships with the new members of the General Assembly,” said Dudley Flood, a member of the board.

“We’re going to have to form new liaisons, which we can do,” he said.

Unpredictable summer

Although universities have been proposing high tuition increases to make up for the expected lack of state funding, administrators are not certain they will actually be allowed to keep the revenue generated from those increases.

Legislators could mandate that the money go toward the state’s general fund instead of the individual campuses.

But Gage said that so far, there have been indications that the new legislative leadership supports letting campuses keep tuition money on the campus instead of using it to plug state’s budget shortfall.

New tuition policy

To make sure schools do not use students as their primary source of funding, the board also approved a new tuition policy in November.

“A Second Four-Year Plan,” which is modeled after the original tuition plan established by Bowles in 2006, keeps the existing guidelines of capping tuition increases at 6.5 percent and using peer institution rates as benchmarks.

However, it does allow campuses to submit proposals for additional tuition increases beyond the 6.5 percent cap for undergraduate in-state residents in times of need.

Contact the University Editor at university@dailytarheel.com.

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