Board of Governors discussing funding for UNC system

It began with 5 to 10 percent, then rose to 10 to 20 percent, and now as much as 20 to 30 percent of the University system’s state funding is believed to be in jeopardy.

At the UNC-system Board of Governors meeting today, the main item of discussion is expected to be the system’s budget and plans to cope with a significant reduction in funding for its 17 campuses.

Coincidently, the meeting falls on the same day as appropriations subcommittees in the N.C. General Assembly are expected to begin rolling out their budget proposals. The higher education subcommittee is expected to present its proposal anytime between tomorrow and early next week.

Administrators are bracing themselves as numbers being discussed in the N.C. House suggest a much higher cut than Gov. Bev Perdue’s proposed 9.5 percent.

Beyond their ‘worst nightmare’

The latest conversations with House representatives indicate they are considering a 21 percent cut, said Hannah Gage, chairwoman of the board.

“That’s unprecedented and beyond everyone’s worst nightmare,” she said.

Charlie Perusse, the UNC system’s new vice president for finance, will lead the budget discussion at the meeting and explain what specific levels of cuts would mean.

“We will weigh out to members where we are exactly, and what we’ve cut so far,” Gage said.

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

As legislators try to close a $2.4 billion shortfall in the state budget, a cut as high as 20 percent to the UNC system this year would mean a reduction of approximately $540 million in a single year — most of which will come from the academic side.

“What’s critical is that the difference between 10 percent and 15 percent is dramatic,” Gage said. “We’re not going to roll over if the cuts are going to make permanent damage.”

A changing funding model

In recent years, a decrease in state funding has led to high tuition hikes as campuses try to offset the cuts.

Last year, tuition for undergraduate residents at UNC-CH increased by $950, which suggests that schools in the UNC system could be moving to a funding model that falls more in line with its peers.

The University of Michigan and the University of Virginia moved to a high-tuition model after years of decreased funding from their state legislatures. But Gage said that model won’t be feasible in North Carolina even though legislators have alluded to it.

“The elephant in the room is the constitutional mandate,” she said.

The state’s constitution requires tuition at UNC-system schools to stay as free as practical.

A change in funding model would also mean enrolling more out-of-state students, which goes against the UNC system’s mission.

“On the surface, it’s very easy for legislators to say we need to be more market-driven, but they don’t finish that sentence. The other side of that sentence would mean changing our commitment to North Carolina,” Gage said.

Unnecessary duplication

Board members will also get an update on the system’s unnecessary duplication review, which is being led by former UNC-Charlotte chancellor Jim Woodward.

The review will examine 2,000 degree programs in the system to identify duplicate programs that universities could eliminate to generate long-term savings. But Woodward said he is still working with administrators to come up with a criteria for eliminating programs.

“It’s easy to talk about program duplication, but quite frankly, most of the duplication is of no concern,” Woodward said. “The challenge is to arrive at a conclusion of what we mean by unwarranted duplication.”

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