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Carolina's Cut is 18 Percent - Biggest in the UNC System

Posted on July 7, 2011

The University will suffer an 18 percent cut in state appropriations for fiscal year 2011-12 — a loss of $108 million. It is the highest cut, by $20 million, among the UNC System’s 17 campuses.

The system Board of Governors in its June meeting delegated to its budget and finance committee the authority to allocate funding to the campuses and to assign reductions based on an overall loss of $414 million in state funds.

An across-the-board reduction would have been 15.6 percent, but the state Legislature would not allow the board to treat all campuses the same. Most of the schools that received lower percentages were among those acknowledged to be less able to raise money from other sources, such as private donations and research grants, and the four schools with the smallest enrollments. The smallest cut was 8.4 percent to the N.C. School of Science and Mathematics, which does not have tuition revenue.

“The was a very difficult cut we received from the Legislature,” said Thomas Ross’75 (JD), president of the UNC System. “We sat down and looked at all the campuses and why they are different.” Ross said some campuses have suffered so much from the cuts of the past three years that they don’t have the economies of scale to enable them to survive.

“None of the campuses are happy with this level of cuts. Chancellor [Holden] Thorp has been particularly understanding of [the impact on] his campus and the needs of the other campuses.”

Ross said another major consideration was Carolina’s ability to raise money from other sources. It is far ahead of all the other campuses in gifts and grants.

UNC’s cut is significantly greater than the most recently talked-about figure of 15 percent. Although South Building administrators have not finished making decisions about where the cuts will fall, they almost certainly will go noticeably into academic programs. Chancellor Holden Thorp ’86 was out of the country Thursday, and Provost Bruce Carney said the impact had not yet been determined, although he said this is $20 million more in cuts than he had been planning for.

Among the known impacts to UNC, the N.C. General Assembly reduced the appropriation to UNC Hospitals by 59 percent and eliminated the entire state appropriation for the UNC Center for Public Television, although it provided nonrecurring funds for the latter for the next year. Those were not subject to BOG action. The state will provide an initial allocation of $15.3 million for the relocation of the law school in the 2012-13 budget.

The system used other factors in determining the percentage for each campus, including:

  • Freshman to sophomore retention — campus performance relative to peer institutions and established BOG targets;
  • Degree efficiency — bachelor’s degrees produced relative to undergraduate enrollment; and
  • Amount of need-based financial aid a campus needs.

Schools that perform well in these areas received lower reductions.

Need-based financial aid took a hit. Across the system, funding for 2011-12 will be $127,130,754, or $35,158,009 less availability for student grants than in 2010-11. It’s not yet known how much Carolina’s funding for aid will be reduced; officials had expected to lose more than $5 million.

The BOG generally is letting each campus cut as it sees fit, but it directed the campuses to consider other solutions before making reductions in instructional programs, including:

  • faculty workload adjustments;
  • research activities restructuring;
  • lower state funding for centers and institutes, speaker series and other nonacademic activities;
  • senior and middle management positions reductions; and
  • elimination of low-performing, redundant or low-enrollment programs.

Before UNC received its final figures, Carney said he expected students returning this fall to notice losses from the budget cuts. That could be in the form of larger classes; fewer sections of some courses; and, if the ranks of graduate teaching assistants are diminished, the loss of elements of individual attention that students expect, such as discussion sections in large lecture courses.

“This campus can go on operating on less money, but I have reservations about whether we can give the students what they historically expect,” Carney said in May.

Carney said at that time that reductions likely would be noticeable soon in reduced grounds maintenance. Capital projects such as an expansion of the medical school, new buildings for psychology and the School of Information and Library Science are on indefinite hold. And faculty retention remains a concern in the third year of no pay raises and as the financial picture improves for private schools that can raid UNC.

Carney said the decision had been made not to close any professional schools. He has asked deans to try not to reduce the number of credit hours taught, but that will depend on the number of adjunct faculty positions that have to be cut.

By July 1, the University had absorbed at least $157 million in total state cuts since 2008. Those cuts have spared instructional programs for the most part.

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