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Enrollment Cuts Possible; Fund Created to Help Employees

Loss of faculty and staff, fewer classes, employee furloughs, and cuts in student enrollment may be necessary if the state reduces the University’s budget by 3, 5 or 7 percent. In anticipation of layoffs, UNC also is setting up an Employee Assistance Fund to help those who might be affected.

And even 7 percent might not be enough. Gov. Beverly Perdue asked state agencies in late February to cut their budgets by as much as 9 percent.

New details of budget cut scenarios were included in a report distributed in early February that came from UNC’s Office of Legal Counsel. It was released at the request of the Employee Forum in response to rumors and questions about layoffs.

The impacts of budget reductions would be felt across the University, with the most dramatic impacts at 5 and 7 percent.

According to the University, a budget reduction at 5 percent would mean the loss of 121 faculty positions and 86 staff positions. The University also would consider a five-day furlough of employees in some areas to avoid additional layoffs.

Class offerings would be reduced. At a 5 percent reduction, the University estimates that 282 classes would not be offered and that 436 sections would be lost, making it harder for some students to meet graduation requirements.

The University also reported that a 5 percent cut would mean staff reductions and affect distance education offerings, technology and acquisitions for UNC’s libraries and funding for outreach programs.

A 7 percent reduction of the University’s budget could result in the loss of more than 230 faculty positions and an additional elimination of 66 staff positions.

“A loss of over 230 faculty and teaching positions would warrant an enrollment reduction of over 3,400 students (approximately, the equivalent of an incoming freshman class),” the report said. It did not detail how such a cut would be made.

In a campuswide memo in mid-February, Chancellor Holden Thorp ’86 wrote, “It would be easy for us to fall into the trap of hunkering down, making cuts across the board and just trying to survive. But the great institutions – the ones that will emerge from this economic crisis even stronger – will be those that are willing to look hard at what they do and then make really smart decisions. I intend for Carolina to be one of those great institutions.”

UNC has hired Bain & Co., a global business consulting firm, to conduct a study to help “identify innovative ways to streamline operations, become more effective, and perhaps achieve additional cost savings.”

The study, to be conducted this spring, will be paid for by the UNC-Chapel Hill Foundation through a restricted gift from a Carolina alumnus.

On Feb. 20, Thorp told the Faculty Council that UNC was setting up an Employee Assistance Fund to help those who might be laid off. The $445,000 fund came from a $250,000 estate gift designated for a high-priority need; a $100,000 donation from the athletics department; $70,000 saved in the cancellation of the annual Tar Heel Bus Tour, a weeklong state tour for selected new faculty and staff; and a $25,000 gift from Thorp and his wife, Patti.

The loss of teaching staff also could affect the University’s accreditation, especially in professional programs. Budget reductions of 7 percent in medicine, dentistry, pharmacy and nursing likely would affect the quality of patient care. These programs also would be affected by significant reductions in the Area Health Education Centers program, which provides continuing education to health practitioners across the state and training opportunities for UNC students.

The report also outlined cuts in other campus units and services. Budget reductions would affect travel, supplies, employee training opportunities, security personnel, housekeeping and grounds management.

On March 1, Thorp told the campus in an e-mail message that new information had been added to the Carolina Budget Information Web page. “What’s new are submissions used to develop our campuswide response to President Bowles’ request in January for planning scenarios showing budget reductions from our state appropriations of 3 percent, 5 percent, and 7 percent in fiscal 2009-2010,” Thorp wrote. “A summary of those state budget scenarios was on the budget Web site when it went live in February.

“The new documents posted have been redacted by the University’s Public Records Officer to protect confidential personnel information. Remember these scenarios were prepared as part of an exercise for preliminary planning purposes and don’t reflect actual decisions that have been made,” he wrote. “Also, remember that units across campus are funded from a variety of sources. These documents, which reflect potential state cuts, show only part of the total picture.

“In addition, we’ve posted some additional details about the study being conducted by Bain & Co., the global business consulting firm that is helping us identify innovative ways to streamline operations, become more effective, and perhaps achieve additional cost savings,” Thorp added. “These postings include the company’s description of the scope of work for this privately funded study.”

The UNC System Board of Governors in mid-February approved a plan to raise tuition and fees by an average of 3.9 percent for in-state undergraduate students at public universities. The increase goes to the N.C. General Assembly as it prepares a state budget for 2009-10.

UNC’s trustees had voted late last year to raise tuition $240 for in-state undergraduates – the maximum allowable under a 6.5 percent cap previously imposed by the BOG – for 2009-10; raise tuition for out-of-state undergraduates by $1,150; and increase fees for all students by $75.

In response to the economic downturn, system President Erskine Bowles ’67 asked the BOG to approving smaller increases – one-third less than the requests received from the 16 UNC System university campuses.

Carolina wound up with a $160 increase for in-state undergraduates – 4.3 percent – and the increase of $1,150 for nonresidents, or 5.6 percent, as the trustees had approved.

With the addition of a 5.1 percent increase in fees for all undergraduates, the total cost for in-staters in 2009-10 would be $5,456; for nonresidents, the cost would be $23,344.

In response to a request from Perdue, Bowles asked the UNC System campuses to submit plans for state budget cuts of 3 percent, 5 percent and 7 percent. Carolina receives about 25 percent of its budget from state appropriation; a 5 percent budget cut would amount to about $25 million.

Bowles said in January that he would ask for legislation to let campuses furlough workers.

A furlough would mean forcing staff to take time off without pay. Bowles did not elaborate about how many people might be affected. After the enabling legislation, furloughs would have to be approved by the Board of Governors.


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