UNC schools, facing $2 billion shortfall, brace for tough budget choices

Public universities plan to ax classes, leave jobs vacant and delay construction projects in the hopes of avoiding layoffs as the state struggles with a budget shortfall that could approach $2 billion.

UNC system leaders, following the direction of Gov. Mike Easley and UNC president Erskine Bowles, have told campuses to prepare for cuts of at least 4 percent this year, meaning they will receive 96 percent of the state funding they had anticipated. Students might not feel cuts right away, but campus leaders say course and staffing reductions will likely become evident by next year.

The reductions, some made already and some to come, are a response to the state telling its agencies early in the fiscal year that cuts are coming, said Rob Nelson, the UNC system's vice president for finance.

“We got early notice and they're temporary cuts, and we have flexibility, so we're working hard to minimize the impact to the classroom,” Nelson said. “The challenge will be if the economy doesn't get better by July 1. Then we might have to work next year with the governor and the General Assembly to make permanent cuts. That will be a difficult challenge.”

Some campuses and academic departments with plenty of unfilled positions or those bolstered by grants can absorb the pain with little effect. But at others, salaries account for 95 percent or more of the operating budget.

UNC Charlotte's growth will allow the campus to absorb the cuts without layoffs because of money allocated for new enrollment, a spokesman said. But the cuts could mean larger classes and a possible reduction in some services. And the campus will see a $2.4 million cut in planning money for a proposed science building.

At N.C. State University, some faculty members are cutting their. own salaries and some instructors have volunteered to teach for free. Campus leaders are crafting plans for cuts up to 6 percent – just in case.

Faculty Chairman Jim Martin is afraid the cuts will reach the classroom.

“I think there is no chance that sections won't be canceled,” said Martin, a chemistry professor. “And little chance that some faculty and staff won't be cut.”

In NCSU's English department, where 17,000 students, majors and non-majors alike, take courses each year, personnel costs account for almost 99 percent of the budget, leaving little room to navigate. With the fall semester more than halfway done, big cuts will come in the spring, in effect doubling the 4 percent cut.

Classes taught by nearly 70 instructors will be reduced. Those instructors, who are not on the tenure track, will take pay cuts but will retain benefits. Some faculty members have volunteered to reduce teaching loads – and lower pay – while others will take a voluntary, 10 percent cut to their summer pay.

At NCSU's School of Public and International Affairs, three instructors felt so badly about how the cuts would affect students that they offered to teach their spring semester classes without pay.

“I don't teach for the money,” said land use attorney Eric Braun, who was planning to teach a graduate class with Raleigh planning director Mitch Silver. “It's a public service as far as I'm concerned, and I enjoy it and think it's important for the students.”

Dealing with shortfall

At UNC Chapel Hill's Gillings School of Public Health, dean Barbara Rimer is cutting $500,000 from her school's budget. She's doing so the same semester that her school celebrated its largest private gift ever, $50 million from Quintiles Transnational Corp. founder Dennis Gillings and his wife, Joan.

That juxtaposition illustrates the complicated nature of budgeting at state universities.

The Gillings money will pay for new research projects, but plays no part in funding day-to-day school operations.

So as Rimer's school is starting 10 new cutting-edge research initiatives, it is making big cuts to its travel budget, hedging on hires, and even ditching one of the two annual issues of the school's magazine. Cutting one issue of the magazine, which goes to 20,000 alumni and friends of the school, saved $30,000.

“It's a big deal,” Rimer said. “It was a difficult decision and not everyone is happy. It's one way we communicate to the world about what we do.”

At UNC Greensboro, the cuts are having at least one obvious effect – the delay of a long-awaited $47 million building for its School of Education.

“I hope this will be the extent of the cuts, but it is very possible that we will be asked to absorb further cuts this year or next,” said Linda Brady, UNCG's chancellor.

In the sociology department at UNC Chapel Hill, chairman Howard Aldrich will tap grant funding that faculty members have amassed over the last few years to absorb a cut of about $66,000. No jobs will be eliminated, no courses lost, he said.

If a one-year cut becomes a two- or three-year cut, his department will be in trouble, Aldrich warned.

“I can't even contemplate what that would mean,” he said.

Generous state support

Greg Doucette, an N.C. State senior and the sole student on the UNC system's Board of Governors, said students haven't felt the impact of this year's cuts, but could if tuition goes up or classes get canceled.

“I haven't heard yet that, for example, students can't graduate on time because they can't get into the right class,” he said. “That would be the most tangible impact, and one we may face next year.”

Compared with other states, North Carolina is quite generous to its public universities. The state ranks sixth nationally in per capita appropriations to higher education, according to an annual study conducted at Illinois State.

The UNC system manages a budget of more than $8 billion, educates more than 180,000 students and employs more than 10,000 faculty members.

State money accounts for about 34 percent of the UNC system's total budget, and at some research-heavy campuses like UNC Chapel Hill, private funds account for an even larger proportion. So campus leaders are adept at finding other forms of revenue and saving money where they can.

One common strategy is to delay hiring.

“If someone leaves and it takes a month or two to fill it, that's a sixth of the salary that is unspent,” said Nelson, the UNC system's vice president for finance. “Sometimes you do have to hold positions open longer.”