UNC-system schools could be helped by surplus in tax revenue

As N.C. residents scrambled to file tax returns Monday, UNC-system schools waited to learn if a possible surplus in revenue could offset proposed cuts in state funding.

The state’s Fiscal Research Division is anticipating a slight surplus compared to prior revenue projections, Rep. Rick Glazier, D-Cumberland, minority member of the N.C. House appropriations subcommittee on education, wrote in an email.

If more revenue is available, the Republican leadership will determine where to re-allocate the extra money.

The division will inform legislators about the final revenue numbers in early May, Glazier said.

“I would certainly hope it would be in education, but there are no guarantees,” he said.

Republican chairmen on the House subcommittee proposed a 17.4 percent cut of $483 million in state funding for UNC-system schools last week in an attempt to close the state’s $2.4 billion projected budget shortfall. Subcommittee members are currently deliberating the specifics of the proposal and deciding whether to amend it before a House floor vote.

Republican legislators have previously said extra tax revenue might allow them to reduce the severity of cuts for higher education.

Speaker Pro Tempore Dale Folwell, R-Forsyth, co-chairman of the House finance committee, said the Republican leadership would consider reapportioning surplus revenue to higher education because the UNC system drives the state’s economy.

But the state’s budget shortfall has weighed on the minds of legislators who say excessive spending in previous years must be curtailed.

Every item funded by state appropriations must be streamlined and held accountable — including higher education, Folwell said.

He said the National Conference of State Legislatures ranks the state’s budget crisis as one of the five worst in the country.

“The years of spray and pray — we can’t do that anymore,” Folwell said. “We just can’t spray money on something and hope that it works.

“We have to pay for performance and not just collaboration,” he said. “Our focus has to be on the fact that the number one natural resource in our state is brains.”

Yet the goal of preserving the state’s education of young minds might be in jeopardy if the House subcommittee’s proposal is passed.

The proposal would reduce funding for community colleges by 10 percent and public schools by 8.8 percent.

Responding to the difference in cuts among the state’s education divisions, UNC-CH Chancellor Holden Thorp said in a statement that the 17.4 percent cut to universities was “disproportionate.”

Legislators have said the UNC system should be able to absorb a larger share of the cuts because it has alternative sources of revenue at its disposal — such as tuition and endowments.

Because of those additional resources, if state tax returns do result in a surplus, some legislators want to reapportion the extra revenue to public K-12 schools instead of universities, because they rely more exclusively on state funding.

Rep. G.L. Pridgen, R-Hoke, who is vice chairman of the House subcommittee, said the tax revenues will figure into the subcommittee’s final budget proposal.

“We are hoping that the extra revenue will be there to help us as we finish out the budget,” he said.