UNC May Lose Part Of Budget

Gov. Mike Easley announced that revenue projections might not meet the state's needs and requested the UNC system return about $72 million, 4 percent of its allocated budget. UNC-CH Provost Robert Shelton said a 4 percent reversion of funds would result in about $16 million in cuts for UNC-CH.

But the provost said figures have not been made concrete. "We have nothing in writing yet," he said.

Easley also announced this week that he will withhold an additional $57.5 million in repairs and renovations funding from the system's budget.

Just last month Easley signed into law a $14.4 billion state budget, which was based on an estimated 4 percent growth in revenue.

But financial reports from the first quarter of the fiscal year show a 2 percent decline in state revenue -- caused possibly by a dramatic economic downturn following the Sept. 11 terrorist attacks.

As a result, Easley has asked most state agencies to return 4 percent of their allocated budgets -- a request that could dramatically affect UNC-CH.

Shelton said the main difficulty with cuts of this magnitude is that it could happen on top of an already permanent $10 million reduction in the University's budget adopted under the new state budget.

A permanent $11 million revenue increase from tuition gathered from this year's enrollment increase could partially alleviate a funding shortfall, Shelton said. The additional funds gathered from increased enrollment could be allocated to academic programs early next week, possibly combating the effects of cuts, he said.

The provost said he founded an enrollment policy advisory committee a few months ago, and the group is now assessing an admissions strategy for fall 2002 in light of the possible additional cuts.

Admissions Director Jerry Lucido, who heads the advisory committee, said admissions officials have room to lower target enrollment numbers for fall 2002 because this year's enrollment exceeded expectations. UNC officials were aiming for freshman enrollment of about 3,500 this year, but numbers actually totaled about 3,700, Shelton said.

As campus officials begin to plan for the cuts, other state officials are working to ensure the cuts are minimal.

UNC-system President Molly Broad said the brunt of the budget reductions would be felt during the spring semester, since it would be difficult for individual campuses to cut funding for the fall semester that is already under way.

Easley's office could not be reached for comment Thursday.

But Shelton said the cuts will not affect spring course offerings at UNC-CH. More likely, the cuts would delay faculty recruitments and filling open positions, he said. Shelton said revenue accumulated from alternative sources, such as research grants and private fund raising, could help sustain integral academic resources and are reason to be optimistic.

But Broad indicated that unless there is an unprecedented economic rebound, the UNC system will sustain some cuts.

"The most optimistic scenario (for economic growth) is a 2 percent net, instead of a 4 percent net," Broad said.

If the state's revenue projection does not reach at least 2 percent growth, the system could lose some of the $57.5 million in repair and renovation funds that are being held by the governor.

But Shelton said he is skeptical that the University will ever see the money Easley has frozen. He added that UNC-CH's 2001 reserve for repairs and renovations now will not cover about $11.7 million in previously slated projects.

Bruce Runberg, associate vice chancellor for facilities services, said the projects included roof repairs for five buildings and the installation of new fire alarm systems in seven campus buildings.

Projects funded by the $499 million allocated to UNC-CH from the $3.1 billion state higher education bond referendum that passed last year will not be jeopardized, officials said.

"The bond money is still there," Shelton said. "That's the irony."

The University Editor can be reached at udesk@unc.edu.