State Deficits May Affect University Funding

State budget projections, released Wednesday to N.C. legislators, predict that revenue for the 2001-02 fiscal year is $700 million to $900 million below projections.

To deal with the problem, some legislators have already discussed making cuts to money set aside for Hurricane Floyd victims and to the state's repair and renovation fund, which totals about $125 million.

Jeff Davies, UNC-system vice president of finance, said he does not know how much -- if any -- additional funding the UNC system would have to revert to the state. "At this point, we have not heard," Davies said. "We are operating under the premise that we will have to revert."

In October, Gov. Mike Easley asked the UNC system to cut 2.7 percent of its funding to cover the anticipated shortfall. Easley requested that most other state agencies revert 4 percent of their budgets, a move that generated about $250 million.

"I'm sure the governor's office is still contemplating the best strategy," Davies said, adding that cuts would be difficult because system schools have already made fiscal commitments -- like hiring professors -- for the spring 2002 semester.

UNC-Chapel Hill Provost Robert Shelton said it is too early to predict what would happen with the University's finances.

Shelton said future funding cutbacks would mirror earlier cuts. "In keeping with earlier reversions, we would like to distribute recurring cuts uniformly and work with the deans," he said. "We would do everything in our power not to impact teaching."

Davies said UNC-system officials would work with the governor's office to minimize fallout from a budget cut.

The fiscal shortfall comes after a record-length legislative session marked by frequent debates on state departmental cutbacks and a much-debated tax hike.

To also ease the budget shortfall, N.C. legislators passed a systemwide 9 percent tuition hike in August.

Shelton said he did not know if the state legislators would increase tuition again. "I think the history of tuition last fall was an exception, at least I hope," he said.

The UNC-system Board of Governors is scheduled to consider another 4.8 percent systemwide tuition increase at its March meeting. The board also will review requests for campus-initiated tuition increases, including a $400 request from UNC-CH, at the same meeting.

Davies said BOG members will take the state's budget shortfall into account when debating any tuition increase. "(BOG members) will consider increases in light of economic situations."

The State & National Editor can be reached at stntdesk@unc.edu.