UNC system looks to tuition hikes to absorb budget cuts

When the UNC system’s governing body met Thursday, discussions about how to absorb budget cuts and supplement them through other sources of revenue dominated its agenda.

At the meeting, held at UNC-Greensboro, the board, which has typically opposed significant tuition raises, expressed willingness to approve hikes beyond what is currently mandated by the system’s tuition policy.

Members also approved new peer institutions for each system university, which schools will use to compare themselves to in several aspects — including tuition.

The system’s tuition guidelines, approved last year, allow schools to propose tuition hikes above the 6.5 percent cap if they can demonstrate that it’s their only viable option for increasing revenues.

The plan requires schools’ tuition rates to stay within the bottom quarter of their peers’.

Administrators at UNC-Chapel Hill have already said they want the University’s tuition rates to be more in line with those of its peers.

And for N.C. State University, raising tuition would be a last resort, Chancellor Randy Woodson said.

The university first needs to focus on advocating for state funding, growing its endowment and expanding research efforts, he said.

“Nobody wants to raise tuition, but we don’t want this university system to become second-rate,” Woodson said.

“Tuition is likely to be a bigger part of our revenue stream.”

Members of the board’s budget and finance committee acknowledged there are multiple ways to increase revenues to alleviate the system’s increasingly bleak budget situation.

The state budget enacted this summer included a 15.6 percent, or $414 million, cut for the system.

David Young, chairman of the budget committee, said administrators must not base decisions on precedents set by past years’ tuition raises.

He said he thinks tuition rates at peer institutions will influence whether schools decide to propose a tuition increase above the cap.

“Everything’s on the table.”

Budget cuts are plaguing system schools in another aspect as well — faculty attrition.

Members of the board’s personnel and tenure committee discussed how to use the system’s limited resources to alleviate waning faculty retention rates.

Phil Dixon, chairman of the committee, said the system’s faculty retention fund has dwindled to between $34,000 and $56,000.

In the past, schools have used the fund to offer individual raises to entice faculty members to stay.

This is the third consecutive year without state pay raises for UNC-system employees.

The state legislature is not likely to direct money toward the retention fund anytime soon, Dixon said.

“We’ve got to convince them that, in establishing priorities, they’re going to have to gradually replenish the fund,” he said. “That’s the key.”

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