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Statement from Chancellor Oblinger Regarding Current Economic Climate

Friday, December 19, 2008

Statement from Chancellor Oblinger Regarding Current Economic Climate

I know that many of you are concerned, as am I, about the current economic climate and its impact on North Carolina State University, even as you and your family personally grapple with the effects of the downturn in the economy. I appreciate your concern for, and commitment to, NC State.

Two significant sources of our funding – state appropriations and endowments – have been affected by this downturn. We already have met the governor's one-time budget reduction target of four percent. To the extent we have been able, we have protected the academic enterprise by absorbing a significant portion of the cuts centrally and limiting travel, leaving open positions unfilled and delaying significant purchases. We have identified the reductions with the goals of the UNC Tomorrow effort and with our own unique mission and ability to serve the state in mind.

The reality is that there will be deeper cuts early in 2009. We do not know yet how deep those additional cuts will be, although we have been asked to develop scenarios for taking reductions up to seven percent. We should have a clearer idea once the state has recorded tax receipts through December – probably the third or fourth week of January. As of right now, state tax revenues continue to run below the baseline projections used to plan the state budget. That means we should continue to expect significant one-time and permanent budget reductions this year and next.

If there is a positive aspect of this discussion, it is that we live and work in a state that values higher education. I am confident that the state will continue to support education as fully as possible.

On the endowments side, our investments have suffered as the stock market and real estate sector have slumped. NC State's combination of quality and affordability consistently makes it one of the best values in higher education. As such, we remain steadfast in our commitment to our students, as well as our faculty and staff.

We will very soon establish a web link to keep you informed of our ongoing budget conversations, which are being led by Provost Larry Nielsen and Vice Chancellor for Finance and Business Charles Leffler, working with our budget advisory committee.

North Carolinians are suffering from the current economic conditions. As The People's University, we recognize that we have a role to play both in terms of working with a smaller budget and continuing to be an engine of economic development. We consistently seek ways to engage with our community, business, government and education partners. The initiatives that grow from these collaborations build economic capacity, create jobs, attract industry and move the state's economy forward. This is certainly no time to pull back from that mission.

In just a few weeks, our annual report will be available, chronicling our many accomplishments from the last year. As we reflect on our accomplishments, I hope you will join me in the great pride and respect I have for our university community. Though the future of the financial markets and the economy remain uncertain for the short term, we are determined to emerge from these difficult times as a stronger institution. I expect 2009 to be a challenging but successful year for NC State.

James L. Oblinger