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Home > About NC State > Chancellor > Speeches and Writings > 2009 > 2.16.09 Budget UpdateChancellor's Budget Update
Monday, February 16, 2009
Since early fall NC State University – like all UNC System institutions and state government agencies – has been developing plans to meet budget shortfalls brought on by a weak economy. It is a two-part process: an immediate one-time mid-year reduction as well as a permanent reduction for the fiscal year beginning July 1.
We met the mandated one-time six percent reduction. As of this week, we are making plans based on the most likely scenario for a permanent seven percent reduction. A seven percent decrease translates to more than $36 million reduction for NC State.
While there are still many unknowns about the state’s budget for the next fiscal year and many difficult decisions to be made by the Governor and state legislators, it is clear that we cannot take a “wait and see” approach to meeting the budget shortfall. It is also clear that we cannot cut $36 million from the budget without cutting positions and impacting administrative and student services and class sessions. This is not an easy decision. The magnitude of the budget shortfall and the fact that more than 60 percent of the university’s budget is made up of faculty and staff salaries and benefits leave us no other choice.
Our approach to job reductions will be to eliminate non-essential vacant positions first. We will work with employees affected by reduction in force (RIF) procedures to provide services, such as help with priority placement into other state vacancies, resume preparation, job search strategies, and other outplacement support.
All academic and administrative units are beginning to take action on plans for a permanent budget reduction of five percent. We are examining campuswide and cross-functional activities that may produce another two percent in reductions.
Each unit’s final plans will be submitted to the Budget Office on March 9.
We have built our budget plans based on campuswide conversations with faculty, staff, students and our University Budget Advisory Committee, and in accordance with guidelines provided to us by General Administration and the Governor. Rather than take across-the-board cuts, we have taken a strategic approach to budget reduction with a goal of positioning the university to recover quickly when better budgetary times return.
In making these decisions, we are following our established principles:
- We will adhere to our stated budget principles
- We will not alter our mission
- We will be as transparent as possible
- We will protect teaching, research and outreach activities to the extent possible
- We will not terminate tenured faculty
As mentioned, there are many factors that have a bearing on funding in the next fiscal year. Although most attention has been paid to state appropriations, other sources of revenue also are suffering, such as endowment gifts and industry grants. We do not yet know how the federal stimulus package might affect the state’s budget or agencies that provide research funding. The harsh reality is that we may see reductions beyond seven percent.
As these questions are sorted out, we will continue to work closely with UNC President Erskine Bowles to help make a strong case for higher education funding. We also understand the serious pressure faced by students and their families in the nation's economic crisis. We are committed to maintaining affordable tuition while still providing a quality education.
I encourage you to visit our Budget Central website, www.ncsu.edu/budget for updated information as it becomes available, and to submit suggestions and questions.