NC State University

A reporter who attended the State of NC State presentation asked the question everyone wants to know: Is it possible to take the cuts we are facing and still drive economic development? The answer to that question has to be that this is no time to pull back from one of NC State’s historic strengths.

Chancellor James L. Oblinger

People are Counting on Us

We have, throughout our history, been an engine for economic development in North Carolina. As I mentioned in my State of NC State speech, people count on NC State not only to provide a high-quality education to our students, but also to send well-qualified graduates into the world.

Our economic development work is vitally important. In the current economy, its importance grows exponentially. People are counting on NC State.

A reporter who attended the State of NC State presentation asked the question everyone wants to know: Is it possible to take the cuts we are facing and still drive economic development? The answer to that question has to be that this is no time to pull back from one of NC State’s historic strengths.

We work across a broad spectrum of economic development activities ranging from nurturing start-ups to partnering with state agencies to bring jobs to North Carolina. In specific terms, over the last year, we saw four new companies spin-off from NC State. We licensed technology to local farmers, who in turn opened a plant in Snow Hill that created 63 jobs. We worked with the Department of Commerce to bring Spirit Aerosystems to Kinston, creating 1,000 jobs – work that Governor Perdue recognized in her State of the State presentation March 9.

It’s the kind of work that will lead the state to better economic times. People are counting on us.

Meanwhile, our budget conversations continue.

Since late fall, NC State has been planning for budget reductions for both this fiscal year’s reversion as well as the anticipated reduction in the 2010 fiscal year that begins July 1. Certainly we know much more about how we would reduce the budget for next year than when our work started. However, the state will not determine its own budget until after the governor and legislature have completed deliberations.

For this year, April 15 is a critical date. That’s when state income taxes are due. Individual income tax makes up about 55 percent of North Carolina’s budget. Until we have a clearer idea of the state’s revenue picture, we will not know if any additional budget cuts are to be anticipated.

Here’s what we know as of today:

• While the first rule of our budget discussions is to preserve our ability to teach students, we likely will cut about 180 class sessions or expand the size of individual classes. That number could rise or decrease as each individual department determines whether faculty will teach additional sections to avoid further reduction.
• We also know that access to a quality, affordable education is vital to the state’s future. Recognizing that affordability and quality are particularly important in difficult budgetary times, we are holding the tuition increase for next year to less than three percent.
• Unfortunately, there is no way to achieve the fiscal year 2010 budget reduction required without considering personnel costs—which make up 60 percent of our total budget and an even higher percentage in many departments. Recognizing this fact, several departments have begun the Reduction in Force (RIF) process for SPA employees and are releasing some EPA “at will” employees.About 25 employees have been affected so far. We have a process in place for helping employees who are laid off, such as assistance with priority placement into other state vacancies, resume preparation, job search strategies and other outplacement support.
• Our budget process is being led by Provost Larry Nielsen, Vice Chancellor for Finance and Business Charles Leffler and me. We have established guidelines for each academic and administrative unit to follow in submitting their 2010 budget reduction plans to the University Budget Office. We will begin to review those plans over the next few weeks and be ready to put our final budget plan into effect once we learn more about state funding.

You can track our budget conversations and sign up for email updates by going to the NC State University Budget News site.

Thank you for all you do for NC State.

James L. Oblinger