NC State University

As we reach the end of the 2009 fiscal year, I want to thank the entire campus community for coming together to meet our budget challenges. Throughout the past year, while facing $37.7 million in reductions and reversions, cash flow limitations, state mandated furloughs and tough decisions, our campus community has rallied together to think creatively and strategically. I appreciate everyone’s efforts, as it will be essential that we continue to work together as we face new challenges in the next fiscal year.

It is clear that the state’s budget situation has not improved. Last week, I called a meeting with our executive officers, deans, vice provosts, department heads, the University Budget Advisory Committee and university budget officers. Interim Provost and Executive Vice Chancellor Warwick Arden, Vice Chancellor for Finance and Business Charles Leffler and I addressed the group to provide the latest information on the expected reduction for 2009-10 and an update of the current version of the House budget. We had a candid discussion about what to anticipate for next year and asked that the information be shared broadly within each unit.

As the House continues to make the finishing touches on its proposed budget, I am asking our campus to move forward with aggressive action to be prepared for more extensive cuts. Even though the state budget is not final, we have some idea of what to expect based on what the House has proposed:

• A potential $336.6 million reduction in state funding for public universities or at least 11.1 percent over our 2009-10 base. The state’s largest universities are expected to get a larger allocation of this cut.
• An increase of $200 a year for tuition for all UNC universities. That equates to an 8 percent increase for NC State students. The tuition increase dollars would not come back to the campuses but go to the state. This increase displaces the campus initiated tuition increase (CITI) already approved by the BOG.
• A reduction in state-appropriated funding for select centers and institutes of 20 -100 percent (by 20 percent in most cases). We had already been in the process of evaluating the status of our centers and institutes. As a result, we are dis-establishing or combining at least 12 of the 68 current centers and institutes and discontinuing further efforts for three of the six that were currently authorized to plan. We also have imposed a moratorium on the submission of new centers and institutes, effective immediately.

The full House is expected to vote on the final budget next week. Following the House approval, the House and Senate will then appoint conferees to determine the final budget, expected to be approved by mid- to late-July.

Historically, we have taken reductions using one time and year-to-year cuts, but we can no longer think that way. We must be more strategic, thinking three to five years out, or longer. To ensure that we are prepared for the next fiscal year, I have asked campus leaders to create a plan by June 15 to identify reductions using an 18 percent target.

There is no question that such a reduction is cause for concern. If we reduce our resources, we also must reduce the work funded by those resources. We can no longer expect the people who are left to do the work of a larger workforce. We cannot teach a growing student body with fewer faculty, and we cannot provide as many services with a smaller staff.

President Bowles and I have met with and called legislators to express our concern about the effects of such cuts on higher education in North Carolina. I have been in touch with our Board members, alumni and others, asking for their help in voicing our concern to their legislators. Cuts of this scale will have tremendous effects on every student. It will have an impact on the university’s mission. Our students will see larger classes, less advising and counseling, higher faculty/student ratios, lower retention and graduation rates, delayed classroom upgrades and laboratory renovations, among other things.

I am hopeful that the reduction will be less than the 18 percent we are planning for, but by planning for a higher number, I believe we are doing what we can to put ourselves in a position of strength—a position that prepares us for a quick recovery when better budgetary times return.

The faculty and staff senates will be co-sponsoring a town hall meeting on Monday, June 8, at 2 p.m. in Stewart Theater to provide the opportunity for a larger audience to hear an update on the budget situation. I also encourage you to continue to help us take the best available course by submitting your questions and suggestions to the Budget News site, where you can also find new information in the questions and answers section.