2016 General Assembly took a pass

RALEIGH – With the 2016 session of the General Assembly now over, it’s clear legislators largely took a pass on urgent issues facing higher education in North Carolina: Fixing HB2 and providing a meaningful raise for university and community college faculty:

Faculty raises.

The folks who teach our children at the university level have seen one raise from the legislature in the past seven years. Eleven of 16 public universities rank below the 50^th percentile when compared with peer institutions in average faculty compensation.¹ Campuses have seen attrition as a result: 76% of faculty who received competing offers from 2012-14 accepted those offers and left.²

Legislators did find a way to give K-12 teachers election-year raises that average 4.7%.³

But the General Assembly gave university and community college faculty raises of just 1.5%, plus a one-time bonus of 0.5% and a merit bonus that will average about 0.75%.⁴

Stephen Leonard, the Chair of the UNC System’s Faculty Assembly, says faculty are loyal to their schools and students.

“But they are not immune to disrespect and contempt. This raise is too little, too late, and too obvious in its implications: 1.5% is just enough to enable the legislature … to publicly brag about addressing lagging salaries, but not enough to convince faculty and staff that the public ballyhoo really marks the end of the scorn with which they have been treated.”⁵

The raises were overdue and welcome. But they are not enough to attract and retain the top faculty in the country to teach our children in an economy that increasingly demands a college degree.

Fix HB2.

The law that requires everyone to use restrooms in government buildings that correspond with the sex on their birth certificate has proved an international embarrassment to North Carolina and cost the state thousands of jobs. It has also hurt recruitment of students and faculty at our public universities.⁶

In the closing days of the session, lawmakers did tweak the law to restore the right to sue for discrimination in state court.⁷ But they left the controversial bathroom provision intact.

The change is not enough to alter perceptions that with HB2, North Carolina discriminates against the LGBT community.

Funds for enrollment growth.

The budget agreement includes $31 million to provide for 3,125 additional students at state universities, a 1.5% increase. It reduces funds for community colleges by $26 million to adjust for a 4.1% decline in enrollment – the equivalent of 8,578 students.⁸

Need-based aid.

In-state tuition at our public universities is scheduled to rise by an average of 4.3% in 2016-17 and 3.7% in 2017-18.⁹ But the budget provides no increase in need-based financial aid.

Raising tuition without increasing aid makes it harder not only for low-income students, but increasingly for middle-income students, to afford college.¹⁰ Increasing tuition without a corresponding increase in financial aid will only add to student debt.

Fixed-rate tuition.

Starting with freshmen this fall, state universities must offer students fixed-rate tuition for four years.¹¹ Legislators say the requirement will provide families certainty when saving and paying for college.

Universities will likely calculate average tuition over four years. But a study in Illinois found that the practice of “frontloading” actually increases tuition more rapidly than it would otherwise increase.¹²

Fixed tuition will offer certainty, but the impact on tuition overall is uncertain and must be monitored.

Limit student fees.

Student fees at state universities can grow no more than 3% a year, starting in 2017-18.

$500/semester tuition at three universities.

Though it met with controversy initially, legislators set tuition of $500 a semester for in-state students and $2,500 a semester of out-of-state students at three public universities, beginning in fall 2018: Elizabeth City State, UNC Pembroke and Western Carolina University.¹³

This measure represents innovative thinking and a legitimate effort to meet a constitutional requirement that legislators provide a college education for as close to free as possible.¹⁴ Legislators must keep their pledge to provide up to $40 million a year to replace lost tuition revenue, however.

Merit scholarships at NC Central and NC A&T.

The budget establishes the Cheatham-White Scholarships to be awarded to 50 students each at NC Central and NC A&T State University – a positive move for two of our state’s largest and most important HBCUs. The institutions must raise funds to match state dollars. Students will begin receiving the merit scholarships in the fall of 2018.¹⁵

Delay NC GAP.

A provision in last year’s budget required state universities to divert their least-qualified incoming students to community college to obtain an associate degree before moving to the four-year institution.

Officials requested a delay to assess whether measures already in place will improve completion rates.¹⁶ The new budget postpones implementation until the 2017-18 academic year.¹⁷

Repeal fundraising cap.

The legislature also voted last year to limit state dollars for private fundraising to $1 million at each state university, which would cost institutions $16.4 million. Universities see a 10-to-1 return on fundraising expenditures and asked for the provision to be repealed.¹⁸

Legislators repealed the requirement, but required universities to cut $16.4 million elsewhere, for a total of $62.8 million in cuts to university operations in 2016-17.¹⁹ This pushes budget cuts at our state’s public universities to nearly $800 million since 2008.

UNC School of Medicine Asheville Campus.

Legislators provided $3 million for the UNC School of Medicine to start an Asheville campus in conjunction with the Mountain Area Health Education Center, as well as $8 million to build a facility.²⁰

ECU Brody School of Medicine support.

The legislature authorized $8 million last year in one-time funds to stabilize East Carolina’s Brody School of Medicine. The budget converted $4 million of that to continuing support.²¹

Income-tax cap.

The Senate proposed one constitutional amendment that would limit the state income tax to 5.5%²² and another that would include both the income-tax cap and a requirement to build the state’s Rainy Day Fund to 12.5% of the General Fund.²³

Such measures would only handcuff future legislatures during budget emergencies. The state House showed wisdom in not taking up the Senate’s proposed constitutional amendments.

Considering the impact of previous tax cuts, the short session was, well, OK for higher education in North Carolina:

State funding per student remains among the best in the nation.
However, public universities continue to suffer cuts – $62.8 million, which amounts to almost $800 million since 2008.
Capping tuition at $500 a semester at three universities was innovative and could hold real promise – as long as replacement funds continue.
Lack of substantive action on HB2 was disappointing and harmful.
Faculty salaries will slip further competitively, and the lack of appreciation and respect will take a long-term toll.

As a result, it is difficult to be excited about trends for higher education funding and support in North Carolina.

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