RALEIGH (October 19, 2023) – UNC System officials predictably praised the new 2023-25 state budget today, saying it puts money into both UNC’s people and its property.
“Faculty and staff work hard to serve our students and our mission, and we need to compensate them, particularly given inflationary pressures,” UNC System President Peter Hans told the UNC Board of Governors.
The budget gives UNC employees a raise of 4% this year and 3% next year. Hans said System employees’ paychecks are nearly 14% higher now than they were in 2021.
With a $30 billion state budget infused with one-time federal Covid-relief dollars, Hans also noted expenditures on building projects. The budget devotes $925 million to UNC System capital projects and $531 million to System repairs and renovations, he said.
He also praised a $420 million effort to pair the efforts of UNC Health and ECU Health to improve rural health care, as well as $320 million for a new children’s hospital in the Triangle, with an emphasis on behavioral health.
“It gives me so much pride as a North Carolinian to tell you that the compact around public higher education is alive and well in this state,” Hans said. “We’ve kept costs in check and tuition low. In return, our lawmakers have made generational investments. The result is one of the strongest, most affordable university systems in the country.”
DURING A REVIEW by the Board’s Budget and Finance Committee, Chief Financial Officer Jennifer Haygood said the state budget devotes a total of $3.7 billion to the UNC System – an 11.4% increase over the System’s base budget.
Declines in enrollment caused a $53 million reduction in funding, Haygood said, but a $32.9 million increase based on a new performance funding model helped offset the enrollment cut. And losses based on reduced enrollment at UNC Greensboro and UNC Asheville were capped at 4.5%.1
Board member John Fraley said an unexplained $2.5 million reduction to the UNC Chapel Hill School of Government is a “pretty substantial hit” and asked whether the System Office will help offset the cut.
Haygood said the System is not, but the School of Government is taking measures such as keeping positions vacant to help cope. “They are on top of it,” she said.
OTHER NOTEWORTHY points of discussions in the Board’s meetings today included:
NC Promise: The program that offers in-state tuition of $500 a semester and out-of-state tuition of $2,500 a semester at four UNC System campuses (Fayetteville State, Elizabeth City State, UNC Pembroke and Western Carolina) now covers 20,000 students.
Elizabeth City, in particular, has seen a 48% increase in enrollment since 2017, and Fayetteville State has seen an increase of 10%.2
“What we’ve really seen is an increase in transfer students who are taking advantage of the NC Promise program,” said Haygood.
Athletics Policy: For the first time, the state budget includes $10 million – $1 million each – for the UNC System’s 10 smallest athletics departments. Haygood said 13 institutions will also receive a portion of the state’s sports-betting revenue when sports betting starts in the state in 2024.3
Haygood noted that UNC athletics collectively generate $1.1 billion a year in economic impact for the state.4 But many athletic programs operate at a deficit, she said, and the additional support will help reduce pressure on student athletics fees.
Distinguished Professorships: The new state budget limits Distinguished Professorships established after July 1 to being matched with state dollars from the Distinguished Professorship Endowment Fund only if they are established in Science, Technology, Engineering and Mathematics (STEM) fields.
Board members seemed puzzled by the provision and had questions. Fraley said he hopes the System Office staff can determine what legislator(s) pushed the requirement.
Board member Art Pope asked whether a donor could still establish a professorship in political science or history with 100% private funds.
“Private funds are not impacted by this,” said David English, the System’s Acting Vice President for Academic Affairs – though it would not be labeled a “Distinguished” professorship.
Pope concluded that the state has the right to prioritize where its matching funds go. But as a private donor, he said he still supports the humanities, liberal arts and natural sciences.
Fraley noted that civics, literacy and other important subjects fall outside STEM fields.
Kirk Bradley, chair of the Board’s Education Planning Committee, said the policy doesn’t preclude further discussions with legislators. “I think there is some latitude,” he said. “While STEM is an important part of our curriculum, there are other parts, too.”
Hans noted that the budget also includes a $15 million recurring increase for the UNC Faculty Recruitment and Retention Fund. So while the legislature might be taking from faculty support with one hand, he suggested, it’s giving with the other to recruit and retain faculty in fields such as literacy.
English said the $15 million in recurring funds to match donors’ contributions is “transformational” to the Faculty Recruitment and Retention Fund.
Since the fund was established in 1985 to provide incentives for private giving, he said, it has received $221 million in state appropriations, but the new funds will provide much more.
IN SUMMARY, the new state budget uses one-time federal money to make substantial investments in capital projects. An increase in funds for the Faculty Recruitment and Retention Fund will help, but it remains to be seen whether modest raises from the General Assembly will stem the loss of key faculty across the UNC System.
1 https://webservices.ncleg.gov/ViewNewsFile/81/CommitteeReport_2023_09_20_Final, pp. 68-69/B41-B42.
2 https://www.northcarolina.edu/apps/bog/doc.php?id=67602&code=bog, pp. 63-74.
3 https://webservices.ncleg.gov/ViewNewsFile/81/CommitteeReport_2023_09_20_Final, p. 69/B42; https://abc11.com/nc-sports-betting-north-carolina-is-sport-legal-in-roy-cooper/13380746/.