Within hours after Governor Beverly Perdue presented her 2010-2011 budget proposal, the presidents of both the University of North Carolina system and the community college system launched public statements decrying deep cuts that will hamper their schools’ ability to educate.
UNC president Erskine Bowles wrote that the governor’s proposed cuts—“new reductions in excess of $100 million—will erode the Academic Core of the University.”
NCCCS president Scott Ralls said that “the proposed system-wide cut of 3.5 percent -- a direct reduction of our per-student funding -- will reach into our classrooms and lessen our colleges’ ability to provide high-quality educational opportunities for our students.”
Despite these claims, both systems actually get overall legislative budget increases in Perdue’s plan for the fiscal year that begins July 1. State appropriations to UNC will rise 1.6 percent, from $2.657 billion to $2.699 billion. For the community colleges, appropriations from the legislature will increase 3.2 percent, from $1.012 billion to $1.044 billion.
While Bowles’ statement points to “reductions in excess of $100 million,” he does not mention that additional appropriations for the 2010-11 school year also exceed $100 million ($113 million vs. $105 million in cuts).
Still, while Bowles and Ralls are using their powers of rhetoric and selective use of numbers to present the strongest possible cases for their organizations, they stop well short of being disingenuous. The discrepancy arises because both Bowles and Rawls are—for the most part—speaking about the reductions to their “management flexibility accounts.” While other appropriations are targeted by the legislature to specific purposes, much of the flexibility account money is disbursed directly to the academic departments, and therefore has a direct impact on the quality of education.
At an April 6 legislative committee meeting, Bowles said that the UNC system could handle a two percent cut, the same as last year’s, without affecting academic expenditures. He said that a five percent cut—a figure mentioned by some legislators—would force the system to cut slightly more than 1,000 jobs, roughly half of them faculty. In the April 20 press release, he suggested that Perdue’s proposed 3.9 percent ($99 million) reduction to the flexibility account will cause as many as 1,200 job losses.
One portion of the UNC budget that is growing dramatically is need-based scholarships. Last year, the state permanently increased the amount of scholarship money for low and lower-middle income students by $11 million, and by an additional $12 million just for 2009-10. The amount of scholarships based on income for the current year is approximately $139 million.
The governor's budget for 2010-11 adds another permanent increase of $34.9 million to the amount given to the UNC system for need-based scholarships. (This will be partly offset by the elimination of another scholarship program targeting low-income students, the EARN program, which will reduce appropriations permanently by $16.2 million in 2010-11.
An additional $17.7 million is available in this budget for need-based scholarships because of an adjustment to the 8 percent tuition increase scheduled for 2010-2011. Last summer, the legislature voted to have the $34.8 million raised by the tuition increase revert to the state’s general fund. Perdue’s budget will instead keep the money at the campuses, where 51 percent will be used for need scholarships, 25 percent for programs intended to improve graduation and retention rates, and the rest for academic programs.
The university system is also getting a one-time appropriation of $54.7 million from the State Education Stabilization Fund. The fund was created by the federal American Recovery and Reinvestment Act of 2009. This appropriation will essentially shrink the cut to the flexibility account by more than half, placing it under the two percent level that Bowles said the system could handle without affecting the academic core. However, this money is for one year only, while the reduction in the flexibility account is permanent.
The situation for the community colleges is different. There is still a great deal of “fat” to be cut from the university system. For example, North Carolina State University can afford to offer an honors philosophy course exploring the potential for time travel. UNC-Chapel Hill has not one, but two, centers for African-American history and culture, and UNC-CH just hosted a presentation teaching female students “how to have better” orgasms—partially funded by the university.
But the community college system has few such frills, and it already suffered a significant drop in per student spending in the current year—from approximately $4,900 to roughly $4,100. This was caused mainly by a huge increase in enrollment (often the case with community colleges in recessions). Community college enrollment statewide rose the equivalent of approximately 34,000 full-time students this year.
Purdue’s budget proposal will provide an additional $85 million to help the system handle the flood of new students for the upcoming year. This bounty will be offset somewhat by a drop of $33.3 million to the community college flexibility account, a 3.5 percent reduction. But many of the other “cuts” in appropriation to the community colleges are counterbalanced by other sources of revenue. These “receipts,” including an $8 per credit hour increase in tuition and a one-time increase in federal funds for literacy programs, are expected to rise by $75.1 million (24.8 percent).
The deep cuts to the flexibility accounts in Governor Purdue’s budget proposal are largely due to decisions made by the higher education systems themselves—they prefer to use the available money for other programs. If UNC officials had suggested to the governor that they prefer to fully fund their flexibility account to maintain the academic core rather than increase the funding for need scholarships, her budget could have provided the system with another $36.4 million for academics. (This number reflects the $34.9 million increase for need scholarships, minus the $16.2 million loss for the EARN scholarship program, plus the $17.7 million from the tuition increase devoted to financial aid.)
When that sum is added to the $54.7 million largesse from the Stabilization Fund, the resultant $91.1 million is early enough to compensate for the entire loss in UNC flexibility money. But the UNC leaders have chosen to use available funds for scholarships rather than for academic programs. The UNC system has been the driving force behind the huge rise in need scholarships in the last few years—“access” has been one of Bowles top two or three priorities for his term as president.
The dire alarms sounded by both presidents are part of the ordinary gamesmanship that should be anticipated during a legislative session in lean times. One would expect Bowles and Ralls to fight for every dollar for their systems, by whatever means they have at their disposal. But now that the governor has had her say, it is time for the legislature to disregard the rhetoric and make tough decisions about next year’s higher education budget based on what taxpayers can afford, and on that most uncommon of all qualities, common sense.