UNC system leaders tackle funding shortfall

Gov. Bev Perdue's budget proposal for 2009-11 calls for the UNC system to receive $168 million less than UNC President Erskine Bowles and campus chancellors had expected.

"This ain't gonna be no waltz," Bowles told university leaders during a Board of Governors meeting.

Officials said the proposed funding could mean 400 to 500 layoffs across the university system. Most would be non-faculty jobs, but leaders warned of larger class sizes, fewer advisers, less maintenance and program reductions.

Bowles said chancellors need to roll up their sleeves and begin identifying possible cuts while he works with state lawmakers to give campuses more flexibility in where cuts are made.

"We agreed not to whine and not to complain," he said.

UNC-Chapel Hill Chancellor Holden Thorp immediately ordered all departments to make cuts for the coming school year equal to a permanent 5 percent loss in state funding.

"We'll make the reductions we feel that we can make now. That will preserve more jobs and more of our programs in the long term," Thorp said.

All state agencies, including university campuses, have been ordered to reduce spending by 7 to 9 percent by the end of June to help close a $2.2 billion deficit in the current budget. Thorp said that has cost UNC-Chapel Hill $36 million.

Projections call for state revenue to be short by $3.4 billion in the 2009-10 fiscal year, which starts in July, and lawmakers have just started to work with Perdue's recommendations to craft a state budget for the coming year.

A 5 percent cut amounts to a recurring $29 million loss for UNC-Chapel Hill, Thorp said, and likely would result in job losses. He said he couldn't foresee a scenario in which tenured faculty would be affected, however.

"I understand the pain that this information will bring to people who have devoted themselves to this university, and I am sorry that we have to take this step. I ask for your support and patience as we navigate this economy," he wrote in a memo to faculty, staff and students.

Bowles and the chancellors have asked for legislative approval to furlough university employees to save money, but it's unclear whether lawmakers will approve the idea.

North Carolina Central University Chancellor Charlie Nelms projected 50 layoffs at his Durham campus.

"It's always very difficult to make cuts because you're dealing with the lives of people, either students, faculty or staff," Nelms said.

Chancellor James Oblinger said cuts at North Carolina State University would lead to "serious pain on the operational side and ... pain as it relates to personnel."

Thorp said other university revenues, such as tuition, research grants and endowment funds, are restricted in how they can be spent. Also, UNC-Chapel Hill's endowment lost 16 percent of its value last year because of the downturn in financial and real estate markets.

The Chapel Hill campus has established an employee assistance fund for laid-off staff, and Thorp said he expects various services for those employees to be in place soon.