When the General Assembly considers the University of North Carolina budget request in January, UNC President Erskine Bowles will once again be at the center of attention.
During the short session this year, Bowles was still in the initial months of his presidency, leading the charge for $299 million in new UNC funding. When the dust settled, Bowles had been able to garner 55 percent of that requested funding, increasing UNC’s general fund appropriation to $2.2 billion. In the months since, Bowles has been heralded for his effectiveness in working with legislators.
As legislators return to Raleigh in the coming weeks, will Bowles and UNC be as successful in securing that same kind of support for the 2007-2009 biennium budget? UNC has submitted a budget request asking for $270 million in new funds and a total appropriation of $2.57 billion for the 2007-09 fiscal year. Since the state is looking at an estimated deficit of at least $300 million, it is questionable whether Bowles will succeed in getting as much money as he wants for the system. If Bowles is successful, is that a good thing?
The UNC system’s top three priorities for increased spending are need-based financial aid, academic salary increases, and student retention. These three areas combine add up to more than $158 million in new funds, most of which ($116 million) would fund salary increases for faculty members. UNC wants $35.6 million for need-based financial aid and $6.38 million for retention programs. Bowles has often said the funding for faculty salaries would help the system be more competitive in retaining the “best and brightest” faculty. He also says that funding for need-based aid and retention programs helps to educate the state’s future for the “knowledge-based economy.”
Not only does UNC want increased funding for need-based aid, but it is also seeking to make need-based aid a part of the continuation budget. If approved, UNC would not have to ask for funding each year for need-based financial aid, as it would be included in the regular budget appropriations. UNC claims by doing so it would ensure “access to the University for students who require financial aid in order to attend college.”
UNC is also seeking $61 million in new funding for research initiatives across the state. Most of that funding is tied up in the North Carolina Research Campus, an effort in Kannapolis at the site of the former Pillowtex plant. Dole Foods owner David Murdock purchased the site in December of 2004 to create a biotechnology venture. He has pledged $1 billion of his firm’s money and has met previously with legislators about obtaining state funding to pay for part of the research that will occur at the campus.
UNC is asking for more than $26 million from the General Assembly for the project in the 2008 budget. That is broken down to $12.5 million in recurring funds and $13.7 million in non-recurring funding. UNC does not say, in the budget request, how the money will be spent in each category. By the 2011 fiscal year, UNC is expected to seek more than $29 million annually in funding for the project.
That is a large annual commitment from North Carolina taxpayers. The General Assembly has already committed $6 million to the project, which has not been spent pending final approval between UNC and Murdock’s development company, Castle & Cooke. If $26 to $29 million per year is needed to secure the project’s future, why not find additional investors instead of going after a big check from the taxpayers? Capitalists are better at evaluating profit and risk potential than politicians are. Legislators should take that into consideration when they look at this part of the budget request.
If there is anything missing from the budget request, it’s alternative funding sources. There are ample opportunities where state resources could be replaced with private contributions from individuals who have an interest in that project. For instance, UNC is requesting more than $4.6 million for scholarship programs to recruit more teachers to the state’s public schools. Given the business sector’s strong interest in improving K-12 education, one would think that the money for those scholarships could be raised privately.
The UNC system is one of the nation’s more heavily subsidized state university systems. For many years, the General Assembly has given UNC most of the funding it has sought without asking tough questions about productivity and educational value for the money spent. Bowles has talked about reducing costs and increasing educational gains. This year would be a good time for the legislators to carefully scrutinize the UNC budget to see how much of it is truly essential.