Budget a big victory for Bowles, Easley

When the North Carolina General Assembly approved the final budget for the 2008 fiscal year in July, it was clear that the state’s education sector was a big winner. Lawmakers had approved a state budget that called for $1 billion more education spending than last year.

It’s that kind of spending that makes Gov. Mike Easley and UNC President Erskine Bowles quite happy. Both came away as big beneficiaries, having shepherded their specific spending proposals and persuaded lawmakers to fund their plans. For taxpayers, of course, the spending was more of a mixed bag, and a costly one.

In all, the 2008 budget came in at $20.6 billion. UNC makes up 12 percent of the budget, receiving a $2.6 billion total appropriation. The community college system received just under $1 billion, $938 million. Total education spending, when the K-12 Department of Public Instruction is included, was $11 billion. These figures do not include significant capital expenditures that will be funded by bonds that do not need voter approval.

Easley’s Education Initiative

Gov. Easley’s budget, presented in February, included plans for the EARN (Education Access Rewards North Carolina) Scholars program. This new program would give two years of tuition ($4,000 in total) to students from families who make 200 percent or less of poverty-level income. Currently, that includes families of four that make less than $41,300 annually.

The program, Easley said at the time, would cost $150 million over the next two years to implement and fund.

Easley marketed the plan by saying that students who obtained an associate’s degree from a Learn and Earn program (the state’s Early College program, which covers two years of college) could take advantage of the EARN Scholarship. This would give them a virtually costless educational experience, from kindergarten through college, so that they could graduate from college “debt free.” He also said that EARN scholars would have to work 10 hours a week.

Easley succeeded in getting the program approved by lawmakers, but it was altered in the final budget. Easley only received $27.6 million for the plan for 2007-08 but received his full request of $100 million from the 2009 budget. Legislators wrote into the budget that only $60 million would come from the general fund; the other $40 million will come from the Escheats Fund, comprised of unclaimed property, which lawmakers often use to supplement programs.

Lawmakers also removed the requirement that students must work 10 hours a week. For a student to be eligible in the second year, “the student must meet achievement standards by maintaining satisfactory academic progress,” according to the budget language.

Bowles’ Success

In shaping his second budget, Bowles continued to show not only his legislative abilities but those of his staff as well. Viewing the House budget, released in May, as less than satisfactory, Bowles and others went to work on the Senate to advocate for their programs.

The result was a Senate budget that was, for the most part, a copy of UNC’s budget request. That carried over into the budget conference, so that the final document funded UNC’s biggest priorities and some additional programs. UNC received a 5 percent salary increase for faculty, more than the 4 percent raise for most state employees; other UNC employees received a 4 percent increase in salary. Also, the ECU Dental School received $1 million for continued planning funds and $25 million for site development and construction.

That includes $36 million for need-based financial aid, which will, like the EARN scholarship, be funded through the Escheats Fund, freeing up general fund revenues for other programs. Bowles and others were also able to gain support for the North Carolina Research Campus, an initiative by Dole Foods’ David Murdock on the site of the former Pillowtex plant in Kannapolis. Combining one-year and recurring funds, that campus gets $16.5 million, short of the $26 million that was requested, but still substantial.

UNC received funding for its online education efforts ($4.2 million in recurring and non-recurring funds). Legislators also inserted funding into the UNC budget to improve the Gateway Technology Center, a distance education center located on the campus of North Carolina Wesleyan College and to establish a fund to increase cancer research at UNC Hospitals.


Taxpayers will foot a substantial higher education bill, much of which falls well beyond the traditional educational mission of universities. For example, the community college system received funding for a hosiery technology center and UNC received money for shellfish restoration.

Lawmakers did reveal some concern about spending that may be outside the realm of education. They inserted a budget provision that requires for the 2009-2011 biennium that the UNC system submit an itemized budget request, which it does not do already. Requests must include a “description of State-funded activities and a justification for the existence of each activity as aligned with the mission of The University of North Carolina.”

It remains to be seen if the measure will actually curtail growth in spending on programs in the UNC system that go beyond educating students. Perhaps the UNC Tomorrow Commission, which will begin public hearings this fall, will have something to say about the mission of the university system.