No Detours on the Big Government Highway, Part II

Editor’s note: This is the second part of a two-part article about the state’s appropriations to the UNC system in the 2009-10 North Carolina operating budget. The first section suggested that there is a growing philosophical division in this country between those who favor an activist government and those who prefer a limited government (as reflected by the current health care debate). It also examined how this polarization is evident in one key area of the higher education budget—providing access. This part discusses several other areas of the higher education budget.

A second major area of contention between the activist government and limited government camps concerns the university’s role in economic development. The UNC system’s participation in the North Carolina Research Campus at Kannapolis has been a controversial issue since its inception; this year, the legislature increased the annual allotment for UNC activities there by $3 million to $22.5 million. According to the General Assembly’s “Joint Conference Committee Report” on this year’s budget, seven UNC schools are involved in research at the campus “to break new ground in health and science discoveries and help attract new employers and jobs to the state.”

This type of research is highly speculative. Even when patents are produced, few spin-off companies become, not just profitable, but part of the region’s established business community. And while proponents of an activist government regard investment in such ventures as essential to keeping the state competitive in the modern “knowledge” economy, advocates of limited government insist that private industry is much more efficient at identifying venues with long-term profit potential, and that low taxes and a sensible regulatory environment are the best way to attract business activity. They perceive UNC’s involvement at Kannapolis not as an investment, but as a $22.5 million annual gamble with extremely long odds of any significant return.

The legislature also gave $5 million to N.C. State’s College of Engineering “in interdisciplinary areas that respond to state and national needs.” Some of this money will likely go for highly speculative (and politically-charged) research for electric vehicles in the school’s Advanced Transportation Energy Center. Additionally, N.C. A&T’s and UNC-Greensboro’s newly-created Joint School of Nanoscience and Nanoengineering is getting an additional $1 million for start-up costs this year.

There are some other additions that, from the limited government perspective, defy reason. Elizabeth City State University’s new School of Aviation is getting an additional $300,000 this year. The school fills no great need—this country has a great many private flight schools and there is no shortage of pilots. This school, if successful, will merely “crowd out” some thriving private schools due to its state subsidies and UNC status.

The UNC School of the Arts has long been a point of contention for limited government proponents. It has exorbitant per student costs, and, rather than contributing to its students ability to earn money, it actually detracts from it—baccalaureate graduates of the school actually earn less on average than state residents with only a high school degree. Yet the school is not only getting $2 million over the next two years ($500,000 both years as a one-time grant, and an additional $500,000 as a permanent annual allotment) to upgrade its film-making school, but it is getting another $1 million added to its annual appropriation because it doesn’t raise enough money on its own to support all student services. (UNC-Asheville is also getting $1 million more for the same reason).

Such inexplicable generosity in the face of budget cuts might be the result of political muscle: Elizabeth City is in the legislative district of the state’s top-ranking senator, Marc Basnight, and the School of the Arts is in the district of state Senator Linda Garrou, who is responsible for writing the senate’s version of the budget. Basnight has long been criticized for his aggressive pursuit of questionable state-funded projects in his home district, and in April, Garrou quietly inserted a provision into the senate’s budget transferring control of UNC-TV from the university system’s general administration to the School of the Arts (the provision was quickly removed upon discovery by the media).

The two philosophical camps differ in the their preferred methods of budget-cutting. The small government advocates approach the downturn as an opportunity to examine the system for inefficiencies and superfluous positions and programs, and to eliminate permanently the most egregious offenders. Their opponents seek to limit the damage to their long-term plans—they favor small across-the-board cuts to many programs, rather than outright elimination of a few programs of dubious benefits.

This tendency to make small reductions was evident in this year’s budget. Some programs that the big government opponents would have gladly taken a budgetary axe to will continue. They include K-12 programs administered by UNC that epitomize the left’s aggressive attitude toward education. One is the A+ Schools program (a 10 percent, $50,000 reduction) at UNC-Greensboro, a highly experimental K-12 educational concept which seeks to “create enhanced learning opportunities for all students by using arts-integrated instruction, which incorporates Howard Gardner’s theory of multiple intelligences, other theories of intelligence, and recent brain research.” Another is the NC Center for International Understanding (a $108,789 cut, roughly 20 percent) which, among other things, organizes overseas travel for teachers and students.

Still, there were a few items so bad even that even the liberal legislature had to cut them, such as the Legislator’s Schools for Leadership Development, a program that brought high school students to university campuses in the summer to “enhance” their “leadership abilities.” The university system is also finally offloading the Center of the Advancement of Teaching, which offers “retreats” to K-12 educators, and its $7 million annual budget to the State Board of Education.

Many decisions were pushed back to the campuses, such as the fate of hundreds of academic and research centers and institutes. However, the entire system has to cut only $12 million for these programs in 2009-10, so it is likely that many of them will simply receive slight across-the-board reductions.

Overall, this year’s budget can be regarded as a lost opportunity by limited government advocates. Many questionable programs remain, and many hard but necessary decisions were delayed for at least another year. As the Bain Report produced by business efficiency consultants at UNC-Chapel Hill suggests, the system is rife with inefficiencies far beyond what will be affected by this budget. Despite the rhetoric about the severe austerity imposed by the recession, “Big UNC” remains firmly on its expansionary course.