George Leef

The campaign for the higher education bonds in 2000 told North Carolina voters that the bonds were the best way to handle the University of North Carolina system’s deteriorating facilities and its pressing needs for new buildings to accommodate an expected surge in enrollment. Bond supporters were adamant and explicit in promising voters that the bonds wouldn’t raise their taxes. Now two years after passage, taxes have already risen and the deepening state budget crisis threatens to see them increase again, UNC is favoring new construction over supposedly critical repairs, there has been no sign of a massive surge in enrollment, and UNC is unnecessarily and openly pursuing contracting procedures that are possibly illegal and likely more costly. A moratorium on the bond sales, allowed by the legislation approving the bonds, appears to be the most responsible way to navigate the state’s fiscal crisis and UNC’s crisis of credibility with N.C. voters.

North Carolina has a long history of support for higher education. The state’s financial commitment to higher education is among the strongest in the United States. The high degree of subsidization of higher education in North Carolina has some very important effects. First, it transfers wealth from taxpayers in general to those families who take advantage of the low-cost UNC system. Second, it stimulates the demand for entrance into the system. Third, it works to the detriment of the private colleges and universities in the state. This paper will analyze each effect of North Carolina’s high subsidization of the University system.