The State Budget and ECU
It is the time of year when committees of the North Carolina General Assembly start to make recommendations and decisions regarding the budget for the University of North Carolina System… and therefore the time of year when the rumor mill runs overtime. Let's take a careful look at what we know and how the administration and the trustees of ECU are preparing for the next fiscal year.
First, much uncertainty exists about the projected size of the revenue gap next year. One can hear estimates from $2 billion to $3.5 billion. We won't really have a good understanding of this until late April. Therefore, ECU continues to be prepared for base budget cuts of 10 percent to 20 percent, but we remain hopeful they will end up closer to 10 percent. Whatever the final number is, it will cut to the bone of ECU, in large part because we have already lost about $100 million over the last three years and ECU remains a very efficient university. There is not much fat to be found.
We have four ways to find the money that will be lost next fiscal year… between $30 million and $60 million. The first is continued efficiency improvements and consolidation of services and administrative offices. Because we've done so much of this for the last six years, I don't think this option will result in large savings; one guess is that we might find up to $5 million from efficiency improvements but that amount is likely to take several years to realize. We have two task forces investigating how we can save money by reducing administrative expenditures in academic departments and dean's offices, and I suspect a large majority of any eventual savings will come from this source. Provost Sheerer and I have met with the Educational Policy and Planning Committee of the Senate, which is preparing guidelines for how we might improve efficiency in academic administration. They are doing excellent work.
Option two is that we will take money from our emergency fund and that is a painful and risky option. Once those funds are gone, it will be difficult to replace them. Further, they greatly reduce our ability to respond to future fiscal crises and unanticipated disasters such as Hurricane Floyd. Further, those funds provide essential one-time funds to build research laboratories and complete building projects that have been underfunded. Nevertheless, we will use money from this source to protect the academic core and to try to save as many jobs as possible.
Options three and four really hurt: increasing tuition and across-the-board cuts to each division and college. Yet, we will have to do both. Tuition and fees have gone up nearly 35 percent in two years, so we will do all we can to limit the additional cost to the student. That said, ECU remains a great educational value. We remain in the bottom quartile of our peers in terms of total tuition and fees paid by North Carolina undergraduates. Our freshmen perform at the 93rd percentile nationally, based on learning such higher order skills as critical thinking, analytic reasoning, and problem solving. Our seniors perform at the 86th percentile nationally. So, our undergraduates receive quality education at a comparatively low price.*
Clearly, we will not be able to meet our budget targets without asking each division to make additional cuts; this means that colleges, departments, and all administrative offices, including mine, will be reducing our operating expenditures and eliminating positions. Unfortunately, not all of these positions will be vacant. When personnel account for more than 80 percent of our expenditures, the loss of jobs becomes inevitable under these circumstances.
That is the picture that we see in mid-March. As we have stated repeatedly, it will continue to evolve. Please remember this over the next few months. ECU knows how to survive a crisis. We have our priorities in order. We will protect the student experience and our faculty as much as possible. When this very tough year is over, we will remain a strong university, devoted to North Carolina and to the 41 counties in the east.
*Data on higher order skills based on the results of the collegiate learning assessment for 2007-2008.