Funding Down But Layoffs Unlikely

NC State expects to avoid layoffs and protect academic programs by raising tuition this fall to help cover nearly $14 million in additional state budget cuts.

The $13.8 million reduction in state funding comes on top of $4.6 million in cuts scheduled to take effect this year as part of the two-year budget cycle, said Charles Leffler, vice chancellor for finance and business.

“I don’t expect there to be a round of layoffs because of the cuts we took last year,” Leffler said. “Because we’ve already done that, I’m not anticipating seeing any significant loss of positions.”

However, it’s “highly likely” that the university will face budget reversions in which the state takes back money, Leffler said.

“A lack of federal Medicaid funding or a shortfall in state tax revenues could cause the governor to tighten everybody’s belts for them. The governor is already indicating that a 1 percent reversion would provide a cushion if federal Medicaid funding doesn’t come through.”

Furloughs could be used to cope with shortfalls in federal Medicaid funds or state tax revenues, Leffler said. Hiring freezes are not planned, although departments will have the option of leaving positions unfilled.

Tuition Increase

Legislators approved a tuition increase of up to $750 per student for the 2010-11 academic year, with at least 20 percent going to cover need-based financial aid.

Although an exact dollar amount has not been set, a tuition increase at the upper end of the limit would help NC State offset a “substantial portion” of budget cuts, Leffler said.

The legislature previously approved a campus-initiated tuition increase of $150 for in-state students and $200 for out-of-state residents, as requested by the Board of Governors.

Under the proposed budget, tuition could be increased by a total of $900 for in-state students this year.

Priorities Protected

The state budget funded three top priorities for the UNC system: enrollment growth, need-based financial aid and operating money to open new campus buildings.

Leffler said the building funds, called operating reserves, will allow NC State to open the Engineering III building and the Randall B. Terry Jr. Companion Animal Veterinary Medical Center later this year.

In addition, NC State will benefit from $3 million in recurring funds to help the College of Engineering hire highly qualified faculty and expand teaching and research. A $1 million allocation for the Kannapolis research campus will be split among several UNC campuses, but should allow addition of one to two faculty, he added.

Erskine Bowles, UNC system president, thanked legislators for their support of higher education during tough economic times.

“On a relative basis and particularly considering the economic climate, the 2010-11 budget we received from the General Assembly was nothing short of remarkable,” he said in a statement.