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Chancellor on Budget Reduction

As we look back over the last several years of the recession, we can see considerable budgetary challenges. During this time, the budget for higher education and for NC State has taken escalating reductions. The cuts have been painful. We have lost jobs, class seats and course sessions. There is less financial aid and tuition is higher.

Yesterday, the Board of Governors approved state budget allocations that included more than 15 percent in reductions for NC State. That represents a loss of about $80 million from our appropriated budget. There is no doubt that there is considerable pain in this budget reduction.

But, as I said in my installation speech, we are not going to let budget challenges cripple us. We will move forward by thinking differently about the way we are organized and operate. If there is positive news in this budget environment, it’s this: the combined efforts of our organizational realignment, strategic planning and ongoing budget planning have positioned us to lessen the impact of the reduction.

We have given ourselves the ability to keep moving forward in a resource-constrained environment. And, we will do so without further tuition increases for the upcoming academic year.

We will be able to limit cuts on the academic side to about 7 percent; on the administrative side, the reductions to the units are typically in the 10 percent range. Not a perfect scenario, but certainly better than 15 percent.

The tireless efforts of many people at NC State have contributed significantly to the campuswide strategic planning process and organizational realignment. With their input, we have the method and means to strategically focus our resources on our academic core, deliver on our research and economic development mission and support organizational excellence.

Also, over the last three years, we have taken budget planning steps to prepare ourselves for just such a budget as this one by, for example, making one-time expenditures rather than recurring investments. Those one-time dollars are then unencumbered in the next budget cycle. Units have also taken steps to hold vacant positions open, which helps to spare us some loss of filled positions.

Even with all the hard work we have done across campus, this remains a difficult time for NC State. While we have positioned ourselves to offset some of this 15 percent reduction this year, repeated, drastic budget cuts over the last several years have exhausted our ability to sustain further losses.

We will continue to do everything we can to preserve the quality of the education we provide to students and the vitality of this university. We will do all we can to continue to be an engine for the kind of economic development that will bring North Carolina back to prosperity. We have been good stewards of taxpayer dollars. We have been good partners with North Carolina. We are a national best value delivering on the promise of quality, affordable education. It is not possible for us to continue to be all those things while our financial support continually erodes.

I know this is a time of great anxiety for everyone, particularly our employees, who have not had a salary increase in three years and who have shouldered the load of lost jobs. I thank you for your dedication to NC State, the state of North Carolina and our students.

The work of creating this year’s university budget is almost over. We are working out the details with the deans and executive officers to provide clarity on unit allocations and should know more next week.

Like you, I am hopeful that the economy is on the way up and that we have weathered the worst of our budget reductions. As we put the budget conversation behind us, we can get on to the work of preparing ourselves for a new academic year with an extra measure of optimism and a renewed pride in NC State University.

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  1. To the responders who want to cut academics and support ‘core’ programs only:
    NCSU is a LAND GRANT institution. That means its primary reason to exist is to educate and support the citizens of NC. Unless we want to become a Univ of Phoenix or ITT Technical Institute we MUST continue ALL programs that support NC. That includes those non-technical programs that many technical folks think are unnecessary. I encourage everyone reading this (including the Chancellor, Provost and the Board, if they actually do) to examine the original mission of NCSU and do some soul searching as to how serious we really are about remaining a land grant. Personally, I have always CHOSEN to work for a land grant simply because of the mission. I am not naive enough to think we can survive without change, but should we become something that we are not not and shouldn’ be? If so, a lot of us are in the wrong place…and no one wins in the long run..especially the folks of NC.

  2. Unfortunately, we probably need to be looking at cutting entire disciplines. Deeper administrative cuts and shallower org charts will help, but we need to stop pulling money from our best programs to keep under-performing programs afloat. NCSU is trying to be too many things. When budgets improve we can reinvest in trying to diversify, but we need to determine our core and protect that for the time being.

    Additionally, I think we should evaluate consolidation of IT. Over the past couple years, OIT, a once bloated organization has had round after round of RIFs while we maintain a grossly disorganized and inefficient IT climate. We are no longer capable to even keep up with changing compliance rules that then threatens our ability to grow or even maintain our research funding streams.

  3. Pointing of fingers and interdepartment bickering will not help. We need to rally round our Chancellor and his decisions. All departments are working hard, all employees are working hard. Thank God that we have good leaders here making these decisions.

  4. On August 17, 2010, the Goldwater Institute (Phoenix, AZ) released a study of spending at 198 leading public and private universities, including NCSU for the period 1993-2007. During that time, the number of full-time administrators at NC State increased by 61.4% per hundred students versus a 4.6% teaching, research and service personnel, and student enrollment increased by 14.4%. The increase in administrators at NCSU is well above the average of 39.37% for all 198 institutions, and, the average full-time teaching and research positions averaged just 17.6% (which looked good when compared to just 4.6% at NC State). Average enrollment increases were about the same as at NC State for the period (14.5%).

    The Chancellor proposes to cut the administrative budget by around 10%, while limiting academic cuts to about 7% It seems clear to me that the bloated administrative budget can be cut much more severely with little loss to the performance, or mission of the University. Less of the cuts should come from the academic side which has been underfunded for years. Our students are continually reuired to pay more and in return, receive less quality in return for their investment in education.

    Dr. Gerald H. Elkan
    Professor Emeritus of Microbiology
    North Carolina State University

  5. We are like the band playing on the Titanic. We are playing really well, but it makes no difference in the long run. If we are going to survive (and there is no guarantee that we will) we must start thinking in terms of systems and processes. Eienstein said we cant fix problems with the same thinking that created them. We can’t omit any person/position without it having some impact, usually a lot larger than we initially think (unintended consequences). Apply the simple 80/20 rule to everything that we consider doing, e.g., 20% of either processes or people cause 80% of the ‘dead weight’. We could eliminate 80% of financial waste by analyzing 20% of the major processes like the 12 cell matrix (who made that idiotic thing up anyway?), administration and maintenance of external funds and the inefficient way our entire budgeting happens at the College level. NCSU is an excellent engineering and technical university, so where are all the process/ reengineering experts already? Dr Woodward attempted to start a such an effort. We have to be smart enough to figure this out, don’t we?

  6. NCSU needs to be looking hard at the Graduate School, and the excessive waste that goes on there. For example, the entire professional development unit is a drain on University resources. It’s nice to have those services when you have the money to throw into supporting them, but not important enough to make the cut when you’re cutting to the bone.
    Admissions could be turned completely over to the departments, student appointments could be handled in HR, student records management could go to the Registrar’s Office.. Hmmm.. what exactly does the Graduate School do as an administrative unit that offers anything of value to NCSU?

  7. It is time to be a year-round university. We need 3 terms a year so we can improve graduation rates and make effective use of our educational facilities that languish during low-enrolled 5-week summer terms. We have 12-month staff but 9-month faculty. For 3 months in the summer, staff are fully funded to support faculty and students who are not here. If you want efficiency, fix the schedule since time is money. There is nothing efficient about summer school. With infrastructure, administration and staff already in place, adding faculty to fully fund
    a 3-month summer term is a relatively small addition. Students can move through their undergraduate and graduate programs at 3 terms a year rather than 2. Or if they choose, they can remain on a 2-term/year schedule and take off a trimester for co-ops, internships, study abroad, research, work, etc. Georgia Tech offers nearly all of its classes during the summer. A faculty governance task force has proposed a new academic calendar with 3 14-week terms with a pilot forthcoming. My preference is three 13-week terms so there is time between terms to organize, prepare, run workshops, upgrade facilities, etc. You can move more students through our programs more quickly without any loss of educational quality.

  8. How can the chancellor support current University wide renovations (e.g. The Tally Center, Book Store, Chancellor’s Villa, Centennial Library) in such a hard economic climate. Should these projects not have been shelved until the economy recovers, retaining academic and staff jobs?

    What is the justification for this?

    1. Simon: Student fees, rental revenue and gifts are funding the Talley Student Center/bookstore renovation and private donations are paying for the chancellor’s residence. The General Assembly approved funding for the Hunt Library on Centennial Campus several years ago, and the state allocation for the project was reduced during the 2009 budget crisis. Here are some links with detailed budget information for the projects you mentioned, along with NC State Budget FAQ.

      Talley Student Center Renovation:
      Chancellor’s Residence:
      Hunt Library:
      NC State Budget FAQ:

  9. Chancellor Woodson:
    I wanted to thank you and your staff for the work with the budget. I realize that this is a difficult problem, and I wanted to congratulate you on your progress with a minimum amount of disturbance to the NC State community.
    I don’t believe the national economic problems have been solved—indeed, I don’t think there has been a serious attempt to do that—and I fear further cuts will be necessary.
    Please, it is easy to cut administrative expenses, and that may be required, but academics need to be seriously considered.
    Thanks for listening.

  10. “We are working out the details with the deans and executive officers”

    Well I would start by cutting the administration by at least 30% and see how much of a change it would make. I would argue that most of the Executive and Assistant and Associate and Vice positions are totally unnecessary on this campus. What do they do other than make meetings and plan things that never get implemented and waste time and money? You could go a long way to making this place run a lot more efficiently if you went to each college and each department and stating that so and so is in charge and if people do not like it then they can leave. The current Dean’s and really good admin secretaries can run almost everything in a college and the rest can be managed in departments. No need for Assistant and Associate Deans. No need for Vice Chancellors and Vice Provosts. Those are all bogus titles anyway. How do they help students on a day to day basis? Cutting research dollars to pay these people is a joke.

    A small for instance for you: the Communications department on campus does NOT need a Chief Communications Officer. There is already a Director so why does that person need a boss? YOU ARE THE BOSS, you can make that place do would is needed by backing the current Director. There is no need to waste $240,000 on another useless administrator.

    I want to be able to take pride in where I work and I work hard to make sure that the students, staff, and faculty have the best network that we can afford (not easy in these times but doable). Please take time to realize that you are looking at the wrong thing by cutting research staff money at the expense of those who return little or nothing to the students.

    Have a pleasant day.

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