UNC Budget Outlook November 7, 2008 The University of North Carolina UNC Faculty Council

The University of North Carolina 2 UNC Summary – Revenues Source: IPEDS Data Total = $8.2 billion

The University of North Carolina 3 UNC-CH Summary – Revenues Source: IPEDS Data Total = $2.5 billion

The University of North Carolina 4 * Excludes capital improvements UNC-CH = 22% of UNC System State Appropriations UNC System = $2.6 billion*

The University of North Carolina 5 * Excludes capital improvements UNC = 12% of overall state budget and 23% of Education budget NC State Budget - $21.2 billion*

The University of North Carolina 6 UNC as a % of State Budget % 12.2% 13.2% 14.2% 16.5%

The University of North Carolina 7 Education Budget Breakdown DPI: $7.8 billion UNC: $2.6 billion NCCCS: $.9 billion Private Colleges: $.1 billion DPI: $7.8 billion UNC: $2.6 billion NCCCS: $.9 billion Private Colleges: $.1 billion

The University of North Carolina 8 Fiscal Year revenue projections are based on 3.9% growth Each 1% of growth = $200 million Currently, revenues are approximately $300 million behind projections. This is a significant deficit for the 1 st quarter. Governor has issued 4% reversions Other Factors: State Health Plan has at least a $300 million deficit for revenue projections are based on 3.9% growth Each 1% of growth = $200 million Currently, revenues are approximately $300 million behind projections. This is a significant deficit for the 1 st quarter. Governor has issued 4% reversions Other Factors: State Health Plan has at least a $300 million deficit for

The University of North Carolina Budget North Carolina is a fast growing state North Carolina will be the 7 th largest state by 2030 Pressures on state budget Economy, declining revenues State Health Plan deficit – $600 to $700 million over biennium Medicaid – $50 million K-12 requirements  Enrollment – $100 million  ABC Bonuses – $100 million State Employee Salary Increases – each 1% is $130 million New Governor, Legislators, & Treasurer North Carolina is a fast growing state North Carolina will be the 7 th largest state by 2030 Pressures on state budget Economy, declining revenues State Health Plan deficit – $600 to $700 million over biennium Medicaid – $50 million K-12 requirements  Enrollment – $100 million  ABC Bonuses – $100 million State Employee Salary Increases – each 1% is $130 million New Governor, Legislators, & Treasurer

The University of North Carolina 10 UNC State Budget “A single, unified recommended budget for all of public senior higher education.” G.S Statute prescribes form of budget requests – three categories: 1.Continuing Operations (enrollment, utilities, vehicle replacement) – allocated to institutions 2.Academic Salary Increases – lump sum to Board of Governors and then allocated to campuses 3.Expansions/Improvements Items – lump sum to Board of Governors and then allocated to campuses New and expanded programs Capital improvements “A single, unified recommended budget for all of public senior higher education.” G.S Statute prescribes form of budget requests – three categories: 1.Continuing Operations (enrollment, utilities, vehicle replacement) – allocated to institutions 2.Academic Salary Increases – lump sum to Board of Governors and then allocated to campuses 3.Expansions/Improvements Items – lump sum to Board of Governors and then allocated to campuses New and expanded programs Capital improvements

The University of North Carolina 11 UNC State Budget Legal Basis State Executive Budget Act – G.S.143C Higher Education Reorganization Act of 1971 – G.S. 116 Board of Governors’ Role: Presents comprehensive financial plans to General Assembly Modifies plans based on resources made available by Legislature Establishes annual budgets which are administered by the constituent institutions Advocacy Legal Basis State Executive Budget Act – G.S.143C Higher Education Reorganization Act of 1971 – G.S. 116 Board of Governors’ Role: Presents comprehensive financial plans to General Assembly Modifies plans based on resources made available by Legislature Establishes annual budgets which are administered by the constituent institutions Advocacy

The University of North Carolina Budget - Continuation Campuses work with Office of State Budget & Management (OSBM): Building Reserves for new State-funded Facilities opening during the biennium Replacement Vehicles & Equipment Inflationary Increases (library books, utilities) Required Staff Benefits & Continuing Personnel Campuses and GA work together, then submit to OSBM: Enrollment Campuses work with Office of State Budget & Management (OSBM): Building Reserves for new State-funded Facilities opening during the biennium Replacement Vehicles & Equipment Inflationary Increases (library books, utilities) Required Staff Benefits & Continuing Personnel Campuses and GA work together, then submit to OSBM: Enrollment

The University of North Carolina 13 Expansion Budget Process Budget Preparation Campus Submissions (Sept) UNC-GA Review (Sept-Oct) 24 Chancellors’ & Affiliates one-on-one discussions (Sept-Oct) BOG Workshops (Oct-Nov) Final Recommendations (Nov) Budget Preparation Campus Submissions (Sept) UNC-GA Review (Sept-Oct) 24 Chancellors’ & Affiliates one-on-one discussions (Sept-Oct) BOG Workshops (Oct-Nov) Final Recommendations (Nov)

The University of North Carolina Expansion Budget – Operating Campus Safety Our Citizens & Their Future: Access to Higher Education UNC Need-Based Grant Regional Partnerships Student-focused Programs:  Community College/transfer  Under-represented populations  Retention and graduation Campus Safety Our Citizens & Their Future: Access to Higher Education UNC Need-Based Grant Regional Partnerships Student-focused Programs:  Community College/transfer  Under-represented populations  Retention and graduation

The University of North Carolina Expansion Budget – Operating Increase Efforts to Recruit & Retain High Quality Faculty 80 th Percentile Across the Board Merit Increases Distinguished Professors Recruitment & Retention Fund Increase Efforts to Recruit & Retain High Quality Faculty 80 th Percentile Across the Board Merit Increases Distinguished Professors Recruitment & Retention Fund

The University of North Carolina Expansion Budget – Operating Our Global Readiness Graduates with 21 st Century Skills  Critical and creative thinking  Analysis  Problem-solving  Verbal and written communication Our Health Dental Program Medical Programs Our Global Readiness Graduates with 21 st Century Skills  Critical and creative thinking  Analysis  Problem-solving  Verbal and written communication Our Health Dental Program Medical Programs

The University of North Carolina Expansion Budget – Operating Our University’s Outreach & Engagement Regional Issues Our Communities & Their Economic Transformation NC Research Campus at Kannapolis NC Research Competitiveness Fund Graduate Student Recruitment & Retention Our University’s Outreach & Engagement Regional Issues Our Communities & Their Economic Transformation NC Research Campus at Kannapolis NC Research Competitiveness Fund Graduate Student Recruitment & Retention

The University of North Carolina Expansion Budget – Operating Our Children & Their Future: Improving Public Education Programs focused on producing math & science teachers Our Environment Campus sustainability programs Research related to sustainability Efficient Use of Available Resources Fiscal Integrity Affiliated Entities Our Children & Their Future: Improving Public Education Programs focused on producing math & science teachers Our Environment Campus sustainability programs Research related to sustainability Efficient Use of Available Resources Fiscal Integrity Affiliated Entities

The University of North Carolina 19 Fire Safety Improvements Funding for projects which have been approved for planning Planning funds for other important priorities Repair and Renovation funds Land Fire Safety Improvements Funding for projects which have been approved for planning Planning funds for other important priorities Repair and Renovation funds Land Budget – Capital

The University of North Carolina 20 Results of Working Together 2006 Session ( Budget) UNC began the session with $2.1 billion and ended legislative session with a budget of $2.3 billion $140 million in capital support 2007 Session ( Budget) UNC started continuation budget process at $2.4 billion; ended legislative session with budget of $2.7 billion – $300 million increase $1 billion in capital support 2008 Session ( Budget) UNC received $159 million in increased appropriations $623 million in capital support 2006 Session ( Budget) UNC began the session with $2.1 billion and ended legislative session with a budget of $2.3 billion $140 million in capital support 2007 Session ( Budget) UNC started continuation budget process at $2.4 billion; ended legislative session with budget of $2.7 billion – $300 million increase $1 billion in capital support 2008 Session ( Budget) UNC received $159 million in increased appropriations $623 million in capital support

The University of North Carolina NC Legislative Process “Long Session” Governor’s Budget Proposal – January 2009 General fund availability is determined Two budgets may be submitted General Assembly convenes – January 28, 2009 Senate Budget – May House Budget – June Conference Process Results in Final Budg et – June/July Governor’s Budget Proposal – January 2009 General fund availability is determined Two budgets may be submitted General Assembly convenes – January 28, 2009 Senate Budget – May House Budget – June Conference Process Results in Final Budg et – June/July