Citing jobs and economic development as her primary concerns, Gov. Beverly Perdue’s proposed two-year budget spared community colleges from the largest cuts. Because the community colleges are so directly tied to immediate development of the workforce, they were one of the few areas that received an increase — of just 1 percent — instead of a cut.

Now lawmakers are developing their own budget proposals. Senate leaders unveiled their spending plan Monday and plan to move it through the budget-writing Appropriations Committee today.

Soaring enrollments at community colleges played a part in the governor’s generosity when she unveiled her budget March 17. Community college enrollments tend to rise during recessions as out-of-work students retool their skills.

This year was no exception: the system saw a 7 percent increase in the fall of 2008 over the previous year. And according to Andrea Poole of the legislature’s fiscal research division, in 2009 spring enrollment is higher than the fall enrollment, the first time this has happened in 10 years.

Consequently, the governor’s budget seeks $47 million in increased enrollment funding based on the fall numbers, and another $500,000 on top of that for the expected increase in the spring. Also, there is an extra $3 million allocated to the enrollment growth reserve.

The University of North Carolina system received a 1.2 percent cut from 2008-09. But that’s less than the 1.8 percent reduction proposed for the entire state budget, and far less than the public K-12 school system’s 4.9 percent recommended decrease.

System president Erskine Bowles’ two main priorities both get significant funding increases in Perdue’s budget — $44 million more for increased enrollment, and an additional $23.4 million for need-based scholarships. Bowles has said that these two items are particularly important in a down economy.

Falling tax revenues forced both higher education systems to make large temporary cuts this year. At the end of last year’s legislative session, and after various non-legislative adjustments were made to the budget, the amount appropriated by the General Assembly for fiscal year 2008-09 from the General Fund to the state’s community college system was $1.02 billion, and to the UNC system $2.89 billion.

Then, after several waves of cuts due to the economic downturn, the 2008-09 budget for UNC was revised to $2.73 billion, a 5.8 percent reduction from the final budget amount. The N.C. Community College System’s revised budget was reduced to $965 million, a 5.1 percent decrease.

UNC’s proposed allotment for 2009-10 is $2.86 billion, a 4.8 percent increase over the revised budget (including cuts). The recommended appropriation for the community colleges for 2009-10 (including post-legislative estimated adjustments) is $1.03 billion — an increase of 1 percent over the last year’s final appropriation, and a whopping 6.4 percent over the revised budget that includes the cuts.

Some of the vocational-oriented community college programs that received considerable increases in 2009-10 are:

•Twenty $150,000 vocational and technical education grants ($3 million);
•Sixty-five additional nursing faculty ($4.8 million in 2009-10, $5.2 million in 2010-11);
•Help to reduce a significant backlog in equipment and technology ($5 million);
•Additional funds for the Military Business Center in Fayetteville ($1.25 million).

There is also a one-time $2.5 million allocation for job-training assistance for displaced workers, such as tuition, childcare, and transportation. However, this will not come from the General Fund since it will be funded by the American Recovery and Reinvestment Act (the federal “stimulus package”).

Two measures will cut into both systems’ discretionary spending. One is called the “Truth-in-Budgeting Reform.” In years past, the total allocation for salaries was overstated since many employees left midyear with no replacements. That money previously was used at the school’s discretion. The governor is now recommending that the salary appropriations be reduced between 2 and 3 percent. This means a reduction of $19 million for the community colleges and $55 million for the universities.

The other measure involves “management flexibility accounts” — used at the discretion of the university chancellors or community college presidents. The university system will be given $96.6 million less than the current amount in 2009-10 (a 3.6 percent decrease) and $85.2 million less in 2010-11 (a 3.2 percent cut).

The community colleges will see their flexibility allocation fall by $20.9 million for both years (2 percent of the current allotment).

Bowles described the governor’s budget as “step two in a five-step dance.” Each house in the General Assembly must come up with their own versions, then reconcile the two, before a budget can be adopted.

Jay Schalin is a senior writer with the John W. Pope Center for Higher Education Policy and a contributor to Carolina Journal.