News: CJ Exclusives

Not Just UNC: Other States Cut College Budgets

North Carolina’s institutions of public higher education are hardly the only ones in the nation affected by an economic downturn in their home state. A report released this summer shows how many public universities and colleges across the country received cuts, some substantial, in their budgets.

Released by the National Association of State Universities and Land-Grant Colleges, the report is entitled “Changes in Annual Tuition Charges at NASULGC Institutions: Academic Year 2003/2004.” The report’s focus on changes in annual tuition charges includes cataloging the sometimes large increases in tuition at NASULGC member institutions in 37 states. Those increases stem from legislatures letting universities compensate in tuition revenue they lost in state appropriations.

The budget cuts (see accompanying table) some universities faced were staggering, but they were also offset by large tuition increases. The University of Virginia, for instance, saw its budget cut by 23.7 percent, but its tuition was raised by 19 percent. The California State University System’s budget was cut 19 percent, but its tuition was raised 19 percent. The University of Colorado at Boulder’s budget was cut by 15 percent and its tuition raised 12.5 percent, and so forth. One-third of the universities in the study reported tuition increases greater than 14 percent.

In North Carolina, the NASULGC study reports, the UNC system as a whole experienced a 4 percent “cut,” offset by a tuition increase of 5.5 percent. East Carolina University, covered separately, saw its budget fall by 3.8 percent but received a 4.9 percent increase in tuition. These “cuts,” however, were not actual decreases from the previous year but instead the difference between budget requests and final funding.

The N.C. General Assembly’s recently completed General Fund budgets for 2003-05 will increase the UNC system’s budget for both of the next two years — by 1.4 percent in 2003-04 and by 1.7 percent in 2004-05. In contrast, the N.C. Community College System’s budget decreases slightly in the biennium. It falls by 1.2 percent in 2003-04 and by 0.1 percent in 2003-04.

Earlier this summer the State Higher Education Executive Officers reported the results of an informal survey in which it noted that 24 states were expecting less state spending on higher education the next fiscal year and only 18 expecting increases, mostly small ones. The SHEEO survey, which looked at 39 states, found that the average change in state spending was a decrease of 3 percent.

Senior research analysts David L. Wright told The Chronicle of Higher Education, “It has been a tough year for a lot of states. In some states, [these budget cuts are] a piling on in terms of cuts from last year or cuts from the middle of the year.”

Gov. Mike Easley touted the study as proof of the state’s commitment to higher education. In a press release on the subject, the governor focused on the tuition increases rather than the apparent cuts, comparing UNC’s relatively modest increase this year with the many, much higher increases around the country. Easley said it “just goes to show how North Carolina’s investment in higher education is paying off for our students.”

The state’s economy, however, has been struggling. As a June 2003 Locke Foundation Spotlight paper showed, “Since mid-2001, North Carolina’s personal income growth (3.98 percent) lagged its neighbors’ (5.03 percent) and the national average (4.23 percent). Also since mid-2001, NC has lost 119,000 jobs, or more than one-third of all the net job losses in the South.”

Nevertheless, as legislators reacted to the crisis, they have been protective of UNC. As an article Aug. 1 in The News & Observer observed, “most agree the university fared extraordinarily well in this year’s legislative session despite the state’s financial troubles.”

The article, “UNC’s PAC a top player,” by Jane Stancill, discussed the impact of “Citizens for Higher Education, a political action committee created last year by wealthy UNC-Chapel Hill alumni, [which] donated $182,000 to 91 candidates and political groups in 2002, almost instantly becoming one of the biggest-spending PACs in the state.”

PAC organizer and UNC-CH trustee Paul Fulton said, “I’d like to think we had an impact” on legislators’ decisions.

Meanwhile, as the Spotlight paper (viewable at www.johnlock.org/spotlights/2003060475.html) showed, North Carolina is one of a very few states to have enacted “large-scale, broad-based tax increases every year since 2001.” While 20 states enacted major tax increases in either 2001 or 2002, only two states — New Jersey and North Carolina — enacted major tax increases in both years. Of those two, Hood wrote, only North Carolina was likely to approve another major tax increase in 2003. In July, lawmakers did, in fact, approve another package of tax increases in 2003 — one that will cost North Carolinians $551 million.

North Carolina taxes have increased every year since voters approved the higher education bonds in 2000.
Voters will recall that the campaign for the bonds’ approval promised that “the Bond issue would not require an increase in taxes,” as a pamphlet printed by the UNC-CH Office of Government Relations put it.