The problem with letting “the good times” roll is that it is hard to stop the rolling when the economy goes downhill.

During the last few years, while North Carolina’s powerful economy filled the state coffers, the University of North Carolina started many new, expensive programs. After the 2007 legislative season, UNC officials praised the General Assembly for its generosity.

This year, with tax revenues falling, those new programs still require funding, even as the university system explores making cuts to key academic programs. Richard Bostic of the legislature’s Fiscal Research Division estimates that the system will need $38 million in permanent cuts and $143.5 million in “one-time budget reversions.” The Fiscal Research Division provides information about the budget to the legislature.

“These cuts will be painful,” UNC system President Erskine Bowles said at the Board of Governors meeting Feb. 13.

On Feb. 11, Bostic laid out some major higher education budgetary issues facing the Assembly. His presentation to the Joint Committee on Education indicated that the legislature’s largesse to the university has created large financial demands. The new programs created during the last full legislative session in 2007 will put financial pressure elsewhere on the system. They are scheduled to grow over time, and they will not yield their intended returns for several years, if at all.

Three of these programs are the EARN Scholarships, research conducted at the new North Carolina Biotechnology Center at Kannapolis, and the University Cancer Research Fund.

Bostic also cited enrollment growth as another considerable factor forcing cuts — enrollment often spikes during recessions. He expects an additional 12,399 UNC students in the next two years, costing the state an extra $44.8 million in 2009-10 and $54.4 million on top of that in 2010-11.

But the programs that began in the 2007 legislative session best illustrate what can happen when good intentions become fiscal mandates. The Education Access Rewards North Carolina Scholarships (EARN) are $4,000 grants for the first two years of college for first-time college students whose family income is less than 200 percent of the poverty line, or $41,300 for a family of four in 2007. Last year, the legislature expanded the program to include students at the state’s private schools.

Bostic said that program provided an estimated 12,000 students with $45.5 million in its first year, 2008-09. Next year, it will cost at least double that amount, since there will be another year of recipients added.

In 2008, the legislature also shifted the primary source of funding — all but approximately $7 million — for the EARN scholarships from the General Fund to the Escheat Fund. The Escheat Fund is created from unclaimed property that reverts to the state, such as when a property owner dies with no heirs and no will.

Also in 2008, other need-based scholarship programs pulled $100.7 million from the Escheat Fund — and the Board of Governors is requesting an additional $23.4 million for fiscal 2009-10. According to Fiscal Research Division estimates, the Escheat Fund, which had nearly $700 million in 2007, will be empty by 2012, depleted by scholarships programs. At that time, scholarship funding will likely revert to the General Fund — becoming a hefty nine-figure burden on taxpayers.

Last year, the legislature gave public schools $6 million for operations at the North Carolina Biotechnology Center in Kannapolis. After his presentation, Bostic suggested that the amount might be closer to $10 million this year — for a highly speculative venture with no immediate gains.

The University Cancer Research Fund is also getting a big jump in funding this year. The state’s annual contribution to this fund will increase to $50 million for the next fiscal year, a $10 million rise. This year, it has a $40 million budget, with $8 million coming from the Tobacco Trust Fund, $16.5 million from taxes on tobacco products, and $15.5 million coming from the General Fund. The future might hold other increases if revenue from the tobacco taxes falls.

Perhaps, if the legislature hadn’t been so generous in good years, the university system’s cuts wouldn’t have to be so “painful” now that times are lean. Bostic said that the state is committed to these projects, but “commitments can be broken. They aren’t constitutional amendments. It’s nice if you can afford it, but… .”

Yet with so much money already devoted to these projects, it will be hard to reverse directions.

Jay Schalin is a contributor to Carolina Journal.