The University of North Carolina System will ask the General Assembly for roughly $45 million in one-time money to deal with fallout from the COVID-19 pandemic — all while cutting other budget requests to include only “must do” items.
But those requests may change, university officials said April 17, since UNC remains uncertain how its campuses will look this fall.
UNC is navigating a whirlwind semester after the university shut down its 17 campuses in March and shifted 50,000 in-person classes online. Most students moved out of dorms to comply with social distancing mandates. Only essential staff — and a couple thousand students with housing needs or other extenuating circumstances — remain on UNC’s campuses. UNC plans to continue online instruction for summer classes.
“Everybody’s got challenges, and we’re trying to do the best where we are,” said UNC interim President Bill Roper during a teleconference meeting of the board April 17.
The UNC System office is set to receive roughly $87 million under the Coronavirus Aid, Relief, and Economic Security Act, but that money will only partially offset costs, university officials said.
The university needs just over $7 million to pay existing bills for online learning, building sanitation, and other emergency costs, UNC’s budget documents say. UNC estimates it will need almost $10 million more to pay those bills through the end of the semester. Cancelled conferences and performances, building closures, and other “receipt-supported activities” will cost the university another $20 million or so. UNC is asking the legislature to recoup that money so it can “support employees and other critical functions normally funded through receipts.”
Finally, the university is asking for $5 million in one-time money and a little over $3 million in recurring money for online learning updates.
UNC’s board is postponing other decisions — like a vote to raise tuition and fees — until the system is better able to see what enrollment and revenue look like down the road. Why not wait a little longer to submit its budget proposal? Carolina Journal asked.
Though state lawmakers aren’t likely to immediately take up budget matters when they convene April 28, the UNC Board of Governors felt it was essential to get system priorities in front of lawmakers sooner rather than later, Roper, along with BOG Chairman Randy Ramsey, told CJ.
Each spring, the board submits a budget proposal to the General Assembly, Roper said. Before COVID-19 threw a wrench into the works, UNC planned to send its requests before the legislature no later than March.
“We just all feel that it’s important for us to put forward our best judgment as to our request right now,” Roper said. “Of course, as your question implies, we’re in uncertain times, and there may need to be further modifications going forward. But we need to be putting forward the request so the people who are receiving it in the governor’s office and at the legislature can begin doing their part.”
UNC will lose nearly $77 million in housing reimbursements, and just shy of $42 million in dining refunds, according to university documents. Eighty percent of that money will be returned to students by April 24, Roper said.
UNC is likely to lose more revenue, said Joe Coletti, senior fellow for fiscal and tax policy at the John Locke Foundation. The question is, how much?
“The struggle is going to be adjustments,” Coletti said. “That revenue for the fall is just a big question mark.”
Out-of-state students, who pay significantly more than residents for tuition, room, and board, may abandon plans to attend UNC schools in the aftermath of the pandemic — especially if it affects UNC’s ability to hold in-person classes beyond the summer, Coletti said.
UNC is unsure how much enrollment may go down, Roper said, but so far fluctuations are steady as compared to last year.
“We have every reason to be optimistic,” he told board members.
UNC is likely to see a drop in enrollments from international students, he said.
For now, the system is simply trying to hold the ship steady. COVID-19 forced the university to move its courses online in a matter of days — a feat by most standards, and a successful one overall, Ramsey and Roper said.
“A lot will be learned, and a lot will be different when we come out the other side of this,” Ramsey said.
UNC’s newly revised budget proposal reduces operating costs by $185 million and removes $632 million in capital improvement projects that were approved by the legislature last year, but vetoed by Gov. Roy Cooper in a budget impasse over Medicaid expansion.
Given financial uncertainties — and a potential shift toward more online learning — UNC should curtail its capital spending going forward, Coletti said.
“We are aware that North Carolina’s near-time revenue will be lean, and we are adjusting accordingly,” Roper said to the board. But the university will prioritize capital improvements at the right time and opportunity, Roper said.