RALEIGH – “It’s a fabulous story.” That’s how UNC President Molly Broad described a record-setting four years of enrollment increases. Across the entire UNC system, the growth exceeded 6,000 new students a year. And it is one of the reasons university officials are citing for a jaw-dropping new budget request of the General Assembly: a 28 percent increase in a single year.
According to media reports, UNC will seek approval of a $2.5 billion state appropriation for FY 2005-06 and $2.7 billion for FY 2006-07. Although I haven’t seen the numbers broken out clearly, it appears that the first-year hike would be about $421 million, of which $105 million would cover a 7.5 percent pay raise and $316 million would cover such items as enrollment growth, library improvements, financial aid, and “economic development.” In the second year, the appropriation would rise another $212 million.
There is no other way to put this: the UNC request is bonkers. It has no relationship to reality, budgetary or otherwise. The UNC proposal is worse than a “wish list,” as one public official called it. It is a deeply revealing insight into what is wrong with state government in North Carolina.
Our state already subsidizes its public university system more in real and proportional terms that does virtually any other state in the nation. Taxpayers are compelled to cover at least two-thirds of the average cost of education (if you back out certain UNC activities not catering to undergraduates), with various government programs and financial aid picking up much of the remainder of the “student” cost. When UNC experiences “fabulous” growth, the rest of the state gets socked with the bill. Part of what “fabulous” growth means is that, given its artificially low price, UNC is pulling students away from enrolling in North Carolina’s many fine private colleges and universities, many of which now have room to spare (and room that taxpayers aren’t also paying to expand via multi-billion-dollar bond issues).
There is no compelling evidence I am aware of that suggests this screwy financial arrangement confers net benefits on North Carolinians, who have no reason to prefer public-university graduates over less-subsidized ones. In part due to excessive subsidy, UNC is almost certainly over-enrolled. Fewer than 60 percent of UNC students finish their undergraduate education in six years. Many who do graduate have little to show for it, contrary to the mythology about a “fabulous” return on the investment. “Fabulist” would be a better term.
More broadly, how could reasonable people ask the legislature for a 28 percent hike in taxpayer funding in a year in which the state’s General Fund budget is again projected to be out of balance by hundreds of millions of dollars, and perhaps more? This estimated deficit doesn’t even take into consideration plans for new K-12 spending in response to the Leandro school-equity decision and other potential exigencies. So, a 7.5 percent pay raise? Another $25 million to subsidize research? And $25 million for “economic development”? Hello? Is this thing on?
I know that many university leaders truly believe that UNC is the economic engine of the state. I know that some other public officials share their delusion. But now is the time for sober reflection, for sound analysis and bench-marking, for prudence and a firm set of priorities. Now is not the time to fly off to Fiscal Fairyland, “fabulous” or not.
Hood is president of the John Locke Foundation and publisher of Carolina Journal.