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Budget Update


January 26, 2011

Dear Colleagues,

I am writing to update you on the budget and a number of other related issues. Please take a moment to read the updates below. 

This will be a very busy and perhaps stressful semester. You are going to hear rumors and speculation about the state’s budget, the UNC system and UNCP. That is a normal consequence of being in a state of uncertainty—the position our entire state is in right now. No one knows what solutions our legislature will agree upon until the budget bill is complete. So, you will hear unfounded rumors like the one I mention below. Be assured that I will keep you informed to the best of my ability. I ask for your patience as we work through these trying times. I am confident as we work together that UNCP will emerge a stronger institution. 

Rumor Control

I know many of you read about a Wells Fargo economist who suggested closing UNCP and Elizabeth City State University to help offset the state’s budget crisis. UNCP’s administration chose not to respond to his comments because acting defensively might lend credibility to his opinions which have no basis in fact. By now, I hope you have read the January 23rd edition of the Robesonian which included an excellent article and editorial on this very issue. We are grateful the Robesonian clarified that there are no plans to close any UNC system school. 

Legislative Session

North Carolina’s legislative session begins this week. Obviously, the budget shortfall is the focus of the General Assembly. Since the state is facing a very large budget deficit, our representatives face a tremendous challenge. I recently discussed the situation with Senator Michael Walters, and we agreed that our local delegation should meet to discuss the University's unique needs during this budget crisis. I will be meeting with our representatives (Walters, Pridgen, Pierce and Graham) next week to discuss how the University is affected by the budget, and how we can protect its mission as a regional comprehensive university serving Southeastern North Carolina.

Budget Update

I know all of you understand the seriousness of the budget crisis. The size of the crisis seems to change daily depending upon revenue forecasts.  But most agree the budget gap remains north of $3 billion and south of $4 billion, requiring a 15-20% reduction to the state budget. Since K-12 and higher education comprise almost 60% of the state budget, it is clear that education will have to do its part to reduce the budget gap. UNCP and other UNC system schools are facing a serious dilemma because approximately75% of our general fund operating budget comes from the state appropriation. Last week, UNC Chapel Hill Chancellor Holden Thorpe announced an immediate 5% permanent cut from the Chapel Hill budget; and he told his campus to expect more in the coming months. The UNCP administration and I have decided not to announce preliminary cuts, but to present a complete budget reduction plan to the campus no later than March 31st. The University Budget Advisory Committee that I formed this fall is working hard to identify possible reductions. At the same time the Executive Staff has been working to identify areas were we may be able to increase revenue or decrease costs. Both groups are making significant progress. As soon as the University Budget Advisory Committee completes its work, these suggestions will be integrated into the University’s budget reduction plan.  When we have completed our preliminary plan, we will make it public it to the campus. After a thorough discussion, we will make final adjustments, if necessary, and then move forward to implement the plan. Unfortunately, personnel accounts for more than 70% of the UNCP general fund budget. Therefore it is going to be very difficult to make reductions without affecting people. This will be especially true if the University is required to consider a reduction of 15% or higher. Please be assured that we are concerned about individual consequences while focusing on the future of the University. Wherever possible and where it makes strategic sense, we will eliminate vacant positions. In that spirit, I ask that anyone who has decided to retire this current fiscal year to notify his or her supervisor immediately. Often people wait until the last minute to announce their retirement even when they know they are going to retire months in advance. If the UNCP administration is aware of retirement plans, we have more options available to us as we develop our budget reduction plans. We can choose to fill a position with a less costly person, delay filling the position or even absorb its function elsewhere. These savings can help limit the number of reductions to filled positions. If you are considering retirement, I urge you to think of your colleagues and make your decision as early as you possibly can.

Contacting the Legislature

I know it may be tempting for you to contact individual legislators to argue the case for UNCP and the UNC system.  In this environment that may not be the best course of action.  The legislature is most likely to focus on UNC as a whole. Therefore, UNCP, like all other UNC institutions, is working in concert with President Ross and his staff to craft and present a consistent message about UNC.  If you wish to suggest an approach for the legislature, I urge you to contact Dr. Glen Burnette directly and talk with him.  He is focusing entirely on this legislative session and will be working with me as I interact with the legislature on behalf of UNCP and UNC.

Program Duplication

If you have been reading the newspapers, you know that UNC President Tom Ross has announced that former UNC Charlotte Chancellor James Woodward will chair a commission to address program duplication across the UNC system.  The UNC system is acting proactively to review its programs before others outside the system do so. This effort will help UNC schools determine on their own what streamlining efforts need to be undertaken. Following the lead of President Ross, I have initiated a program analysis on our campus. Provost Gash, the Deans, and the Chairs will be working diligently this semester to review all academic majors and minors. We will take this task seriously and identify those programs that we can reduce, work in collaboration with other institutions or eliminate from our academic portfolio. By doing so, UNCP will have greater control over program decisions and will emerge stronger academically.

Shared Governance

The University faces many tough decisions over the next several months. The best decisions will be those that emerge from shared governance where administrators, faculty, staff, and students know their roles in the decision making process. To ensure each group understands its responsibilities, the University must have clear policies, procedures, and regulations available to all constituents. Currently, all institutional policies are scattered throughout university divisions, embedded within the area that created the policy. I have directed legal counsel, Joshua Malcolm, to begin a process to identify all University policies and consolidate them in one location on the Chancellor's website. This is the first step in making everyone aware of institutional policies that affect them. I have also directed the Provost to convene a conference committee composed of himself, representatives from the Faculty Senate, legal counsel, and the Director of Human Resources to review the current faculty handbook. Our handbook has evolved over the years to include a combination of policy, procedure, regulation, and general information. Unfortunately, there is no clear distinction between any of these. I have asked the conference committee to develop a plan to (1) reorganize the handbook to clearly distinguish between policy, regulation, procedure and information, and (2) develop a set of rules clearly outlining how the handbook is modified and updated. 

Institution of Choice

During my opening address to the campus, I identified becoming “An Institution of Choice” as one of our major strategic themes. Although we are in the midst of a severe budget crisis, we must continue to make progress on this theme by improving our academic profile. I have taken steps to deal with two specific issues that I believe will help. First, I will clarify the criteria and procedures required for the recruitment of tenure track faculty. It is critical that we bring the most qualified faculty to this campus through consistent practices that mirror those of the UNC system. Second, I asked the Provost to revise the current policy on good academic standing. If you have not reviewed this policy, you will be surprised to learn that our students can remain in good standing without maintaining a 2.0 GPA for their first 89 hours! This is clearly inconsistent with the rest of the UNC system which maintains a minimum GPA of 2.0. I believe these low expectations affect our retention and graduation rates.  The Provost will work with the Faculty Senate to have a policy in place beginning in the fall 2011.

Chancellor Kyle R. Carter