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Frequently Asked Questions

Updated 2/11/09

How much in funding reductions is the state projecting?
A: The governor’s recommendation presented to the Joint Budget Committee for the current fiscal year and the next fiscal year is a $100 million total reduction to higher education. The reduction is being made primarily as the result of a decrease in state revenue from personal and corporate income tax, capital gains tax, and sales tax.

What will be the effect of the state funding reduction on UNC?
A: If the governor’s budget proposal is accepted by the Joint Budget Committee, UNC would receive a $2.9 million total reduction in state funding over 2008-09 and 2009-10 combined. In addition, state-funded financial aid for UNC would be reduced by a total of $590,000. While these cuts are significant, it is important to remember that state support is only one piece of UNC’s total revenue. Multiple revenue streams are in place for setting and managing the budget. State funding represents about $44 million, or 25 percent, of UNC’s $177 million operating budget.

How is the university responding to state budget reductions?
A: Adjustments must be made to the budget both by increasing revenues and by continuing to identify ways to reduce expenses. President Norton and other university presidents have been talking with legislators and other policy makers about a new higher education funding model that is a hybrid of the traditional public and private funding models, which could generate additional tuition revenue for UNC.

How will a hybrid funding model help in dealing with the budget reduction?
A: A hybrid model would recognize the Board of Trustees’ authority to set tuition at appropriate levels while also spending some of the tuition revenue on financial aid for students who can’t afford the higher cost. This approach would allow Colorado universities to base tuition on a number of factors, including the institution’s mission, its price relative to peers and market conditions, with less state intervention. UNC’s tuition, a significant contributor to the operating budget, is about 60 percent of that of its peers as defined for a study by the N ational Center for Higher Education Management Systems (NCHEMS). That percentage is nearly the same when comparing UNC with the other Colorado research universities. Even though state of Colorado higher education institutions are underfunded by $750 million, according to the NCHEMS study, UNC and other institutions have been regulated by the state in making tuition adjustments.

What would the tuition hybrid model mean for students’ share of tuition?
A: While the “sticker price” would rise, the increased revenue would enable the university to create customized financial aid packages for students who need financial aid the most. Research shows that what matters most to students is net tuition (price after deducting financial aid and scholarships), not the sticker price.

How would institutions be held accountable for raising tuition?
A: The state’s expectations could be addressed through already existing accountability provisions. In addition, institutions must carefully and deliberately set rates as to not price themselves out of the market. Price, quality, demand, and the competitive market situation are all factors that must be considered in order to maximize the value delivered by every institution. Taking into account all of these factors and utilizing market data collected by the universities, governing boards could make informed decisions to responsibly set tuition rates.

What budget cuts will UNC make in response to the reduction in state appropriations?
A: While it’s too early to tell what UNC’s state appropriation will be, the reduction for the current year (2008-09) is expected to be covered with contingency funds and savings in energy costs. Because enrollment did not decline as much as anticipated, a moderate amount of contingency funds are available. Also, the university realized a one-time savings in energy costs because natural gas prices were not as high as expected. The 2009-10 budget will require additional strategies, including the implementation of a hybrid tuition and financial aid model, setting differential tuition and fees , and working to increase the number of external grants. Ongoing work to reduce costs and operate efficiently is already in place and has prepared UNC for a time like this. Budget decisions will be directly tied to the commitment to invest in priorities and move will forward with respect to the academic plan.

In what areas will the university continue to invest?
A: Four main areas of investment have emerged as a result of recent campus input, previous planning , and experience from past economic downturns .
People: Reducing personnel has a particularly corrosive effect that can take years to recover from. Every effort will be taken to protect UNC’s investment in its people.
Core business: Maintaining and increasing quality academic programs will remain a top priority.
Recruitment and retention: Reaching out to prospective students and supporting the success and graduation of enrolled students are vital to the university’s ongoing progression.
Marketing: Raising the profile of the university will help the university continue to build momentum.

Will there be layoffs, a hiring freeze or furloughs? What about salaries?
A: Increasing revenues and reducing non-personnel costs are top priorities before making cost-cutting decisions affecting personnel. At this point, layoffs and hiring freezes are not being implemented. Job openings will continue to be reviewed as they become available. There has been much discussion throughout the state and on campus about furloughs. There is consideration being given to allow institutions the option to impose furloughs; however no clear direction has been provided by the state. At UNC no decision has been made to implement furloughs. Several groups have expressed interest in options such as early retirement and furloughs if it would help keep the campus workforce stable. Whether pay increases will be an option , or to what level , has not been determined.

Will the budget reduction affect campus construction projects already under way?
A: Three construction projects are in the works and will continue. Turner Hall and the second and final phase of the West Campus Housing project are funded by university-issued bonds. A renovation to Butler-Hancock Hall will be funded from $11.5 million in state-issued bonds. An additional $3 million in state support for the Butler-Hall renovation has been delayed. Architects will adjust plans if the state’s portion of the funding doesn’t come through.

How can I learn more?
A: Visit http://www.unco.edu/finadmin/Financial%20Mattersinformation.htm to read e-mails sent by the president and other budget resources .