President's Campus Communication 3/4/10

Dear Colleagues,

This is another installment in my continuing series of updates about the state budget situation and our timeline for developing a FY10-11 budget to recommend to our Board of Trustees.

Further reductions to the state budget announced by the Governor in February do not change the FY10-11 budget for higher education. We expect a $3.5-million decrease in UNC’s combined state and federal stimulus funding next year, and federal requirements to qualify for stimulus funds should prevent this from changing significantly. This means we expect to receive $40.6 million in state and stimulus funds, which is about one-quarter of our total operating budget. In addition, the current version of the state budget legislation (Long Bill) caps increases on resident undergraduate tuition at 9 percent. All things considered, this qualifies as good news.

To develop UNC’s FY10-11 recommended budget, we will build on the work we did in the FY09-10 budget process, continuing to develop a consistent and transparent approach to academic fees and to identify operating expenses that are unbudgeted and/or unfunded. We will also use work now under way to develop new revenue models for Extended Studies and summer session and to untangle our internal charging system. The FY10-11 budget will be the foundation for a multi-year financial plan.

I will meet with our “budget leaders” group of deans, vice presidents, assistant vice presidents and governance group leaders on March 24 to discuss the multi-year financial plan and FY10-11 budget. We will not be asking for detailed proposals in the budget process as we typically do. It is also extremely unlikely that the FY10-11 budget will include any salary increases. We will continue to focus on reducing expenditures and generating new revenue for the cliff reserve while investing our energy where we can make a difference, such as in student recruitment and success.

I will continue to keep you apprised as we move forward.

Kay