Fellow Bears,
Over the past several months, I have shared updates with our university community — during Board of Trustees meetings, in my spring and fall welcome messages, with campus leadership, and most recently in my State of the University address.
Throughout these communications, I have highlighted key achievements and milestones — made possible through your dedication to this important work and our shared commitment to advancing our strategic priorities — while also acknowledging the financial challenges we have faced as we navigate a complex and changing landscape in higher education.
Today, I want to be direct because our financial pressures are significant and will require action in the weeks ahead.
In June, we received approval from the board on a balanced budget for the year, which included significant commitments to reduce expenses through savings resulting from employee turnover, balanced with thoughtful hiring decisions and careful management of spending in other categories. Despite our efforts in these areas, updated fall budget projections confirmed that current expenses continue to exceed revenue, necessitating immediate action.
Unexpected reductions in state funding for the current year, along with greater concern about state funding for at least the next few years, lower-than-expected enrollment revenue with limited prospects for substantial growth in the near future, decreased vacancy savings in personnel expenses due to historically low employee turnover, and unavoidable cost increases such as health care and inflationary impacts on other operational expenses all contribute to the issue we now face.
Given the current environment, I am compelled to make comprehensive changes this fall to ensure UNC’s health and success today and into the future.
To address both our immediate issues and to protect the long-term financial stability of UNC, campus leaders are currently working to identify and weigh reductions and changes that will bring our expenditures into alignment. The solution will not be found through a single change, but rather through thoughtful consideration of reductions to personnel and non-personnel expenditures. This work has been and will continue to be guided by our commitment to prioritizing our students and their success, minimizing the impact to our employees as much as possible, and positioning our university for success and stability now and into the future.
The coming months will not be easy. Over 65% of our operating expenses are made up of personnel related costs, which means reductions to personnel, including layoffs, will unfortunately be necessary. Changes of this scale will be felt across the university — by students, faculty and staff. I recognize and sympathize with the concern and uncertainty this creates.
Please know that I and other campus leaders are committed to approaching decisions with care and respect, understanding the very real effects they will have on our campus community. As part of this commitment, I invite you to join me at our upcoming Budget Town Hall on Thursday, Oct. 16. This will be a candid conversation and an opportunity to talk openly about where we are today, how we arrived at this point, and the work that is necessary to ensure UNC’s financial stability this year and beyond. The Budget Town Hall will be recorded and made available online following the event for anyone who is unable to attend in person.
Watch the recording of the Budget Town Hall Update
Sincerely,
Andy Feinstein
President
