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UNC System continues its tuition freeze for 7th year in new state budget request

Updated at 5:25 p.m.

The UNC System Board of Governors has approved its budget request to the General Assembly. Economic inflation has been top of mind for university officials, and the board held with its plan to shield in-state students from those effects.

“For the seventh year in a row, we are recommending no tuition increase for resident, undergraduate students,” the Board of Governors’ Budget and Finance Committee Chair Jim Holmes announced to a round of applause by the board.

UNC System CFO Jennifer Haygood acknowledged that the decision will increase the pressure universities are experiencing from their own rising expenses to provide services, offer competitive salaries and fund the growing costs of ongoing construction projects.

“That's how many institutions outside of our system pay for these types of increases, is they just raise tuition,” Haygood said. "We have made a concerted decision that we want to prioritize affordability and not pass on those costs to our students and families, and we hope that the General Assembly appropriately gives us some additional funds to help address these inflationary cost increases."

The UNC System’s budget priorities suggest the General Assembly raise salaries for university staff, in line with other state employees, and invest in reserve funds to help recruit and retain employees in hard-to-staff positions. However, the system is not recommending a specific dollar amount for those priorities.

The UNC System does however have a dollar figure in mind for a range of other budget items. It is requesting $16.8 million in state funds for a faculty retirement incentive targeted at universities that are struggling with falling enrollment. Less faculty on staff would mean fewer paychecks to dole out in the face of dropping tuition income.

The system is also requesting $16.7 million less than last year in state funding based on enrollment, since 12 of 16 universities enrolled fewer students this school year.

The system is requesting $10.5 million for financial assistance to students at seven universities to help boost their graduation rates. The aid would be aimed at students who are on track to graduate academically, but who are in danger of dropping out due to financial reasons.

And while tuition remains frozen for in-state undergraduate students, nine universities are proposing tuition hikes for either out-of-state students or graduate students.

Art Pope wants BOG to be more 'proactive' in writing university budgets

Only one member of the Board of Governors voted against the UNC System’s proposed budget priorities. That was Art Pope, an influential Republican donor and the former budget director for Governor Pat McCrory.

Pope said he commends the board for holding tuition flat for in-state undergraduate students.

“We've held the line, but holding the line is not enough,” Pope said, adding that he is concerned the UNC System might raise tuition or state funding requests in the future.

“I'm advocating that we, the UNC Board of Governors, dig into and prioritize that base budget and determine what is the university's highest priority and what is the least important expenditure that's been carried over from previous years,” he said.

Pope argued that state law grants the board the power to take a more hands-on approach to developing universities’ base budgets.

“There's a difference between managing a budget and developing the budget, and the constitution statute expressly charges the Board of Governors with the development of the budget rather than leaving it to the campuses to do so,” Pope said, referring to the state law that outlines budget responsibilities for the UNC System.

Board Chair Randy Ramsey and Budget Committee Chair Jim Holmes said the Board of Governors has delegated aspects of the budget process to the boards of trustees and university officials at individual campuses.

“There are many points in the process that governor Pope raises that I don't disagree with,” Ramsey said. “I think we need to explore some things. However, I would say that the budgeting process starts on the campuses.”

“We specifically empower the boards of trustees to approve their budget for the reason that the chair said,” Holmes agreed. “They're much more tuned and we should be, in my opinion, relying on them. They should have the authority to say yes or no to what goes on at those campuses.”

Pope said he would like the Board of Governors to lead the university’s budget process much like the state governor leads the state budget process by developing a proposed budget in communication with state agencies, which the General Assembly then considers, revises and enacts.

“It doesn't have to be comprehensive, zero-based budgeting from scratch. That's not realistic,” Pope said. “But I do hope and appreciate consideration for a more proactive process, which I think is the intent of the statute, which was enacted when the consolidated universities were formed.”

Pope is not a member of the UNC System Board of Governors’ Budget and Finance Committee. Holmes and others on the committee encouraged any board members who have questions or ideas regarding the budget process to attend their committee meetings or meet with UNC System staff.

Liz Schlemmer is WUNC's Education Reporter, covering preschool through higher education. Email: lschlemmer@wunc.org