January 8, 2009
Budget Update

To the Campus Community,

I hope that every member of the UNC Asheville community had a wonderful holiday and that 2009 is off to a promising start for each of us.

I am writing to follow up on the budget discussions that we began in December before the winter break. My intention is to share with you what we currently know about our budget situation and to keep our campus informed as the economic environment unfolds over the coming year. We will have an All Campus Meeting next week (Thursday, January 15, at 12:15 pm in Humanities Lecture Hall) to start the semester, bringing us together to share additional information about our University.

As you recall, last semester our campus experienced a series of budget reductions that amounted to 4.6% of our overall State budget. This cut was applied to the current 2008-09 fiscal year. Because we are committed to preserving the salaries and jobs of people in ongoing positions, this cut resulted in a 15% reduction in operating budgets for most areas, with the academic areas experiencing a 10% reduction. We also began to manage our vacancies very carefully, suspending many searches, some indefinitely. As a result, many of you have had to absorb additional work or to do without expected resources. I am grateful for the colleagueship and community spirit that has helped us continue to serve students so well during this difficult time.

Then in December, prior to the winter break, all State agencies were asked to outline how each agency would prepare for permanent budget reductions of 3%, 5%, and 7% in the subsequent two fiscal years, 2009-10 and 2010-11. We appreciate everyone’s assistance in helping to identify possible strategies for reductions, especially in light of how little time we had to consult before the end of the semester.

Over the holiday, we have continued to work on preparing for the potential cuts in a way that will allow UNC Asheville to respond to the State’s possible budget shortfalls. Let me be clear: budget reductions in the next two fiscal years will be painful and difficult. However, we do have the opportunity to proceed in a thoughtful and intentional way that allows us to honor the University’s mission and our work in implementing our Strategic Plan.

Here’s how we anticipate this process will unfold:

First, on January 5, we submitted to UNC General Administration a general outline of the consequences of a 3%, 5% and 7% permanent budget reduction for the two fiscal years beginning July 1, 2009 and July 1, 2010.

In developing our outline, we continued to hold as a high priority preserving the salaries and jobs of people in ongoing positions. As budget reduction scenarios get progressively severe, this may require a new level of flexibility and/or reassignment of individuals to different work. Vacancies will be managed even more tightly, and hiring of new employees will be limited to only the most critical positions. We also attempted to preserve direct services to students, proposing cuts in areas that are further away from the student experience.

Second, the UNC General Administration will take the outlines provided by all campuses and use the information to describe the increasingly significant impact of budget cuts at the 3%, 5%, and 7% levels to the Board of Governors, Governor-elect Perdue and the General Assembly. While we are confident of the quality and depth of our thinking in developing this plan, we will not know if UNC General Administration will accept our plan as presented, nor do we know if all campuses will be impacted equally or if special consideration may be given to smaller campuses.

Later this week, you may hear of discussions that the Board of Governors will be holding at their January 8 & 9 meeting. Although the State and University budgets will certainly be part of their discussion, we do not anticipate that they will vote on campus requests for tuition and fee increases until their next meeting on February 12 and 13. At that time, we expect to learn whether UNC Asheville’s request was approved for tuition and fees increases.

Third, once the spring semester begins in a few weeks, we will know more precisely about our spring enrollment, and whether our spring enrollment targets were achieved. This will give us a more accurate picture of our 2008-09 revenues, an important element in framing next year. At that time, we will also conduct a 6-month financial review which will help us manage the remainder of this fiscal year.

Fourth, in late February or early March, we expect to learn about any required budget cuts for the next fiscal years based on discussions at the State level and the State economic situation. Once we know the scope of any required budget reductions, we will use the outline that we submitted on January 5 as a guideline in meeting the budget targets, taking full advantage of any flexibility afforded to us at that time.

In the coming weeks, we are likely to read in newspapers or hear on broadcasts about various forecasts, projections and predictions of the evolving economy. Throughout the semester, I will attempt to share with you what we know for sure, bearing in mind that we will not be in control of all the decisions that will affect our campus, now and in the years to come.

For those of you who have questions about UNC Asheville’s response to the Governor’s request, I would refer you to the vice chancellor for your area, who will be in the best position to describe how your division is participating in this process.

Thank you for the splendid manner in which each of you continues your responsibilities despite the difficult economy.

Anne Ponder
Chancellor