March 17, 2009
Budget Update

To the campus community,

Since it will be Thursday of next week before we gather for the next All Campus Meeting on March 26, I am writing to provide the most up-to-date information about our budget situation.

♦ Current Year Budget Cut: Shortly before spring break, we learned that the 6% budget cut for the current year has been increased to 7%. This means that, starting this month, UNC Asheville will receive only 93% of our original budget. This places us in the position of reducing our budget an additional 1% ($342,000) in this fiscal year. The good news is we believe the stringent measures we have in place, combined with the excellent budget stewardship being demonstrated by all campus budget managers, will allow us to manage the remainder of the 2008-09 fiscal year without taking additional drastic measures.

♦ Priorities: In several previous updates to the campus, both written and in person, I have emphasized our University and strategic priorities when making these difficult decisions. The first is, and always will be, the need to preserve the student educational experience. While cuts will have to be made, we will not compromise the quality of education we provide to our students. This priority is consistent with the most recent guidance from the UNC Board of Governors, who have asked that “a sharp focus on mission and academic integrity should drive each campus’ budget-cutting strategy.” The second priority, which is closely related to the first, is to preserve the jobs of those in ongoing positions, as they have the greatest influence on the student educational experience. We believe that, with a few exceptions, we will be able to keep this commitment for the current fiscal year.

♦ Next Year’s State Budget: However, with each passing day, we are learning that the financial outlook for the next fiscal year is even gloomier than anticipated just a month ago. This will be all too familiar to anyone who has been reading or listening to the news. The Governor projects a revenue shortfall in excess of $3 billion for the coming fiscal year. Earlier projections ranged from $1.2 billion to $2 billion. We do not know yet how this will impact UNC Asheville, but I will bring the newest possible information to our next All Campus Meeting.

♦ Advocacy from UNC-GA: Just days ago, President Erskine Bowles presented the University’s case to the Legislature, in an effort to limit the effects of the budget cut on the State’s University system. He made a case for future budget cuts that are small, flexible, and – most importantly -- non-recurring. Each of our campuses has provided him with numerous compelling examples of how the current cuts are affecting the education of our students. We will not know for some time how the University will fare in the next budget cycle, but I am confident that the University has a very powerful advocate in President Bowles.

♦ Policy Update: As I mentioned in our most recent Budget Forum, we have recently been asked by the Office of State Personnel to update our campus policy on Reductions In Force (RIF), which outlines the decision-making and procedures the University must take if any SPA employees were to lose their jobs due to a Reduction in Force. Approximately 50 people attended a review session of this policy and took the opportunity to ask questions about this policy. You may have heard that other campuses and State agencies are already implementing RIFs. If we are forced to consider RIFs, we will follow the guidelines provided in this policy.

♦ Furloughs: Many of us have read in the news about possible furloughs, which are temporary unpaid days off to meet temporary budget restrictions. Although many states and organizations are using furloughs to manage temporary budget cuts, this is currently not allowed under North Carolina law, and neither the state nor the university system is considering them at this time.

♦ “Vertical Cuts”: You may have read in the news that Governor Perdue is strongly encouraging state agencies to consider "vertical cuts," or the elimination of entire programs or departments. Similarly, President Bowles and the Board of Governors are encouraging UNC campuses to consider whether the various centers and institutes can be curtailed or eliminated in order to focus University resources on its core academic mission. You may have read in our local newspaper that the Arboretum is in President Bowles' list of examples. Here at UNC Asheville, only one such decision has been made so far: by July 1, 2009, the Leadership Asheville program will continue to be hosted on our campus, but we will no longer serve as the guarantor – we will continue to share support of the program with our many community partners with a more limited role.

♦ Tuition: In February, the Board of Governors approved President Bowles' revised proposal for campus-based tuition increases. Unless the N.C. Legislature takes action contrary to this proposal later this spring, UNC Asheville's tuition for 2009-10 will increase by $50/year, instead of the $75/year we had originally requested. This translates into a $69,000 reduction in anticipated revenue for our campus. 40% of the campus-based tuition revenues would be allocated to financial aid, and 60% would be allocated to the highest priorities of the campus. Under the current proposal, student fees would increase by $104.50/year.

The next All Campus Meeting is scheduled for Thursday, March 26, at 12:15 p.m. in Humanities Lecture Hall. At that time, I will have further updates from the March meetings of both the UNC Asheville Board of Trustees and the UNC Board of Governors, and will share those with you. It is also anticipated that the Governor will have submitted her budget for the next biennium later this week, so an update on that may also be possible at the All Campus Meeting.

In the meantime, since so many have asked, “What can I do?” I will offer the following:

• Friday, March 20, is the next Admitted Students Day on campus. Take the opportunity to welcome a family, encourage a prospective student, and show them what you love about our University.

• If you have questions or concerns about specifics in your area, talk with your supervisor or your vice chancellor.

• If you have suggestions or ideas about how to save money and do our work better, please send those to John Pierce, Vice Chancellor for Finance and Operations.

• You man consult the web page we’ve developed for Budget Updates http://www.unca.edu/news/budget.html. This site include the UNC Board of Governors most recent guidance on budget decision-making, as well as previous campus announcements on this topic that can provide further context for this information,

• Buffy Bagwell, Director of Human Resources, and John Pierce, Vice Chancellor for Finance & Operations are available to come to any department or staff meeting to discuss the implications of the budget cuts on individuals and departments.

• Take heart that as we communicate with each other and work together to bring our university through this economic crisis, “our best defense is unity”.

Anne Ponder
Chancellor