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State budget director rejects UNC’s budget plan

RALEIGH (AP) — State Budget Director Art Pope says the University of North Carolina is asking for too much money next year and told its governing board to come up with a more realistic plan.
Pope wrote the UNC Board of Governors about a proposal by the combined 17 campuses and seeks 11 percent more than the current state budget plan this year. The News & Observer of Raleigh reported Tuesday (http://bit.ly/1ctZSm5 ) that Pope told the board it basically ignored his office instructions to limit budget expansion requests to no more than 2 percent.
Pope reminded the board in a memo last week that while Republican Gov. Pat McCrory supports the UNC system, there are competing priorities such as Medicaid and state employee and teacher raises.
“The spiraling cost of higher education, the increased costs to students and their parents, including growing personal debt, as well as the increasing demands on the state budget, cannot continue indefinitely,” the memo said. “The University of North Carolina has a responsibility to its students and to the state to operate and improve the university in the most cost effective and affordable manner as practicable.”
University leaders say they are preparing a detailed response to Pope. Board chairman Peter Hans said the university welcomes a discussion on the budget. UNC, which received $2.5 billion in state funds to operate for the year ending June 30, requested an increase of $288 million.
“The Board of Governors is asking those tough questions as well. In that sense the state budget director is doing what taxpayers should expect him to do,” Hans said. “I also think the university has good answers to those questions and we will make our case thoroughly and realistically.”
The General Assembly reconvenes in May to make adjustments to the second year of the two-year budget approved last summer. McCrory will offer his own spending plan that incorporates UNC and the rest of state government.
Pope, a former legislator and retail chain CEO, said in his memo that the proposed increase would require the governor and legislature “to make major reductions in other state agencies and programs, such as our courts, the ‘K-12’ public schools, and health care.”
The UNC Board, composed mostly of Republican appointees, approved the request Feb. 21. The system’s proposal says appropriations per student have declined 7 percent while tuition receipts per student have jumped 47 percent for the five years ending in mid-2013.
“Further reductions and large tuition increases hamper UNC’s ability to meet instructional needs and threaten academic quality,” the budget request said.
UNC system spokeswoman Joni Worthington said in an email the request for more operating funds is “actually quite modest.” The university is funding $38 million of its strategic changes through its own spending cuts, the newspaper said.
In his memo, Pope questioned how the system was using overhead payments that come with grants and contracts, mostly from the federal government. UNC’s cash balances for those receipts totaled $269 million at the end of the 2012 fiscal year, the memo said.

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