Wednesday, February 18, 2004

Chairman Brad Wilson

Comments to the UNC Board of Governors

February 13, 2004

The N.C. General Statutes direct the Board of Governors to set tuition rates for our 16 campuses, and five years ago the Board adopted a comprehensive policy to guide its actions in this regard. As evidenced by the lengthy discussions in recent weeks, this board has taken that responsibility very seriously.

As we continue our work, it is our duty to carefully consider all of the facts as we determine what is in the best interest of the University. We will continue to listen carefully to all who have a point of view about tuition. We will continue to study the proposals submitted by the campuses, as well as additional data provided by the campuses and the Office of the President. We will be deliberate in our consideration and debate. We are going to follow a process that is right—not fast. At the end of the day, this Board must not be swayed by prevailing political winds but must fulfill its statutory and moral responsibility and make a decision that is in the best interests of the University and the students we serve.

Higher education has never been more important to this state’s economic future. Funding decisions we make now will affect North Carolina’s educational progress for years to come. In other words, the decision we ultimately make about tuition is not just about today. It is about the future.

As you know, I have spent a considerable amount of time traveling to our campuses and talking with administrators, faculty, students, and staff. I have walked the grounds, been in the buildings—both new and old—and I have seen and heard compelling evidence of the erosion of quality that is occurring in our University at an unacceptable pace.

I am convinced—based on this experience and after reading The Personal Stories Project—that the quality of a UNC education is now at risk. I am equally convinced that low tuition without high quality is no bargain. So this tuition debate is really about whether this Board is going to permit the continued erosion of the quality of public higher education in this state.

Over the past three years, University-wide enrollment has grown by more than 20,000 students, to 183,000. That is akin to adding the student body of East Carolina University, along with the faculty and student services needed to support it. Another 6,900 additional students are expected to enroll this fall. While the Governor and the General Assembly have provided funding for enrollment growth, increased need-based financial aid, and other Board priorities in recent years—and we are very grateful for that support—these new funds have been largely offset by cuts elsewhere in the University’s budget and by required reversions and withholdings.

During the past three years—a period of dramatic growth—UNC expenditures from state appropriations have been virtually flat. As a result, the state dollars we have had available to spend per budgeted student have actually dropped by about 8 percent over this time. That’s a loss of $700 per student.

In far too many cases, the result has been larger classes, fewer course sections, and disruption of students’ graduation schedule. Again, low tuition without high quality is no bargain.

We know that many students and their families have been hard hit by the state’s struggling economy. We are all in agreement that tuition should not become a major source of revenue to fund educational access in this state. That is why this board called for a one-year freeze on tuition rates last year, even in the face of growing enrollment demand and repeated state budget cuts.

New national statistics released since our last meeting show that in 2003-04, UNC tuition and fee charges for in-state students actually became more affordable relative to peer institutions across the nation. For example, for comprehensive universities, only six states reported lower costs than North Carolina. We also fared better among flagship institutions.

These conclusions are consistent with the recent study by the State Education Assistance Authority, which concluded that despite rising tuition, this University remains affordable for North Carolina residents. The creation and expansion of the UNC Need-Based Aid Program is largely responsible for this development, and in approving previous campus-initiated tuition increases, this Board has insisted that adequate need-based aid be set aside to offset the impact of higher tuition on needy North Carolina students.

The quality of a university is built on its faculty, and the inability of the Governor and the legislature to provide funding for salary increases has placed UNC at a growing competitive disadvantage. As we heard yesterday from Dr. Bataille, an independent 1998 study found that our campuses would need about $28 million in additional state support to raise faculty salaries to the competitive benchmark set by the Board of Governors. Since then, we’ve lost further ground. The tuition sought by our campuses this year to support faculty salaries would not even bring us to the average of our peer institutions. To make matters worse, it would take another $24 million to provide our faculty with benefits comparable to those at our peer institutions.

Clearly, we will be hard pressed to maintain the quality of education that North Carolinians expect and deserve without additional revenues. We agree with Governor Easley and others that salary funds and other basic support for UNC should come from the state’s General Fund. While we are hopeful that the state may be in a better fiscal position in 2004, there is little hope that the state can meet all our needs in another tight budget year. This will be an important issue of discussion with the Governor and our friends in General Assembly.

One this is certain. If North Carolina is to rebuild and strengthen its economy, it cannot afford to lessen its historic commitment to affordable access to the University, and it cannot afford to let the quality of a UNC education erode further. Low tuition without high quality is no bargain.