Five forces of concern for public universities: strain on state budgets, part 1

A few weeks ago, Hunter Rawlings came to campus to give a talk about the future of public higher education. You can watch the talk on Carolina’s YouTube channel or at the end of this post.

Hunter has a special vantage point – he is the president of the American Association of Universities, which represents the top 61 research universities in the country. Carolina is celebrating the 90th anniversary of our invitation to the AAU, which is the most prestigious higher education association.

Before heading the AAU, Hunter was the president of the University of Iowa and Cornell University. His academic field was classics, and he was a student-athlete at Haverford.

In his talk, Hunter outlined five forces of concern for public universities. Some of these are areas where Carolina has had challenges, and others are areas where we are doing much better than our peers around the country. These areas are:

1. Strain on state budgets.

2. Complexity of universities as organizations.

3. Relations between systems and flagships.

4. Public sentiment about liberal arts education and college access.

5. Intercollegiate athletics.

In the coming weeks, I will post a blog entry about each of

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these points, laying out the challenges posed by each, but also how I think Carolina is poised to outperform our peers in each area.

The first challenge is the strain on state budgets. Everyone at Carolina is well aware of this strain, given the steps that we have had to take the last four and a half years to deal with problems in the state budget.

The budget problems arise from multiple sources. Of course, the economic downturn that started in the fall of 2008 has been a huge factor in lowering tax collections and state revenues. But increasing health care costs also play an important role. Nearly every year, the state health plan and Medicaid require additional funding that usually takes precedence over spending on other items.

In addition to these budget pressures, there is a lack of interest in raising taxes to offset these losses – and

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that is true in many other states besides North Carolina. Two years ago, a temporary sales tax expired, which created the need for the large cuts that we made in the summer of 2011. Thankfully, revenues held steady in 2011-12, and measures were taken to correct the shortfalls in Medicaid so that we could give employees raises this summer. We are grateful to the General Assembly for this year’s budget and the flexibility to provide salary increases to our faculty and staff.

The state budget shortfalls have created a need to raise tuition more than we would like. But the revenues received from the tuition increases have been vital to restoring our ability to retain faculty and providing salary increases. And even with the recent increases, Carolina’s tuition remains the absolute lowest among our peers selected by UNC General Administration.

3 Comments

  1. 1

    Interesting discussion. I for one am happy to pay higher taxes to keep NC’s state education at the cutting edge and affordable for as many people as possible.

  2. 2
    Robert M. Lewis

    Absolutely agree with Mr. Payne. As Carolina goes, so goes the quality of life for so many North Carolinians.

  3. 3
    Michael Jano

    I could not agree more. If higher taxes are necessary to support the level of education needed in North Carolina I am all for it.