WINSTON-SALEM (April 18, 2024) – The UNC System will seek an additional $70 million in operating funds – or 1.9% – from the General Assembly this spring, largely to reward UNC campuses for increases in enrollment and efficiency.
The plan reviewed by the UNC Governors this week relies on the System’s new performance-weighted funding model, which shifts to award funds based on actual student credit hours completed rather than simple enrollment. It also gives additional weight to institutions based on such factors as graduation rates, time to degree, student debt at graduation and cost per degree.
Legislators will return to Raleigh Wednesday for their so-called “short” session to make adjustments to the state’s two-year budget.
The System will ask the General Assembly for an additional $46.5 million for performance-weighted enrollment funding. Chief Financial Officer Jennifer Haygood told Board committees that student debt and cost per degree are both down over the past two years.
The System will ask $5 million in one-time dollars to limit losses at UNC Pembroke and Winston-Salem State University, however, based on enrollment declines at the two institutions – $3.7 million at UNC Pembroke and $1.3 million at WSSU. UNCP faces a loss of $2.4 million based on the System’s funding model, and WSSU faces a loss of $3.3 million.
The legislature granted similar stop-loss protection for UNC Greensboro and UNC Asheville last year due to enrollment declines at those campuses.
OTHER LEGISLATIVE REQUESTS include:
Completion Assistance: The System will also seek $8.5 million for completion-assistance programs at seven institutions to aid students at risk of not graduating on time due to financial troubles – Elizabeth City State, Fayetteville State, N.C. A&T, NC Central, UNC Asheville, UNC Pembroke and Winston-Salem State universities.
“Since 2017, almost 27,000 students with more than 60 credit hours stopped out of a UNC System institution,” a report on the initiative says. “Of those students, 14,000 had more than 90 credit hours. While students leave for a variety of reasons, finances are often cited as the number one reason students decide not to reenroll.”
The effort is aimed at institutions with high percentages of Pell Grant recipients with higher-than-average attrition rates. Each institution could offer a student up to $5,000 in assistance. The initiative is modeled on a similar program at Georgia State University that increased on-time graduation.
Salary adjustments for hard-to-fill positions: The System also requests $15 million for “labor market salary adjustments” to address recruitment and retention in hard-to-fill positions.
For the past several years, the System has only sought parity with raises given other state employees by the legislature. But the summary of the request notes that raises for state employees have not kept up.
“Institutions are struggling to recruit and retain talent due to the tight labor market and salaries that have not kept up with inflation,” it says. As an example, an employee who made $70,000 in 2018-19 would make $77,695 in 2023-24 after legislative raises. But due to inflation, that employee would need to make $85,769 this year to have the same purchasing power, so that employee has lost $8,074 in real, inflation-adjusted earnings.
Construction cost inflation: The construction industry has seen record inflation in recent years, the System’s legislative request says. So the System asks for an additional $48 million to cover increases in repair and renovation projects at eight UNC campuses.
Upgrades to security equipment and infrastructure: The System will seek $17 million for replacements and upgrades.
HBCU critical infrastructure: The System requests $21.5 million for critical utility needs at Elizabeth City State, N.C. A&T, NC Central and Winston-Salem State universities. The campuses face “significant risk” to their utility operations. The projects include boiler replacement, emergency generators, and repair and and replacement of campus steam distribution systems.1
1 https://www.northcarolina.edu/apps/bog/doc.php?id=67951&code=bog, pp. 3-14.
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