As the state House and Senate try to reconcile their respective budget plans, one thing is clear: The plan adopted by the House is the best budget for higher education in North Carolina in at
least five years.

Attention in recent days has focused on the Senate’s budget proposal, which would shrink the size of the state’s budgetary pie, cutting taxes by $73 million in 2015-16 and $421 million in 2016-17. ¹ In part because of those reductions, the Senate plan includes no raises for University faculty.

The budget the House approved last month seems to recognize that most University faculty have seen just one raise in the past six years, and that 76% of faculty members who received outside offers over the past two years accepted those offers, often taking millions in grant dollars with them. ² While the House budget is not perfect, it would provide raises that average 2% for University faculty. ³

After the sweeping tax reductions of 2013, prominent Republicans, including Frank Dowd IV, the Chairman of Charlotte Pipe and Foundry Co., urge legislators to be cautious about making more tax cuts.

“Rather than further tax cuts, I urge fiscal prudence,” Dowd wrote in The Charlotte Observer in May. “… We also need to continue to make good on promises to increase teacher pay, as well as fund other educational needs, including the university system.” ⁴

Former Glaxo CEO Bob Ingram, the chairman of the Research Triangle Foundation, also takes issue with the Senate’s plan to sharply curtail sales-tax refunds to nonprofits.⁵ The proposal could cost hospitals affiliated with UNC Health Care – in Raleigh, High Point, Lenoir, Elkin, Smithfield, Rocky Mount and Hendersonville – tens of millions in additional taxes.⁶

After nearly $700 million in budget cuts to the University system since the Great Recession, UNC Board of Governors Chairman John Fennebresque praised the House budget May 22 after House members approved it in a bipartisan vote. While the Senate budget would provide no across-the-board raises, the House proposal would devote more than $60 million to raises for University faculty and staff.

“It stops the cutting and begins to reverse the trend that began with the Great Recession,” Fennebresque said. “It also recognizes the tremendous role our faculty and staff play in the success of the state’s economy.” ⁷

The Senate does deserve credit for proposing to spend $150 million on a backlog of nearly $4 billion in needed repairs and renovations to University buildings,⁸ raise starting teacher pay to $35,000,⁹ and spend $21 million to provide much-needed raises for community college instructors.¹⁰

The budget process now enters a critical phase where House and Senate negotiators will try to resolve differences between the two plans.

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¹ http://www.ncleg.net/sessions/2015/budget/2015/Senate_Committee_Report_2015-06-17.pdf, p. 1.
² UNC General Administration, Faculty Retention Efforts, July 2012-June 2014.
³ http://www.ncleg.net/sessions/2015/budget/2015/House_Committee_Report_as_modifiedbyrules_2015-05-21.pdf, p. F11.
⁴ http://www.charlotteobserver.com/opinion/op-ed/article21507690.html
⁵ http://www.newsobserver.com/opinion/op-ed/article23877202.html
⁶ UNC Health Care, June 22, 2015.
⁷ Statement of UNC leaders on the proposed 2015-16 House budget, May 22, 2015.
⁸ http://www.ncleg.net/Sessions/2015/Bills/House/PDF/H97v7.pdf, p. 451.
⁹ http://www.ncleg.net/sessions/2015/budget/2015/Senate_Committee_Report_2015-06-17.pdf, p. F1.
¹⁰ http://www.ncleg.net/sessions/2015/budget/2015/Senate_Committee_Report_2015-06-17.pdf, p. F5.