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Raleigh budget squabbles impact WCU

University of North Carolina System Interim President Bill Roper (far left) tours the Western Carolina University steam plant March 5. Ashley Evans/WCU photo University of North Carolina System Interim President Bill Roper (far left) tours the Western Carolina University steam plant March 5. Ashley Evans/WCU photo

A state-level budget stalemate that’s been ongoing since July could cause real problems — and real changes — at Western Carolina University if it continues much longer. 

“Each of the projects listed in the budget represents a critical need for Western Carolina University,” said Chancellor Kelli R. Brown. “The long-term effects of a lack of funding could be devastating to the health of our campus.”

This is especially true in light of the university’s status as an N.C. Promise institution. WCU is one of three University of North Carolina schools to participate in the program, which offers in-state undergraduates the chance to attend for just $500 per semester in tuition. The actual cost of offering a semester of education is far more than $500, but the agreement is that the state will fill the gap. 

With no budget yet passed for the 2019-20 fiscal year — which began in July — the state is still operating on the 2018-19 budget. Because N.C. Promise just launched in fall 2018, that budget did not include all the funding the program now requires, especially with enrollment rising. The university faces a budget shortfall of $4 million that should have been covered in state funding for fall 2018 and 2019. According to a financial report presented to the WCU Trustees’ Finance and Audit Committee March 5, receipts from student tuition and fees decreased by $19.45 million from 2018 to 2019, when N.C. Promise went into effect. 

“This is one of the reasons why the budget impasse affects Western and the other two N.C. Promise institutions so heavily,” Vice Chancellor for Administration and Finance Mike Byers told trustees during a Finance and Audit Committee meeting March 5. “We normally would have collected tuition from students similar to the prior four years, but this year that difference would have been made up by the buy-down in N.C. Promise. Taxpayers would have picked up that much more of the students’ tuition than they already do, but for the three N.C. Promise institutions that gap hasn’t been filled.”

The budget is already nine months late, but according to Director of External Relations Meredith Whitfield, the wait is likely to drag on much longer. 

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“It sounds like there is a strong likelihood we will not get a budget deal this year, and it might be something we’ll have to wait until after the (November) election for,” she told the trustee’s Administration, Governance and Trusteeship Committee March 5. 

The current strategy is to get the state government to at least pass a mini budget covering universities even as the overall budget stalemate continues. The budget issue stems from Democratic Gov. Roy Cooper’s refusal to sign a budget that doesn’t include provisions for Medicaid expansion and the Republican-controlled General Assembly’s refusal to pass one that does. 

If nothing gives, WCU might have to make some tough decisions. Namely, it might have to rein in enrollment. Since the current budget went into effect, WCU has added 1,133 new students. Much of that increase is attributable to increased interest resulting from the N.C. Promise program. 

“We are beginning to think about the possible need to slow the rate of enrollment growth because we don’t want to enroll a larger number of students and not be able to provide them with the high-quality educational experiences that they expect,” said Brown. “The lack of funding to meet the needs of our increasing enrollment won’t be felt in just the classroom. For example, I am concerned about the impact in our ability to meet the health care needs of our students, including mental health.”

University of North Carolina System Interim President Bill Roper visited WCU March 5 to highlight the university’s budget needs stemming from the ongoing budget impasse. 

“Continuing support of our universities requires fiscal backing from our state’s leaders,” said Roper. “My concern for the UNC System is, pure and simple, nonpartisan and apolitical, which is why I will continue to request that our state’s leaders on both sides of the aisle come together to find a resolution. I maintain hope that the budget will get enacted. There are no greater examples to illustrate the importance of getting this accomplished than the critical needs that face Western Carolina.”   

In addition to N.C. Promise, the budget impasse has stymied critical capital projects not included in the current operating budget — most notably, Western Carolina University is unable to repair its outdated and failing steam plant, which is one harsh winter or mechanical failure away from a complete shutdown. This scenario nearly occurred in 2016, and four years later, the steam plant is living on borrowed time. The opening of the Tom Apodaca Science Building will also be delayed if operations and maintenance funding in the budget continues to be tied up into the next legislative session.

An ongoing budget stalemate will also adversely affect WCU’s ability to attract and retain key faculty, which could in turn impact faculty-to-student teaching ratios. Additionally, university leaders fear that the impasse will impact the institution’s credit evaluation by Moody’s, which is set to occur later this spring. A lower credit rating could limit WCU’s ability to finance planned capital projects. 

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