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Chancellor Oblinger's Update on the Budget

State Budget Update from Chancellor Oblinger

Late Thursday afternoon, Governor Bev Perdue instructed state agencies to take several steps to balance the state’s budget, including a reduction of seven percent.  As you know, we have already been planning for a one-time reduction at this level for the current fiscal year.

In addition, Gov. Perdue has ordered that no purchase orders will be issued for goods and services.  All travel and training requiring appropriations will be limited to instances involving public safety, public health, job requirements and economic development opportunities.

Although the instructions include a hiring freeze, universities have been granted an exemption at this time.  However, our leadership team will continue to consider whether we would institute a campus hiring freeze.  Meanwhile, we will carefully review all hires in order to meet budget reduction targets.

More information will be provided as we receive further clarification and instructions.

Chancellor’s Update on the NC State Budget

Difficult economic times have presented the nation with some very significant challenges.  North Carolina certainly has felt the effects as state tax receipts shrink to levels well below the income needed to support the budget.  The impact very likely will be felt for years to come, as economists here on our own campus and across the country project that a recovery is more than a year away.

We live and work in a state that values higher education. Our governors and legislators have always placed higher education high on their agendas, and I am confident that Governor Perdue will do the same.  In turn, NC State consistently helps educate tomorrow’s leaders across all our disciplines, performs relevant and responsive research, and communicates these findings as we help build economic capacity, create jobs, attract industry and move the state's economy forward.

Of course as North Carolina and the people of the state deal with new budgetary realities, so does NC State University.  If you have been following our ongoing budget discussions, you know that we already have taken a one-time six percent budget cut and that we have been asked to show the impact of three, five and seven percent permanent decreases in the budget for the next fiscal year beginning July 1, 2009.

We are working with President Bowles to help make the case that cuts to higher education have a dual effect on the state’s economy by not only limiting academic programs but also slowing our ability to fuel North Carolina’s economic health.

Our own efforts to meet the state’s budget reduction targets continued on Monday in a meeting of University Council, which is made up of executive officers, deans, faculty, staff and students.  In the meeting, we reaffirmed our approach to the budget reductions:

1. We will adhere to our budget principles
2. We will not alter our mission
3. We will be as transparent as possible
4. We will protect teaching, research and outreach activities to the extent possible
5. Barring more drastic reductions, we will not undergo large-scale reorganizations

A seven percent reduction translates to about $36 million for NC State.  To put the budget reduction into perspective, an idea that saves us $100,000 would have to be repeated 360 times to get to $36 million.  It will be impossible to meet that figure by a piecemeal approach.  We need to think bigger than that. 

We are examining opportunities to increase revenues and reduce costs.  We are looking at our organizational structure, redundant programs and services, and efficiency improvements.  We will proceed strategically, carefully and rationally to examine measures that cut across the university as well as those that can be accomplished within individuals units.  We will make decisions that meet the demands of the budget and we will do it in a way that will help the university recover quickly when better budgetary times return. 

I understand that you have questions.  How will we meet the cuts?  How will this affect me personally?  How will this affect programs and functions of the university?   We have established a web page to keep you informed of the decision-making process http://www.fis.ncsu.edu/rm/budget_central/. I encourage you to visit the page for regular updates and to submit your suggestions, questions and comments.  You may also provide your suggestions to your dean or unit head.

I share your concern about the uncertain times ahead and want to reassure you that the leadership of this university is involving people across the campus to determine the best ways to deal with the financial reductions.  We must work together to ensure that even in a difficult economy we will continue to be an engine for economic development, doing our part to help the state recover.  I appreciate your concerns and understanding as we work through this difficult period.