Yours at Carolina
E N L I G H TE N ED SELF- IN TEREST
XIOwing economy and the ongoing costs from Hurricane Floyd - as well as enrollment increases, rising
Medicaid and health-care costs for state
employees, and two adverse court decisions
- have left our state with a revenue short-
fall of more than $500 million this year and
the prospect oflarger deficits next year and
in years to come.
some N.C. House
draconian cuts in
education; one proposal would have
made up part of
the shortfall from
more than $37 mil-
lion in Carolina's "overhead receipts."
These funds are generated by research on
diseases, such as cystic fibrosis and schizo-
phrenia. That proposal would impede this
research while doing little to address our
state's long-term financial problems.
Without new revenues, North Car-
olina cannot maintain its AAA credit
rating, forcing the state to spend more ofour
University bond funds approved by voters
last fall on interest payments instead of
badly needed facilities. There was too ht-tle discussion about the cost of an
unprepared work force and the inability to prepare college students to compete in the
global economy. The loss of North Car-
olina's credit rating would result in eco-
nomic damage that would cost every
taxpayer more in the future.
Often, University leaders are encouraged to become more self-sufficient, and
that has been happening. While state
appropriations to Carolina continue to
grow, they have done so at a much slower
rate than have tuition increases, private
philanthropy and research funding. And
the percentage of Carolina's revenues
coming from state appropriations has
declined steadily, from 42. 5 percent in
5epI('HI be r i OC lob e r 2aa1
1985-86 to 29. 5 percent in 1999-2000.
Carolina's faculty through their research
now bring into North Carolina almost as
much revenue as the General Assembly
appropriates to UNC; this past year, our
faculty generated an average of$150,000
each in research awards.
While North Carolina's manufacturing
economy is slowing, it is clear that our
state's economic future is tied directly to the
knowledge industry and heavily dependent
upon our University as well as other area
institutions. Studies show that for every $1
A Decade of Change
FY 89-90 FY 99-00
• State appropriations
• Government contracts & grants
• Private gifts & grants as reported to CAE
• Tuition & fees
From fiscal year 1989· 90 to fiscal year 1999-2000, state appropria-
tions grew 4. 3 percent. government contracts and grants grew
9. 3 percent. private gifts and grants grew 12. 1 percent. and tuition
and fees grew 10. 1 percent.
Government contracts and grants increased as a percentage
of state appropriations from 52. 6 percent in FY 89-90 to 83. 6
percent in FY 99-00.
Private gifts and grants as reported to CAE (includes related
entities) increased as a percentage of state appropriations from
21. 5 percent in FY 89· 90 to 43. 2 percent In FY 99·00.
Tuition and fees increased as a percentage of state appropriations
from 18. 5 percent in FY 89-90 to 31. 7 percent in FY 99-00.
invested in Carolina, an additional $3 are
generated. Where else can our state make a
wiser investment than in Carolina?
Still, not only do some legislators
threaten to take the overhead receipts
generated by our faculty in vigorous national
competition, the state also insists on main-
taining antiquated and stifling regulatory
controls in purchasing, construction and
personnel. Such controls no longer serve
the state since they add unnecessary delays,
raise costs and make it difficult to recruit
and retain the best faculty and staff.
A resolution unanimously adopted by
our Board of Trustees noted that Carolina
"understands the dilemma of North Carolina's lawmakers" and "fully expects to
do its part in helping the state resolve its
budget crisis." Our trustees also noted that
"our public schools, C0l1U1lUIUty colleges
and universities are our state's best investment to ensure a speedy economic r
ecov-ery" and urged the General Assembly "to
consider both cost-cutting and revenue
enhancements together as a way most
likely to preserve and protect North
Carolina's educational system in service to the
future of the state and its citizens."
Enlightened self-interest should prompt
North Carolina legislators to provide continuing, generous financial support to our
campus and much needed regulatory relief
in purchasing, construction and persOlmel.
Please share these messages with your
North Carolina legislators in the weeks and
months ahead. You will help preserve the
value ofyour diploma and help your
neighbors by providing for a brighter economic
future for all North Carolinians.
Yours at Carolina,
Douglas S. Dibbert ' 70