Bowles Makes Cuts at UNC

CHAPEL HILL – When Erskine Bowles, the business executive who had served as President Clinton’s chief of staff, took over the UNC system in January, he proposed a visionary agenda that would dictate his activities. Among the top priorities was running the organization more effectively and through the prism of his business experiences.

In the past week, we’ve seen some of the results of that agenda. Bowles announced last week that he plans to cut 10 percent, or $1.3 million, from the UNC General Administration budget. The move would eliminate 15.5 positions, half of which are currently filled, including four vice presidents and six associate vice presidents. However, when taking into account three new positions created by Bowles earlier this year, the net reduction of the cut is 12.5 positions.

Higher education is very high in labor cost and approximately 80 percent of the UNC General Administration budget in the past has gone towards personnel.

Other cuts in the proposal would include $125,000 a year on payments for a King Air plane that was used primarily by UNC officials and doctors. The plane will be sold by the foundation that owns it and will be replaced with two smaller crafts.

Bowles, who was brought into the UNC system for his managerial expertise (among other reasons), said in a letter to UNC staff alerting them to the cut, that the move would help to “redirect every single dollar we possibly can to the classroom and to the 200,000 students we’re responsible for educating.”

The cuts have been a long time coming for the UNC system, which has had a history of growing in size while complaining about tight fiscal constraints. Legislators have often criticized the size of the administration of the UNC system, while approving the system’s financial requests. In 2005, Sen. Robert Pittenger (R-Mecklenburg) questioned UNC system leaders, especially then-President Molly Broad, saying that legislative leaders were concerned about high administrative costs.

UNC’s move to cut spending comes as a recently-released report by the National Center for Education Statistics shows that from 1993 to 2003 “the growth of the workforce at college and universities outpaces that of both the overall U.S. civilian labor force and student enrollment, thus continuing a pattern that began in the 1970s.” According to the report, college staff employment grew by 22 percent from 1993 to 2003. The civilian workforce in that time frame grew at a 13 percent clip, while student enrollment grew 16 percent.

While the report makes no suggestions that increased personnel budgets have led to higher tuition costs, it doesn’t take an economist to understand that if an organization has increased costs (such as personnel) that eventually those costs will be made up in higher prices for its product (in this case, tuition) for consumers. North Carolina’s constitution states that tuition should be kept “as low as practicable” and cutting out unnecessary administrative cost is a good way to do that.

Each institution in the UNC system — not just UNC’s General Administration — should make the effort to examine its personnel budget and ask the question, “is this position truly needed in our efforts to educate students?” If the position does not lead to improving the education of students, then university leaders should consider eliminating it or finding private funding sources.

President Bowles should receive credit for making this effort to cut spending, especially after the General Assembly approved a large increase in UNC funding, taking it to more than $2.2 billion per year. In business, you don’t stop trying to improve efficiency just because you are currently running profitably. There are undoubtedly other parts of the UNC system where close scrutiny would find that state funds are being spent to little or no educational purpose.

Bowles has brought the community college system and the Department of Public Instruction to the table to improve communications and programs that affect all three organizations. UNC, under Bowles, has also moved to make the North Carolina School of Science and Math part of the system officially, an effort that will improve accountability.

In eight months, Bowles has proved that he’s a very different sort of higher education leader. Students and taxpayers should hope that the changes that have been completed to date are only the beginning. There are still serious problems throughout the system that Bowles and other university leaders should address in order to truly improve educational value. First and foremost, that would mean ensuring that students who graduate are proficient in basic language and math skills.

Whittling away at unnecessary cost is a lot easier than changing an academic culture that has chosen to let attention to educational fundamentals slide. That will be Bowles’ most serious and long-running test.

Shannon Blosser is a staff writer with The John William Pope Center for Higher Education Policy.