H. Martin Lancaster, President 
North Carolina Community College System

Law Seminar, North Carolina Association of Community College Trustees
Sheraton Imperial, Research Triangle Park, NC
March 11, 2002

To understand the "State of the North Carolina Community College System," one must first understand both where we have been recently and the environment in which the System is currently operating. To say the least, these are both difficult and challenging times for the System, but the System’s response has been and will continue to be, to meet those challenges.

Where have we been, as a System?

We began the current fiscal year "late." It was not until October 4, 2001, that the State Board was able to make budget allocations to the fifty-eight community colleges and the Center for Applied Textile Technology. We as a system, as a result of an economic slowdown that had begun months before, were already in the midst of serving thousands of additional adults: those who had been displaced from the market place; those non-English speaking students struggling to get into and move forward in the market place; and those people seeking that one continuing education skills course that would enable them to re-enter the work force better prepared. You see, our task had begun long before the budget bill was passed.

We had just emerged from a legislative session that, while bruising for many, had been relatively kind to us. We had received full funding of our enrollment growth served in the previous year; we had received the first funding increment in moving faculty and professional staff salaries toward respective national averages; we had seen the successful re-authorization of House Bill 275 (funds for equipment, New & Expanding Industry, and Focused Industrial Training) for a four-year period, and we had escaped deep and damaging permanent budget reductions that had threatened us in April and May.

But the bright successes of the legislative session quickly turned to the reality of a sagging economy and a bleak revenue forecast for the State. As quickly as colleges received their budgets, they were advised to set aside funds for a reversion. And not long thereafter, the call came to do just that. In the face of unprecedented enrollment increases, our colleges were asked to give back funds to the State to meet a worsening revenue shortfall. More recently, we were asked to give back more as other state agencies were asked to revert a total of 7%. Thanks to the recognition of Governor Easley of the roll we play in our State's economic recovery, our final reversion for the campuses totaled 2.96% and 4% for the System Office.

We all worked together to mitigate those reversions, and while they did require the reduction of some activities, we were able to avoid the deep cuts that might have faced us and which would have been devastating to our colleges.

It is important to pause at this point in reflecting what has happened over the past eight months of this fiscal year, to recognize the fact that even while all around us the picture was becoming gloomier, community colleges were not. Let me give you a couple of illustrations:

• We are serving an additional 14,000 full-time equivalent students this fiscal year.
• Faculties have stepped up, making more preparations and delivering more instruction than in any previous year.
• Our financial aid staff, counselors, job placement personnel, assessment staff, and the whole range of student support people are meeting students where they are with their individual needs.
• College administrators have worked through difficult tuition, admission, reaccredidation, service delivery and staffing issues.

In other words, the members of the Community College family have given more than 100 percent to respond to unparalleled student needs and demands. In that sense, the State of the System has never been stronger.

New program offerings in allied health, information technology and service industries have attracted record numbers of adult learners, and Continuing Education enrollment has seen its strongest growth rate in over five years. Simply stated, a real strength of this great System is its ability to respond to a changing economy and generate programs and courses of instruction that business and industry needs and students desire. In that sense, the System has demonstrated its enormous capabilities and flexibility.

Where are we now?

I would be remiss in describing the State of the System, if I did not tell you that the System is stressed, and the System faces its greatest threat to funding that it may have ever faced. Administrators, Faculty and Staff cannot continue at their current pace of meeting the needs of adult learners without additional support. This comes in the form of both enrollment and compensation increases. People can only be asked to do so much for so long for so little before they are worn out.

We must have additional enrollment growth funds to add faculty and support staff. We must have funds for additional compensation lest we lose our best and hardest working personnel. And soon, we must have equipment funds to replace over 34,000 instructional computers, over 500 pieces of shop and lab equipment costing over $30,000 each, and outfit the huge number of new and renovated buildings to be built with the 2000 Bond Funds.

These needs which must be met to keep the State of the System strong, come at a time when the State is facing its worst budget shortfall in decades. The current year estimate is between $900 million and $1.3 billion. Next fiscal year is predicted to be as bad, or worse. We in the Community College System, not unlike other areas of education, state and local agencies and institutions, are being asked to identify permanent budget reductions, perhaps as high as 10%. This presents real challenges for us in the face of record student demand. With the help of your presidents and their staffs, we are analyzing how those huge cuts will affect our classrooms and our support infrastructure. Rest assured that I will take those impacts to the Governor and do my best to limit those cuts.

The strength of our System is found in our ability to hold together on difficult issues. There is no issue of greater threat to our continuing success of serving students than the State’s current budget situation. The State of our System will deteriorate quickly if we are required to give up large sums of instructional and support dollars. And as such, we must rally together: Trustees, Presidents, Faculty and Staff. In the upcoming legislative session, we must work together to guarantee and ensure that the state of the North Carolina Community College System stays strong, responsive, and healthy.

Both the State Board and I enlist your support in that endeavor.

The State of the System is good, but it will only remain so with your help.

Thank you.

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