H. Martin Lancaster, President
North Carolina Community College System
Leadership Seminar
Research Triangle Park, North Carolina
October 10, 2002
Good afternoon and thank you for the opportunity to talk briefly about the 2002 Session of the General Assembly and the legislation that affects Community Colleges. As we think and talk about the Session just ended, I believe it is important to consider:
- Why is there a mid-biennial session?
- Where did Community Colleges begin the 2002 Session?
- Where did we wind up at session’s end? and,
- What substantive legislative issues came from the session that does and will affect community colleges?
Why is there a mid-biennial session?
For those of you who have been involved in the legislative process as long as I have, you will remember the days when the General Assembly met in Raleigh in odd-numbered years, stayed only a few months, passed a two-year budget, and essentially went home, entrusting to the Governor and Council of State the authority to administer budget and policy matters.
About 30 years ago the State Budget was approximately $1.1 billion and the General Assembly met every other year. The Advisory Budget Commission at that time was a powerful budget entity (Chaired by Mr. Tom White), made up of influential legislators, that basically determined what items would be included in the Governor’s budget package.
Thirty years later, the budget has grown by about thirteen times to $14.3 billion. Sessions are now held every year, and have grown dramatically, both in terms of length and complexity. In fact, the 2001 Regular (long) Session Conference Report on the Budget was dated September 19. For the 2002 Extra (short) Session just ended, the Conference Report was dated September 18. It seems that one session has just ended when another starts.
The past thirty years have born witness to at least one major recession each decade, usually at the beginning thereof. As a result of the "Separation of Powers Act" in the mid-eighties, there has been a diminishing of the power of the Advisory Budget Commission, and a growth in the fiscal staff of the General Assembly. There has been the appointment of numerous legislative study commissions and oversight committees to examine and report on budget and policy matters that have fiscal implications.
Why, then, is there a Session between regular sessions? I think the answer is obvious: To deal with matters of the budget. And it is the budget with which this "short" session of the General Assembly was consumed.
Where did Community Colleges begin the 2002 Session?
To understand where we began the 2002 Session, it is necessary to go back in time to October 2001. Having just approved budget allocations on October 4th, the State Board immediately advised colleges to withhold at least 4% from their allocations. Why such a recommendation? Because the budget passed by the General Assembly was predicated on a 4% revenue growth rate, and it was obvious to the Board that this would never materialize.
From November 2001 until January 2002, the state revenues began a dramatic decline. On January 31, I met with the State Budget Director, who asked for budget reductions totaling 4%. Through conversations with the Governor, I was able to bring those reductions down to about 2.96%.
By February 28, 2002, the budget shortfall was $530 million, and growing rapidly each month. In late February, Governor Easley asked me to define for this staff permanent budget cuts for fiscal year 2002-03, in advance of the Short Session of the General Assembly, of between 4 and 10%. At this point, the deficit was projected to be about $1.5 billion.
In March of this year, a team of presidents was assembled at my request by NCACCP President Dr. Jim Owen, to work with my Vice President for Finance and his staff to make recommendations to me and the State Board for permanent cuts. That task was completed by March 18, 2002, and submitted to the Governor and his staff.
In essence, we were facing permanent budget cuts of between $24 and $60 million. At the same time, and as a result of a terrible state economy, we knew we were experiencing unprecedented enrollment growth, to the tune of over 10% and at a cost of over $50 million. Needless to say, we were all worried.
What happened? Nothing short of a minor miracle. State Board members, Trustees, Presidents, Faculty, Staff, Students, our friends in business and industry all rolled up their sleeves (quite literally at the day of the Legislative Reception barbecue) and went to work. We met with and educated legislators to the nexus between job re-training, workforce development, Community Colleges, and the state’s economy. And legislators listened. They supported us.
Where did we wind up at Session’s end?
Thanks to your hard work, and that of all the Community College family, we are pleased to report that the North Carolina Community College System is the only entity in state government that actually had an increase in their budget. That is to say, while other state agencies and institutions took permanent reductions up to 10%, our System budget actually grew by about 4%. It is pretty amazing to think that we went from cuts of from 4-10% to an increase of 4%.
Let me quickly highlight some of the budget items:
- Full funding of enrollment growth ($51.8 mil)
- Funding of NCIH line charges ($1.2 mil)
- Additional funding for the State Grant Program for financial aid ($1.0 mil)
- Preservation of the full amount for Summer Term ($7.1 mil)
- Holding equipment reductions to the minimum ($1.0 mil)
But in addition to the budget, it is equally important to note the level of support that we enjoyed throughout the Session. For without that support for what we do and how we do it, the result could have been catastrophic.
What substantive legislative issues came from the session that does and will affect community colleges?
Along with the matters of budget, and our successful outcomes, there were a couple of legislative issues and policy matters that came out of the 2002 Session. First, the General Assembly delegated to the State Board two important decisions that I believe are noteworthy. Number one, while the Assembly could not fund improvements in both faculty and professional staff compensation, they encouraged and empowered the Board to give salary and other compensation increases within funds appropriated.
Second, while at the eleventh hour it was necessary to take an additional $5 million reduction in the Community College System budget, the Assembly did delegate to the State Board the flexibility to determine where those reductions would be taken.
In both these instances, the Assembly affirmed the confidence it has in the Board as a governing and policy-making body.
Further, it is important to note that a major study identified Assembly, which could have an impact on both the number and structure of colleges in our System, will for the first time be undertaken by both the Education Oversight Committee and the State Board.
The Assembly also acknowledged the need to look seriously at multi-campus college funding.
There were a number of peripheral issues with which we were involved, but thanks to very good liaison work in the Assembly; none of them were damaging to the System.
Summary
As we look forward to the next long session of the General Assembly, which will begin in January 2003 and will likely prove to be just as challenging as this summer’s session, I believe it is important to pause and reflect upon what we have all been able to accomplish this year. From dour predictions about budget reductions, to a 4% budget increase. From uncertainty about enrollment growth, to full funding. And from uncertainty over our future, to an acknowledgement that this great institution is the state’s leader in providing education and economic opportunity to displaced workers, and those seeking entry in the workforce.
Thank you.
RETURN TO TOP OF CURRENT PAGE
Last modified: Friday, May 20, 2011 01:55:23 PM
This page maintained by Chancy Kapp.