RALEIGH (April 10, 2025) – Tariffs are up, despite the president’s pause on them this week. The stock market is down – and extremely jittery.

And so, it seems, are members of the UNC System’s Board of Governors.

At a meeting of the Board’s Budget and Finance Committee Wednesday, several members voiced doubts about the strength of the country’s and the state’s economies – and the need for the UNC System to be cautious.

Jennifer Haygood, the System’s CFO, said the System’s balance sheet is strong, adding $1.6 billion to its net position in 2023.

But even though UNC Management achieved 12% returns on university investments in 2023, “We know that there is turbulence on the horizon,” she said, adding that the university system shouldn’t expect the same returns this year.

Seemingly sensing a tightening budget, System President Peter Hans said today that on a trip to Italy last year, he learned about a “lasagna” analogy where organizations add layers of complexity.

“As a result, I will be directing a reduction in administrative costs at those institutions where spending growth is outpacing state salary adjustments and increases or declines in student credit hours,” he said.

“The goal of this effort is to rebalance and calibrate the university back toward its core missions of teaching, research, and service – and to remove accompanying administrative burdens that make it hard for us to thrive. Our public universities should be vibrant, creative places to work, teach, and discover. … That requires ‘tending the garden’ in any large, collaborative, and subsidized organization now and then.”

BOARD MEMBER Art Pope, a former legislator and state budget director, noted Wednesday how as a member of a state House budget committee during a 1991 shortfall, he had to cut funds for higher education.

“We do not want a legislative committee … going through computer printouts eliminating positions,” he said.

The University needs to police its own budget and fund essentials, not niceties, he said.

“Where the economy’s going, I don’t know. So we need to be prepared for the worst.”

As the committee reviewed use of its 94 million square feet in 2,965 buildings, board member Harry Brown, a former state senator who chaired the Senate Appropriations Committee, recalled having to cut some agencies by 6% during a downturn in state revenues in 2011.

Brown said he has a feeling we’re about to enter a similar period.

“The first thing you look at may be capital, which may be cut,” he said.

Pope noted that the state constitution guarantees North Carolinians access to higher education “as far as practicable … free of expense,” and that the Board of Governors has held tuition constant for nine years despite rising inflation.

And Committee Chair Kirk Bradley said the board needs to continue to maximize use of university facilities and phase out under-enrolled programs.

“Tuition needs to be a last resort, not a first response,” Bradley said.