Carolina Value: keeping tuition and fees as low as possible

By W. M. “Marty” Kotis III

Kotis is the CEO and owner of Kick Ass Concepts, a commercial real estate developer of properties in the Carolinas and the manager of multiple hospitality businesses. Kotis earned a B.S. degree in business from UNC-Chapel Hill’s Kenan-Flagler Business School in 1991 and an M.B.A. from UNC-Greensboro in 1995. Kotis also served on the University of North Carolina system’s Board of Governors.

North Carolina’s Constitution requires the state to provide the benefits of the university to the people of the state as free as practicable. At the same time, state leaders take pride in providing an education not only low in cost, but also high in quality. Our aim, therefore, is to provide a university education of great value.

To achieve this central goal at UNC Chapel Hill, our Board of Trustees is keeping in-state tuition flat for the sixth straight year. Tuition is higher for the one in five students from out of state whose families typically do not contribute to the state tax revenues supporting the university.

We have also kept fees low for all students, on the premise they should pay only for related costs and not generate revenue for other purposes. In fact, our student fees are the lowest in the state’s university system.

Our efficiency efforts not only ease the burden for students, they also help keep UNC-CH attractive at a time when the cost of a college education is spiraling upward, and as some universities’ enrollments are dropping. UNC-CH was one of only four universities in the UNC System, out of 16, to see enrollment increase in 2022.

For the 18th consecutive year, U.S. News & World Report recently ranked UNC-CH as the best value among America’s public universities, the nation’s fifth-best public university, and America’s 29th best university overall.

At the same time, we trustees have a duty to oversee the management of UNC-CH as a valuable long-term asset of North Carolina’s almost 11 million people, a job we take seriously. Signing the front of a paycheck gives one a keen appreciation for the need for cost controls. By design, many members of the board have business experience, which helps us manage costs actively and honor our fiduciary responsibility to the state.

We have eliminated a persistent $100 million budget deficit while navigating complex administrative practices. The knowledge that we are evaluating schools and departments helps each become more mindful about spending. Meanwhile, we are expediting long-overdue repairs and renovations. In other words, we’re overseeing the university as we would our own households.

Our volunteer board is engaged and committed to working hard, solving problems, and advancing the university’s core missions of teaching, research, and public service. This sometimes requires asking tough questions and turning down requests. That’s partly a matter of oversight and accountability on behalf of the people of North Carolina.

It’s also a matter of sustainability, as a lean and efficient operation attracts and maintains public support for our programs and initiatives. North Carolina taxpayers should feel confident that we’re spending their money wisely and effectively for the benefit of our growing state.

This approach is good for students, too. Thanks to our focus on low tuition and fees, combined with generous financial aid for students in need, 64% of our undergraduates leave Chapel Hill with no student debt. The 36% of graduates with student debt have about $10,000 less than the national average.

Carolina’s winning equation is: high quality + low cost = great value. At Chapel Hill, that’s the winning formula that we, as trustees, are proud to uphold.

University’s budget now prioritized for efficiency and accountability

By John P. Preyer

When Chairman David Boliek and I joined the Board of Trustees in 2019, we were astonished to learn during our orientation that the University had not one annual operating budget, but 18. Given our experience running businesses, we couldn’t imagine how a $4 billion enterprise could function effectively, much less efficiently, without unified budgeting.

Preyer, Vice Chair of the Board of Trustees (1990, Political Science), is the President of Restoration Systems, an environmental company specializing in wetland, stream, nutrient, and habitat mitigation, headquartered in Raleigh.

Without an all-funds budget, the University was divided into multiple academic fiefdoms operating largely independently, with schools and departments doing their own thing without sufficient regard for overall campus priorities.

Such an exceedingly decentralized approach made it difficult, if not impossible, for the Chancellor and other campus administrators to prioritize spending prudently, oversee it properly, and make adjustments when warranted.

It also created a nagging structural budget deficit that eventually ballooned to more than $100 million during the COVID-19 slowdown.

In short, we were spending money like it was magic cash, instead of finite, hard-earned contributions from the state and other donors, including half a billion dollars a year in citizens’ taxes. That’s no way to treat donors, big or small, and it’s not how we should run America’s first and best public university. We needed change.

More solid footing

With the approval of the UNC System’s Board of Governors, UNC-Chapel Hill’s trustees have fixed this.

With our new delegated budgeting authority – and the cooperation of the Chancellor and the University’s Vice Chancellor for Finance and Operations – the Board of Trustees can now better set campus spending priorities, invest wisely and, if needed, cut strategically where necessary.

Our goal is to achieve better operating efficiency in how the University fulfills its mission to educate future leaders, conduct research, and serve the people of North Carolina.

This is a long-term game-changer for the University, and it shows how we’re implementing the Board of Governors’ financial objectives for all system schools while making UNC-Chapel Hill stronger.

Helpful business experience

Those of us with business backgrounds have relevant experience in hiring people, meeting payrolls, prioritizing capital expenditures, borrowing money, and adjusting operations to fit market demands. Anyone who has prioritized spending in their family budget knows that hard choices often must be made, or else you can quickly overspend your way into trouble.

Ensuring the financial health and efficient operation of the University provides more bang for the buck for the public and all our donors, and best serves the people of North Carolina.

A vibrant and efficient UNC-Chapel Hill is our obligation to everyone. As we begin preparing the University’s proposed budget for fiscal year 2023-2024, we’ll now be better able to adapt to the evolving needs of our great university and its students now and in the future.

Better planning. Greater efficiency. More flexibility. Stronger accountability.

To me and my fellow trustees of the University we love and serve, that’s real progress.