When Republicans took control of the UNC System, they vowed to turn the system into a profitable business. That business is now foundering.
North Carolina undertook a frightening, poorly planned experiment in August when wary parents drove their teenage children to University of North Carolina campuses to begin the fall semester in the midst of a deadly pandemic. Despite reassurances from UNC administrators about safety protocols, there is little doubt that the push for in-person classes was driven to a large degree by financial fears.
A surge in COVID-19 cases in early August followed the return of 19,000 undergraduates to UNC-Chapel Hill, leading to the closing of campus to most students and a shift to online instruction after only one week of classes. Financial losses from the pandemic and a badly flawed “Roadmap” to open campus will be enormous. Similar openings followed by COVID-19 outbreaks, rapid re-closings, and financial losses occurred at NC State and East Carolina University. In a recent video, UNC Board of Governors (BOG) Chair Randy Ramsey said that “like any other business CEO,” his job is to tell everyone at UNC that they should prepare for 25–50 percent cuts, including layoffs of large numbers of faculty and staff. Mandates to prepare for cuts have come down to campuses from the BOG.
When they seized control of the North Carolina government in 2010, Republicans vowed to turn the UNC System into a profitable business or degrade it when they could not. This “business model” is now foundering. What the BOG and UNC administrators leave out of their news releases is the role their business model has played in creating the current crisis.
Beyond COVID-19, parents of UNC system students have experienced sticker shock from costs that have ratcheted up 87 percent since 2010, according to the Budget and Tax Center.  The bill for an in-state student at UNC-Chapel Hill is now $24,300 for tuition, fees, room, and board. The hikes belie the provision in the State’s Constitution that higher education “as far as practicable, be extended to the people of the State free of expense.” In a state where the median family income is $54,000, this has forced many students into debt.
The cuts are part and parcel of Republican devotion to shrinking government. In 2013, after winning a racially gerrymandered victory and getting Republican Pat McCrory elected governor, conservative majorities in the NC House and Senate rammed through regressive income and corporate tax cuts and increased sales taxes in a reactionary assault on ordinary North Carolinians.
Despite publicly bemoaning high taxes, Republican legislators increased average income taxes for the bottom 80 percent of taxpayers while cutting taxes for the top one percent of NC residents by an average of $940,000. They failed to close tax loopholes for the wealthy and increased sales taxes which most heavily impact low-income residents. They eliminated the state’s Earned Income Tax Credit, harming the poorest citizens, while reducing the corporate income tax rate from 6.9 percent in 2012 to 3 percent by 2017 — effectively providing their corporate donors with a 57 percent tax cut, according to a 2013 Budget and Tax Center report.
As a result, state government revenues declined by $1.5 billion by 2015, the BTC reported. Because the effects of tax cuts worsen over time, in 2019 alone the state government lost $3.6 billion in revenues. The cumulative cuts have produced an astounding $12 billion in lost revenues since 2013, BTC director Alexandra Sirota wrote in a July 27 email.
These effects played out as “management flexibility” cuts imposed on UNC campuses by the BOG between 2010 and 2015, amounting to almost $680 million.  UNC employees’ wages and salaries have declined in real terms (except for administrators), programs have been closed, and some of the system’s most gifted faculty have left for more attractive positions elsewhere. State funding per student declined 11 percent over the same period.
The UNC “business model” amounts to a scheme to squeeze revenues out of the families of its student “customers” and has been especially harmful to poor students and students of color. It creates an unbearable burden on young adults, as many students have taken on debt or full-time work to pay tuition bills.
The COVID-19 pandemic now threatens the viability of UNC’s business model. UNC-Chapel Hill’s “Roadmap” for reopening campus, which defied recommendations from local health officials, proved to be a public health disaster (with 1,100 COVID cases as of this writing), and its human and financial costs are still mounting. Recent openings of the other UNC System campuses to more than 220,000 undergraduates are similarly predictable debacles.
What to do now in the midst of the pandemic?
First, on November 3, voters must throw out the free-market ideologues in the North Carolina General Assembly who don’t know the meaning of public education, and they must elect responsible lawmakers who will act in the public interest, not as plutocrats’ mouthpieces.  They must rescind the huge tax cuts for corporations and the wealthiest families, as well as regressive sales taxes, to undo the massive damage already done. The goal over the next decade should be to build a more equitable tax system to support higher education, and reduce tuition and fees while forgiving or restructuring student debt to make access to higher education accessible for all.
The new government in Raleigh should create (or demand federal support for) relief packages for UNC campuses facing COVID-19 budget crises. The UNC System should be given access to the state’s $1.2 billion rainy-day fund to meet funding shortfalls at smaller campuses and those historically serving Black and American Indian students. The two campuses that hold multi-billion-dollar endowments (UNC-Chapel Hill and NC State University) should draw on those funds to bridge their budgets until the COVID-19 crisis abates.
The pandemic makes clear that the free marketeers’ fealty to for-profit education is a chronic disease afflicting the UNC System. The therapy is obvious. It’s time to rescue public higher education from the hostile forces arrayed against it by voting for change.
Don Nonini is a professor of anthropology at UNC-Chapel Hill.
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