UNC-Chapel Hill trustees approve budget priorities, cuts amid continuing financial pressures

UNC-Chapel Hill is set to spend $47.93 billion next fiscal year, according to a new all-funds budget approved by the Board of Trustees.

Chief Financial Officer Nathan Knuffman presented the plan to the trustees this week. He said UNC-Chapel Hill is still facing multiple funding uncertainties, both from the state and federal governments.

The federal government awarded about 100 fewer HHS research grants to UNC-Chapel Hill last year, according to a presentation from the head of the university’s federal relations. Kelly Dockham said the U.S. Office of Management and Budget also hasn’t released already appropriated funding to the National Institutes of Health for fiscal year 2026.

Administrators feared more severe cuts, but Knuffman said those are unlikely for now.

The university is, however, operating without enrollment funding from the state General Assembly. North Carolina is the only state in the country without a state budget.

“This budget assumes the state will provide enrollment funding,” Knuffman said at a BOT budget and finance committee meeting. “If those dollars do not materialize, we may be forced to consider yet additional cuts.”

Earlier this year, the UNC-Chapel Hill Board of Trustees passed a plan to cut $86.5 million from the university. That built on an announcement from Chancellor Lee Roberts in July that administrators wanted to eliminate $70 million from the university amid budget constraints.

Knuffman says the university has “saved” $17.5 million through a combination of administrative staff reductions, lowering food and alcohol expenditures, and requiring schools to “abolish” long-term unfilled positions.

Those employment changes have been putting pressure on UNC-Chapel Hill staff members. Rebecca Howell, chair of UNC’s Employee Forum, said many employees are doing the work of more than one staff member.

“We might need cutting by attrition, but the work of that position that isn’t refilled doesn’t go away – and current staff are picking up pieces and moving forward,” Howell said at a BOT university affairs committee meeting. “I’d venture to say that it’s hard to be efficient when you are handling extra work and putting out fires more than you are preventing them in the first place.”

Over the next three years, UNC-Chapel Hill will continue its “cost control” plan which also includes reducing financial aid for out of state students, encouraging some faculty to leave the university through a retirement incentive program, and removing low-performing academic programs. The latter echoes some elimination strategies other UNC System institutions made years prior.

Knuffman expects these and other cuts will “save” the university more than $89 million.

In addition to those cuts, UNC-Chapel Hill’s budget also includes several investment priorities. Campus-wide initiatives include growing enrollment, artificial intelligence projects, and improvements to campus safety.

Those campus safety plans involve developing a real time information center, improving fire alarms and lab ventilation infrastructure, and making more opioid-reversal medications available on campus.

Knuffman said the budget for artificial intelligence will range from funds for the provost to lead an “academic and research” space to using operational AI for administration-related tasks.

University administrators also plan to invest in more targeted initiatives, like startup funding for STEM and engineering faculty and “operational support” for the university’s School of Civic Life and Leadership (SCiLL).

SCiLL has been embroiled in controversy since its inception, and increasingly so this year. University administrators recently spent $1.2 million on an investigation into the school, but refused to release the results for privacy reasons.

The university budgeted nearly $65.5 million for athletics-related salaries for fiscal year 2026-2027, all coming from “auxiliary or other trust funds.”

This university budget was completed before the firing of men’s basketball coach Hubert Davis. Costs associated with buying out Davis’s contract and hiring a new coach – which may also include a multi-million dollar buyout – are likely to come from funds donated specifically for that purpose.

UNC-Chapel Hill and the state’s other 15 public universities will submit their all-funds budgets to the UNC Board of Governors for final approval. The UNC BOG usually reviews the plans in May, shortly ahead of the new fiscal year.

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