Storm Signals Ahead

By Arch T. Allen

Editor's Note: The author earned undergraduate and law degrees from the University of North Carolina at Chapel Hill, served on its board of trustees from 1989 to 1991 and was vice chancellor for development and university relations from 1991 to 1995. The author's loyalty to the institution and his interest in American higher education have engendered concerns about their present state and their future. He offers this essay to address the current state of affairs.

It is British historian Paul Johnson in his book History of the American People who reminds Americans that higher education played a crucial role in the development of the United States. And it was in North Carolina in 1795 that visionary leaders laid the cornerstone in the village of Chapel Hill for the new nation's first state supported institution of higher learning. Today, at the edge of the Millennium, the Chapel Hill campus remains the flagship of a sprawling statewide system that comprises 16 campuses with an enrollment of nearly 155,000 students.

But warnings are clearly sounding, as evidenced by recent events.

The state legislature, in a debate with broad political implications, this year rejected a proposed $3 billion bond issuance for capital improvements at North Carolina's 16 state-supported campuses--and that was half the amount a consultant said was needed.

The failed effort and the way it was handled not only prevented capital improvements; it also raised questions about the state's higher-educational leadership.

As that leadership tries to steady itself from that jolting defeat, the flagship campus in Chapel Hill faces other problems that challenge the national reputation that it has gained from more than two centuries of hard work and hard cash. Consider, for example, that Carolina's budgeted expenditures for the current fiscal year exceeded revenues by $11 million. Not only did that financial mismanagement cause some current-year corrections on campus; it raised questions about UNC-CH's long-term management.

On the academic front, one of Carolina's leading scholars accepted a research position with a scientific laboratory after the university system's bureaucracy decided not to reappoint him for a second term as vice provost for graduate studies and research. Professor Tom Meyer reportedly bucked the UNC bureaucracy and went outside channels to advocate increased support for graduate studies and research, prompting UNC President Molly Broad to "go ballistic," by her own words.

All of that occurred as the campus was struggling with the death of Chancellor Michael Hooker and the departure of other key leaders, all of which has resulted in an alarming turnover at the top of the academic administration. Members of the faculty are up in arms and nervous. They characterize the decision not to reappoint Meyer as "scandalous," and they believe the Chapel Hill campus administration has been "completely cowed by a heavy-handed UNC presidential system."

In the context of these and similarly alarming events, what is the state of the UNC System, as the 16-campus, higher education structure is now known?


First, for perspective, it's important to consider that the UNC System evolved from several separate histories. The Chapel Hill campus was established to educate the early state's elite white males in the liberal arts. Other institutions followed, most notably the land-grant agricultural and technical college that became North Carolina State University at Raleigh.

Separate educational opportunities were offered for women at various teachers colleges and at Women's College in Greensboro. And, as a part of the state's racially segregated past, supposedly "separate-but-equal" campuses were established for blacks, including the institutions now known as North Carolina Central University in Durham and North Carolina Agricultural & Technical State University in Greensboro.

The first efforts to bring the universities together in a single system began during the Great Depression when expenses were a major concern. The state consolidated the Chapel Hill campus, N. C. State at Raleigh and Women's College in Greensboro under central management. Referred to as the Consolidated University, it was overseen by a board of trustees and a president elected by that board. A chancellor who reported to the Consolidated University president administered each campus.

But North Carolina operated 11 other college campuses, and they were governed by a separate entity, the State Board of Higher Education.

Such a separate governance structure was to prove cumbersome in the years following World War II, when the "GI Bill" sent students flooding through college doors across the nation. Fortunately, federal government funding provided for expansion of programs and facilities to deal with the influx of new students. The Chapel Hill campus benefited from this funding, including money for the construction of a four-year medical school and teaching hospital.

As this was happening, change was occurring in Greenville on the campus of a state-supported college with the historical mission to train schoolteachers. Once known as East Carolina Teachers College, the Greenville school had a new leader in President Leo Jenkins, whose ambitious plans soon were to provide fertile fodder for renowned political battles. Foremost among them was his proposal that a medical school be built on his campus.

Jenkins argued the school was needed to prepare doctors for under-served rural areas of Eastern North Carolina. His opponents countered that one state-supported medical school was enough--especially in a state blessed with med schools at Duke University and Wake Forest College, both private colleges. If another state-supported medical school were built, argued others, it should be in Charlotte to provide better geographical balance. But Jenkins prevailed, and the state legislature decided the issue less on a basis of educational needs and more for reasons of political and economic development.

As East Carolina got its medical school and as Chapel Hill solidified its reputation as the state's "flagship" university, politicians throughout the state began clamoring for "university" status for their schools--and they prevailed. The former Women's College in Greensboro was renamed the University of North Carolina at Greensboro. A college in Asheville was renamed the University of North Carolina at Asheville; likewise in Wilmington. Not surprisingly, given general feelings of jealousy between the Chapel Hill and Raleigh campuses, an effort failed to change the name of N.C. State University to the University of North Carolina at Raleigh.

Clearly, though, the state's system of colleges had become ensnared in political considerations that went beyond their educational mission. It's not surprising in retrospect that the system entered the 1960s unprepared for the explosive political uprisings of that activist decade. College students, especially in Chapel Hill, became involved in all manner of demonstrations, and the people who made state laws--and controlled the purse strings--did not like it. They retaliated by passing what was known as the Speaker Ban Law. Later held to be unconstitutional by a federal court, the law prohibited communists from speaking on state university campuses.

But before the law could be struck down, students and faculty at UNC-Chapel Hill and other campuses angrily called for repeal on grounds of free speech and academic freedom. Communists were even invited to speak on Franklin Street with only a stone wall separating them from thousands of students and faculty members who gathered on the campus side of the wall to listen.

Amidst this furor, East Carolina's Jenkins checked the political temperament and told legislators what they wanted to hear: His campus was unaffected by the law because it would never invite a communist to speak there. Thus festered the divide between the Chapel Hill and Greenville campuses and between Chapel Hill's Consolidated University governing board and East Carolina's state governing board.

The need for compromise and accommodation was apparent, and a move was led by Governor Robert W. Scott who proposed that all state-supported colleges be brought under a central governing authority. Thus was born in 1972 the current University of North Carolina System. Advocates of the original three-campus Consolidated University initially opposed complete consolidation, but William C. Friday, the president of the Consolidated University, emerged as a catalyst for change.

When it was apparent that consolidation was inevitable, the major remaining issue was whether the new system would have centralized or decentralized management. Leaders from the State Board advocated decentralized, campus-based management while Friday and the Consolidated University leaders favored centralized management with some delegation to the campuses.

Friday and his allies prevailed, and the newly created central governing board selected him as the new UNC System's first president.

A 32-member Board of Governors was established in 1972, and it continues to govern all 16 campuses of the University of North Carolina, the official name of the new central agency. Despite the name, the central organization has no classrooms, no teachers and no students. It educates no one and issues no degrees. It is a bureaucracy made up of communicators, lobbyists, planners and budget officials. It sets the policies and, subject to the state budget process, largely controls the flow of state money to the 16 campuses.

To borrow a nautical analogy, it is not a ship at all but rather a land-locked fleet headquarters.

Each campus does have its own administrative structure made up of a chancellor and a 12-member board, eight of whom are appointed by the UNC System Board of Governors and four by the governor. But these campus boards have little real authority, primarily passing substantive matters to the Board of Governors. The current structure means that the board closest to each campus has no real say over most matters, not least being the campus budget. Rather, each campus budget is administered by the chancellor under the direction of the UNC System president. Additionally, although campus trustees control the search process for a new chancellor, they must submit final nominations to the UNC System president, who in turn offers a final recommendation to the UNC System Board of Governors for approval.

And each chancellor is ultimately responsible to the UNC System president--not to his or her board of trustees.


The UNC System was fortunate to have as its first captain a strategist as skilled as Friday, who navigated the state budget process and occasional crises. The legislature funded the system generally as Friday saw fit and especially attempted to overcome the effects of the earlier "separate-but-equal" funding of the different campuses.

In one notable victory for Friday, he resisted efforts by the U.S. Department of Education's Office of Civil Rights essentially to take control of the UNC System because of what the government perceived to be racial imbalances among the various campuses. Friday fashioned a plan that kept the system under state control but committed it to actions to remedy the effects of past racial segregation. The historically black campuses began to receive more funding for needed improvements, and the formerly all-white campuses initiated affirmative- action programs in faculty hiring and admissions. Curricula also were expanded to include race-based studies and courses in women's studies.

Under Friday's guidance, a system born out of political turf building during turbulent times grew in stature to be called one of the best in the nation.

C.D. Spangler Jr. continued his predecessor's basic policies, including a staunch belief that tuition should be kept as inexpensive as possible for North Carolina students. In one notable confrontation, Spangler scolded UNC-CH Chancellor Paul Hardin for siding with then-Governor Jim Martin and advocating a tuition increase for Chapel Hill students, with the increase to be spent on campus. More to the point: It was a challenge to the UNC System's centralization of finance, and Spangler quickly put down the brief rebellion.

Spangler, a businessman with no background in higher-education administration, was unaccustomed to being in the public eye but often found himself there because of his responsibility to consolidate the budgets of 16 campuses and present a centralized financial wish list to the legislature.

Theoretically, a centralized budgeting process makes sense. It should cut out inefficiencies caused by duplication of programs on the various campuses. Unfortunately, as politicians stepped into the mix and as campus leaders became more ambitious, notable duplications were allowed during Spangler's reign. Some regional campuses now offer graduate and research programs that mimic those in Chapel Hill and Raleigh. Some of those programs, such as graduate studies in engineering at UNC-Charlotte and a biomedical research program at N. C. Central in Durham, were funded largely because of regional economic- development or race-based political considerations.

Still, Friday and Spangler grew the UNC System. As budget managers, their priorities were threefold: expand programs, keep faculty salaries on pace with national standards and build facilities. Unfortunately, over the years, little money has been spent systematically for capital improvements on the 16 campuses after program-expansion and faculty-pay priorities were satisfied. In fact, UNC System capital projects frequently have been taken care of on an ad hoc basis and with inadequate planning at both the system and campus levels.

A notable exception to that general lack of long-term planning came in the early 1990s when the UNC System proposed a $300 million bond issuance for capital improvements. The legislature authorized a referendum, which was approved in a statewide vote in 1993. But a reading of the results sent a message: Support was solid in the urban areas, especially in the Triangle that was home to three campuses. But weaker support in rural areas caused concern about the voters' overall commitment to the UNC System.

Against that backdrop, in 1994, Republicans took control of the state House chamber and nearly gained control of the Senate. Budgetary politics suddenly changed from Democratic dominance to a two-party dynamic; the UNC System was unprepared for Republicans sharing power.

Until then, the Democrat-controlled legislature had assured that the UNC system's Board of Governors was dominated by Democrats, many of whom were significant party fundraisers. Stirring that new political mix even more, Governor Jim Hunt surprised many in 1995 by proposing smaller increases in the UNC System budget than had been requested by the system. Faced with such "cuts," Spangler scrambled for new friends in the new legislature. He found few, but the UNC system found enough to survive the budget crisis.

But one reality had set in that simply didn't exist under Friday: The UNC System budget no longer was sacrosanct.

The 1995 legislature let go with enough money to expand programs and increase faculty pay, but not enough to repair existing buildings and replace inadequate ones. For instance, Venable Hall at UNC-Chapel Hill, home of one of the nation's best chemistry departments, has stood for years as an outdated and neglected monument to poor capital-improvements planning. As Venable's needs went neglected over the years, scores of new buildings were constructed on the Chapel Hill campus and elsewhere in the system, including a facility for the biomedical research program at N. C. Central in Durham. While a new building for the Engineering School at N.C. State was not funded, new graduate engineering programs were established at UNC-Charlotte.

The legislature apparently recognized the poor planning by the UNC System in 1997, when it mandated a study of the system's capital needs. Under the new presidency of Molly Broad, the UNC System hired a consultant who delivered a staggering $6 billion list of capital needs. Included were highly publicized "peeling-paint" situations such as Venable Hall and various "leaky-roof" conditions throughout the UNC system. Also included were recommendations for new facilities, such as a new home for the Engineering School at N.C. State.

The report put Broad squarely in the spotlight, a position to which she was not accustomed. She was second in charge in the California State system--not to be confused with the top-tier University of California System. According to university insiders, two prominent male candidates, both experienced institutional presidents, were passed over by the search committee in favor of the less-experienced Broad.

In reaction to the consultant's report, Broad proposed a $3 billion bond issuance using certificates that could be approved by the legislature and did not have to be put to a vote of the people. Though the idea had the advantage of avoiding a statewide referendum, the type of certificates she chose carried a significantly higher rate that would cost the state $250 million in annual interest instead of $210 million for voter-approved bonds. Nonetheless, her proposal gained the support of the governor, the state treasurer, the president pro tem of the Senate and the speaker of the House.

Prospects were bright for passage in the 1999 session. To publicize the proposal, Broad posed for a photograph with the governor and supporters of the proposal, all Democrats. It passed the Senate, which had regained a comfortable Democratic majority. But it ran aground in the House, which had but a narrow Demo-cratic majority. There, Republicans and some Democrats questioned the wisdom of authorizing $3 billion in bonds that would nearly triple the state's debt without submitting the question to a statewide vote.

As details of the proposal leaked out, Broad's priorities came into question. For example, included in the $3 billion request was a new $30 million performing-arts facility, not on a campus, but in tourist-dependent Dare County, home of Senate President Pro Tem Marc Basnight. Although a relative pittance in a $30 billion request, such "pork" emboldened House opposition. Other components were questioned, including $65 million for digital conversion of North Carolina Public Television's production and transmission facilities.

Sensing an opportunity to regain control of the House in the 2000 elections, Republicans promised campaigns against any House Democrat voting for a bond issuance not requiring voter approval. The $3 billion proposal sank, and Broad and her colleagues in the UNC System offices went home with a rough education in the state's new two-party politics.

Then, in a curious turn after earlier alarms of urgency, Broad announced that any bond referendum should be delayed until after 2000 to avoid entanglement with election-year politics. Perhaps concerned with the overwhelming defeat this year of a $650 million school bond issuance by Wake County voters, and perhaps recalling the soft pockets of support for the UNC System's $300 million bond issue in 1993, some concluded that Broad wasn't prepared to put support for the UNC System to a vote of North Carolinians.

That raised questions of whether Broad is in touch with the state that now underwrites her salary and whether she understands the people who have supported their higher-educational system so generously for more than two centuries.


Today, North Carolina's state-supported universities enter a new Millennium facing troubling questions, two of which are critical to its future:

First, should they remain under centralized bureaucratic control--"a heavy-handed UNC presidential system" as protesting Chapel Hill faculty members call it--or should the 16 campuses be governed under a decentralized system? In other words, should the campuses sink or swim on their own, with the operational and capital needs of each unshackled from the system? Put in literal terms, should a new chemistry building on the Chapel Hill campus or a new engineering building on the N. C. State campus depend on approval of a "pork barrel" provision for a performing arts center not on any campus?

Secondly, can the campuses transcend partisan politics and political ideology and gain the support of a majority of citizens? In other words, can North Carolinians--Democrats, Repub-licans, liberals and conservatives--be confident that their campuses are not politicized?