Kleinschmidt, Thorp work to inform others
As the reality of upcoming budget cuts sets in, town officials are considering how the University’s economic troubles will affect Chapel Hill.
Mayor Mark Kleinschmidt and Chancellor Holden Thorp have been working together to gauge the impact the budget crisis could have on the town’s workforce and economic development.
Additionally, Kleinschmidt has approached other mayors of towns that host UNC-system schools to help them prepare for the cuts and the effects they will have.
“What I’m trying to do is provide information and increase the awareness among mayors who host UNC schools on how budget cuts will affect their communities,” Kleinschmidt said. “The idea is that they will share these concerns with their local legislators.
“Hopefully, it will have an impact. Hopefully, they will minimize the cuts.”
North Carolina is facing an estimated budget deficit of about $3.7 billion for the 2011-12 fiscal year, and the UNC system is being asked to consider reducing spending by up to 15 percent.
While the University has absorbed budget cuts during the past two years, most of these cuts were administrative and didn’t have much of an impact on the town, Kleinschmidt said.
“Now they’re going to go deeper. It’s likely going to involve real people this time,” he said.
“We’re looking at potentially thousands of jobs.”
Kleinschmidt said Chapel Hill’s main employer is the University, which has been credited with keeping the area’s historically low unemployment rate far below the national average during the recession.
And of the University’s more than 12,000 employees, about 4,300 live in Chapel Hill.
“When they make cuts, it’s affecting people who live here,” Kleinschmidt said.
Thorp said he and Kleinschmidt have met multiple times, most recently Monday, to discuss the different effects the budget cuts could have.
Thorp said the University helps to support the town through sharing the costs for public events, paying property taxes and, most importantly, through participating in the Chapel Hill Transit system.
“But the biggest impact for the town will be if the University has to continue to shrink — if there are fewer people paying rent or fewer people investing in town businesses,” he said.
“If there are any layoffs, then obviously the town will be affected if employees have to move to find employment elsewhere.”
Kleinschmidt said he has been talking to mayors of towns who host other UNC system schools to discuss ways to prevent potentially damaging cuts.
He said he has set up a conference call with host-town mayors next week and will also discuss the issue at the North Carolina Metropolitan Mayors Coalition winter meeting on Feb. 24 and Feb. 25.
Greenville Mayor Pat Dunn said her city has already started preparing for the repercussions of possible cuts at East Carolina University.
Dunn said the University is one of the area’s largest employers in addition to the health care industry.
“At this point we don’t know exactly what the impact is going to be,” she said. “But we are conscious of the economy in 2011, and we are adopting a conservative budget to be able to meet the needs of the citizens of our city.”
Kleinschmidt said the effect of the budget cuts on the Chapel Hill economy are hard to predict, but changes could be seen if fewer people are spending or living in town.
He also said he does not know how the potential layoffs could affect the town. But as the main supplier of the local workforce, layoffs from the University could drastically affect employment in Chapel Hill.
“It’s not that we get ‘X’ amount of dollars from the University,” Kleinschmidt said. “It has indirect impacts.”
By Chelsey Dulaney | The Daily Tar Heel
Feb 14, 2011
