The Case for Restructuring the Governance of North Carolina Higher Education

Dr. Moeser makes a compelling case for restructuring UNC System governance. In this well-researched piece, he explores the history of governance actions that concern him and calls for change. Specific areas of concern listed are:

• The elimination of campus-based tuition increases, the fuel for faculty salaries;
• The cap on tuition funds allocated to need-based aid, placing great stress on the Carolina Covernant;
• 2015.  Closure of the Law School’s Center for Poverty, Work, and Opportunity;
• 2016  The firing of President Thomas Ross;
• 2016  The removal of the Governor’s power to appoint 4 of 13 Trustees;
• 2017  Stripping the Law School’s Center for Civil Rights ability to engage in litigation;
• 2020-22  The BOT has not respected Chapel Hill’s strong tradition of shared governance with the faculty.  Recent examples of this     include the obvious reluctance of the BOT to grant tenure to Nikole Hannah-Jones, despite a strong recommendation from a faculty committee.; The BOT amended the process to allow board members and others to nominate Distinguished Alumnus and Alumna Award, a process that had traditionally been a faculty prerogative. 
• The BOG expanded the powers of the system president in the selection of campus chancellors.  Under the new policy, the system president can add two candidates to a chancellor search, one of whom must be a finalist for the position, essentially allowing the system president to hand-pick a chancellor. 
• The General Assembly, without consulting the BOG, included in the state budget provision to move the system headquarters to Raleigh, allowing for the merger of the UNC System and the Community College System

Dr. Moeser concludes by saying; “Governing boards exist to set policy for the institutions in their charge and to select senior administrators with carrying out those policies, not in running the day-to-day activities of the institution.  These boards need to respect the culture and traditions of the universities they govern, including the concept of shared governance with the faculty.”

Chancellor Emeritus James Moeser

January 21, 2022

I rise today to make the argument that it is time for the restructuring of North Carolina’s governance of higher education.  I want to establish first that political interference in the life of the university has always been an issue.  However, this interference has recently taken on a much more troubling aspect of partisanship and ideology.

 As I prepared for this paper, I re-read two important books that tell us how we got to this point.  The first book is Light on the Hill by William Snider.  It is a history of UNC from its founding in the 18^th century to the 1980’s.  The second book that I reviewed was William Link’s excellent biography of President William Friday, which received the 1995 Mayflower Cup for non-fiction.  Both are publications of the UNC Press. 

 As I thought further about this subject, I was struck by a statement by Link in his preface that a major priority for President Friday was the protection of the University from political interference, citing the inclination of the North Carolina political power structure toward intervention and politicization of higher education.^[1]

            Going back to the origins of the UNC System, it was during the Frank Porter Graham administration that UNC expanded to become a consolidated university.  The move to consolidate the state’s three principal universities, the university at Chapel Hill, the North Carolina State College of Engineering and Agriculture, and the North Carolina College for Women (Women’s College), was inspired by the Crash of 1929 and the need to reduce state spending.  Without any input from the three institutions, Gov. Max Gardner announced that he would recommend consolidation to the General Assembly in 1931.  

            At first Graham and his colleagues in Chapel Hill opposed this move.  The other two institutions  were less well established and largely vocationally or technically oriented.^[2]  However, as the state’s dire financial circumstances became clear, the handwriting was on the wall, and the institutions were consolidated.  The UNC Board of Trustees chose Graham as the president of the consolidated university.  Graham chose leaders for the other two institutions in Raleigh and Greensboro, respectively, but he continued to operate out of South Building in Chapel Hill.  He bent over backward to be fair to the other institutions.  He was both the president of the Consolidated University, and the university in Chapel Hill, a practice Mr. Friday continued when he became president.

            The General Assembly determined that the consolidated University of North Carolina would be governed by a 100-member Board of Trustees, just as the university had been governed before consolidation.  The trustees were elected by the General Assembly, and they were a picture of the white and mostly male establishment in North Carolina.

Greensboro welcomed the association with the university, but Raleigh chafed under it.  A major issue of contention was the fact that both universities had engineering schools, with the superior one in Chapel Hill, although the legislation creating the consolidation stipulated the “a unit of the university shall be located at Raleigh and shall be known as Carolina State College of Agriculture and Engineering of the University of North Carolina.”^[3] Graham ultimately solved this problem by moving engineering to Raleigh.  Other transfers were made between institutions with the goal of eliminating duplication.  

Frank Porter Graham resigned the UNC presidency in 1949, having been appointed to the U. S. Senate by Gov. Kerr Scott upon the death of the incumbent senator.  He was succeeded in the presidency by Gordon Gray, former Secretary of the Army.  Gray had an undistinguished five-year term as president (1950-55).  One of Gray’s best decisions was the appointment of young lawyer as his executive assistant, William Clyde Friday.  

Friday had thought that he would be going to Washington with Senator Graham, “but three days before Graham left for his new job, as Friday later told the story, “we stood together at the Old Well.  He [Graham] put his hand on my shoulder and said, ‘it’s better you stay here.’”^[4]  Five years later, through an interesting twist of fate, William Friday was the UNC president, a post he would hold for the next 30 years (1956-86).

            It was during the Friday administration that the University of North Carolina system became what it is today.  But it was not an easy evolution.  The administrative structure of the consolidated university was essentially unchanged from 1931 until 1969 when, through legislative action, three institutions were added to the University: the University of North Carolina at Charlotte, the University of North Carolina at Asheville, and the University of North Carolina at Wilmington, each with its own chancellor, reporting to the UNC president. 

            “The expansion of the three-campus consolidated university to a six-campus UNC system in the 1960’s profoundly altered the balance of power in higher education in North Carolina.  Friday remained skeptical of expansion generally and dubious, at best, about UNC expansion to Wilmington and Asheville. He characterized this decision as ‘a mistake’ made because of irresistible political pressure.”^[5]

            But the biggest political fight of all was yet to happen.  Enter Governor Bob Scott, who served as Governor of North Carolina from 1969-1973, and characterized by Link as “impetuous.”^[6] Scott was a graduate of N. C. State, who became “highly critical of what he considered the stronghold of elitist power at Chapel Hill.”^[7]  These two titans – the governor and the university president – would engage in a long-term political battle over the future of higher education in North Carolina. 

            Gov. Scott, who had previously served as regional chairman of the Southern Regional Education Board and a member of the Educational Commission of the States, was intensely interested in higher education.  He persuaded the legislature to reconstitute the State Board of Education with leaders of the General Assembly as members^[8] and the governor as chair.          

            All of this was done without any knowledge of it by Bill Friday or anyone at UNC.  President Friday only learned of it in a conversation with a legislator.  He was deeply concerned about the politicization of higher education and the direct intervention of the Governor and legislature.  The trustees were adamantly opposed to these moves, which they regarded as an infringement on their governing prerogative.  

            There followed months of back and forth negotiating and posturing by both sides – Friday and the trustees on one side, and Governor Scott and key members of the General Assembly on the other.  This struggle went on for over a year.  At one point, Gov. Scott threatened the university’s appropriation in retaliation for opposing his restructuring plans.  It became very heated and acrimonious.  

            After months of political fighting, “an expanded multi-campus system that would embrace all sixteen senior institutions in the state and a single governing board that would supersede both the State Board of Higher Education and the UNC Board of Trustees all became law on October 1971.”^[9]

            With minor changes, this is essentially today’s UNC System, with 17 constituent institutions and a 24-member Board of Governors.  “It is a testament to Friday’s political abilities that most people now regard the system, essentially thrust on him, as his own creation.  But Friday nonetheless succeeded in later transforming a political defeat into an administrative victory by fashioning a system that bore the direct imprint of his personality and managerial style.”^[10]  My entire purpose in relating this complex history of the UNC System is to establish the fact that political interference in the University of North Carolina has been a constant throughout its history.

            I arrived in North Carolina in 2000 to become the ninth Chancellor of UNC Chapel Hill.  I was appointed by President Molly Broad, who had come to the UNC System from the California State University System where she was Executive Vice Chancellor.  She was not only the first female president, but the first non-North Carolinian to be president.  Molly would not allow anyone to utter the S-word (system), insisting that she was the President of The University of North Carolina.  (She was technically correct about that; it was one of the legacies of Bill Friday.)  The public confusion over the name once prompted Dean Smith to try to get legislation passed that would have restored Chapel Hill’s traditional name and clarified the name of the system. 

            The first point of tension between UNC Chapel Hill and the system president and BOG occurred at the beginning of my third year, 2002.  In the wake of nine-eleven, the faculty committee charged with suggesting the book for the First Year Reading Program suggested Michael Sells’ book on the Qu’ran.  I thought this was an entirely appropriate idea, not imagining that the choice of this book would lead to national controversy.  The Fox News Channel picked up this story and began to fan the flames of the right-wing metaverse.  Ultimately, we were sued by the Faculty Policy Network, charging that we were indoctrinating students in Islam.  President Broad provided no support for me in this crisis, and the Board of Governors failed to pass a resolution supporting academic freedom.  

Tensions also grew between the campus and the system over the issue of control of Federal overhead receipts (facilities and administration costs). For years, the state and/or the university system had been reducing our state appropriation by a percentage (up to 25%) of our federal F&A receipts, with the mistaken view that the campus was adequately compensated for its conduct of research, and these federal funds constituted “double dipping.” (This, of course, reflects a total misunderstanding of the inadequacy of the federal F&A rate, which needs no discussion here.)

I helped our Board of Trustees understand how critical to the advancement of the university’s research agenda it was to reverse this practice. We had an urgent case in the construction of the science complex, where a portion of the first phase was going to be shelled-in without additional resources. We needed to build out the shelled space in to retain a key faculty member who was being heavily recruited by several other universities, but we had not yet raised the private funds necessary to finish the shelled space.  We devised a plan to finish the space by using anticipated F&A funds to back-stop private support that we were hoping to raise.  But that plan would fail, if the state, in effect, took part of our F&A away.

Our board mobilized and formed a political action committee, which in a short period of time became one of the most powerful political lobbies in North Carolina, the second largest political action group in the state.  The PAC quickly made a legislator’s position on F&A retention as the proxy for being a friend of Chapel Hill and thus meriting the PAC’s support. Gradually, the climate on our retention of F&A receipts began to change. 

Molly Broad and the BOG hated the PAC for its very success in supporting the research mission of UNC-Chapel Hill.  The News and Observer editorialized against it, but it had the complete support of the Board of Trustees and the leadership of the General Alumni Association, which was militantly opposed to the system’s theft of our name.  The PAC was strictly bi-partisan, supporting both Democrats and Republicans who were supportive of UNC-Chapel Hill’s objectives.

If there was a single thread that ran through all my public presentations during my tenure, it was the importance of faculty salaries. We made faculty support the number one priority of the Carolina First Campaign, creating 225 endowed professorships. It was also the centerpiece of our legislative efforts as well. I convinced the Board of Trustees of the importance of recruiting and retaining the best faculty as the centerpiece of all we were attempting to do. They got it. The PAC got it, and they were enormously helpful. Once we won the F&A battle, faculty salaries became the issue.

I used to say that we wanted to have a faculty that the University of Chicago also wanted. The trouble is that the University of Chicago (and their several wealthy peers) came calling. In 2003, we discovered that we were losing two out of three contested counter-offers. This was a clear path to mediocrity. It was a crisis. We were at a difficult time in terms of state support, with several years of little or no increases in faculty compensation.

North Carolina has a long tradition of low tuition coupled with generous state support. When that support went into decline, however, it was critical that we turn to tuition as a funding source for faculty salaries. (This was one of the few areas where Mr. Friday and I disagreed.  He was a strong proponent of low tuition, while I argued that low tuition was essentially socially regressive, subsidizing the costs of higher education for wealthy (mostly white) families.  I advocated higher tuition and a strong need-based financial aid program.)  We succeeded in getting authorization from the legislature to increase tuition and to keep those funds on campus for faculty support and need-based student aid. Simultaneously, we created the Carolina Covenant program, which guaranteed all students at or below 200% of the federal poverty level, a debt-free graduation. This program became a national model.

Even with these safeguards in place, I still had major battles with the system Board of Governors, which had little sympathy for the plight of its flagship research campus and no understanding of the competitive environment for research universities. Once again, the PAC came to our rescue, convincing the legislature to overrule the BOG. Perhaps my most telling argument to them was the fact that UNC faculty across the university averaged $211,000 in external funding, while the average salary was about $165,000. Talk about a return on investment, this was it!

Three years later, as a result of salary increases funded largely from tuition sources, we had reversed the negative trend, winning two out of every three contested retentions. By the time I left office, after two very good years of state appropriations, UNC’s faculty salaries, by rank, were higher than either Michigan or Virginia, and only slightly behind UC Berkeley and UCLA, our four major national peers. This was a key part of our overall strategy, and I am convinced our success with faculty compensation was directly related to the significant run-up of external research funding that continues to this day.

Molly Broad was followed in the system presidency by Erskine Bowles, with whom I had a fabulous relationship.  Erskine said publicly that the chancellors should run the universities, and his job was to fire them if they didn’t do it well.  I spent my last three years in office as a very happy and contented chancellor.  (Erskine was still sensitive to the use of the word system.  He would allow it, but only if was a lower=case S.)  It was President Margaret Spellings who changed the name of UNC General Administration to the UNC System Office.

All the time that I served as Chancellor, the Democratic Party continued to control both houses of the General Assembly, and they continued to elect both Democrats and Republicans to the Board of Governors.  I recall being more concerned about a BOG member’s being a booster of one of the universities or a region of the state than their party affiliation.  Most of the time the interests of Chapel Hill and NC State, the system’s two R1 universities, were aligned, and I enjoyed very good relationships with both chancellors Marye Ann Fox and Jim Oblinger.  I used to meet at least once a month with each.    

I also established strong personal relationships with Marc Basnight, the president pro tempore of the NC Senate, and Tony Rand, the Senate majority leader.  They became champions of Chapel Hill’s research agenda.  We have Marc Basnight to thank for the UNC Cancer Hospital and an annual appropriation of $50 Million for cancer research, which has been fuel for a huge run-up in federal research funding.  I left office in July of 2008, and the next Chancellor, Holden Thorp, had to deal with the economic crash of 2008, among other issues.  However, major changes were about to break on the political front.  

Since 1900 when Blacks were disenfranchised and Democrats destroyed a long-standing bi-racial alliance in the state’s Republican Party, North Carolina, like much of the South, became a one-party state.  The Democratic Party had near-uncontested control of state government well into the civil rights era.  While it is true that we elected Republican governors in 1972 (Jim Holshouser) and 1984 (Jim Martin), the breakthrough year for the GOP was 2010 when they captured both houses of the General Assembly and allowed them to re-district (and gerrymander) the state based on the 2010 census.  North Carolina was part of a national effort by Republicans to turn legislatures of key swing states and the U. S. House of Representatives. 

 After 2010, the Republican majority began using a partisan lens to screen candidates for the BOG. The U. S. economy was in general recession after the crash of 2009, and the Republicans wasted little time in cutting taxes.  Understandably, they also put a stop to tuition increases.  In 2012 North Carolina elected Pat McCrory as governor, solidifying Republican control of state government, with an announced agenda of cutting taxes

Slowly but surely, the Board of Governors began to chisel away at various UNC programs and initiatives that the right wing hated.  In 2014, they established a cap on the percentage of tuition funds that could be allocated to student financial aid, but they also eliminated campus-based tuition increases altogether, determined to keep tuition low.  Thus, they killed two programs they didn’t like – funding for need-based student financial aid, and a source of funds for faculty compensation.  

The former had a devasting effect on the financial aid budget.  According to Shirley Ort, the former Associate Provost and Director of Student Financial Aid, in the four years prior to 2014, the university received a cumulative total of $34.6 million in funding provided by the tuition set-aside policy, all dedicated to need-based aid.  The is the equivalent of a 5% payout on a $692 million endowment.  In her view (and mine), there is no way to secure the same level of accessibility and affordability no matter how effective we may be in fund-raising.  

In 2015, the BOG shut down the UNC Law School’s Center for Poverty Work, and Opportunity headed by former dean Gene Nichol.  Nichol was a thorn in the side of the Republican Party because of his blistering News and Observercolumns.  He is an outspoken liberal firebrand, who continues to this day to advocate for the poor and oppressed.    

Also in 2016, the BOG fired Tom Ross, who in 2011 succeeded Erskine Bowles as system president.  From my perspective, Ross was a judicious and very effective system president. In 2013-14, I had an opportunity to work directly with him when he asked me to serve as Interim Chancellor of the UNC School of the Arts in Winston-Salem.  In my opinion, the firing of Tom Ross was an example of naked partisan politics.  

In the fall of 2016, Roy Cooper, a Democrat, was elected governor.  Whereas the General Assembly elected all the members of the BOG, according to the 1971 law, the governor appointed four of the thirteen campus trustees.  Immediately, the General Assembly stripped the Governor of his authority to appoint campus trustees (among several actions to limit his powers).  By this action, the NCGA essentially transferred the appointing authority from the Governor to the Senate Majority Leader and the Speaker of the House.

In 2016, the BOG elected Margaret Spellings as system president.  Spellings had been George W. Bush’s Secretary of Education and was the chair of the Commission on the Future of Higher Education, commonly known as the Spellings Commission.  Spellings was given a five-year contract, but she resigned and went back to Texas after three years.  Notwithstanding the initial controversy over her appointment, I found her to be a good system president.  I think she left because of the increasingly raw politics on the BOG and in the General Assembly.  

In 2017, the BOG, by a vote of 24-3, stripped the UNC Law School’s Center for Civil Rights of its ability to engage in litigation.  I was present at this meeting and was disappointed that President Spellings was completely silent throughout the meeting.   

That brings us to the present time.  After a brief interim presidency by William Roper, former CEO of UNC Health, the BOG appointed Peter Hans as system president in 2020.  Hans, who was Phil Berger’s choice in 2016 when the BOG selected Spellings, is a Republican, who has a track record of support from powerful Democrats as well as Republicans.  A recent Assembly profile of Hans compared him to Bill Friday.^[11]  I will reserve judgment on that assessment.  

 Hans has been on both of North Carolina’s two governing boards for higher education.  The N.C. House of Representatives elected him to a six-year term on the State Board of Community Colleges in 1997.  The N.C. Senate elected him to the UNC System Board of Governors in 2003, 2007, (the Senate was still under Democratic Party control) and 2011, and he chaired the BOG from 2012 to 2014.  It is hard to determine what role Peter Hans will play in setting system policy, but some troubling signs are already appearing.    

          UNC-Chapel Hill has a strong tradition of shared governance with the faculty. Recent actions by the BOT have caused new tensions between the trustees and the faculty.  These tensions boiled to the surface in the obvious reluctance of the Trustees to act on the faculty’s recommendation of tenure for Nikole Hannah-Jones.  In another case, the BOT also amended the nomination policy for Distinguished Alumna and Alumnus Awards to allow board members and other members of the campus community to make nominations, a process which had traditionally been a prerogative of the faculty. Many faculty feel disrespected by the BOT.   

In another assault on shared governance, recently, the BOG voted to expand the powers of the system president in the selection of chancellors for the 17 constituent institutions. Under this new policy, the system president can add two contenders in a chancellor search, at least one of whom must become a finalist, allowing the system president to hand-pick a campus chancellor.

Another troubling sign is the fact that the General Assembly, without consulting even with the Board of Governors, included in the state budget a provision to move the UNC system headquarters to a government building in Raleigh, allowing for the merger of the two systems of higher education in North Carolina under Peter Hans.^[12]

Clearly, something is going on when Art Pope, one of the best-connected Republicans in North Carolina, complains that no one on the BOG knew this was afoot.  The co-location of the system headquarters in Chapel Hill has long fueled the feeling that UNC-Chapel Hill was somehow advantaged by this, while on the campus the view was that this co-location was a distinct disadvantage for Carolina.  But the larger question of the merger of the university system with the community college system is a major issue that requires careful thought and consideration.  

The appointment of Peter Hans, the previous CEO of the Community College System and a former member of that board, and the secretive way the state budget included a move of the UNC System office to Raleigh to a yet-not constructed government building, suggests an agenda that is not in the best interests of either system.  

On November 8, 2018, I outlined my concerns to newly elected Governor Roy Cooper, advocating the appointment a bi-partisan commission to study the governance of public university systems in the United States and to make recommendations for the restructuring of governance in North Carolina.  I urged the Governor to appoint people of substance from all sectors of the state, people whose collective reputations would add weight to any recommendations the commission might make.  

I also advocated for the commission to consult with the major national organizations that represent major institutions of higher education in the U. S. – the American Council of Education (ACE), the Association of American Universities (AAU), the Association of Public and Land-Grant Universities (APLU), and the Association of Governing Boards (AGB). 

Governing boards exist to set policy for their institutions and to select the senior administrators charged with carrying out the policies that the boards have established, not in running the day-to-day operations of institutions.  These boards need to respect the culture and traditions of the universities they govern, including the concept of shared governance with the faculty.

There is an apocryphal story about Dwight D. Eisenhower. When he became president of Columbia University, he addressed the faculty saying that he was happy to be able to talk to the employees of the university.  To which a faculty member responded, “Mr. President, we are not employees.  We are the University.”

We need boards that understand this truth – boards that are non-political and, at least, bi-partisan.  That is what North Carolina needs.  That is what we deserve.  

---

^[1] William A. Link.  William Friday:  Power, Purpose, and American Higher Education.  Chapel Hill, UNC Press, p.xiv.

^[2] Ibid., p. 212

^[3] Ibid., p. 215

^[4] Ibid., p. 254

^[5] Link, p. 169

^[6] Ibid., p. 170

^[7] Snider, p. 288

^[8] Link, p. 170

^[9] Ibid., p. 185

^[10] Ibid., p. 185

^[11] https://www.theassemblync.com/long-form/uncs-mild-mannered-change-agent/

^[12] https://www.theassemblync.com/short-form/tensions-rise-within-the-unc-system-board-of-governors/