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Equity, fiscal and otherwise

Posted on March 26, 2009 by Staff

At the end of this month, the university presents a fiscal impact study on Carolina North, and with it the focus of the next phase of discussions on the project shifts to the sometimes concrete and often ethereal financial intertwining of town and gown.

How the towns support the university and the university supports the towns has been part of the dialogue and scuttlebutt here for more than two centuries. It was not that long ago that water, phones and electricity were managed by the university and what lines there were between the leadership of each were well blurred.

Just as the utilities have changed, so has the leadership of the community. And with the growth of both the towns and the university, the roles have changed as well. Chapel Hill and Carrboro are no longer simply the bedroom communities that serve the university. They are part of one of the fastest-growing metropolitan regions of the country and each is struggling to provide the services and infrastructure to support present and future populations.

The shared missions remain. Both local governments and the university have a strong interest in maintaining a good quality of life — in clean water, safe streets, thriving downtowns and so on.

Paying for these is the question. University officials like to point to the “indirect” benefits, and can, of course, cite many.

While the towns are the benefactors of the unique contributions to the community of a top-notch university, bills still have to be paid in cold, hard cash.

This is especially of concern in projects off the main campus, such as Carolina North and the recently announced Carolina Commons where the university is playing the role of developer. There’s nothing inherently wrong with that, as many universities do similar things to expand research facilities and provide housing for employees. As the fiscal-equity debate ensues, we’ll be interested in hearing if the university is willing to pay the same kinds of fees for infrastructure as other developers. Already, there are worrisome indications that at least some in the school’s leadership are balking at that.
The impacts on the towns, from police and fire protection to stormwater management and transportation planning, are pretty much the same.

It should also be remembered that when it comes to Carolina North, Chapel Hill already took a hit when its one-dollar-per-year lease on the town’s public works and bus facilities ended. At one time, that arrangement, valued at more than $300,000 annually, was informally considered a part of the fiscal equity equation. The town pays roughly $500,000 each year in debt service on its new facilities.

These are difficult budget times for both the towns and the university. Property owners reeling from the recent round of reassessments are going to be putting the heat on their elected officials to keep taxes down even as the need for services and growth-fueled infrastructure costs expand.

On campus, staff cuts, health care increases, possible furloughs and slashed expenses are on the table and every employee’s mind.

These conditions will likely color the debate ahead, but they should not drive the solutions. What the towns and the university negotiate when it comes to fiscal equity will be an arrangement that has to function in both good times and bad spells.

It should be fair, comprehensive and recognize the unique roles and responsibilities of Orange County’s local governments and an institution that belongs to all of the people of North Carolina.

It is an honor, a privilege and, during this time of year, a downright thrill for our community to host the flagship of the University of North Carolina. We entrust our leaders to make sure that through good faith and common sense it is not a burden as well.

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