CHAPEL HILL - UNC President Erskine Bowles is pushing new efficiencies that could hold down costs by as much as $440 million during the next five years across the UNC system. He's also prepared to ask the legislature for an 11 percent budget increase next year.

Bowles hopes to shrink administrative costs and plow the savings back into the classroom. Earlier this year, Bowles reduced staff in his own general administration headquarters, cutting the budget by 10 percent. This week, he said he would give the money -- $4.5 million -- back to the state.

The efficiency moves will also no doubt win points with the UNC system's bankers at the General Assembly, which could bode well for Bowles' ambitious budget proposal. But Bowles said it was more than a political strategy.

"We're serious about being good stewards of the taxpayers' money," he said.

The budget request, approved Friday by the UNC Board of Governors, proposes $271 million in new spending next year, including a plan to raise faculty pay at each university to the 80th percentile of salaries at peer campuses. The plan also includes money for new initiatives, including $26 million for a research campus in Kannapolis, a $15 million fund for research, $4.2 million to start a UNC Online degree site, and $2 million for summer programs for freshmen who are at risk of academic trouble.

"This is a big budget," he said. "This is a bold budget, but now is not the time for small steps."

A healthy budget increase would lessen the pressure on tuition, said Bowles, who recently proposed a 6.5 percent cap on tuition increases. The budget request also includes nearly $36 million for financial aid.

The spending plan, efficiency efforts and new accountability measures for campuses are all part of Bowles' vision for higher education in North Carolina.

Since the former Wall Street deal-maker and Clinton White House chief of staff started the UNC job in January, he has looked at university operations with a businessman's eye. In March, he formed an advisory committee made up mostly of corporate leaders to pinpoint possible efficiencies in a sprawling university system that includes large research campuses and small liberal arts schools. The group, led by BellSouth-North Carolina head Krista Tillman, presented its 250-page report Thursday.

The group focused on "back office" administrative processes that have little to do with a school's academic mission, Tillman said. It suggested a host of changes that would drop burdensome reports, eliminate redundancies and leverage the system's buying power.

Recommendations included systemwide contracts for dining services, vending machines, computer purchases and credit card deals. Bookstore operations could be consolidated, libraries could share resources, and campuses could achieve energy savings through green buildings, the committee said.

Tillman said the campuses should operate less like separate small businesses and more like one big company. And she said she had encountered skepticism on the campuses, where some employees fear losing their autonomy.

While merged operations would save money, she stressed that UNC campuses would not have to sacrifice their distinctive missions and culture. "I don't think you want to move to a heavily bureaucratic, centralized system," Tillman said.

Some of the recommendations would require legislative changes or regulatory relief, which is likely to be controversial. In the summer, an effort by UNC to streamline construction reviews met with stiff resistance from state agencies that oversee those functions.

One idea -- operating independently from the Office of State Personnel -- would be a huge change. Bowles and his staff have already talked to Gov. Mike Easley's office about it.

UNC-Greensboro Chancellor Patricia Sullivan said the efficiency approach is good, but she would hate to see a system that, for example, would limit the types of computers faculty need. "Some of the things about consolidation are worrisome because we don't have a lot of experience with it," she said.

The ideas will be fleshed out in the months ahead. Meanwhile, individual campuses have been asked to undertake their own efficiency studies.

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