The Legislature Has Adjourned: How Did This Session Impact UT?

The Tennessee General Assembly has officially adjourned for the year after considering the final legislative calendars and passing the State’s $33 billion spending plan for FY15-16.  A number of higher education issues impacting UT were addressed this session.  We’ve been keeping our UT Advocacy Network up-to-date through our weekly legislative report, The Weekly Watch.  If you don’t already get that report, make sure you sign up here.

Thanks to the work of our state policymakers and UT advocates, the legislative session resulted in mostly favorable outcomes for the University of Tennessee. Some of those outcomes include:


97mFull Funding for State’s Higher Ed Outcomes-Based Formula: Funded
UT works hard to make sure its institutions are the state’s top performers. This year, the legislature fully funded the outcomes-based formula, resulting in a $9.7 million recurring operational increase for the UT campuses. While this funding does not address the projected $377 million budget gap over the next ten years, it does enable the University of Tennessee to mitigate the need for significant tuition increases this year.


funding increaseIncreased Funding for UT Institutions That Provide Services to All Tennesseans (Non-Formula Units): Funded
The increased recurring funding of $4.89 million will cover the Institute of Agriculture (UTIA), which has a presence in all 95 counties, Institute for Public Service (IPS) and Health Science Center (UTHSC). In 2013, UTIA, IPS and UTHSC provided outreach to more than six million people. Unlike our traditional campuses, these units have limited or no tuition mechanisms to offset previous declines in state revenue.



UT Knoxville Science Laboratory: Funded
The state authorized $99.5 million for a new UT Knoxville science laboratory building on Cumberland Avenue at 13th Street.  The new science laboratory will provide cutting-edge facilities to educate students and produce groundbreaking research. The project was one of UT’s top budget priorities this year and was included in the Governor’s original FY15-16 budget proposal.  It will help advance UT Knoxville’s ‘Top 25’ Initiative.


4HWest Tennessee 4-H Camp and Conference Center: Funded
The state authorized approximately $16 million for UT’s new West Tennessee 4-H Camp and Conference Center, to be located in Hardeman County.  The Center is turn-key ready and will fulfill a key part of the University’s outreach mission, providing youth in west Tennessee with an interactive environment to learn about STEM subjects, natural resources and agriculture.  It will be self-supporting through revenues generated via the Conference Center.  UT Extension’s three 4-H centers in Middle and East Tennessee currently serve 13,000 young people.  West Tennessee was the State’s only grand division without a 4-H Center.


windtunnelUT Space Institute Wind Tunnel Construction: Funded
The state authorized $1 million in capital outlay toward the construction of a new advanced wind tunnel at the UT Space Institute for the purpose of high speed flight and hypersonic research.  The wind tunnel would be the second of its kind in North America and is believed to be only the third of its kind in the world.  This funding will hopefully leverage additional future investment in this emerging research priority of the U.S. Department of Defense and the United States Air Force.


maintenanceMaintenance Projects on All UT Campuses: Funded
The legislature appropriated funding that will go toward ensuring our campuses and institutes are providing safe learning and work environments for our faculty, staff and students.  There are maintenance projects for all UT campuses included in the budget.  Examples of these projects include ADA (Americans with Disabilities Act) compliance upgrades, fire safety improvements, roof replacements, and security upgrades, among others.


utpedsUT Pediatric Research Initiative: Funded
Included in the budget is $3 million in matching funds for a joint pediatric research initiative of the UT Health Science Center, Le Bonheur Children’s Medical Center, and St. Jude Children’s Research Hospital.  The initiative, ‘UT Peds,’ has helped reduce childhood obesity and asthma as well as assisted in recruitment of world-class staff, researchers, and physicians to treat Tennessee’s children.  This is year three of a five-year state funding commitment of $15 million.


advmanuUT-ORNL Advanced Manufacturing Initiatives: Funded
The budget includes $3 million in non-recurring funding to support UT-ORNL’s Advanced Manufacturing initiatives and supplement a $250 million federal grant in this area.




payforplayPay-for-Play for Student Athletes: Not Passed
For the second year in a row, Rep. Antonio Parkinson (D-Memphis) and Sen. Reggie Tate (D-Memphis) filed legislation seeking to pay student athletes that graduate from a Tennessee public higher education institution.

Paying student athletes upon graduation is a direct violation of NCAA bylaws.  Passage of the bill would have rendered every NCAA Division I athlete attending a public Tennessee university automatically ineligible to compete and, by extension, eliminate all Division I sports at Tennessee’s public postsecondary institutions.  While the House sponsor of the legislation argued that the legislation would force the NCAA’s hand on the issue of pay for student athletes, current NCAA bylaws are clear on requirements to maintain amateur status.

The legislation required colleges and universities to deposit 1 percent of their gross athletic revenue from merchandise sales and broadcast licensing agreements into a state-administered trust fund, which would be invested and then doled out to graduating athletes in payments not to exceed $50,000 for Tier 1 athletes (football, track & field, basketball and baseball) and $25,000 for athletes in other sports.  Ultimately, the bill was sent to “General Sub.”  The “General Sub” status took the bill off notice for this year, but keeps it alive if the sponsors request to put it on next year’s legislative calendar.


rotcIncreased Lottery Scholarship Flexibility for ROTC Students: Not Passed
Unfortunately, a bill that sought to provide more flexibility for current and future ROTC student cadets to retain their HOPE Lottery Scholarships did not make it successfully through the legislative process this year.  Currently, students must complete all their required ROTC courses and major and minor-related courses within an unlimited-hour eight-semester timeframe or an extended timeframe with a limit of 120-semester hours.

These limitations are particularly problematic for ROTC cadets majoring in STEM fields, which traditionally have little flexibility to accommodate the credit hours required for ROTC.

The legislation, sponsored by Rep. John Ragan (R-Oak Ridge) and Sen. Mark Green (R-Clarksville), would have removed the semester hours attempted in required ROTC courses from the semester hours attempted for Lottery Scholarship participation purposes.  The bill was taken off notice in the last days of the legislative session.  It had been flagged for fiscal concerns by the Administration as it required roughly $200,000 in lottery funds, which otherwise would be used for the Tennessee Promise.



perfevalEmployee Performance Reviews No Longer Public Record: Passed
Governor Bill Haslam has signed into law a measure exempting public higher education employee performance evaluations from the public record, essentially correcting a public policy oversight in state law.  Since the passage of the TEAM Act in 2012, state service employee performance evaluations have not been part of the public record.  One of the initial rationales of removing these evaluations from the public record centered on sound management practices:  Having performance evaluations as a public record simply discouraged managers from documenting needed areas of employee improvement.  Without formal documentation of these matters, the State was left with no reliable evidence of employee performance.

This change will afford higher education employees the same level of privacy as most other state government employees. The University supported the measure as it addressed an important fairness issue.


salaryCost-of-Living Adjustment for Higher Education Employees: Partially Funded
The University has a $150 million market gap in employee pay which it is seeking to close over time. Due to limited state revenues, UT employees did not receive a cost-of-living adjustment in last year’s budget. This year’s cost-of-living raise will help UT remain a competitive employer in higher education and recognize UT employees as a critical component of the state’s workforce.  The budget provides 55 percent of the funding necessary to provide a salary increase at UTC, UTK and UTM, essentially requiring these campuses to secure the additional funding needed to cover the unfunded portion of the salary increase.  The budget fully funds salary increases for the University’s non-formula units (Institute for Public Service, UT Institute of Agriculture, UT Health Science Center).



counselingLegislation Threatening Accreditation of State-Based Psychology Training Programs:  Not Passed
This legislation meddled with higher education degree program requirements and placed the accreditation of psychology programs at Tennessee public higher education institutions at risk.  The bill would have allowed any counseling, social work, or psychology student trainee to refuse treatment to any client with whom they might claim to have a religious difference.  Currently, student trainees are made fully aware of the ethical codes governing the training programs at the beginning of their coursework.  Yet, proponents of the legislation argued that the ethical codes that require counselors, including student trainees, to treat the clinical needs of all patients should no longer be recognized as reasonable guides.  Much like the professions of medicine and law, social work and psychology professionals have clearly defined scopes of practice and ethical guidelines adopted by national associations that govern their respective professions.

The implication from proponents of the legislation was that the accrediting associations such as the American Psychological Association, and by extension, the American Bar Association, or the American Medical Association, have no standing in Tennessee.

Because the bill placed accreditation of psychology programs at state universities at risk, sought to micromanage higher education curriculum, and modified degree program requirements, UT opposed the bill.  The sponsors, Sen. Joey Hensley (R-Hohenwald) and Rep. John DeBerry (D-Memphis), ultimately deferred the legislation.


opensourcetextbooksBill Opening Door for Sole Use of Open-Source Textbooks for General Education Courses: Not Passed
Public higher education institutions reached an agreement with Rep. Mike Sparks (R-Smyrna) this session to defer legislation he sponsored to authorize a special legislative committee to review and recommend new policies regarding higher education textbook selection, the use of open-source materials for general education courses, and efforts to minimize the costs of textbooks.

Instead of legislation, a formal request will come from the Education Committee chairs asking that public higher education institutions coordinate a review process to look at current policies, what innovative steps are being explored, and what some other states are doing to minimize the cost of textbooks. A presentation before the House and Senate Education Committees will be expected in March 2016.



distanceedA More Efficient Approach to Distance Education: Passed
Lawmakers passed the “State Authorization Reciprocity Agreement Act,” which authorizes the Tennessee Higher Education Commission (THEC) and public and private higher education institutions in Tennessee to join the National Council for State Authorization Reciprocity Agreements (NC-SARA).   This authorization will offer significant relief from the current administrative burden and cost associated with offering distance education/online programs in other states. UT was very supportive of the legislation as an efficiency and cost-saving measure.  Rep. Harry Brooks (R-Knoxville) and Sen. Dolores Gresham (R-Somerville) served as the bill sponsors.



veteransPublic Higher Education Institutions Required to Commemorate, but Not Close, on Veterans Day: Passed
Lawmakers passed an amended version of a bill that requires Tennessee public universities to hold an official campus program or event commemorating Veterans Day, as well as allow students, faculty, and staff who are veterans to participate in campus observances without adverse action or absence.  The University of Tennessee supported the amended version of the bill, which will ensure campus commemorations continue into the future and that students and employees that are veterans can easily participate.

The original bill required the public universities to close on Veteran’s Day, which would have dealt a devastating blow to the high-quality annual Veterans Day events that currently happen on each UT campus.  We appreciate the sponsors of the legislation, Sen. Randy McNally (R-Oak Ridge) and Rep. Dennis Powers (R-Jacksboro), working towards an amended version of the bill that achieved positive outcomes for all involved parties.

Legislators Pass State Budget, Includes UT’s Top Capital Priority

State lawmakers passed the State budget today, avoiding legislative attempts in the House to remove and/or reduce state funding for UT’s highest priority capital project, the West Tennessee 4-H Camp and Conference Center.

Rep. Tim Wirgau (R-Buchanan) introduced and then withdrew an amendment on the House floor seeking to strip state funding from the project.

Two weeks ago, UT Advocacy issued an “Advocacy Alert” on the new 4-H Center, asking advocates to urge their elected officials to support the project.  After an incredible grassroots response with over 7,300 communications to members of the General Assembly in support of the project, we are happy to report that the new 4-H Center passed with broad support.  To those advocates who took action:  We cannot thank you enough.  Your support made all the difference.

The State budget includes full funding of the State’s outcomes-based funding formula for public higher education, an increase in funding for non-formula units like the UT Institute of Agriculture, the UT Institute for Public Service and the UT Health Science Center.

The budget also includes:

  • Funding for a new science lab building at the University of Tennessee, Knoxville;
  • Capital maintenance funding for projects on all UT campuses;
  • $3 million in matching funds for the UT Pediatric Research Initiative;
  • $1 million in capital outlay to construct a new wind tunnel at the UT Space Institute;
  • $3 million in non-recurring funds to support UT-ORNL’s Advanced Manufacturing initiatives and supplement a $250 million federal grant in this area; and,
  • Authorization for a 1.5 percent merit pool salary increase for public higher education employees.

Lawmakers will return to the Hill next week to consider bills behind the budget before adjourning for the year.

Lawmakers Unanimously Advance UT Budget

UT budget hearing

UT President Joe DiPietro testifies during Senate Education Committee Budget Hearing

The University of Tennessee had one of its busiest weeks on the Hill so far this session, as lawmakers in three legislative committees heard the proposed UT budget and questioned higher education leadership on a variety of topics.

President Joe DiPietro outlined for lawmakers the urgent situation faced by the UT System:  A $377M forecasted budget gap over the next decade if no corrective action is taken.  Without significantly increased state support, the University must find its own way of fixing its business model—by generating more revenue, finding efficiencies, and doing more with less—all while remaining of excellent quality and striving for improvements.

Some revenue-generating tools outlined by DiPietro raised questions amongst lawmakers.  Representative Ryan Haynes (R-Knoxville) asked DiPietro to explain the need for increasing out-of-state enrollments.  “I want to make sure our universities stay open to our [Tennessee] students,” he stated.

“We’re talking about modestly increasing our out-of state enrollments while maintaining our in-state enrollments,” DiPietro stated.  Out-of-state students generally pay more in tuition, providing a needed source of revenue for UT schools in an era of struggling state appropriations for higher education.

At UT Knoxville, for example, an out-of-state student pays roughly $18,000 more than an in-state student.  DiPietro has given the campuses discretion to increase their percentage of out-of-state students up to a boundary of 25 percent of total enrollments.  The current average level for UT campuses is between 12 and 13 percent.  National studies confirm that about half of out-of-state students end up staying in the state where they attend college and joining its workforce.

Overall, House lawmakers seemed pleased with DiPietro’s approach to re-evaluating UT’s business model.  House Finance Committee Chairman Charles Sargent (R-Franklin) called it “a wake up call to all of us on the Committee,”  adding, “if we don’t fund UT and the other schools, this is what happens.  These are choices we’re going to have to make.”

The Governor told the press this week that he understands why UT is pursuing these options, citing the sharp decline in funding for public higher education over the years.  “The state’s share of higher education’s funding has dropped from nearly 70 percent 20 years ago to about 30 percent [today].  And as the state’s share has declined, tuition and fees have sharply increased…I think they’re saying, ‘we have to make the economics work for us,’ he stated.

Senate lawmakers also seemed to approve of DiPietro’s approach.  Senator Jim Tracy (R-Shelbyville) told DiPietro, “You kind of stole my thunder… I think we’re going to have to change the paradigm of higher education and you and your Board have started doing that…We’ve got to think outside the box… I think you’ve hit on something.”

The UT budget unanimously passed out of the Senate Education Committee and will next head to the Senate Finance Committee.  So far, it appears there is a solid base of legislative support for the proposal.

The Governor’s FY16 budget proposal is certainly a strong one for higher education, but DiPietro has articulated that the strong proposal is no reason to hold off on being proactive in addressing UT’s “unsustainable” business model.  “We are not back where we were before the recession,” he said, further noting that there is no guarantee the proposed funding levels will continue in the future.  “We have to be ready,” he said.

UT Completes House Budget Hearings; Senate Hearing Forthcoming

This week, University of Tennessee President Joe DiPietro presented the proposed UT budget for FY15-16 to the House Finance, Ways and Means Committee and the House Education Administration and Planning Committee. DiPietro praised the budget proposed by Gov. Bill Haslam, saying that it is “one of the better budgets” that he has seen in his tenure with UT. Despite the strong budget proposal, however, DiPietro noted that it does not solve a serious business model problem facing the UT System.

DiPietro stressed the seriousness of the “broken” higher education business model to Committee members, reporting that projections place UT with a $377 million budget gap over the next decade. He highlighted the problems associated with continuing to plug this growing budget gap through increasing student tuition—a burden on Tennessee students and families he referred to as “unsustainable.”

DiPietro reiterated to both Committees that UT is dedicated to finding solutions to address business model concerns. In light of limited additional state revenues, campuses will be asked to implement measures to increase effectiveness, find efficiencies, and become more entrepreneurial while maintaining excellence.

While DiPietro emphasized to legislators that there would be not be “big changes overnight,” he did outline some example pathways to help solve the projected budget gap, including the option for campuses to increase enrollment of out-of-state students to, at most, 25 percent. House Finance, Ways, and Means Committee Chairman Charles Sargent (R-Franklin) recognized the difficult funding situation facing UT, calling the budget gap and DiPietro’s corresponding action plan a “wake-up call” in regard to decisions the legislature will need to make surrounding higher education finance in the future.

Despite hard budget model decisions looming on the horizon, DiPietro was confident in stating that the UT System “will be better because of the journey.”

UT has its final budget hearing, with the Senate Education Committee, on March 4. We will keep you updated on any new information as it becomes available.

UT Board of Trustees Endorses Plan to Save Costs, Increase Revenue to Alleviate Unsustainable Business Model

UT President Presents to the Board of Trustees

The University of Tennessee Board of Trustees on Thursday endorsed a plan presented by President Joe DiPietro to allow the campuses and institutes to save costs and increase revenue to help efforts to change the University’s business model and address a projected $377 million funding gap over 10 years.

The campus and institute leaders will have latitude to use a variety of methods to make changes as long as they remain within several boundaries. These changes will be implemented over the next two budget cycles, starting with FY16.

The plan, using input from a budget advisory group, follows discussions the president has been having since June 2014, when he first presented the need to address the business model, which currently has the University increasing tuition to make up for declining or static state appropriations. The goal is to keep tuition increases as low as possible, this year being within the Tennessee Higher Education Commission’s recommendation between zero and 4 percent.

“We are not insolvent or in financial ruin. The only way to preclude tuition increases is to fix it ourselves. It is about maintaining quality and moving ahead. We will be a different organization in the next four to five years,” DiPietro said.

Gov. Bill Haslam’s proposed budget for FY16 is favorable to the University, but DiPietro noted it has been rare to have a strong or good budget.

“I have been in Tennessee for 10 (legislative) sessions now and recall two (years) like this one. It might seem obtuse to make this change, but we are not back where we were before the recession. We need to be ready,” DiPietro said.

Board Vice Chair Brian Ferguson told DiPietro the board approves of the plan. “We stand ready to support and provide our best advice,” Ferguson said.

The projected $377 million gap is an increase over a $155 million gap provided previously. The gap is based on average inflation of 3 percent, static tuition increases, operating expenditures increased by the inflation rate, salaries increased to address a gap of $153 million over five years and deferred maintenance of $25 million annually.

DiPietro’s action plan includes:

  • Program realignment and consolidation: campuses will address low-performing programs to fund program reinvestment and perform a feasibility analysis and develop a plan for program consolidations to save costs.
  • Allocation and reallocation plans: set aside 3 percent of base year’s total unrestricted E&G expenditures to address strategic initiatives, address deferred maintenance and identify cost savings from voluntary retirement and other workforce development options.
  • Unfunded mandates for tuition waivers and discounts: the UT System Administration will study these discounts, estimated to be $7.4 million annually System-wide.
  • Tuition structure review: Options include expanding differential tuition, increase enrollment of out-of-state students and the 15-4 tuition plan.
  • Non-formula fee structure: Non-formula units (Health Science Center, Institute for Public Service and Institute of Agriculture) will review whether outreach efforts are capturing actual cost of delivery and determine whether fees should be charged.
  • Tenure and post-tenure review process:  The UT System Administration, with involvement by the Faculty Council, will conduct a comprehensive review of the University’s established tenure and post-tenure review process.

While choosing from these options, the campuses and institutes must stay within the boundaries of keeping out-of-state enrollment less than 25 percent of undergraduate total, remaining within the top five annually under the Complete College Tennessee Act formula, increasing research expenditures by 6 percent annually, keeping customers and clients of outreach services at this year’s level or higher and increasing the total number of gifts, pledges and bequests by 15 percent annually.