UT Board of Trustees Kicks Off Discussion on Multi-Year Initiative

Benchmarking, economic forecasts and hypothetical strategies to overcome declining state appropriations and make the University of Tennessee more effective, efficient and entrepreneurial was the subject of the UT Board of Trustees’ Wednesday workshop.

UT President Joe DiPietro had set the stage for Wednesday’s discussion about funding at the trustees’ annual meeting in June. The board’s workshop covered the issue more in depth and allowed trustees to ask questions. The purpose of the discussion was not to devise strategy but gain a better understanding of the issue in order to plan a multi-year initiative.

Projections are that the University could face a gap in state funding of more than $150 million over the next decade–assuming the University could limit tuition increases to 3 percent annually, inflation did not exceed 3 percent annually, and state funding did not increase. To cover such a gap, tuition would need to be compounded to 55 percent or 4.5 percent each year.

DiPietro has said that continuing to increase tuition to cover declining state appropriations is a business model that is struggling, and it is not sustainable to continue to pass along additional costs to students and their families. The University has three options: take no action, get smaller or start on a bold initiative to fix the problem, he said.

“We own this problem. We have to fix it,” DiPietro told trustees. “Change is normally painful for everybody. We will seek broad input. We will make tough decisions.”

Dr. Bill Fox, director of the Center for Business and Economic Research at UT Knoxville, provided the trustees a forecast of state revenues, and each chancellor presented initial thoughts on ways to streamline operations and increase revenues.

The trustees looked at data comparisons with other university systems and heard the president talk about ways other university systems and universities have addressed similar funding issues. UT has been using cost-saving measures since the 2008-09 recession and identifying lean processes. Ideas pitched included increasing enrollment of out-of-state students to raise revenue, reviewing academic portfolios, and analyzing better uses of campuses’ space.

“The current funding model of the University of Tennessee is perilously close to broken. Given the fiscal constraints on the state budget, which includes a structural budget deficit, it is unlikely that significant increases in state appropriation to the University of Tennessee will be forthcoming unless the sense of priority for funding higher education becomes widespread and improves. Thus, it is incumbent upon the University to be become more entrepreneurial, efficient and effective, by enhancing existing revenue streams, reducing expenditures, and reallocating existing resources to better achieve system/campus goals and objectives,” according to a UT benchmarking analysis submitted to the trustees.

The board next meets Oct. 2-3, when the discussion will continue. A more set strategy is expected to be revealed at the winter meeting Feb. 25-26 in Memphis.

DiPietro Takes Stand for Education, Tells Trustees a Plan Is Under Development

Education is critical to the future prosperity of Tennessee and should be a higher priority for the state. University of Tennessee System President Joe DiPietro told the Board of Trustees yesterday he is committed to reversing the current trend of dwindling state appropriations for higher education.

The board also honored UT President Emeritus Joseph E. Johnson with the Trustees’ Lifetime Achievement Award, the highest honor bestowed by the board. Johnson has worked continuously for the University since 1963, serving in several executive positions including UT president from 1990 to 1999. He is credited with devising the structure of the UT System and raising fundraising levels and support.

Trustees approved a $2.05 billion budget for fiscal year 2015, reflecting relatively flat state funding for higher education. The budget includes a 6 percent tuition increase for most undergraduate and graduate students and contains no salary increases for faculty and staff for the first time since FY11.

In 2001, tuition and fees made up 25 percent of unrestricted educational and general revenues for the University while state appropriations were 53 percent. In 2011, the lines crossed, with tuition and fees making up 47 percent and state appropriations 38 percent. That trend continues today with tuition and fees at 49 percent and appropriations at 39 percent.

E&G Funding Graph

In 2001, state funding made up 53% of UT’s unrestricted educational and general revenues. Today, state funding makes up only 39%, while tuition and fees make up 49%.

“We have to develop a plan and build a coalition,” DiPietro said. “We need for Tennessee to make investments in education. It’s not just what is right for us. It’s right for all Tennessee. It’s right for our children’s children as we go forward.”

UT’s undergraduate campuses in Chattanooga, Knoxville and Martin received modest increases based on the outcomes-based funding formula set forth in the Complete College Tennessee Act (CCTA). The CCTA funding formula is based on several metrics related to graduate and undergraduate graduation rates, undergraduate student progression and research expenditures. The performance outcomes by UT campuses resulted in a recommendation of $14 million in new funding, but the state appropriated only $5.7 million to the University. The state budget also provided no capital outlay, funding for non-formula units or funding for increased advising services.

DiPietro noted the governor’s Drive to 55 to increase the percentage of Tennesseans with some type of degree to 55 by 2025 and the Tennessee Promise, which will provide free tuition for students to state community colleges, are good steps.

“It’s now time to put the last piece in place,” DiPietro said. “I’m committed to trying to resolve this problem. I think it’s time for us, with your help, to make a stand, a stand about higher education, a stand about education in the state and a stand about reversing the trend.”

The University had hoped to keep tuition increases to 3 percent if the state could fully fund CCTA performance and provide other requested funding.

“After learning the amount of state support, we asked the chancellors to determine the revenue needs on each campus. Tuition helps fund operating costs, utilities, inflationary costs, scholarships and fellowships, additional faculty positions, academic program and research projects,” DiPietro said.

Tuition increases approved for all campuses effective this fall:

  • UT Chattanooga – 6 percent increase, or $365 a year more, for in-state undergraduates ($6,430 a year total) and $436 a year more for in-state graduate students ($7,708 a  year total)
  • UT Knoxville students admitted before fall 2013 – 6 percent increase, or $496 a year more, for in-state undergraduates ($8,766 a year total) and $572 a year more for in-state graduate students ($10,112 a year total).
  • UT Knoxville students admitted in fall 2013 under the 15-4 tuition model – 3 percent increase, or $294 a year more, for in-state undergraduates ($10,074 a year total) and $390 a year more for in-state graduate students ($11,584 a year total). The new 15-4 model charges new full-time undergraduates for 15 credit hours instead of 12 credit hours to encourage four-year graduation.
  • UT Knoxville students admitted in fall 2014 under the 15-4 tuition model – $10,366 a year for in-state undergraduates and $11,876 a year for in-state graduate students.
  • UT Martin – 6 percent increase, or $380 a year more, for in-state undergraduates ($6,716 a year total) and $454 a year more for in-state graduate students ($8,014 a year total)
  • UT Health Science Center – no tuition increases
  • UT Veterinary Medicine – 5 percent increase or $1,132 a year more for in-state students and out-of-state students

In response to Senate Resolution 626 considered this spring by the General Assembly following debate over the student-organized Sex Week event at UT Knoxville, DiPietro enlisted the help of campus leaders to develop recommendations for a System-wide policy on student activities fees.

The board approved the Policy on a Student Programs and Services Fee, which directs campuses to develop an opt-in procedure before the fall semester that allows students to expressly authorize payment toward student programs funded by the Student Programs and Services Fee (SPSF). The opt-in procedure applies only to UT Chattanooga and UT Knoxville. UT Health Science Center and UT Martin do not allocate any part of the fee to student-organized programming.

The policy also directs the campuses to include a statement with the opt-in procedure that student-organized programming may be controversial or objectionable to students and that a list will be provided of all student-organized programming funded by the SPSF during the previous academic year. The policy addresses the membership of the Student Programming Allocation Board, which allocates the SPSF for student-organized programming. It says the board must have a majority of non-student employees of the University with at least 40 percent of members being students.

The Diversity Advisory Council, comprised of representatives across the UT System, developed a diversity statement that was approved by the board. In part, the statement reads: “The Board affirms the educational value of a diverse and fully inclusive campus community, one that is enriched by persons of different backgrounds, points of view, cultures, socioeconomic status, and other diverse characteristics. The Board expects the University to engage in a variety of initiatives to advance diversity in all aspects of University life.”

The board approved performance goals and a retention amount for UTC Chancellor Steve Angle, who is eligible to participate in the Performance and Retention Plan for executive officers of UT after serving as chancellor for one year as of July 1, 2014. Angle’s plan covers July 1 through June 30, 2017. The maximum retention amount he can receive is $130,950, which is 15 percent of his 2014 base salary multiplied by three years in the plan. DiPietro recommended goals for Angle such as increasing the six-year freshman graduation rate from 37 percent to 47 percent and increase the number of alumni who donate to the University from 2,601 to 2,759.

UTHSC Chancellor Steve Schwab underwent a comprehensive performance review that is conducted for chancellors after four years in office and at subsequent four-year intervals. Schwab has been chancellor since 2010. DiPietro noted in Schwab’s review that UTHSC has stabilized the educational enterprise and grown the clinical functions, and he noted Schwab is committed to increasing total research expenditures, number of research proposals, research award dollars and number of research awards.

In February, the board approved two new policies on the use of University property that replace policies that had been in place for more than 40 years. Under the Tennessee Uniform Administrative Procedure Act, the rules were sent to the Tennessee Attorney General, who asked for some clarification of the rules. The board approved new language as part of the rules.

The “Use of University Property” rule states that students, employees, members of the Board of Trustees, government officials, contract workers, volunteers, prospective students, alumni and people invited by a student, student organization or employee are authorized users of University property.

The new “Use of University Property by Non-Affiliated Persons for Free Expression Activities” rule states that University property is not open for free expression activities for persons who are not students, employees or volunteers. There are exceptions to this rule, including a person invited by a student organization to join in the student organization’s speech, a person invited by a faculty member to join in the faculty member’s speech and a person invited by a University unit. The rule also states University and city streets and sidewalks parallel to those streets are open to speech by any person.

The board opened the meeting by presenting an honorary resolution for outgoing trustee Shalin Shah, the student representative from UT Chattanooga. Non-voting members R.J. Duncan, the student representative, and David Golden, the faculty representative, from UT Knoxville joined the board.

The board was informed of the University’s plans for the house and property in Knoxville bequeathed to UT by Eugenia Williams, who passed away in 1998. DiPietro accepted an advisory committee’s recommendation that the University issue an RFP to lease the property for a term of 99 or 50 years. The successful bidder would be required to restore the house and maintain other structures and property according to University specifications. The bidder also could occupy the house, make additions and improvements that meet historic restoration standards or construct a single family house on the property.

In other action, the board approved:

  • UTHSC’s regional tuition rate program for the College of Pharmacy in Memphis for a three-year trial period. Eligible students in Mississippi and Arkansas in a 50-mile radius of Memphis could receive a 75 percent discount on out-of-state tuition, beginning in fall 2014.
  • Extension of UTC’s regional tuition rate program for undergraduates and graduate students. The program is offered to students in seven counties of north Georgia and Alabama. Eligible students receive a 75 percent discount on out-of-state tuition. The undergraduate program has been in place since 2007, and the graduate program in place since 2010.
  • UT Knoxville Faculty Handbook revisions regarding faculty rights and responsibilities of shared governance.
  • Naming of the UT Knoxville volleyball practice facility the Joan Cronan Volleyball Practice facility in honor of Cronan, the director of women’s athletics retiring this summer.
  • Naming of the Chi Omega sorority house at UT Martin for Pat Summitt, Lady Vols coach emeritus and UT Martin aluma.
  • Revision of Academic Affairs and Student Success Committee charter
  • Tenure recommendations from all campuses.

The meeting’s full agenda and materials are posted at http://bot.tennessee.edu/.

An archive of the webcast meeting is available at http://www.tennessee.edu/.

One UT Advocate Speaks Out

The column below was written by Bo Roberts and published in The Tennessean on June 2.  Roberts is a Nashville-based marketing consultant who has worked with and consulted for higher education institutions in Tennessee.  He is a Co-Chair of the UTAA Alumni Legislative Council and member of the UT Advocacy Network.

To most of us, $19 million is a whole lot of money; it’s certainly much more than the oft-referenced cost of a cup of coffee.

But, that’s the specific amount sliced from Tennessee’s allocation to public higher education institutions for the fiscal year beginning on July 1. While the governor was forced to reduce his entire budget after a lackluster year in tax revenue collections, $19 million represented a huge number, both literally and psychologically, to college and university administrators throughout the state. They had “earned” that money by excelling at a new system designed to reward productivity. Student enrollment numbers were no longer the ultimate benchmark.

So, just how much is $19 million in the grand budgetary scheme of things? It’s a mere hundredth of 1 percent of the overall $12.7 billion state budget. To put that in perspective, a family with a gross annual income of $100,000 would have to adjust its budget by $150. At approximately one cup of coffee a week, though, most wouldn’t call that a threat to making their mortgage payment.

We all understand that budget choices are agonizing. We’ve been there. Yet it comes down to plain priorities: public higher education has been suffering from a lack of preferential treatment for decades.

I say this while acknowledging that Gov. Bill Haslam has put more emphasis and given more attention to our colleges and universities than any other governor in recent memory. In fact, the budget reduction cited here was made to one of this administration’s strongest new initiatives: an effort to alter the culture of higher education by focusing on results (graduates) rather than enrollment totals. Haslam’s bold approach, coupled with his “Drive for 55” to increase the number of college graduates in the Volunteer State, and his “Tennessee Promise” to make tuition free to community colleges and colleges of applied technology, is indicative of the allegiance this administration has devoted to this particular issue.

However, don’t miss the fact that the governor is battling a funding trend that began many administrations ago. Here’s a tale-telling snapshot of recent history: 20 years ago, tuition covered about one-third of the revenues for public higher education; 10 years later, tuition costs had doubled and the amount students paid was up to 50 percent of the revenues. Today, tuition has quadrupled and covers nearly two-thirds of revenues. As any tuition-paying parent in Tennessee would agree, it’s far more than a casual cup of coffee.

How did this happen? Choices. When crunch time came, it seemed fairly painless for administrations and legislators to resist covering increasing education costs because they fully understood that the institutions could make those costs up by simply increasing tuition. The misery was passed along, so to speak, alleviating any potential hue and cry from the voters about “raising taxes.”

Speaking of suffering, Gov. Haslam was recently quoted as saying “nothing pained him more” than the cuts he had to make to raises for teachers, state employees and to higher education. We can commiserate with him because it has truly been a time of tough decisions.

But, back to choices. My hope is that when the choices are made during the next legislative session, a “cup of coffee” for higher education will take precedence over other, seemingly more important priorities. It should make the final cut. We’ll take the coffee plain, please, no cappuccinos or frills needed.

House Speaker Beth Harwell To Tour UT Martin Parsons Center

Harwell_MediaTennessee House Speaker Beth Harwell (R-Nashville) will make her first visit to the UT Martin Parsons Center at 4:30 p.m., Monday, June 2. A tour of the new West Tennessee Healthcare Foundation Nursing Wing that will open in August is the focus of her visit to the center. The expansion will house the university’s Bachelor of Science in Nursing program.
Joining Harwell will be Rep. Steve McDaniel (R-Parkers Crossroads), who represents Decatur County and also serves as deputy speaker.

Initial funding for the expansion was included in the 2013-14 budget proposed by Gov. Bill Haslam and approved by the Tennessee General Assembly.  A $1 million appropriation was made to build a 10,000-square-foot addition to the current facility. The addition includes classrooms, a skills laboratory and a high-fidelity computerized simulation laboratory.

The expansion plans received an added boost when the West Tennessee Healthcare Foundation also made a $1 million commitment to the project.

“I am looking forward to seeing this new addition to the University of Tennessee at Martin in Parsons,” Harwell said about her upcoming visit. “This nursing program works with health-care facilities across the state to provide experience for its students. Their commitment to excellence means enrollment is expected to hit its highest mark next year, and I am excited to tour the facility and meet the people who make the program a success day in and day out.”

The Parsons Center will have openings for up to 30 students annually for the program. BSN program graduates will be eligible to take the National Council Licensure Exam for Registered Nurses and obtain licensure as registered nurses.

Nursing students at Parsons will receive the same experience as those students enrolled at the Martin campus. The program works with health-care facilities across the region to provide three years of clinical experience for its students. Similar programs at other institutions offer only two years of clinical experience.

A ribbon-cutting ceremony to celebrate the expansion is planned for August.

2014 Legislative Outcomes

The 108th General Assembly of Tennessee wrapped up its 2014 business last week despite significant controversy and tension over taxes, budgets, and education.  As in years past, the legislature produced just under 3,000 bills for consideration and an additional 2,499 resolutions.  Due to the sheer scope of the University of Tennessee System, over 600 bills were tracked with either direct or indirect impacts.

So, where does that leave us for 2014?  A summary of legislative outcomes, created for UT Advocates, is below.

final-legislative-outcomes2014