Tag Archives: Budget

President Obama Releases FY2014 Budget Proposal

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President Obama released his proposed Fiscal Year 2014 budget Wednesday morning.  The budget proposal includes new investments in education, infrastructure, and research, along with the President’s proposals to alter Social Security, Medicare, and tax policy.  This budget proposal comes two months later than usual, largely a result of sequestration and an incomplete fiscal year 2013 budget.

The United States House and Senate have already passed their respective FY2014 budgets, although they contain significant differences.  The President’s budget will inform and spark debate on a number of included proposals, many of which will be debated long beyond the appropriations process.

The following items in the President’s budget proposal relate to higher education.  Several of these items may be unique opportunities for the University of Tennessee if enacted.

  • A 9% increase from 2012 levels for non-defense research and development (R&D)
  • Investments in clean energy R&D, promoting the safe production of natural gas, and creating an Energy Security Trust to fund research efforts that would help shift cars and trucks off oil  (a $2 billion investment over three years)
  • Investments in infrastructure development (including power grids that are resilient to  extreme conditions)
  • Funding increases for the Department of Agriculture competitive peer-reviewed  research grants to support research in human nutrition and obesity reduction, food safety, bioenergy, and climate change
  • A $1 billion Race to the Top fund to support competitive grants to states that commit to driving reform in their higher education policies and practices, while doing more to contain tuition.  This funding would support up to ten states who commit to sustain fiscal support for higher education while modernizing policies to constrain costs and improve outcomes, remove barriers preventing the creation of innovative student learning methods and new degree pathways, empower consumer choice through increased transparency, and smooth transitions into college and between institutions of higher education
  • $260 million for a First in the World fund. Up to $175 million of the proposed fund would support an evidence-based grant competition encouraging innovative approaches to college completion, supporting research to build evidence for successful strategies, and disseminating proven strategies. A priority would be included for projects designed to improve access and success of high-need secondary students
  • Investment in the recruiting and preparation of 100,000 STEM teachers and the creation of a new STEM Master Teachers Corps
  • Reforms to campus-based aid programs (such as Supplemental Educational Opportunity Grants, Federal Work-Study, and Perkins Loan programs) to reward colleges that set responsible tuition policy, deliver good value and quality to students, and serve low-income and Pell eligible students well. These criteria are not defined further in the proposal with the exception of the Federal Work Study program.  Relative to this program, “quality” would be evaluated in part by providing “meaningful work to students.” The proposal also calls for an additional $150 million for the Federal Work Study program with the intent to double recipients in a five year time frame
  • Sufficient funding to support the Pell Grant Program without any eligibility changes. The funding request for FY14 would increase the maximum Pell award to $5,785 in academic year 2014-2015.  This is an increase from the current academic year award of $5,550, as well as the 2013-2014 academic year award of $5,645
  • Cost-neutral student loan reform that prevents interest rates on federal student loans from doubling on July 1 of this year, as scheduled. Future rates on new loans would be set each year based on a market interest rate, which would remain fixed for the life of the loan so that student borrowers would have certainty about the rates they would pay

For more information, please see the overview document below from the Office of Management and Budget. 

The President’s budget proposal can be accessed by clicking here.

Budget Update

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Last week, Finance Commissioner Mark Emkes presented the Administration’s Budget amendment to the Senate and House Finance, Ways, and Means Committees.  The amendment provides The University of Tennessee Institute for Public Service and The University of Tennessee Institute of Agriculture with a 2.5 percent increase (roughly $3 million) in recurring operational dollars.  These units were not included in the Governor’s original budget proposal.  Non-formula unit funding is incredibly important to UT, and we appreciate the Administration’s efforts to include these increases in the Amendment.  These Institutes deliver needed and in-demand services to Tennesseans across the state on a daily basis.  The amendment also includes $1 million in grant funding to the Parsons Foundation for the UT Martin nursing building expansion and $24 million for the UTK Steam Plant Conversion.

The Senate and House amendments have also been released.  Click here to view a listing of legislative budget amendments relative to the University of Tennessee.

THEC Approves Higher Education Budget Recommendations

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The Tennessee Higher Education Commission (THEC) met today for their quarterly meeting where they approved the FY 2013-14 operating and capital budget recommendations to be submitted to the General Assembly and the Governor this coming year. The Governor’s hearing and subsequent approval by THEC represent the first steps in formulating the Governor’s budget proposal.

The THEC operating budget recommendation includes a $35.5 million increase in state appropriations to fund the growth in the outcomes based formula, and a $14.1 million increase for program initiatives and operating costs at non-formula units. Now in its third year of implementation, the outcomes based funding formula as outlined in the Complete College Tennessee Act of 2010 replaced enrollment figures as the basis for THEC’s funding recommendations. The $35.5 million represents a new infusion of dollars into the funding formula irrespective of the proposed budget reductions submitted by the Administration.

The recommended capital budget includes two major UT projects.  These projects account for $135.9 million (or 47%) of the recommended total budget of $289.1 million. The first UT capital project on THEC’s priority list is the UT Health Science Center’s renovation to the Crowe, Nash, and Mooney Building Complex.  The complex will house administrative offices and research laboratories.

The second UT project, ranked fifth on THEC’s priority list, would provide a new multidisciplinary science laboratory facility at the University of Tennessee, Knoxville.  The building would be located at the intersection of Cumberland Avenue and 13th Street and would house research and teaching laboratories, associated support services, faculty and departmental offices, and a vivarium.

Regarding capital maintenance, THEC’s recommendation for the University of Tennessee amounts to $44.3 million (or 42%) of the total recommended $104.8 million.  Last fiscal year, higher education received a total of $71.4 million in capital maintenance funding, representing the largest investment in capital maintenance since 2004-05.

A note on the budget:  The Governor’s budget proposal will be presented to the legislature in late January.  Budget discussions amongst the legislature will occur thereafter, the final budget passing in the spring.  The UT Board of Trustees will consider tuition matters in June 2013, a decision largely based on the actual appropriations provided by the state.

Copies of THEC’s operating and capital budget recommendations are available for download.

Higher Education Budget Hearing Highlights UT Strengths, Needs

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Governor Bill Haslam held his final round of budget hearings yesterday, November 13.  Present for testimony were UT President Joe DiPietro, Board of Regents Chancellor John Morgan, and Tennessee Higher Education Commission Executive Director Rich Rhoda.  THEC’s state funding recommendation for FY 2013-14 included a $35.5 million dollar increase for higher education.  The increase would be a welcome change due to the dramatic decline in public funding for higher education that has occurred over the last ten years.

Per the Governor’s request, THEC also prepared a contingency plan for higher education funding which included a 5% budget reduction.  This request was not unique to higher education–all state agencies were asked to submit such plans.  It has been noted by the Governor that if these cuts are implemented they will not be uniform across each state agency.  Based on the funding recommendation provided by THEC,  a six percent tuition increase for Tennessee’s public universities was recommended for FY 2013-14.  A three percent increase was recommended for community colleges and technology centers.

President DiPietro’s testimony centered around three critical higher education areas: quality, access, and affordability.  Some notable points from his testimony are below.

Quality
Over the last five years, the UT System has increased the number of undergraduate degrees awarded by 21.4% and graduate degrees by 12.4%.  UTK and UTM have the state’s highest graduation rates amongst public universities, with UTC holding the state’s fourth highest rate.  The UT System is producing more graduates in STEM areas, with an increase of 29% in the last five years.  Our campuses are regularly recognized for quality by independent organizations such as US News and World Report and the Princeton Review, and this year is no different.  In fact, UTK is now ranked 46th in US News and World Report (up one spot from last year), UTC was named a “Best Value” by US News, and UTM was ranked a “Best in Southeast” by the Princeton Review while having the state’s highest student satisfaction rates.

Access
UT continues to focus on access and a diverse student body.  Through the UT Martin Centers in McNairy County, Jackson, Parsons and Ripley, rural counties in Middle and West Tennessee are connected to the University. Due to these centers, 900 students have initiated their pursuit of higher education and subsequently graduated from UTM.  Online degree programs have also provided increased access.  The UT System has 63 academic programs that are completely online.  Combined, these programs enroll over 5,300 students.

Affordability
Tennessee college graduates have the 9th lowest debt burden in the nation.  At UT’s undergraduate campuses, student debt has gone down some 13% over the last five years.  While tuition has increased, campuses have kept net cost (cost after application of merit and need based aid) to students at relatively low levels.

At the hearing, President DiPietro requested that the Governor consider higher education funding with increased weights for STEM degree production.  He also highlighted the need for an increased appropriation for UT’s Non-Formula Units.  One of the last topics addressed by the President was faculty and staff compensation.  While other state agencies receive full funding for salary increases, higher education does not, requiring 40-50% of these funds to be generated through tuition.  President DiPietro articulated that UT seeks full state funding of these salary increases and flexibility for administering them.

The Governor’s budget proposal will be presented to the legislature in late January.  Budget discussions amongst the legislature will occur thereafter, the final budget resulting in the spring.  The UT Board of Trustees will consider tuition matters in June 2013, a decision largely based on the actual amount of appropriations provided by the state.

To view the archived video of the hearing, click here.  For more information about the recommended budget, visit the Tennessee Higher Education Commission’s website.