UT President Presents Top 5 Funding Requests to Governor

UT President Joe DiPietro attended Governor Haslam’s budget hearing on Friday to advocate for the University’s top funding requests. The Governor’s budget hearings are an important first step in the State’s budget process, as the Governor weighs testimony from these hearings to develop a spending plan typically presented to the legislature in late January or early February.

The proposed spending plan is taken seriously by the legislature.  Usually, very few major budget amendments are passed. In fact, the legislature did not pass a single substantive amendment modifying the Governor’s spending plan last year.

100 percent graphic

In 2014, 100% of governor’s budget requests were approved by the legislature.

To put it frankly: Recent history suggests that if you want your major priorities to be funded, they typically need to be included in the Governor’s proposed spending plan. While any budget proposal will ultimately have to win the approval of the state legislature, the Governor’s budget hearings are a critical launch point to the budget process as entities compete for limited resources and other budgetary pressures begin to mount.

A very important 25 percent

State funding for the University is essential.  It represents about 25 percent of UT’s total budget, and despite the decreases in state funding that have occurred since the 2008 recession, UT has continued to increase its performance outcomes, graduating more students and producing more research.

But UT’s current business model, which relies heavily on tuition increases to offset dwindling state funding and fill a growing budget gap, is unsustainable as a long-term plan to continue providing affordable education to students and services to all Tennesseans.

The University is doing its part to address this budget gap through analysis that will result in recommendations to increase the efficiency, effectiveness and entrepreneurship of its campuses and institutes. Read more about the University’s funding and performance metrics here.

What are the major state funding priorities for the University of Tennessee in 2015?

 

budget-01-9.7M-alt-151Full allocation of funds based on campus performance.The state’s funding formula for higher education has recommended UT schools receive $9.7 million in new funding.  President DiPietro is asking the governor to recommend that UT receive full allocation of this amount.

Why: UT has worked hard to make sure its institutions are the top performers in the state in order for the campuses to be awarded funding.  Last year, the University was awarded 34 percent less than the formula recommended.

 

budget-01-7.3M-alt-151$7.3 million in additional funding for UT institutions that provide services to all Tennesseans. The funding would cover the Institute of Agriculture (UTIA), which has a presence in all 95 counties, Institute for Public Service (IPS) and Health Science Center (UTHSC).

Why: These institutions provide services that benefit all Tennesseans. In 2013, UTIA, IPS and UTHSC provided outreach to more than 6 million people. And unlike our campuses, these units do not have tuition mechanisms to increase funding.

 

budget-01-capital-projectsFunding for the West Tennessee 4-H Center ($14.3 million) and Knoxville-Science Laboratory Facility ($83.7 million). The state’s higher education coordinating agency (THEC) has ranked both projects in the top six for funding by the state.

Why: Both projects are critical to moving the University forward. The West Tennessee 4-H Center would provide youth in west Tennessee with a camp experience in addition to serving as a conference center. The science laboratory will provide new facilities to educate students and produce groundbreaking research. The University has already raised matching funds for these projects.

 

budget-01-maintenance-navyFunding for building safety and maintenance.
The University is requesting $53 million for 11 projects that will improve building safety and upgrade some existing facilities.

Why: These projects will ensure that our campuses are providing safe learning and work environments for our faculty, staff and students.

 

budget-01-salaries-tealSalary increases for UT employees. President DiPietro is requesting, at a minimum, a cost-of-living salary adjustment.

Why: The University has a $150 million market gap in terms of employee pay that it is trying to close over time. As state employees, the University is asking the state to help fund increases for UT employees, as their work is critical to the state’s future.  UT employees did not receive a cost-of-living adjustment in last year’s budget.

5 Things You Should Know About the Governor’s Budget Hearings

1. The Governor’s budget hearings are where the state budget process begins.
The Governor’s budget hearings serve as a launch point for the State’s budgeting process. All state departments, agencies and entities, including the University of Tennessee System, will lay out their funding requests for the state’s next budget year—requests that the Governor will ultimately weigh as he compiles his 2015-2016 budget proposal. That proposal ultimately will be presented to the legislature in late January or early February and can be amended or passed into law in its proposed form.

2. The Governor’s budget proposal is taken seriously by the Legislature.
In Tennessee’s recent history, the legislature typically has not made major modifications to the Governor’s proposed budget. In fact, last year the legislature did not pass a single substantive amendment modifying the Governor’s spending plan. The only amendments made were at the request of the Haslam Administration in light of dwindling state revenues. To put it frankly: Recent history and experience suggests that if you want your major priorities to be funded, they typically need to be included in the Governor’s proposed spending plan.

3. Last year’s revenue woes are likely to result in a conservatively crafted budget.
Tennessee’s last budget year closed with a $300 million revenue hole—a hole that may result in up to a 7 percent cut to state departments, agencies, and entities. In fact, at the Governor’s hearings, it is expected that each entity will detail what impact a 7 percent cut would have on its operation.

There is some good news in the state’s revenue numbers for the current fiscal year. General Fund revenue is roughly $91 million over projected levels at this point. But given last year’s mid-session revenue crisis where the Governor had to significantly alter his spending plan, we’re likely to see a more conservatively crafted budget to insulate against the possibility of revenues taking a turn for the worse.

4. There is mounting pressure from all sides.
The Governor is facing mounting pressure on both sides of the budget equation—there is mounting pressure to further cut state taxes, which will in turn limit the state’s ability to fund existing services; and there also is mounting spending pressures behind various state services whose needs have been building for a number of years. For higher education specifically, these needs include, but are not limited to, adequate state funding for the day-to-day operations of campuses, funding to improve academic quality and services to students, to maintain existing buildings, and to address aging infrastructure and growth through the funding of needed new facilities.

5. Higher education’s budget hearing is on December 5 at 2:30 P.M. CST.
You can tune in live to watch UT President Joe DiPietro lay out the University’s key priorities or check back here for coverage. To tune in live, click here.   

Tennessee Promise Passes House, Heads to Governor’s Desk

The Tennessee Promise Scholarship Act of 2014 was passed by the House of Representatives last night on an 87-8 vote.  Members voting no included Representatives Joe Carr (R-Lascassas), Glen Casada (R-Franklin), Jeremy Durham (R-Franklin), Andy Holt (R-Dresden), Judd Matheny (R-Tullahoma), Cameron Sexton (R-Crossville), Billy Spivey (R-Lewisburg), and Rick Womick (R-Rockvale).

The legislation passed in the Senate earlier this week and now heads to the Governor’s desk, his signature being the final step in the lawmaking process.

The Tennessee Promise is a key component of Governor Haslam’s Drive to 55 Initiative, the goal of which is raising higher education attainment from the current level of 32 percent to 55 percent by the year 2025.  The Promise Scholarship will serve as a “last dollar” award, to be applied after all other scholarships and financial aid towards the cost of tuition and fees for first-time Tennessee freshman students pursuing an associates degree or technical certificate.

But the legislation also includes provisions aimed specifically at helping students at four-year universities.

Currently, HOPE scholarship eligibility is capped at 120 attempted semester hours or when a degree is earned, whichever of the two comes first.  If a student attempts 120 hours, yet still hasn’t attained a degree, their eligibility for the HOPE ceases.

The Tennessee Promise legislation changes this.  The legislation allows students to remain eligible for the HOPE scholarship for 8 full semesters (taking as many hours as they wish within that period), or to use the standard 120 semester hour cap.  In short, students will receive more flexibility in retaining their scholarships.

As with most policy changes, the change in HOPE Scholarship terminating events comes with a price tag.  To cover the cost of making this change, The Tennessee Promise legislation changes HOPE Scholarship award amounts.

At four-year universities, freshmen and sophomores eligible for the HOPE award will receive $3,500 annually.  HOPE eligible juniors and seniors will receive $4,500 annually.

Legislators Pass $32 Billion State Spending Plan: No Raises for State Employees, No Complete College Tennessee Outcomes Funding

The House and Senate passed the state’s FY14-15 budget this week as legislators rapidly approach the end of session.

According to an article by Knoxville News Sentinel reporter Tom Humphrey, House Finance Committee Chairman Charles Sargent (R-Franklin) said that this budget marks the “first time in institutional memory” that the General Assembly has approved a state budget without adopting any amendments proposed by individual legislators.

Although they ultimately failed, legislators filed several amendments as attempts to provide some type of state employee raise as well as full funding for the Complete College Tennessee outcomes-based formula.

These amendments included ones filed by Sen. Mark Norris (R-Collierville) and Rep. Mike Harrison (R-Rogersville), which appropriated over $20 million the Complete College funding formula if tax revenues rebounded.  These measures were ultimately withdrawn.

Simply put:  The budget, which now heads to the Governor’s desk, includes no state dollars for higher education employee salary increases or the outcomes-based funding formula for the coming fiscal year.  These items, although included in the original budget proposal, were removed primarily due to lower than anticipated state revenues.

The Tennessee Higher Education Commission recommended in November that $29.6 million be provided to fund the Complete College formula to meet the production and outcomes successes of the top performing Tennessee higher education institutions.

Governor Bill Haslam Launches Drive to 55 Initiative

Driveto55HorizontalLogoGovernor Bill Haslam today officially launched his ‘Drive to 55′ Initiative, the goal of which is to increase the percentage of Tennesseans with a post-secondary credential in order to meet Tennessee’s current and future workforce and economic needs. A broad assemblage of higher education and business stakeholders as well as members of the Tennessee General Assembly attended the launch.

“We want Tennesseans working in Tennessee jobs. We want Tennesseans to have an opportunity to get a good job and for those in the workplace to be able to advance and get an even better job,” Haslam said. “Currently in Tennessee, only 32 percent of us have a certificate or degree beyond high school, and studies show that by the year 2025 that number needs to be at least 55 percent for us to keep up with job demand. We have a lot of work ahead of us.”

The governor outlined Tennessee’s current situation including:

· Nearly 70 percent of Tennessee students entering community college need remedial classes before they can take college level courses;

· More than 20,000 Tennessee high school graduates choose not to continue their education each year.

· There are approximately 940,000 adult Tennesseans that have some college credit but haven’t earned an associate or four-year degree.

· On the state’s current path, Tennessee is projected to reach 39 percent of citizens with a certificate or degree beyond high school by the year 2025. To reach 55 percent would be 494,000 more people.

· Tennessee is 20 percent below the national average in terms of degree attainment.

Among other speakers, the governor’s special advisor for Higher Education, Randy Boyd,  gave an update on the progress made to date on the ‘Drive to 55′ initiative including:

· $16.5 million in this year’s budget for equipment and technology related to workforce development programs at Tennessee colleges of applied technology and community colleges, which institutions will begin receiving in the coming weeks.

· Launch of WGU Tennessee – an online, competency-based university aimed at the 940,000 adult Tennesseans that have some college credit but didn’t graduate with an associate or four-year degree.

· Newly created endowment of $47 million using operational reserve funds from the Tennessee Student Assistance Corporation (TSAC) to provide nearly $2 million each year to support scholarships for “last dollar” scholarship programs such as tnAchieves. These scholarships fill the gaps between students’ financial aid and the real costs of college including books, supplies, room and board.

· Launching the SAILS program, Seamless Alignment and Integrated Learning Support, to give students who need extra support in math attention during their senior year in high school so they can avoid remediation when they enter college.

· Legislation sponsored by Majority Leaders Mark Norris and Gerald McCormick to create the Labor Education Alignment Program – or LEAP – to better coordinate key stakeholders on the state and local level to address workforce readiness.

· And new online learning innovations in Tennessee through partnerships with edX and Coursera.

Haslam appointed Boyd to the position in January, and he has consulted with a formal working group made up of the governor, executive director of the Tennessee Higher Education Commission (THEC), chancellor of the Tennessee Board of Regents (TBR), and president of the University of Tennessee.

In his presentation, Boyd also placed emphasis on the importance of dual enrollment and other high school pre-college programs, a topic many legislators have been avid to address next session. Boyd stressed that a successful effort to reach 55 percent degree attainment will require the state to focus on more than two and four-year degrees.  An increasing emphasis will be placed on certificates at technology centers and community colleges.

The governor will be traveling the state in the coming weeks to further discuss Tennessee’s workforce development needs and the ‘Drive to 55′ Initiative.

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