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  These measures were ultimately withdrawn.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.

THEC Approves Higher Education Budget Recommendations

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

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.

Higher Education Budget Hearing to Occur Nov. 13

In addition to being Election Day, November 6th marks the beginning of the Governor’s FY 2013-2014 Budget Hearings.  The hearings will be held over the course of one week, with higher education scheduled for Tuesday, November 13th at 9:30 A.M. CST.  All proceedings are accessible live online at www.tn.gov.

Governor Haslam provided a brief preview of the process in the below video, emphasizing support for higher education.

“We remain committed to investing in education and will be very intentional about higher education funding in this year’s budget. Education is crucial to attracting and growing Tennessee jobs.  Revenue collections continue to exceed expectations.  When more money is coming in, there is often a rush to spend those dollars.  Working with the legislature, we’ve been careful to hold back the reigns on additional spending. I think it’s our job to provide the very best service to Tennessee taxpayers at the lowest cost, and we take that job seriously.  The public budget hearings are a first step in making sure that we get it right.”