Senators File Budget Amendments

The Senate Budget Subcommittee met last week to hear budget amendments filed by members.  The amendments, 154 in all, were voted on by committee members this week.

Below are the Senate amendments that would have impacted the University of Tennessee System.  None of the amendments passed, dying either from the lack of a motion or the sponsor’s decision to withdraw.

Senate Amendment

Senate Sponsor

Purpose

Recurring

Nonrecurring

11 Norris Funds the higher education funding formula from any excess revenue collections $20,310,200  
19 Burks Funds the higher education funding formula at THEC recommendation $29,600,000
28 Gresham Purchase of Lone Oaks Farm/TN 4-H Camp $50,000
72 Summerville Eliminate funding for UT Access and Diversity Initiative -$5,688,900
73 Summerville Reduce funding for UT University-Wide Administration -$1,000,000
119 Finney Supporting institutional missions at all academic formula units (THEC recommendation) $29,600,000

Governor’s Budget Amendment Released: Salary Raises, Higher Ed Increase Foregone

Governor Bill Haslam released his budget amendment Tuesday morning, cutting $160 million from his FY14-15 budget proposal and an additional $150 million in the current fiscal year.

The cuts, necessitated by an ongoing decline in state revenue collections, eliminate proposed new funding for higher education and pay raises for state employees.  State employees were originally slated to receive a 1 percent salary increase this year.

No doubt troubling for higher education leaders, the amendment represents the first time since the adoption of the Complete College Tennessee Act that no new dollars will be allocated to reward outcomes achieved by Tennessee’s public colleges and universities.  The Tennessee Higher Education Commission (THEC) had recommended a minimum of $29.6 million in funding towards that end.

The Governor’s original budget proposed that $13 million, representing the state’s portion of a 1 percent salary increase for higher education employees, be run through the Complete College outcomes-based funding formula in lieu of THEC’s funding recommendation.

Under the proposed amendment, higher education will receive no new dollars towards employee salary increases or the outcomes-funding formula for the coming fiscal year.

Governor Delivers State of the State and FY15 Budget Proposal

On Monday evening, Governor Bill Haslam delivered his last State of the State Address of his first term.  The State of the State outlines the Governor’s priorities for the upcoming year and is given in conjunction with the release of his proposed budget.

Relating to higher education, this year’s address focused predominately on community colleges and technology centers, key components to the Governor’s Drive to 55 Initiative.  Below, we’ve culled through both the address and the budget to provide you with major proposals that impact the University of Tennessee.

There is no doubt that it was a tough budget year for the State.  Revenues have been consistently below budgeted estimates, making the proposed FY15 budget even more difficult to prepare.  All in all, the University of Tennessee was spared from any budget cuts, while the entire state budget took a 2.4% reduction.

Complete College Tennessee Outcomes Funding Formula
The Complete College Tennessee Act of 2010 changed the way colleges and universities were funded to reflect how well they perform rather than how many students they enroll.

Under the first three years of the new model, the “outcomes” funding formula has been fully funded as recommended by the Tennessee Higher Education Commission (THEC).  This year, the Governor’s budget has the formula funded at less than 33% of the $29.6 million THEC recommendation.

Specifically, the Governor’s budget proposes $9.3 million in funding for “formula units.”  This funding represents the total of new operating dollars to be allocated across 9 state universities, 13 community colleges, and 27 Colleges of Applied Technology.  Additionally, a $3.6 million increase is proposed to be distributed amongst all non-formula units (including the UT Institute of Agriculture, UT Institute for Public Service, and the UT Health Science Center).

It is important to note how the Governor’s CCTA funding recommendation was derived.  Rather than putting General Fund money into the funding formula, the Governor has opted to use the funding that would have otherwise provided the state’s portion (55%) of a 1% salary increase to higher education employees.  The state portion (the $9.3 million) represents the only new monies toward the funding formula this year.  Higher education has historically been expected to leverage the remaining 45% of any salary increase pool through future tuition increases.

Capital Projects
THEC is responsible for establishing the capital project priority list for all of higher education. That this list has historically been addressed in priority order.  The Governor’s budget includes only capital outlay for two community college projects.  This leapfrogs the #1 THEC priority—a UTK Science Laboratory Facility.  While there is no capital outlay funding for new UT buildings in the proposed budget, there is $39.4 million of needed funding included to maintain existing UT facilities.

Tennessee Promise Scholarship
The Governor also proposed a last-dollar scholarship—the Tennessee Promise.  Under the proposal, Tennessee students seeking to attend community colleges and technology centers would be able to complete two years of education at no cost to the student.  After all financial aid and scholarships are utilized (i.e. Pell Grants, HOPE scholarships, etc.), the Tennessee Promise would cover students’ remaining costs.  The proposal is estimated to cost $34 million annually, and calls for moving roughly $300 million from the Lottery Reserve Fund into a new endowment. The current Reserve Fund sits at roughly $400 million and the change will leave $110 million in reserves for HOPE Lottery scholarships.  At this point, the impact of the Tennessee Promise Scholarship on the University of Tennessee is somewhat unknown.  While UT supports the intent of the proposal, it is unclear how it might impact enrollment at regional institutions such as UT Chattanooga and UT Martin.

8-Semester Lottery Eligibility
The Governor’s budget calls for changing the terminating event for HOPE lottery scholarships from 120 hours (with exceptions for some majors) to 120 hours or 8 semesters, whichever occurs last.  This change allows for students to more easily double major, pursue a complex minor, or exceed minimum requirements for degree completion while maintaining their HOPE for a 8-semester (four-year) period.

This change is coupled with an alteration to the current structure of HOPE scholarships.  Right now, eligible students receive $4,000 annually at four-year institutions.  Under the proposal, freshman and sophomores attending four-year schools would receive $3,000 annually.  Juniors and seniors would receive $5,000 annually.

UT Peds
$3 million is included in the Governor’s budget to continue the state’s 5-year, $15 million funding commitment for UT Peds—a joint pediatric research venture for the UT Health Science Center, Le Bonheur Children’s Hospital, and St. Jude Children’s Research Hospital.  This is the second year of the state’s 5-year commitment.

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.

Sneak Peek: General Election Survey and Why You Should Care

USA Today reported this week that roughly 90 million Americans won’t vote in November. Dubbed “unlikely voters,” there are numerous reasons these Americans often won’t make it to the polls.  41 percent of those surveyed reported that they won’t vote in November simply because their “vote doesn’t make a difference anyway.”  For those working in and around government in Tennessee, that statement is unsettling.

Our state recently experienced a primary election where some winners were determined by just a few votes.  There was one candidate that lost by five votes.  Others lost by eleven, fifteen, forty-one, and 105 votes.  These races were quite literally down to the wire.  Those running would tell you: EVERY VOTE COUNTS.

When the General Election rolls around in November, don’t become part of this statistic.  Head to the polls and be an issues voter.  To help you learn more about candidates running in your area,  UT Advocacy partnered with the UT Alumni Association to administer a survey on higher education issues to all Tennessee legislative candidates.  Although results won’t be available until mid-September, a sneak peek of the questions we are asking is provided below.

Remember: Early voting begins October 17.  Election Day is November 6.  Don’t be an unlikely voter.  Be an issues voter.  Head to the polls and remind those running that you expect them to vote ORANGE.

Here is what UT Advocacy is asking candidates:

State Support for Higher Education
Ten years ago, state appropriations accounted for nearly 60% of the cost to educate Tennesseans in our public postsecondary institutions.  Today, that funding has been reduced to 32%, thus forcing the out-of-pocket costs to students to rise over the same period.  Due to recurring budget cuts to higher education, campuses have been forced to offset a portion of those reductions with increased tuition, grants, and private gifts.  Tuition is the only source of recurring funding the University can control to ensure the provision of high quality education, research, and outreach to the entire state.

1.  Would you oppose or favor efforts to maintain, if not increase, state funding for higher education?

2.  Would you oppose or favor efforts to cap, freeze, or place other constraints upon tuition?

“Non-formula” Units
Essential to the land-grant mission of the University of Tennessee are the “non-formula” units such as the UT Health Science Center, the UT Institute for Agriculture, and the Institute for Public Service.  These entities are directly responsible for carrying out research, community outreach, and public service in each of Tennessee’s 95 counties.  However, the funding model for these units has not kept pace with the ever-expanding demand for the services these units provide.

3.  Would you oppose or favor expanding current state appropriations to the University’s non-formula units to better meet the service and outreach needs of local governments and Tennesseans across the state?

Campus and Workplace Safety
Recent years have seen legislative attempts to increase the presence of weapons on public college campuses. Current state law already allows select individuals to possess and carry guns on campus in conjunction with their official duties.

4.  Would you oppose or favor alterations to current law that would have the effect of increasing the presence of guns on campuses and in the workplace?

Lottery Scholarships
The HOPE Lottery Scholarship Program provides grants and scholarships to qualifying Tennessee residents attending regionally accredited private or public postsecondary institutions in Tennessee.  The program has experienced fiscal shortfalls in recent years due to increases in participation that exceed growth in revenues, causing concern about the program’s long-term solvency. Despite those concerns, some recent legislative attempts have focused on expanding the use of lottery funds to include for-profit schools.

5.  Would you oppose or favor legislation further authorizing the use of HOPE scholarships at for-profit schools?

6.  If participation continues to exceed revenues, which measure would you support in order to ensure fiscal solvency for the Lottery Program? [Answer options: Raising academic eligibility requirements; Lowering the amount awarded per scholarship; Both; Neither; Not sure; Comments:___ ].

Be an informed voter!  
Check back for results before early voting
begins on October 17th.