UT President Joe DiPietro Joins Panel on Higher Ed Workforce Preparedness

Reliable funding that enables excellence while holding institutions accountable is the single-greatest challenge facing public higher education, University of Tennessee President Joe DiPietro told a gathering of Nashville business leaders on Wednesday.

“We really started to address this challenge when our board met in June, and I suggested higher education’s current business model is unsustainable,” DiPietro said. “Since I took office in 2011, I’ve gotten in front of our legislature every year, and frequently, to tell them it’s a problem.

“It’s what keeps me up at night, so we’re rolling up our sleeves to seek a long-term solution that doesn’t require 4 to 6 to 8 percent tuition increases. We have to do everything we possibly can to ensure effectiveness, efficiency and entrepreneurial approaches to filling funding gaps, all while maintaining our excellence.”

DiPietro’s comments came during the Nashville Business Journal’s 2014 annual “Nashville Ahead” program. He joined three other higher education leaders for a panel program titled, “A Discussion on Higher Education and Workforce Readiness.”

More than 100 leaders in business, industry and government attended, and when asked what business could do to most help higher education, DiPietro had a two-part answer.

“First, be truth tellers. If we’re not producing the product you need, pick up the phone and let us know. We seek to produce the best-prepared graduates that we can, and we need your input to ensure that,” he said.

“Second, we have to commit to high standards for education in Tennessee. To say to Tennesseans, ‘We need to have standards’ is nothing new. Having and adhering to standards is critical to the important completion agenda behind Gov. Haslam’s ‘Drive to 55’ effort. It’s critical that students arrive at college well-prepared, and that’s what standards make happen. I encourage your support for high public education standards at all levels in Tennessee.”

UT campuses already actively partner with business to meet needs throughout Tennessee and beyond, according to DiPietro.

“Our campuses have consciously worked with employers to respond to the needs of the market,” he said. “Industry told us we need more engineers in Tennessee, so our UT Knoxville campus, for example, partnered with Eastman to grow STEM (science, technology, engineering and math) education while also enhancing it, and the result is we’re producing more engineers whose education has them very well-prepared.

“The needs of the population and of healthcare providers we partner with to serve the population called for expanding our efforts to train doctors, nurses, dentists and pharmacists. As a result of that, our UT Health Science Center is working with Saint Thomas Health here in Nashville to greatly expand our presence in Middle Tennessee. At the same time, in West Tennessee, UT Martin is expanding capacity in rural communities like Parsons to produce more nurses.

“In Chattanooga, we have numerous ventures with Volkswagen that serve both that manufacturer and students at our UT Chattanooga campus very well, and Volkswagen is just one of many business partners UT Chattanooga is working with.”

DiPietro was joined by Western Governors University Tennessee Chancellor Kimberly Estep, Middle Tennessee State University President Sidney McPhee and Volunteer State Community College President Jerry Faulkner to discuss current trends in higher education to prepare students to be better-prepared employees.

DiPietro routinely meets with business, industry and economic development leaders through formal and informal events. Alumni and industry councils also help campus leaders keep in touch with the business world.

“The University of Tennessee leads our state in helping students complete their degrees, and we are becoming more entrepreneurial in the ways we partner and work with business and industry to provide a well-trained workforce that ultimately benefits all of Tennessee,” DiPietro said after the program.

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.

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.