DiPietro Takes Stand for Education, Tells Trustees a Plan Is Under Development

Education is critical to the future prosperity of Tennessee and should be a higher priority for the state. University of Tennessee System President Joe DiPietro told the Board of Trustees yesterday he is committed to reversing the current trend of dwindling state appropriations for higher education.

The board also honored UT President Emeritus Joseph E. Johnson with the Trustees’ Lifetime Achievement Award, the highest honor bestowed by the board. Johnson has worked continuously for the University since 1963, serving in several executive positions including UT president from 1990 to 1999. He is credited with devising the structure of the UT System and raising fundraising levels and support.

Trustees approved a $2.05 billion budget for fiscal year 2015, reflecting relatively flat state funding for higher education. The budget includes a 6 percent tuition increase for most undergraduate and graduate students and contains no salary increases for faculty and staff for the first time since FY11.

In 2001, tuition and fees made up 25 percent of unrestricted educational and general revenues for the University while state appropriations were 53 percent. In 2011, the lines crossed, with tuition and fees making up 47 percent and state appropriations 38 percent. That trend continues today with tuition and fees at 49 percent and appropriations at 39 percent.

E&G Funding Graph

In 2001, state funding made up 53% of UT’s unrestricted educational and general revenues. Today, state funding makes up only 39%, while tuition and fees make up 49%.

“We have to develop a plan and build a coalition,” DiPietro said. “We need for Tennessee to make investments in education. It’s not just what is right for us. It’s right for all Tennessee. It’s right for our children’s children as we go forward.”

UT’s undergraduate campuses in Chattanooga, Knoxville and Martin received modest increases based on the outcomes-based funding formula set forth in the Complete College Tennessee Act (CCTA). The CCTA funding formula is based on several metrics related to graduate and undergraduate graduation rates, undergraduate student progression and research expenditures. The performance outcomes by UT campuses resulted in a recommendation of $14 million in new funding, but the state appropriated only $5.7 million to the University. The state budget also provided no capital outlay, funding for non-formula units or funding for increased advising services.

DiPietro noted the governor’s Drive to 55 to increase the percentage of Tennesseans with some type of degree to 55 by 2025 and the Tennessee Promise, which will provide free tuition for students to state community colleges, are good steps.

“It’s now time to put the last piece in place,” DiPietro said. “I’m committed to trying to resolve this problem. I think it’s time for us, with your help, to make a stand, a stand about higher education, a stand about education in the state and a stand about reversing the trend.”

The University had hoped to keep tuition increases to 3 percent if the state could fully fund CCTA performance and provide other requested funding.

“After learning the amount of state support, we asked the chancellors to determine the revenue needs on each campus. Tuition helps fund operating costs, utilities, inflationary costs, scholarships and fellowships, additional faculty positions, academic program and research projects,” DiPietro said.

Tuition increases approved for all campuses effective this fall:

  • UT Chattanooga – 6 percent increase, or $365 a year more, for in-state undergraduates ($6,430 a year total) and $436 a year more for in-state graduate students ($7,708 a  year total)
  • UT Knoxville students admitted before fall 2013 – 6 percent increase, or $496 a year more, for in-state undergraduates ($8,766 a year total) and $572 a year more for in-state graduate students ($10,112 a year total).
  • UT Knoxville students admitted in fall 2013 under the 15-4 tuition model – 3 percent increase, or $294 a year more, for in-state undergraduates ($10,074 a year total) and $390 a year more for in-state graduate students ($11,584 a year total). The new 15-4 model charges new full-time undergraduates for 15 credit hours instead of 12 credit hours to encourage four-year graduation.
  • UT Knoxville students admitted in fall 2014 under the 15-4 tuition model – $10,366 a year for in-state undergraduates and $11,876 a year for in-state graduate students.
  • UT Martin – 6 percent increase, or $380 a year more, for in-state undergraduates ($6,716 a year total) and $454 a year more for in-state graduate students ($8,014 a year total)
  • UT Health Science Center – no tuition increases
  • UT Veterinary Medicine – 5 percent increase or $1,132 a year more for in-state students and out-of-state students

In response to Senate Resolution 626 considered this spring by the General Assembly following debate over the student-organized Sex Week event at UT Knoxville, DiPietro enlisted the help of campus leaders to develop recommendations for a System-wide policy on student activities fees.

The board approved the Policy on a Student Programs and Services Fee, which directs campuses to develop an opt-in procedure before the fall semester that allows students to expressly authorize payment toward student programs funded by the Student Programs and Services Fee (SPSF). The opt-in procedure applies only to UT Chattanooga and UT Knoxville. UT Health Science Center and UT Martin do not allocate any part of the fee to student-organized programming.

The policy also directs the campuses to include a statement with the opt-in procedure that student-organized programming may be controversial or objectionable to students and that a list will be provided of all student-organized programming funded by the SPSF during the previous academic year. The policy addresses the membership of the Student Programming Allocation Board, which allocates the SPSF for student-organized programming. It says the board must have a majority of non-student employees of the University with at least 40 percent of members being students.

The Diversity Advisory Council, comprised of representatives across the UT System, developed a diversity statement that was approved by the board. In part, the statement reads: “The Board affirms the educational value of a diverse and fully inclusive campus community, one that is enriched by persons of different backgrounds, points of view, cultures, socioeconomic status, and other diverse characteristics. The Board expects the University to engage in a variety of initiatives to advance diversity in all aspects of University life.”

The board approved performance goals and a retention amount for UTC Chancellor Steve Angle, who is eligible to participate in the Performance and Retention Plan for executive officers of UT after serving as chancellor for one year as of July 1, 2014. Angle’s plan covers July 1 through June 30, 2017. The maximum retention amount he can receive is $130,950, which is 15 percent of his 2014 base salary multiplied by three years in the plan. DiPietro recommended goals for Angle such as increasing the six-year freshman graduation rate from 37 percent to 47 percent and increase the number of alumni who donate to the University from 2,601 to 2,759.

UTHSC Chancellor Steve Schwab underwent a comprehensive performance review that is conducted for chancellors after four years in office and at subsequent four-year intervals. Schwab has been chancellor since 2010. DiPietro noted in Schwab’s review that UTHSC has stabilized the educational enterprise and grown the clinical functions, and he noted Schwab is committed to increasing total research expenditures, number of research proposals, research award dollars and number of research awards.

In February, the board approved two new policies on the use of University property that replace policies that had been in place for more than 40 years. Under the Tennessee Uniform Administrative Procedure Act, the rules were sent to the Tennessee Attorney General, who asked for some clarification of the rules. The board approved new language as part of the rules.

The “Use of University Property” rule states that students, employees, members of the Board of Trustees, government officials, contract workers, volunteers, prospective students, alumni and people invited by a student, student organization or employee are authorized users of University property.

The new “Use of University Property by Non-Affiliated Persons for Free Expression Activities” rule states that University property is not open for free expression activities for persons who are not students, employees or volunteers. There are exceptions to this rule, including a person invited by a student organization to join in the student organization’s speech, a person invited by a faculty member to join in the faculty member’s speech and a person invited by a University unit. The rule also states University and city streets and sidewalks parallel to those streets are open to speech by any person.

The board opened the meeting by presenting an honorary resolution for outgoing trustee Shalin Shah, the student representative from UT Chattanooga. Non-voting members R.J. Duncan, the student representative, and David Golden, the faculty representative, from UT Knoxville joined the board.

The board was informed of the University’s plans for the house and property in Knoxville bequeathed to UT by Eugenia Williams, who passed away in 1998. DiPietro accepted an advisory committee’s recommendation that the University issue an RFP to lease the property for a term of 99 or 50 years. The successful bidder would be required to restore the house and maintain other structures and property according to University specifications. The bidder also could occupy the house, make additions and improvements that meet historic restoration standards or construct a single family house on the property.

In other action, the board approved:

  • UTHSC’s regional tuition rate program for the College of Pharmacy in Memphis for a three-year trial period. Eligible students in Mississippi and Arkansas in a 50-mile radius of Memphis could receive a 75 percent discount on out-of-state tuition, beginning in fall 2014.
  • Extension of UTC’s regional tuition rate program for undergraduates and graduate students. The program is offered to students in seven counties of north Georgia and Alabama. Eligible students receive a 75 percent discount on out-of-state tuition. The undergraduate program has been in place since 2007, and the graduate program in place since 2010.
  • UT Knoxville Faculty Handbook revisions regarding faculty rights and responsibilities of shared governance.
  • Naming of the UT Knoxville volleyball practice facility the Joan Cronan Volleyball Practice facility in honor of Cronan, the director of women’s athletics retiring this summer.
  • Naming of the Chi Omega sorority house at UT Martin for Pat Summitt, Lady Vols coach emeritus and UT Martin aluma.
  • Revision of Academic Affairs and Student Success Committee charter
  • Tenure recommendations from all campuses.

The meeting’s full agenda and materials are posted at http://bot.tennessee.edu/.

An archive of the webcast meeting is available at http://www.tennessee.edu/.

2014 Legislative Outcomes

The 108th General Assembly of Tennessee wrapped up its 2014 business last week despite significant controversy and tension over taxes, budgets, and education.  As in years past, the legislature produced just under 3,000 bills for consideration and an additional 2,499 resolutions.  Due to the sheer scope of the University of Tennessee System, over 600 bills were tracked with either direct or indirect impacts.

So, where does that leave us for 2014?  A summary of legislative outcomes, created for UT Advocates, is below.

final-legislative-outcomes2014

House Finance Committee Hears Higher Ed Budgets

The University of Tennessee completed its final budget hearing this week before the House Finance, Ways, and Means Committee.  The University of Tennessee presented alongside the Tennessee Higher Education Commission, Tennessee Board of Regents, and the Tennessee Foreign Language Institute.

Some interesting facts from the hearing include:

  • UT ​Knoxville produces more undergraduate, graduate, and professional degrees than any other institute in the state.
  • UT Martin and UT Chattanooga have both increased their degree production this year.
  • Over half of the students at UT Knoxville have zero debt when they graduate.  (Overall, student debt has dropped 7.8 percent at UT undergraduate campuses over the last five years).

Tuition rates and future increases received considerable discussion at the hearing. “No one likes to raise tuition, but the reality of keeping [the UT system] moving in the right direction…necessitates resources,” DiPietro stated.

The Tennessee Higher Education Commission recommended a 2-4 percent tuition increase earlier this year, a recommendation hinged on the expectation of full funding of the Complete College Tennessee Act (CCTA) outcomes formula.  Due to a difficult budget year for the state, the outcomes formula is funded at less than a third of THEC’s recommendation in the Governor’s FY15 budget proposal.

Although tuition is expected to increase, “it is a goal of the University of Tennessee System to stay within the single digit range,” DiPietro stated.

President Joe DiPietro also expressed support of the Governor’s “Drive to 55″ Initiative during the hearing.  The University of Tennessee System supports increasing access to post-secondary education, a critical component of the Governor’s plan.

When specifically asked about the Tennessee Promise, DiPietro called the proposal “a big bold program with a lot of merit.”  The Tennessee Promise is a last-dollar scholarship proposal for Tennessee high school graduates seeking to attend a community college or Tennessee College of Applied Technology (TCAT).

DiPietro also expressed the importance of considering a “safety net” for regional institutions like UT Martin and UT Chattanooga, who could potentially experience enrollment setbacks due to the migration of students to community colleges or TCATs.

Proposed Higher Education Budgets Heard in House Education Committee

Yesterday, the House Education Committee held budget hearings for the University of Tennessee, the Tennessee Board of Regents, and the Tennessee Higher Education Commission (THEC). While the Committee does not make a recommendation regarding these budgets (this is done in the House Finance and Senate Education Committees), the hearing provides an opportunity for members to ask questions of the State’s higher education leadership.

Overall, the hearing focused primarily on the Governor’s proposed budget and its impacts on the State’s two higher education systems, especially in light of the Complete College Tennessee Act of 2010 (CCTA) and pending Drive to 55 Initiative. The CCTA placed Tennessee in the national spotlight for higher education reform and changed the way colleges and universities were rewarded. Prior to passage, funding was largely based on enrollment—how many “seats” the college or university could fill. Now, colleges and universities are rewarded based on how well they achieve outcomes, such as graduating and retaining students.

But for the first time in the new funding model’s history, it likely will not be funded fully. THEC, who makes a funding recommendation annually, recommended $29.6 million to fund the formula for FY15. The Governor’s budget proposes only $9.3 million for the formula—the same $9.3 million required to meet the state’s portion of a 1 percent salary increase for higher education employees.

Even in the midst of a tough budget year for the State (the State’s overall budget took a reduction of 2.4 percent), the funding levels included in the Governor’s budget for higher education led to an interesting line of questioning in the House Education budget hearing.

Members asked how the budget recommendation might impact tuition increases.

In the fall, THEC recommended an increase of 2 to 4 percent. While leaders articulated that they hope to keep tuition increases down—they also recognized that the funding level in the budget proposal changes the conversation.

Rep. Ryan Williams (R-Cookeville) directly asked the Chancellor of the Tennessee Board of Regents, “Do you feel like the General Assembly has fulfilled its promise on the Complete College Act as it relates to funding?”

“Yes and No,” Morgan answered, referencing the formula’s fully funded past and its potential future for being funded at under a third of the recommended level.

Rep. Williams vocally recognized the funding disparity in the proposed budget for outcomes that higher education institutions have achieved, thanking leaders for their hard work. “Obviously, this $29.6 million is based upon the fact that we said to you as a General Assembly “You do this—You provide these outcomes—We fund you. And we appreciate your hard work.”

Another interesting line of questioning arose from Rep. Bill Dunn (R-Knoxville), who asked presenters to comment on the current structure of higher education in Tennessee and the idea of merging the higher education systems. The overwhelming response from both President DiPietro and Chancellor John Morgan was that restructuring the systems would not likely yield significant cost savings nor increase efficiency given the academic and mission roles each system plays in the state.

At this hearing, no direct questions were asked regarding student fees and student programming. The issue continues to be highly controversial amongst legislators and legislation on the matter is pending.  An important note: Questioning by members was somewhat limited due to time constraints on the hearing room.

To watch the budget hearing, click here.

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.