Deadline for budget amendments passes, Rumors of concern over UT’s top capital priority

Lone Oaks AerialWith 140 budget amendments proposed in the Senate and 235 proposed in the House, there appears to be no shortage of ideas on how to spend a state revenue surplus that could easily reach half a billion dollars by the end of the fiscal year.   In recent months, indicators continue to point toward positive growth of major state revenue producers.

Governor Haslam’s proposed budget amendment is expected within the next two weeks.  Advocates will recall the Governor’s original budget proposal ranked the West Tennessee 4-H Center (also known as Lone Oaks Farm) second on the Governor’s proposed capital projects list.   In recent weeks, however, we have learned that there may be some legislative resistance in supporting this project, UT’s top capital priority.

We remain confident that the 4-H proposal will be adopted by the legislature.  As the situation continues to unfold, UT will take every effort to help ensure the project’s smooth passage and broad legislative support.  Please be on the lookout for more information on how you can help soon.

The West Tennessee region has been without a 4-H center since 2009, when the previous facility was closed and sold due to budget cuts and inadequate capital maintenance over a period of many years.

The offer of Lone Oaks Farm as a proposed replacement for the West Tennessee 4-H center came forth and was recommended through an exhaustive selection process last year.  The more than $30 million dollar facility is being made available to the University for approximately $16 million.  The 1,200-acre property comes turnkey-ready—educational programs, events and activities can be offered immediately.

Lone Oaks Farm will be used to teach youth about agriculture, natural resources, and other STEM-related subjects.  It will also be used to conduct educational workshops and meetings by industry and agri-business groups, something that is needed and could help spur economic development in the western part of the state.  The Center is expected to be self-supporting through the revenue it generates and will help fulfill a key part of the University’s outreach mission.

UT testifies on HOPE Scholarship change for ROTC cadets; Bill passes unanimously to full committee

Wednesday, the House Education Instruction and Program Subcommittee passed a bill that could change the way HOPE scholarship hours are calculated for ROTC students in Tennessee. The legislation, sponsored by Rep. John Ragan (R-Oak Ridge), would address problems in the HOPE hours calculation that cause some STEM-major ROTC cadets to lose eligibility for the state-sponsored scholarship in their third year of study.

The issue arose in 2013 when the Army Cadet Command placed three Tennessee ROTC programs on the “cut list” because they were not recruiting enough STEM (science, technology, engineering, and mathematics) majors. The problem, however, could be traced in part to an issue with the state’s HOPE lottery scholarship program.

Currently, students lose HOPE eligibility after attempting 120 credit hours at a Tennessee postsecondary institution, but that causes issues for cadets enrolled in a STEM program such as engineering. Curriculum and graduation paths for students in that major are highly fixed and unchangeable. Therefore, those cadets cannot fold the hours to earn their commission through the ROTC program into their major or a minor, and some must take up to 140-150 hours to earn both their degree and commission. These students currently lose their HOPE money after 120 hours, leaving the student to make up the difference to complete their program of study.

Rep. Bill Dunn (R-Knoxville) addressed the fact that ROTC cadets are often given a stipend as part of their participation in the program, but those funds are changing and not as plentiful as they once were.

Lou Hanemann, Associate Director for Higher Education Policy and Analysis, testified for the University of Tennessee, saying, “There is a stipend scholarship that is available for most ROTC students, but the reason those institutions were put on the cut list was funding concerns. The funding for those scholarships has begun to shift.”

The bill, fully supported by the University of Tennessee, would create an hours exemption for ROTC classes only.  It passed on a unanimous voice vote and will next be heard in the full House Education Instruction and Programs committee.  A companion bill in the Senate, sponsored by Sen. Mark Green (R-Clarksville), will be heard in the Senate Education Committee.  We will post any updates on the bill’s movement as they become available.

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/.

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.