The University of Tennessee had one of its busiest weeks on the Hill so far this session, as lawmakers in three legislative committees heard the proposed UT budget and questioned higher education leadership on a variety of topics.
President Joe DiPietro outlined for lawmakers the urgent situation faced by the UT System: A $377M forecasted budget gap over the next decade if no corrective action is taken. Without significantly increased state support, the University must find its own way of fixing its business model—by generating more revenue, finding efficiencies, and doing more with less—all while remaining of excellent quality and striving for improvements.
Some revenue-generating tools outlined by DiPietro raised questions amongst lawmakers. Representative Ryan Haynes (R-Knoxville) asked DiPietro to explain the need for increasing out-of-state enrollments. “I want to make sure our universities stay open to our [Tennessee] students,” he stated.
“We’re talking about modestly increasing our out-of state enrollments while maintaining our in-state enrollments,” DiPietro stated. Out-of-state students generally pay more in tuition, providing a needed source of revenue for UT schools in an era of struggling state appropriations for higher education.
At UT Knoxville, for example, an out-of-state student pays roughly $18,000 more than an in-state student. DiPietro has given the campuses discretion to increase their percentage of out-of-state students up to a boundary of 25 percent of total enrollments. The current average level for UT campuses is between 12 and 13 percent. National studies confirm that about half of out-of-state students end up staying in the state where they attend college and joining its workforce.
Overall, House lawmakers seemed pleased with DiPietro’s approach to re-evaluating UT’s business model. House Finance Committee Chairman Charles Sargent (R-Franklin) called it “a wake up call to all of us on the Committee,” adding, “if we don’t fund UT and the other schools, this is what happens. These are choices we’re going to have to make.”
The Governor told the press this week that he understands why UT is pursuing these options, citing the sharp decline in funding for public higher education over the years. “The state’s share of higher education’s funding has dropped from nearly 70 percent 20 years ago to about 30 percent [today]. And as the state’s share has declined, tuition and fees have sharply increased…I think they’re saying, ‘we have to make the economics work for us,’ he stated.
Senate lawmakers also seemed to approve of DiPietro’s approach. Senator Jim Tracy (R-Shelbyville) told DiPietro, “You kind of stole my thunder… I think we’re going to have to change the paradigm of higher education and you and your Board have started doing that…We’ve got to think outside the box… I think you’ve hit on something.”
The UT budget unanimously passed out of the Senate Education Committee and will next head to the Senate Finance Committee. So far, it appears there is a solid base of legislative support for the proposal.
The Governor’s FY16 budget proposal is certainly a strong one for higher education, but DiPietro has articulated that the strong proposal is no reason to hold off on being proactive in addressing UT’s “unsustainable” business model. “We are not back where we were before the recession,” he said, further noting that there is no guarantee the proposed funding levels will continue in the future. “We have to be ready,” he said.Tags: 2015, budget gap, Business model, Governor Bill Haslam, higher education funding in Tennessee, increasing out of state enrollment, UT Budget, UT Budget hearing, UT President Joe DiPietro