Wednesday, June 16, 2010

TTU: No More Workforce Reductions Expected

Unless something drastically changes in the state’s budget or in the Tennessee Board of Regents tuition recommendation, Tennessee Tech University officials are not planning any additional campus-wide reductions in force this year.If, as expected, Gov. Phil Bredesen signs the budget document approved by both houses of the Tennessee legislature earlier this month, higher education base funding reductions will be held at 6 percent. Earlier discussions included an additional 3 percent cut, but some funding was restored to avoid that scenario.

“Our state legislative leaders did a good job of sparing higher education from deeper cuts,” said TTU President Bob Bell. “The proposed budget, along with the recommendations made by the TBR committee on tuition increases, is a very difficult but reasonable one considering the economy and state budget concerns.”

The TBR committee for business and finance has also recommended a tuition increase that, if approved by the full board on June 25, will help keep budget reductions at the 6 percent level.

“It means we likely will not have to implement our more severe reduction scenarios this year,” said Claire Stinson, TTU vice president for Business and Planning.

Early this month campus officials began implementing the 6 percent budget reductions (a cut of approximately $2.7 million), including a reduction in force. This year’s 6 percent scenario represents a total state appropriation reduction of more than 30 percent since 2008 for TTU. In order to help offset some of those drastic reductions, the TBR will consider a proposal to raise tuition 5.2 percent for students enrolled in 12 credit hours, and higher for those taking more hours (students taking more than 12 hours will still pay $35 less per credit hour than those students taking less than 12 hours). However, that recommendation must still be voted on by the full board of regents during its June 25 meeting. Campus officials had already budgeted for a projected 5 percent tuition increase, along with 1.8 percent enrollment growth. Any changes greater or less than those predictions can have a positive or negative impact on the budget, Stinson said. Growth in the state’s economy could also have an impact on state employees, including those in higher education. While Governor Phil Bredesen proposed a 3 percent bonus for state employees in his budget, legislators replaced that plan with a proposal for a one-time supplemental longevity payment – contingent upon state general fund revenues increasing by at least $50 million in the current year.It won’t be known until September whether that goal has been met, so the bonus, if available, will be paid in October. If funded, the payment will equal to $50 per year of service with a minimum payment of $150 and a maximum payment of $1,250. To be eligible, an employee must have at least one year of service prior to Oct. 1, 2010.Also included in the legislative budget is funding for some capital maintenance projects on college campuses.

For TTU, that means planned maintenance and renovation projects can proceed, including:

Roof repairs on six campus buildings.
Waterproofing improvements to the South Patio of the Roaden University Center to repair leaks.
Adding safety guardrails to the road leading to the Appalachian Center for Craft.
About $1.5 million for critical academic classroom renovations, beginning with Henderson Hall.

“It’s important to note that we will not know the full budget picture for TTU until October,” said Stinson. “Our budget is always dependent on the state’s economy. At this point we will not be making any additional cuts in July unless the tuition plan changes dramatically from what the committee proposed.”And while the budget bill has not yet been signed by the governor, indications are that he does not anticipate vetoing any part of it.

A timeline for what to expect regarding the coming fiscal year’s budget includes:

***June 24-25: The TBR meets and will set tuition rates. If a tuition increase is approved at higher than 5 percent, TTU’s budget will benefit. If it is set lower than 5 percent, more reductions will be required.

***July 1: If additional reductions are required because of tuition changes, campus officials will identify cuts.

***September: As enrollment numbers are finalized, officials will know whether additional funds will be available (if growth is greater than 1.8 percent) or more cuts are required. State economic officials will also have a clearer picture of whether one-time employee bonuses will be funded.
October: A full and final budget picture will be available. If funded, one-time bonuses will be distributed.

The Complete College Tennessee bill passed by the legislature early this year also mandates a state shift in future higher education funding. The funding formula, which was previously based heavily on increasing enrollment, will now be driven by enrollment, retention and graduation rates. The budget impact of that formula change will likely begin in Fall 2011.

“We have a strong planning system in place,” said Bell. “We will see some interesting progress being made over the next year. Challenges will continue, but Tennessee Tech University will become better and stronger in the long run. Our faculty, staff and students represent the life of our university, and they will define our future.”