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Strategic Budget Advisory Committee (SBAC)
Strategic Budget Advisory Committee

Bill Aims to Merge UT, Regents College Systems

Tennessee looks to cut costs with restructuring

February 27, 2009

By Colby Sledge
THE TENNESSEAN

Tennessee's higher education system could face a massive reorganization that some lawmakers say is overdue to eliminate redundancies and waste in state universities.

Under a bill filed in the state legislature Thursday, the state's two college systems — the University of Tennessee and the Board of Regents — would disappear on July 1, 2010, along with the Tennessee Higher Education Commission that oversees them.

The bill, filed by Senate Democratic Leader Sen. Jim Kyle of Memphis and House Finance Chairman Rep. Craig Fitzhugh, D-Ripley, capitalizes on vacancies at the top of both of the state's university systems. University of Tennessee President John Petersen announced his resignation last week, and this week the Board of Regents called off its search for a new chancellor.

The two systems have been in existence since the early 1970s, when the Tennessee Higher Education Commission created the Board of Regents from the state's non-UT universities and community colleges.Since then, the state has been loathe to address concerns from Board of Regents schools that UT campuses receive more attention from lawmakers — a complaint that led to the creation of the Regents system in the first place.

But lawmakers supporting the bill say they're willing to take a look now at any plan that might make more sense economically.

"I'm as orange as they come. I'm not going to do anything that would jeopardize our flagship institution," Fitzhugh said. "But there may be efficiencies and productivities in the 21st century that weren't around when we set this thing up."

Under the proposal, leaders of those systems would have until Jan. 25, 2010, to present a restructured plan to state legislators. If lawmakers don't like it, they could create their own structure to implement for 2010-11.

"We're saying to the higher education community and to our state, 'You bring us a model,' " Kyle said.

Talk of revamp fizzled in '90s

More than a decade ago, state lawmakers were considering how a different system might be implemented using revenue from a proposed income tax.

That proposal ultimately failed, and with it went any serious discussion about reshaping the system, said Rich Rhoda, executive director of the Tennessee Higher Education Commission.

"What's different now is the state support," Rhoda said. "In the past, there was always some growth in the state economy, and it was a matter of how higher education could function better with more state support.

"Now, it's how well higher education can function with less and less state support."

Higher education systems across the country often come under the microscope during lean budget years, said Claire Van Ummersen, vice president for the Center for Effective Leadership at the American Council for Education. Florida legislators are considering returning to a more centralized system after allowing public institutions to form separate boards of trustees.

"It seems that, every time resources are very constrained and there's not a way for legislators to really look at providing funds for special programming and the like at institutions, they begin looking at the structure," Van Ummersen said.

Tennessee higher education has seen two budget cuts in the last year and was facing a $181.6 million reduction this year before the federal stimulus package became law. Colleges and universities could receive nearly $500 million in additional federal and state funds over the next two years, but school administrators are forging ahead with cuts they say are long-term necessities.

UT's Petersen, who will leave his post in June, briefed trustees Thursday on a budget that could result in nearly 800 job losses, including almost 550 layoffs. Tuition could increase 7 percent at Chattanooga and Martin campuses, and 9 percent at the Knoxville campus.

The Board of Regents is in similar straits. Board members gave retiring Chancellor Charles Manning the power in January to grant requests from college presidents to furlough employees and cut salaries.

Student retention is an issue

Manning indicated this week that he might delay his retirement to guide the system through cuts and any major reorganization. Such changes, Manning said, need to address student retention and graduation and not simply economic concerns.

"Hopefully we could keep it on track and away from a pseudo-solution, where you're reorganizing in some way, but you haven't addressed the fundamentals," Manning said.

Manning mentioned the possibility of creating a separate system for community colleges, much like those in California and North Carolina. Creating such a system could risk those schools being passed over for state funding in deference to universities, said Volunteer State Community College President Warren Nichols.

But whatever a new system might entail, it needs to be considered now, he said.

"If there's ever going to be a time to have a serious discussion about what higher education should look like, now would be the time to do that," Nichols said.

Gov. Phil Bredesen has indicated that he might consider merging the two systems, a move that has usually been seen as politically unfeasible. In an interview last week with the Chattanooga Times Free Press, Bredesen called the current situation "an interesting window of opportunity."

It would be an opportunity for Bredesen to make a lasting imprint on higher education, an area that has seen a decrease in state appropriations during his tenure. During his State of the State address this month, Bredesen said higher education would have been his top priority if he had a third term.

Bredesen hasn't seen bill

Bredesen spokeswoman Lydia Lenker said Thursday afternoon in an e-mail message that the bill did not come from the governor's office and he had not seen it.

Republicans might take issue with the time line for creating a new plan contained in the proposal. Several groups, including the school systems, business leaders and students, should be considered, said Senate Speaker Pro Tempore Jamie Woodson, R-Knoxville.

That could take the state in a different direction than a complete restructuring, she said.

"It does appear to be a bit of a bull in a china shop for what needs to be a meaningful conversation," Woodson said.

Another bill, sponsored by Rep. Mark Maddox, D-Dresden, and Sen. Andy Berke, D-Chattanooga, would create a task force to study higher education. The task force would have to report to the governor by February 2010.

Additional Facts

WHO’S INVOLVED

UNIVERSITY OF TENNESSEE

  • UT-Chattanooga
  • UT-Knoxville
  • UT-Martin
  • UT Health Science Center (Memphis and Knoxville)
  • UT Space Institute (Tullahoma)
  • STATE APPROPRIATIONS (2008-09): $465,805,200*

TENNESSEE BOARD OF REGENTS

  • Austin Peay State University
  • East Tennessee State University (including School of Medicine and rural health centers)
  • Middle Tennessee State University
  • Tennessee State University (including three off-campus centers)
  • Tennessee Tech University
  • University of Memphis
  • 13 community colleges, including Nashville State and Volunteer State (Gallatin)
  • 26 technology centers
  • STATE APPROPRIATIONS (2008-09): $690,189,500*

*includes auxiliary campuses, medical schools and other programs