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Strategic Budget Advisory Committee (SBAC)
Strategic Budget Advisory Committee

Chattanooga: Higher Education Facing Two-Tiered Cuts

Thursday, December 18, 2008

Joan Garrett

By:

Joan Garrett - Chattanooga Times Free Press (Contact)

Students at the University of Tennessee at Chattanooga may shoulder a 7 percent tuition hike next fall as UTC works to offset more than $8 million in state appropriation cuts.

Tuition also could jump by 5 percent at Chattanooga State, hit by a $3.3 million cut, and at Cleveland State, cut by $1.2 million, according to Tennessee Higher Education Commission documents.

“These kind of cuts are tremendous, but (UTC) is braced to deal with it,” said Richard Brown, vice chancellor of finance and operations at the school. “It represents one of the most devastating cuts to higher education in the last 20 years.”

In all, Gov. Phil Bredesen is asking higher education institutions to trim $181.6 million from their 2009/10 fiscal year budgets.

Tennessee Higher Education Commission officials on Wednesday informed leaders at the University of Tennessee system and the Tennessee Board of Regents what cuts would be made at specific institutions, said Jim Vaden, associate executive director of fiscal affairs at the commission.

In addition, commission officials said they expect tuition increases to be capped at 7 percent, with the exception of larger schools such as the University of Tennessee in Knoxville or the University of Memphis, which may raise tuition by 9 percent, said Mr. Vaden.

“We purposefully kept the recommendation of fees low so that the students wouldn’t have to carry a huge proportion of these reductions,” said Mr. Vaden.

In addition to the $181.6 million cut to the state’s higher education institutions, another budget reduction of 5 percent could be added in the coming months, officials said.

The cuts are two-tier and would go into effect in July, said Mr. Vaden.

The first-tier cuts requested by Gov. Bredesen total $103 million. Mr. Vaden said cuts may be limited to one tier if the state receives federal fiscal assistance. Without federal help, tier two will be triggered — another cut of $78.5 million, he said.

If the Tennessee Legislature is required to enforce the two levels of cuts, higher education will lose 14.6 percent in state appropriations, a staggering number compared with the 4 percent lost in state appropriations last year, said Mr. Vaden.

“These cuts are terrible on the institutions,” said Mr. Vaden. “I am glad it wasn’t any greater.”

These cuts will be part of Gov. Bredesen’s budget that will be proposed to the Legislature in February. Adjustments may be made, which could deepen cuts, if state tax revenue is lower than expected at the end of the fiscal year, said Mr. Vaden.

Sen. Bo Watson, R-Hixson, said there are “no simple answers” to the fiscal turmoil faced by the state.

“There is no magic, silver bullet for this,” said Sen. Watson, a Senate Finance Committee member. “I think the Legislature and the executive branch are both going to work really well together to come to a solution that’s going to be unpleasant for everyone. There is not a pleasant solution. Every option before us is a difficult option.”

If universities in the state raise tuition by 7 percent, generating $47.6 million in revenue, they still must reduce their budgets by $75 million, Mr. Vaden said.

A 5 percent tuition increase at community colleges, generating $8.3 million, would still leave schools cutting a total of $22 million, he said. Dr. Brown said UTC made plans to cut up to 20 percent of its budget and is not shocked by the 18.5 percent slash named by the Higher Education Commission.

Officials at UTC will continue to look at trimming or canceling programs that do not fit within the institution’s core academic mission, he said. In the past, the Cadek Conservatory of Music, the Challenger Center and the UTC Children’s Center have been named as possible targets.

Officials also are scrutinizing academic and athletic programs and may outsource some university jobs.

“At this junction, jobs will likely be lost,” said Dr. Brown. “It will be very difficult to meet these levels of reductions.”

However, when it comes to tuition increase, Dr. Brown said officials will be sensitive.

“Citizens across Tennessee are also experiencing a financial crisis, and they may not be able to afford higher education,” he said. “We understand we need to keep tuition and fees at a moderate level.”

Jim Catanzaro, president of Chattanooga State Technical Community College, said the two-year school has anticipated the reduction but that it is tough.

There won’t be any major changes in the way the college does business, Dr. Catanzaro said, however, officials will look for more ways to build revenue, including increasing enrollment.

“We are not going to touch any part of the academic infrastructure of the college,” Dr. Catanzaro said. “I would rather not be cut, that is for sure, but we built our business plan knowing there would be down times and up times.”

Staff Writer Andy Sher contributed to this story.