May 11 Budget Update

May 11, 2009

The spring semester has ended, and the pace of University life has slowed a bit. But I can assure you my staff and I have been very busy.

I want to update you on our progress toward the FY2010 budget and some changes coming soon as we approach the Board of Trustees meeting in June and the start of the new fiscal year on July 1.

I have asked each campus and institute to prepare two-year budgets that account for use of federal stimulus money that the state will allocate to the University. The stimulus money will put off -- not prevent -- the $66 million state funding reduction two years from now.

These budgets are part of an overall plan we are putting together to operate the University for the next two years and prepare it for a new president. My interim term is for two years, and I want to have the University in the best shape possible for our next president.

UT will be better after the next two years because we will be forced to focus on what we do well, what needs to be improved and what needs to be discontinued.

As part of this two-year effort, we are identifying areas for cutting costs. Where those cuts involve jobs, the stimulus money gives us a two-year window in which to make those cuts as humanely as possible.

We expect reasonable tuition increases to be necessary to help meet expenses, and we are following the recommendations made by the Tennessee Higher Education Commission.

In addition, the System administration budget is being reduced by 10.3 percent at this initial stage of assessing System expenses. Further System budget reductions may come in the future.

Also, we have been evaluating and reworking the organization of the System administration. We expect to present a new organization work chart at the Board of Trustees' Effectiveness and Efficiency Committee meeting on June 1. This will be the first stage of an ongoing assessment of System structure and organization.

In this reorganization, we are looking at the services the System provides. Some of those may shift to the campuses, but it is important to note that shifting them to the campuses means their costs will shift to the campuses.

I know faculty and our students are concerned about the future of some of our academic programs. The board will receive a report with a list of programs recommended for consolidation or termination based on University and THEC program reviews. You can find a copy of the proposal list under Budget Announcements on the System budget Web site at

The Board of Trustees will hold its annual meeting June 16-17 in Knoxville. I hope that you will watch the Webcast of the meeting.

Thank you for everything you do for the University of Tennessee. You're a part of a great institution that is providing a great service to our state. I encourage you to stay engaged in these discussions about the future of UT.

For more information about the budget process, please continue to visit our System budget Web site at

Also, I encourage you to continue offering feedback and suggestions to UTalk by visiting

Acting President, Jan Simek