May 14 Budget Update

May 14, 2008

To: All UT Faculty and Staff
From: President John Petersen

On Monday night, Gov. Phil Bredesen presented an updated budget submission for the coming fiscal year to a joint session of the Tennessee Senate and House of Representatives.

Tennessee is among 24 states across the country where budget shortfalls are affecting higher education. Noting the substantial revenue shortfall of recent months and its broad impact on state budget projections, Gov. Bredesen proposed a cut of $55.8 million – or 4.1 percent – in higher education funding overall. The final budget still must be passed by the legislature.

On Tuesday, Finance Commissioner Dave Goetz outlined impacts of the proposed cut in higher education funding. The proposed reduction in operating funding for the University of Tennessee would be $21.2 million. Capital maintenance funds available for UT would be reduced to $6.7 million.

The Tennessee Higher Education Commission will now work with UT and the Tennessee Board of Regents to distribute the reductions. Within that framework, individual campuses and institutes will need to develop plans for how best to meet the required reductions.

In his Monday remarks, Gov. Bredesen emphasized that he expects higher education to tighten its belt rather than shift the impact of funding reductions to students’ families in the form of overly large tuition increases.

Given the economic difficulties already faced by so many Tennessee families, we must be willing to absorb a substantial portion of increased costs.  Our goal will be to do that in strategic ways that look to long-term, positive positioning and minimize the impact on our students and our programs.

Our priority and commitment continue to be preserving the quality of education and programs at the University of Tennessee and to you--the people who make those programs possible.

We are in discussions now with campus chancellors and other leadership about their decisions on how their organizations will make necessary spending cuts.

Because we are Tennessee’s leader in educating the state’s workforce and a key driver of economic development, the University has a critical role in the state’s long-term success. I agree with Gov. Bredesen that by managing carefully and identifying fundamental areas of focus, we can continue to move Tennessee forward even in tough times.

Please contact your supervisor with questions, concerns or suggestions –- or you are welcome to get in touch with me.

Thank you for all you do for the University of Tennessee.

— John Petersen