Analysis of the Governor’s Budget

As you are aware, on Monday evening Governor Lee presented his 2019‐20 budget to the Tennessee General Assembly. We have conducted a preliminary analysis of the details of the Governor’s Budget and I wanted to outline how his proposed budget could affect our University, if approved by the Legislature.

Highlights of the budget as they relate to MTSU’s institutional needs and priorities are as follows:

• Net operating appropriations, which includes adjustments made through the funding formula, will increase by $3.8 million.

• Even though this year’s budget does not include a separate funding allocation for higher education salary increases, it does provide that additional funds can be used for salaries and/or operational expenditures at the discretion of the University. Increases over the past few years have been minimal but improving employee salaries remains my number one priority in establishing the University 2019-20 budget. I continue to make the case to our state legislative leaders and the executive branch, and more recently to our own Board of Trustees, regarding the importance of improving salaries for our employees. The Governor’s Budget included funding equivalent to a 2 percent salary pool for state agencies.

• A new 54,000 square foot academic facility to house the School of Concrete and Construction Management, ranked No. 3 on the higher education priority list by the Tennessee Higher Education Commission, is among $133.1 million in capital outlay projects that Lee recommended for the state’s universities, community colleges and technical colleges. The recommendation would provide $34.1 million in state funding and require the university to raise $6.0 million through other sources, representing a total project cost of $40.1 million.

• The Governor recommended $73.4 million in capital maintenance funding for all of higher education, which includes funding for two (2) of MTSU’s six (6) recommended capital projects and additional funding for ADA projects, totaling $6.4 million.

• Establishes $3 million of recurring funding to the Bureau of TennCare for the Graduate Medical Education (GME) program—financial assistance for medical students—to increase the number of primary care providers in underserved rural areas of Tennessee. This funding could assist with a partnership we have with Meharry Medical College for a fast‐track program for select, qualified students to receive both an undergraduate degree from MTSU and a medical degree from Meharry in six years.

• In 2016, THEC recommended funding for the Tennessee Board of Regents’ (TBR) strategic initiative involving campus safety. This initiative involved requested funding of $8.9 million to implement the recommendations of the Safety and Security Task Force. Phase III funding for this initiative is included in the Governor’s Budget at $2 million for TBR and the Locally Governed Institutions (LGI’s). MTSU’s share of this funding will be $213,900.

With the limited operating appropriations provided in the budget to cover our fixed costs increases (i.e. faculty promotion increases, utilities, software maintenance, etc.) and increases in funding scholarships, we will once again be operating on a very tight budget. The FOCUS Act, if you will remember, also gives THEC the authority to issue a binding tuition and mandatory fees range that the University must stay within when raising tuition and fees. While the preliminary recommendation is for a tuition increase in the range of 0‐2.5%, the final range will not be issued until early May by THEC.

As the Legislature debates the final budget, we will continue to review additional information as it becomes available and incorporate the impact into the University’s budgeting process for the upcoming year. As future developments are known, I will continue to communicate with the campus through our campus website and with email messages to keep you abreast of the Legislature’s actions.

Sidney A. McPhee

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