Logo

Budget Overview Spring 2017

Our overall enrollment for Fall 2016 was relatively flat compared to the previous year, which reflected our hard work to hold steady in the second year of the Tennessee Promise, a last-dollar scholarship program that covers tuition and fees for high school seniors wishing to enroll in the state’s community and technical colleges. I was encouraged to see we had almost a 2.5 percent increase in domestic freshmen this fall and an uptick of more than 5.25 percent in new graduate students.

We received an increase of more than $3.7 million in state appropriations, which is based on outcomes formula adjustments and new funds for outcomes improvement. That new money, coupled with about $2.48 million resulting from tuition increases, helped offset the $1.5 million reduction that came as a result of our .98 percent decrease in full-time equivalency. These new funds were allocated to pay for:

• A 1 percent pool salary increase fully funded by MTSU

• Faculty promotions

• Increased cost of software maintenance agreements

• Cost increases in utilities and in operations and maintenance

• Scholarships, tuition discounts, employee fee waivers and dependent discounts, and graduate assistant fee waivers

• Funding for college deans’ requests for continuing improvements on the MTSU Quest for Student Success initiatives

• Funding for three critical faculty positions

• Funding for personal computer replacement for faculty • Supplemental Instruction

Looking toward Fiscal Year 2017–18, MTSU’s share of the THEC outcomes formula adjustment will be a decrease of $1,907,300. THEC voted at its November meeting to propose new state funding totaling $48 million for the higher education formula institutions. MTSU’s share of the proposed new funding will be $4,581,900. Thus, MTSU’s state funding could actually increase by $2,674,600.

The commission also voted to recommend $12.22 million in capital maintenance funds for MTSU projects, including alarm system updates, piping and manhole replacement, roof replacements, Keathley University Center mechanical and HVAC upgrades, elevator modernizations, domestic water- sewer system updates, Miller Education Center roof replacement, and Stark Ag Center mechanical updates. No MTSU capital project was proposed for new capital outlay funding for 2017–18.

THEC’s recommendations have been submitted to the Department of Finance and Administration for consideration in the proposed state budget that Gov. Haslam will be submitting to the state legislature in the coming weeks. At that point, we will have more information regarding our likely 2017–18 state appropriation.

Fiscal Year 2015–2016 Budget Overview

Fiscal Year 2014–15 was the first year of full implementation of the state’s outcomes-based funding formula as called for in the Complete College Tennessee Act. Under the act, productivity, rather than enrollment, drives state funding distribution.

MTSU’s 2015–2016 outcomes formula adjustment will result in a state funding decrease of $1,285,900. MTSU had received an increase for the current fiscal year of $1,252,000. The Tennessee Higher Education Commission (THEC) voted at its November meeting to propose new state funding totaling $25.7 million for the formula institutions. MTSU’s share of the THEC-proposed new funding would be $2,533,200. Thus, MTSU’s state funding could actually increase by $1,247,300.

THEC also voted to recommend $9,840,000 in Capital Maintenance funds for MTSU projects for Fiscal Year 2015– 2016. The projects include central plant controls updates, generator replacement, automation system control panel replacements for several buildings, domestic water-sewer systems updates, exterior repairs for several buildings, Jones Hall plumbing updates, and campus-wide sidewalk repairs. No MTSU Capital Project (building construction) was proposed for new funding.

THEC’s recommendations have been submitted to the Department of Finance and Administration for consideration in the proposed state budget that Gov. Bill Haslam will be submitting to the legislature in the coming weeks. At that point, we will have more information regarding our likely 2015–16 state appropriations.

State Budget Formula Rewards Retention, Graduation

Fiscal year 2013–14 will be the third and final year of implementation of the state’s new outcomes-based funding formula, as called for in the Complete College Tennessee Act. Under the act, productivity rather than sheer enrollment drives state funding distribution. 

Based on this final phase, MTSU’s 2013–2014 recurring state funding will be reduced by $1,752,100. However, the Tennessee Higher Education Commission (THEC) voted at its November 2012 meeting to propose new state funding totaling $35,500,000 for higher education institutions. MTSU’s share of the proposed new funding will be $3,470,600. Thus, MTSU’s state funding could actually increase by a net of $1,718,500.

The commission voted to recommend $7,590,000 in Capital Maintenance funds for MTSU projects, including the Murphy Center roof/ceiling replacement project; the Central Plant cooling tower replacement project; the Absorption Chiller/ Tower replacement project; the Jones Hall plumbing update project; and various projects entailing electrical updates to campus buildings.

THEC’s recommendations have been submitted to the Department of Finance and Administration for consideration in the proposed budget that Governor Bill Haslam will be submitting to the state legislature in the coming weeks. At that point, we will have more information regarding our likely 2013–14 state appropriations.

Improvements, Pay Raises Also In Governor's Budget Proposal

The governor’s budget proposal also included several other projects of interest to the University community. It recommends a 2.1 percent reduction, or $1.6 million, in our state budget appropriation. This reduction is significantly less than the 5 percent reduction that was under consideration last fall. And it is likely that the impact of that reduction will be mitigated by a non-recurring payment from the “hold harmless provisions” in the new outcomes-based formula. I will be meeting soon with the provost, deans and vice presidents to discuss budget needs and challenges and, as always, we will make efforts to minimize the effect of these potential changes.

The proposal recommends a 2.5 percent salary increase for all state employees, including employees of the higher education systems, effective July 1. As usually the case, it will not be fully funded and higher education institutions will be required to find a portion of that increase.

Last but not least, the proposal included $5,320,000 for four capital maintenance projects:

  • $2,140,000 for underground electrical updates;
  • $1,620,000 for updates to heating and air conditioning in the Murphy Center;
  • $1,050,000 to replace the Walker Library roof;
  • And $510,000 for water and sewer system updates.

As you can imagine, the governor’s budget proposal has recommendations that affect many state entities who interact with the University, so we are working to learn whether there are other potential impacts that we need to consider. I will keep you informed as we know more on the budget as it moves through the legislature and towards approval.

2012-13 Budget Overview

Last year, the State of Tennessee implemented an outcomes-based funding formula for higher education, as called for in the Complete College Tennessee Act (CCTA). Productivity, meaning improved retention and graduation rates rather than enrollment, now drives the methodology by which the Tennessee Higher Education Commission (THEC) recommends state funding for higher education institutions.

Fiscal year 2012–13 will be the second year of implementation. This process also includes phasing out a previous “hold harmless” provision which resulted in institutions being funded unequally at different percentages of their funding formula calculations. Once the hold harmless provision is completely removed in 2013–14, institutions will be funded equitably at the same percentage of their outcomes-based funding formula.

For planning purposes, the Department of Finance and Administration instructed state agencies to prepare the 2012–13 budget with a 5 percent reduction in state appropriations. For higher education, this would result in a reduction in state appropriations of $51.1 million. For MTSU, the reduction would be $4.219 million. Combined with the second year of the implementation of the outcomes-based funding formula, MTSU’s net reduction would be $4,243,200. We will not have firm details for several weeks, however, until Gov. Bill Haslam proposes a budget and submits it to the General Assembly.

THEC recently approved a second distribution recommendation for 2012–13 operating funds that reflects the increase in institutional performance across the various outcomes in 2010–11. The aggregate increase in outcomes was 3.3 percent, requiring an increase of $19.3 million in state appropriations. THEC’s recommendation for MTSU in this regard would be an increase in state appropriations of $1,961,800.

These recommendations have been submitted to the Department of Finance and Administration for consideration in the governor’s proposed budget.

Secured By miniOrange