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Budget Committee
May 3, 1999

The Faculty Senate Budget Committee (FSBC) met on April 19 to discuss the campus budget hearing held on April 14. The committee appreciates its inclusion in the hearing and the opportunity for subsequent dialogue with the administration. The committee wishes to bring to your attention the following comments and questions, each of which is followed by a response from the Chancellor.

1. Actions of the Faculty Senate Budget Committee and the Faculty Senate are irrelevant without significant increase in funding for UTK. The current approach to generating funds has failed. In its report to the Faculty Senate, the Budget Committee will recommend that the Senate formulate a coordinated strategy for increasing funding to UTK. An underlying tenet of this strategy should be that the UTK administration and the UT System administration should "lead the charge" in making our case to the legislature. One part of a well-known creed is "If I am not for myself, who will be for me?" With regard to UTK's budget, this part of the creed has been too long neglected.

RESPONSE. I agree with the observation that increased funding for UTK is the central budget issue we face. The essential requirement for that to happen in my opinion is some form of tax reform in Tennessee that will generate more revenue. The best we can hope for in the next year is a patch work budget that will, hopefully, find enough new revenue to minimize the $365 million shortfall that has been predicted by the Governor. Then we can hope that the General Assembly will meet in another special session this fall to produce results on tax reform.

I also believe that there needs to be a massive grass roots educational program about the need for tax reform. Some of the wavering representatives might be persuaded to move to a position of support for tax reform if their constituents can be persuaded. There needs to be a concerted effort by many groups such as industry, education, Citizens for Fair Taxation, AARP, etc. I have heard that within the next few days, a group headed by some distinguished leaders of the state may be announced to lead the charge on behalf of tax reform. I intend to become a part of such a movement in every way possible.

2. What is the timeline for planning for the increased enrollment expected this coming fall? Planning during the summer, when many faculty are elsewhere, is difficult. Department heads and deans could make better plans if they had necessary information now.

RESPONSE. Planning for the anticipated enrollment increase is currently underway. John Peters has been working with the Deans and has given them the green light to look for adjunct instructors to handle the increased teaching load. Phil Scheurer has been making necessary adjustments in university housing to accommodate the increased enrollment. These plans in Academic Affairs and Business and Finance have been underway for a month or more.

Of course, the actual enrollment will not be known until the fall semester begins, but the best historical indicators that we have used for years with pretty good reliability still indicate an increase in fall 1999 enrollment.

3. What are the salient features of the emerging plan for a potential $6.4M reduction in the 1999-2000 budget? Although the cut may not be necessary, its magnitude is such that it would cause serious hardships to some programs. Though no one wants to plan for the worst, especially when funding has been so low for so long, the campus needs to have some idea of how things will go if the worst comes.

RESPONSE. Planning for a potential budget cut involves the following process.

A. Top priority will be given to avoiding layoffs by reducing expenditures.

B. The first reduction in expenditures is likely to be the stopping of faculty and staff searches. It does not make sense to me to be hiring new people if that can be done only by laying off people.

C. We will make the best guess possible as to the probable tuition increase that the Trustees will approve. We know how much new money a tuition increase generates ($590,000 net for each 1% increase in tuition). We don't know what the Trustees will allow. We have transmitted our recommendation for tuition increase (double digit) to Dr. Johnson for negotiation with the Trustees.

D. We will look at current expenditures to see where reductions can be made. I do not want to speculate at this time on where there might be opportunities for reducing expenditures. This gets to be very complex with compromises abounding. I hope that the legislature might find enough new money to allow a continuation budget as a minimum. Of course a continuation budget will not allow any progress to be made on the $14 million new need list that has been developed by the deans and the vice chancellors.

In keeping with the comments in item 1, above, the Budget Committee offers the following resolution.

Resolved, that the President of the Faculty Senate, in consultation with the Executive Committee, other appropriate committees and councils of the Senate, and the Chancellor's office, promote the formulation of a coordinated strategy for increasing funding to UTK, and establish the role of the Faculty Senate in that strategy.