Governor's Budget Recommendations Include News for TBR Institutions

Governor Haslam presented his FY 2012-13 budget recommendations to the General Assembly on Jan. 30. Below is a summary of some items pertinent to Tennessee Board of Regents institutions.Operating Funds - Recurring• A recurring state funding reduction of $12.1 million is recommended, equal to 2.1% of current state appropriations. This reduction is significantly less than the 5% reduction that higher education institutions were notified might be possible in Fall 2011. • Recurring funding of $14.9 million is recommended to recognize improvement in educational outcomes at TBR institutions. Measures of these outcomes include number of degrees and certificates awarded, student retention and progression points, research and service efforts, workforce training activities, and graduation rates.• Recurring funding of $17.2 million is recommended for a 2.5% salary increase for state employees, including employees of the higher education systems. The state funding recommended is based on the higher education funding formula, meaning that institutions would be responsible for funding approximately $10.1 million toward the cost of the 2.5% salary increase. • Premiums for the health insurance program are expected to increase in CY 2013. Recurring funding of $2.5 million is provided to partially fund the employer share of this increase.• Recurring funding of $476,300 is recommended to meet increased employee retirement contributions to the Tennessee Consolidated Retirement System.Operating Funds – Non Recurring• Non recurring state funding of $10.0 million in FY 2012-13 is recommended to address the impact of the second year of the phase out of the old THEC enrollment formula’s hold harmless provision. This funding benefits institutions losing funds from the hold harmless phase out by providing additional time to adjust to the new planned recurring funding level. As a reminder, the Administration and legislature provided $15.0 million in FY 2011-12 for this purpose and have expressed an intent to provide funding of $5.0 million in FY 2013-14 to fully carry out this transition plan. Of the $10.0 million recommended for FY 2012-13, $9.2 million accrues to the benefit of TBR institutions.• Non recurring state funding of $4.0 million is recommended to support operations of the Lambuth Campus of the University of Memphis. This is the second year of a five year transition period.Capital Outlay. • Full funding of $126,650,000 is recommended for the MTSU Science Building. The Governor’s recommendation envisions a non-state fund match for this project of $18,750,000 and is consistent with the action taken by THEC in submitting TBR’s proposed capital plan.• Authorization is provided for planning activities on the next five (5) TBR capital priorities, namely: o Nashville State’s Academic & Support Building; o Northeast State’s Technical Education Complex; o UoM’s Biochemistry & Biology Building; o Volunteer State’s Humanities Building; and o Columbia State’s Williamson County Campus.The planning activities authorized would be funded from matching funds to be provided by institutions from non-state sources.Capital Maintenance. • Funding of $39.9 million is recommended for TBR institutions. This recommendation captures the system’s first 33 capital maintenance projects. The recommendation for the TBR System includes $800,000 to fund ADA projects.