October 18, 2013
KNOXVILLE – Tennessee’s economic growth remains slow, and it is not likely the state will be able to set aside more funding for higher education than a year ago. The good news is that the state can achieve Gov. Haslam’s Drive to 55 initiative, which seeks to increase the number of graduates in the state, and it will have a tremendous impact on the state’s economy for the future.
That was the economic outlook William F. Fox, director of the Center for Business and Economic Research at UT Knoxville, provided to the University of Tennessee Board of Trustees meeting on Friday.
Fox, who provides economic analysis for the state, estimated the state will need $749 million for the FY2015 budget “to do the same things it is doing this year,” he said, adding that the state is short about $400 million of that at this time. “Revenue is not growing at a pace that will permit the state government to spend more.”
Funding for higher education is down 15 percent in the state in the last several years.
“It is hard to imagine a situation in which the picture gets better,” Fox said. “It looks like a very tight year.”
Gov. Haslam has set a goal to have 55 percent of Tennesseans with at least a two-year degree by 2025. Fox said the Drive to 55 is possible but will take extraordinary growth in graduations and acquisitions of degrees.
For future growth of the state economy, “the solution is in a better educated and better skilled workforce,” Fox said.
UT System President Joe DiPietro gave an update of the implementation of the UT System Strategic Plan. He said the second phase of the plan would be implemented this winter and that it is important to keep momentum going with the plan, which was approved by the board in June 2012.
The University will present recommendations for the state budget to the governor this fall, and DiPietro said he hopes a different tuition model will limit an increase by single digits if certain conditions can be met. Other priorities are closing the compensation market gaps for faculty and staff and obtaining funding for capital outlay and maintenance.
Each committee reviewed portions of the Strategic Plan dashboard relating to the corresponding goal, and DiPietro also touched on several charts on the dashboard.
For Goal 1, Enhancing Educational Excellence, undergraduate student enrollment by campus is up at all campuses except UT Martin for 2013, and graduate student enrollment has dropped at all campuses. The six-year graduation rate for new freshmen graduating from any institution, the statistic report to the Tennessee Higher Education Commission, is up to 73 percent at UT Knoxville and down a little to 54 percent at UT Martin and 50 at UT Chattanooga for 2012-13. The first-year freshmen retention rate is moving in a positive direction: 85.6 percent at UT Knoxville, 69.9 percent at UT Martin and 69.1 percent at UT Chattanooga.
The retention and graduation was the topic of the board’s annual workshop in September. DiPietro said advising is a key means to increase retention, which is a way to help with the Drive to 55.
“We can’t simply grow our enrollment. We have to be more efficient,” DiPietro said. “We think by making an additional investment in professional advising we would advance more quickly.”
For Goal 2, Expanding Research Capacities, total research expenditures increased by 20 percent from 2008-09 to 2012-13, and the number of UT invention disclosures is up to 145 for the UT System in 2012-13, demonstrating a positive trend. In the last three years, a total of 70 U.S. patents have been awarded across the UT System. “Over time we need to hit a big win, and we will, but the trends are headed in the right direction,” DiPietro said.
For Goal 3, Fostering Outreach and Engagement, the number of non-credit programming participants is nearly 4.1 million across the UT System. “I believe UT is best in class in our outreach efforts,” DiPietro said. He also mentioned the 50th anniversary of the UT Center for Industrial Services, which is an entity within the UT Institute for Public Service that provides assistance to more than 400 manufacturers and averages $600 million in economic impact a year.
For Goal 4, Ensuring Effectiveness and Efficiency, the number of gifts, payments, pledges and bequests maintained at $149 million for FY2013, and the endowment has increased to $919 million in FY13, up from $665 million in FY09. This goal also looks at affordability, and the in-state undergraduate mandatory tuition and fees at each campus are lower than their peer groups. UT Knoxville’s in-state tuition and fees is 11 percent lower than peers, and it’s 6.5 percent lower at UT Chattanooga and 3 percent lower at UT Martin.
DiPietro cited an example of an ongoing effort for the University to pay vendors electronically instead of issuing written checks that are mailed. Savings for each transaction can range from about $2 to $5, and based on the nearly 120,000 checks issued in FY2012, the savings are estimated to be about $425,000 a year.
For Goal 5, Advocating for the University of Tennessee, the instances of speaking engagements, media mentions and interviews and meetings with government officials by the president increased over the last year. The number of Tennessee counties with UT advocators organized by the Office of Government Relations and Advocacy increased to 82 last year.
“It’s easy to advocate for a place like this, and it’s a privilege,” DiPietro said in listing several national accolades UT campuses have earned over the last year.
For more information about the dashboard, visit president.tennessee.edu/strategicplan/dashboard/index.html.
The board approved the list of capital outlay projects. The top four projects on the list total $302 million, including matching funds from the institutions, and they include a science laboratory facility at UT Knoxville, academic classroom building renovation at UTC, energy and environmental science education building for the Institute of Agriculture and an engineering services facility at UT Knoxville. The capital outlay list was prioritized based on the desire to address outcomes that are measured by the Complete College Tennessee Act, that has changed the formula the state uses to make appropriations to public institutions of higher education, as well as, needs in the STEM (science, technology, engineering and mathematics) fields. Last year, the state provided considerable funding for capital outlay after several years of not providing funding.
The board also approved a list of 11 capital maintenance projects that would total $45.7 million for FY14-15.
The final report of the Committee on Effectiveness and Efficiency for the Future was presented to the board. The committee was formed as a special committee of the board in 2008, but the board determined effectiveness and efficiency initiatives are now being undertaken in the Strategic Plan and measures displayed on the dashboard. Since formation of the committee, nearly 200 efficiency projects have been documented that generated estimated savings of more than $71 million.
UT Knoxville Chancellor Jimmy G. Cheek gave the board an update on the Top 25 initiative, and the board also approved honorary resolutions for outgoing trustees Anne Holt Blackburn and Doug Horne.
In other action, the board approved:
The Board of Trustees meeting was webcast live and archived for later viewing. The meeting's full agenda and materials and the webcast archive are posted at bot.tennessee.edu/.
Gina Stafford, (865) 974-0741, firstname.lastname@example.org
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