Tennessee higher education institutions are stuck in a state of suspended economic uncertainty as state lawmakers continue to wrangle over the state budget.
Last Thursday, Gov. Don Sundquist vetoed the “no new taxes” budget that was approved on July 12, promising to set off a new round of debate for lawmakers and sending shudders through many college campuses struggling with budget woes stemming from the lack of state funds.
“This is as bad as I have seen the condition of education in Tennessee in my 30 years in education, and the sad part is that it could get worse,” said Jim Vaden, executive director of finance for the Tennessee Higher Education Commission.
Lawmakers will reconvene Tuesday for an override session in response to Sundquist’s veto and will determine which budget the state will operate under.
If the override is unsuccessful, the state will revert to a temporary budget passed by the legislature on June 29 that was implemented to avert the shutdown of state government on July 1.
The vetoed budget, which uses the lump sum of $560 million in tobacco settlement funds to help cover the state’s budget shortfall, includes scholarships and grants to help offset the highest tuition increase ever for students in Tennessee. Moreover, the vetoed budget would include an across-the-board 2.5 percent increase in pay for faculty and staff at institutions governed by the Tennessee Board of Regents, including The University of Memphis.
“It is very important that our faculty and staff receive the pay increase because otherwise, we stand to lose more good educators to lesser universities simply because we cannot match the same pay scale as other states,” said Dr. Shirley Raines, president of The U of M.
However, the temporary budget does not include the 2.5 percent increase in pay, and the state mandated freeze in operational spending will likely continue to plague many higher education institutions in the state.
The U of M has recently been forced to freeze hiring, grants, contracts and perform a host of other “dire” measures to help shore up the inadequate funding from the state.
The temporary budget does, however, give legislative leaders the opportunity to resume discussions on implementing an income tax as a means of boosting state revenues, a measure that is receiving strong support from the higher education community.
“I will be very frank on the issue,” Raines said. “A broad-based income tax for Tennessee is a necessity and essential for the progression of higher education in the state.”
Raines added the current tax system is simply not working, and Tennessee is quickly falling behind its regional neighbors in many aspects of higher education.
Tennessee currently has one of the highest sales tax burdens in the nation, and is one of only nine states that do not have a broad-based income tax.
“We are hoping that the state legislature has realized that (not having) the introduction of new revenue coming from some kind of tax reform is having a crippling effect on higher education institutions, and they simply can’t operate efficiently and progressively under continuous budget constraints,” Vaden said.
While neither budget adequately addresses the “profound funding needs” of the state’s higher education institutions, Raines, who has made several trips to Nashville lobbying for increased funding and other U of M needs, said she remains optimistic legislative leaders will realize the impact and importance that higher education has on the state and act accordingly.
