Between 1994 and 2004, the median tuition at a four-year institution in Tennessee increased 71 percent. At the same time, state dollars per student went into a steady decline.
"For a number of years, we really haven't had any new state appropriation dollars," said Bob Adams, vice chancellor for business and finance at Tennessee Board of Regents. "That's how we end up with higher tuition."
With enrollment up by 9,500 full-time equivalent students across Tennessee and state appropriations stagnant, universities have no choice but to raise tuition costs in order to keep total university budgets stable, officials said.
"Historically, when budgets are being pinched by overall revenue problems, higher education tends to get reduced increases," said Joe Marks, director of Education Data Services at Southern Regional Education Board.
In Tennessee, budget problems have plagued the state for the past few years. With the state's budget funded by sales tax, available dollars are based on consumption. When consumption is down, as has been the case in Tennessee and across the nation in the past few years, sales tax revenue is down, leaving the state with fewer dollars to fund the same programs.
Statewide, TennCare costs have increased dramatically, and money that possibly could have gone to higher education went to those costs instead.
"Increasing tuition is the only way we can stay competitive nationally," said Kevin Roper, executive assistant to President Shirley Raines in charge of government relations for The University of Memphis. "I think we are still very competitive."
In fact, tuition and fees at The U of M are about 5 percent lower than the national, in-state average for four-year universities, according to data from The U of M and the U.S. Department of Education. However, the 71 percent increase in Tennessee between 1994 and 2004 corresponds to a 48 percent increase nationwide.
Decisions to increase tuition are not arbitrarily made by each university, said Rich Rhoda, executive director of the Tennessee Higher Education Commission.
First, officials from THEC, TBR and the UT system meet to discuss funding needs. THEC makes an official funding request to the governor, and the governor sets his budget based on those recommendations and his own judgment of where the limited funds can best be used in the state.
"It's been a long time since a governor has fully accepted our higher education recommendation," Rhoda said. "No governor in recent memory has fully funded higher education."
The reason, he said, is simple - unlike K-12, higher education is not mandatory, and "the governor and General Assembly are very aware that higher education is different than K-12" in that colleges and universities can produce their own revenue in the form of tuition and fees.
According to a presentation presented to The U of M faculty in August 2005 by President Raines, the 2005-06 academic year was the first time student fees exceeded state funding as a percentage of the "Educational and General" revenue.
"In a perfect world, I have no doubt Governor Bredesen would be committing full funding, but it's not a perfect world," Rhoda said. "There's no reason to believe we will ever go back to where we were" in regards to state funding.
Adams at TBR agreed.
"Other things are so pressing," he said, citing lawsuits with which the state has been presented in K-12 education, prisons and mental health. "Higher education is not a right, it's a privilege."
Between the lawsuits and a "fairly stagnant" revenue base, "there are claims made on the money and not much left for higher education," Adams said.
He said that for the TBR board members, the hardest part of the job is voting on tuition increases.
"But with utilities going up, we've got to keep the lights on," he said. "I don't foresee anything on the horizon to get back to where we were. The hope is to try to stop that shift, but I don't think the state is going to be in any position soon to put more of that money into higher education."
Now, TBR is looking at recommending roughly a 9 percent tuition increase across the state, based on inflation, utility cost increases, a 2 percent salary increase and no new state dollars. The U of M Student Government Association has said The University will increase tuition between 5 and 6.5 percent next year, as reported in The Daily Helmsman on March 15.
Charles Manning, chancellor of TBR, said that one possibility for relief could come in the form of a one-time $28 million appropriation from the state. If that happens, the tuition could increase only 6.5 percent. The money, however, was not in Governor Bredesen's budget proposal.
"Overall, the probability is not very good," Manning said.
"I believe our mission is to raise the education level of Tennessee," he said. "We try to teach additional students at a cost somewhat less that you can find in other states."
At The U of M, The University is looking at other ways in which to complement and try to offset higher tuition costs, Roper said.
Fund-raising and research funding can help by paying for certain parts of The U of M budget and supplementing tuition dollars. Research money also helps individual students by providing graduate assistant opportunities.
"The University is being creative," Roper said. "We try to hold down costs for students. We're looking at every possible way to hold down tuition."
