With whispers circulating of double-digit percent tuition increases for Tennessee colleges and universities, some students will be relieved to hear federal money finally might be trickling down to The University of Memphis.
Tennessee higher education will directly receive $500 million, Gov. Phil Bredesen said during his 2009-2010 budget proposal Monday night.
"Under the rules we have been given, they are getting a great deal of the Tennessee stimulus money," Bredesen said. "They not only won't have to make cuts, but cuts they have already taken here in Tennessee have been restored: about $100 million extra in this fiscal year."
This is money that higher education will most definitely take advantage of, said State Rep. Jason Mumpower (R- Bristol).
"It gives us the opportunity to plan and streamline, and it gives leaders at various universities and colleges opportunities for the future in a way so it's beneficial to the students," Mumpower said.
Over the next few months, the Tennessee House of Representatives and the Tennessee Senate will decide if the governor's budget proposal will pass.
"We will pass the budget," Mumpower said. "There's not a chance that we won't."
The stimulus money Tennessee higher education is receiving as a result of the American Recovery and Reinvestment Act that President Barack Obama signed into law Feb. 17 comes with a small catch.
Tennessee stimulus money is only good for the next two years. This deadline is why Bredesen emphasized that the recipients should spend and invest wisely.
"When this money ends 21 months from now, our campuses will suddenly need to begin operating with about $180 million less in state funding than they had this year," Bredesen said.
Tennessee school districts will receive $524 million.
"Unless there is a local commitment to provide long-term funding after the federal stimulus ends, I would strongly recommend to local districts that these be spent on one-time items or used as transitional funds, lest you just create a budget crisis for yourselves two years from now," Bredesen said.
Careful spending is especially encouraged because the state government will not bail the schools out, Bredesen said.
Overall, the recovery package for Tennessee totals approximately $5 billion of the $789 billion from the American Recovery and Reinvestment Act.
Of Tennessee's federal money, 58 percent will go towards what Bredesen called "Congressional" funds, which the governor said have been almost entirely earmarked by Congress.
Examples include $490 million for the food stamp program, $318 million for unemployment insurance, $573 million for road and bridge infrastructure and also money going toward education.
The other 42 percent of the $5 billion is for "Tennessee" funds, which include the $500 million for higher education. The remaining $1.6 billion of "Tennessee" funds will go toward balancing the state budget and helping state agencies to transition to smaller budgets for the future.
The Tennessee government is leaving no room for "what ifs" with the state federal stimulus package. Mumpower said they are fashioning a responsible financial plan.
"Tennessee is better off than a whole lot of states in the nation," Mumpower said. "It's a situation where we're not waiting for that 'what if.'"
With this money, Bredesen said he wants to create sensible and conservative long-range responsibility. He said he wants "to recognize these stimulus funds for the one-time help that they are, to use them wisely and compassionately, and most of all, when this recession is over, to leave our state looking to the future strong and independent."
This means creating a strong financial future for Tennessee colleges.
"More than most other areas, higher education has dodged a bullet and bought some time. But there is a great deal of work to be done to reorganize and streamline for a much leaner future - to practice good stewardship," Bredesen said.
"I ask you to work with me over the months ahead to reposition higher education to better meet the challenges we face."
