The July beginning of the fiscal year brings with it a new budget that offers some good news for employees and students, but another challenging year for campus operating funds.

The good news:

* The State Legislature approved a 2 percent across-the-board pay increase for all regular employees, both full- and part-time, effective July 1.

* Funding was also provided for a one-time, $350 bonus for full-time employees with at least three years of creditable service as of Oct. 1. Permanent part-time employees should receive a percentage of the $350 proportional to the part-time status of the employee.

* The maximum number of eligible years for longevity payments was also increased, from 25 years to 30. Payments remain $100 per year of creditable service.

* Matching funds for 401k deferrals were raised from $30 to $40, effective July 1.

* Student tuition increases were kept to 4.1 percent this year, the lowest increase in 10 years, thanks to additional funding for the state's higher education budget.

Despite these added benefits for personnel, the campus begins the new budget cycle with increased operating expenses that will require funding beyond what is currently available. How we balance those needs is yet to be determined. And just how much money will be needed is unknown as well.

"We ended the year with a balanced budget, but only by using funds we would have preferred to go into reserves," says TTU President Bob Bell. "We want to get away from that in the future, so this year, we'll need to be very conservative and look for ways to bring our spending under control."

Overall for higher education, the news has been better than in years past. Earlier this year, the State Legislature voted to provide an extra $34 million for higher education funding. That translated to $1.3 million for TTU. However, the new money is already committed to help cover the anticipated new expenses.

Some of those expenses include:

* The cost of installing new computer software systems is projected to increase because of unexpected or unplanned add-ons, upgrades and training expenses. (The software system, called the Banner project, is a Tennessee Board of Regents mandated program that will eventually replace our campus information database systems, including SIS, HRS and FRS. See the Tech Times in August for more details on the Banner project.)

* In order to keep up with the scholarships competing schools offer, scholarship awards and acceptances continue to rise.

* A planned energy cost-saving measure may instead result in greater expenses. Trying to take advantage of TVA’s “interruptible power” rate plan that has saved companies up to 40 percent on utility costs, we purchased $4.5 million worth of generators. Just after they were installed, TVA changed the rate plan, and now the cost savings may not materialize. TVA is still negotiating a plan with the three state universities that installed the generators.

* Overloaded computer network router hardware has resulted in the need for new router equipment to help serve the online systems with faster response and working times.

The cost of some of these expenses won’t be known until later, which means campus officials have to be especially conservative and austere with funds now.

“We understand that state funding is not going to get much better any time soon,” says Claire Stinson, vice president for Business and Fiscal Affairs as of July 1. “We need to take a long-term look at our needs and how we can get to where we need to be.

“I’ve studied our budget, and there’s no fat there at all.”

“For several years now, TTU has been forced to use reserve funds to help balance the year-end budget,” says Dave Larimore, Faculty Senate president and member of the campus budget committee. “That reliance on reserves has caught up to us, and we need to make some difficult decisions to get us back to where we need to be.”

One of those decisions the budget committee made was not to offer any additional across-the-board pay increases while some other campuses are dedicating funds to do so.

“The bottom line, what everyone needs to know, is that we can’t expect to get more money from the state,” says Larimore. “The only way we generate more money is with more students paying tuition. When enrollment grows, our funding grows. Until then, we must control our spending.”

“This year we’ll have to be very conservative,” says Stinson. “My goal, and President Bell’s goal for me, is to look at our budget and our budgeting process and make sure we tie our budgeted dollars to the university’s strategic plan.”

Watch the Tech Times for updates on the budget.