A new campus-wide budgeting structure and funding allocation plan has been put into place. While some of the changes won’t be readily apparent to many of us, the entire university can expect to benefit from it.

The plan provides a model for distributing funds in a way that supports the university’s mission, strategic goals and priorities. It will also allow the university to rebuild reserve funds that had been depleted due to several years of insufficient budgets and to provide a new fund for special initiatives.

To accomplish those goals requires some permanent budget reductions from many areas across the campus and a change in the way funding has traditionally been distributed. A budget committee has spent many months researching budgets at other institutions and developing equitable distribution models.

“We know units have felt some pain through this process, but it’s important for the overall fiscal strength of the institution,” says President Bob Bell.

“This re-allocation is a long-term process. The current budget situation, while not a crisis at all, is the product of more than 15 years of decisions made in a difficult budget environment. We are going to take our time in making adjustments, while maintaining the priority programs at the state’s technological university.

“Hopefully, infusion of new funding from the legislature and tuition increases, coupled with enrollment growth in lower producing programs will help ease this process. Year-end savings each year will also help us rebuild resources,” Bell adds.

“We have a responsibility to ensure that the university continues to operate in an efficient and fiscally prudent manner. I appreciate the many long hours the committee has put into the continuing development of this model.”

The committee’s first priority was to identify how much reserve funding was needed to get TTU back up to a reasonable level compared to other Tennessee Board of Regents universities.

“We agreed it needed to be between $8 and $10 million. That’s a large sum, but it is reasonable if we can do it over a period of time,” says Claire Stinson, vice president of Business and Fiscal Affairs and committee chair.

The goal is to set aside $1 million a year for at least eight years in reserves and $500,000 a year for special, one-time funding initiatives, like seed money for new and innovative programs.

That $1.5 million has been taken from budgets across campus. Specifically, reductions were distributed in the following way:

• $265k – 17.7%  - from instruction
• $200k – 13.3% - from academic support units
• $158k – 10.5% - from student services
• $109k -  7.3% - from institutional support units (University Advancement, Business & Fiscal Affairs, President’s Office, Printing Services, etc.)
• $767k – 51.2% - by replacing scholarship funding with private money and foundation dollars and absorbing scholarship offers that were ultimately declined.

All of the $109,000 instructional support reduction came from University Advancement, and Maintenance and Operations budgets were not included in the reductions because they are required by the Tennessee Higher Education Commission to be used only for maintenance and capital projects.

The committee’s second priority was to develop an equitable model to distribute instructional funds according to university goals and priorities.

“We looked at the enrollment and credit hour generation for each academic unit, but we also wanted to be fair in considering the cost differences among different disciplines. We know Engineering costs more to teach, for example, than classes in History,” Stinson says.

So the committee incorporated information from the Delaware Cost Study* for each discipline taught into the funding model.

The committee also built into the model a formula to assign priority levels to some disciplines. After consulting with Bell and Provost/Vice President Marvin Barker, Stinson added higher priority levels for Engineering and Science programs to better reflect the university’s unique mission.

When the model was complete and funding figures were included, results indicated under-funding in some units, chiefly within the College of Education, while other units have been over funded.

“We are now looking at ways to implement the re-allocation plan over the next several years,” Stinson says. “This model gives us a logical document to use when we have additional funding or when positions become vacant. We will also review non-instructional costs.”

The current plan is to use vacant positions and lapsed salary money to move to a more equitable distribution of funds to reduce costs in over-funded programs and provide much-needed additional funds in Education, for example.

“A better way of looking at it is to see how many new students we need to recruit or how many current students we must retain in the over-funded programs to match the model,” Stinson says.

Differential maintenance fees were not included in the model funding formula. The revenue from the fees, in addition to the priority funding, resulted in Engineering receiving $1 million more than the basic model indicated, Stinson adds.

“We want to be fair and equitable, yet recognize the strengths of the programs for which the university is already known.”

* [The Delaware Cost Study is an analysis of data on teaching loads by faculty category, direct cost of instruction, and externally funded research and service productivity. It allows comparisons of institutional data with national benchmarks and other institutions.]