As you are aware, on Monday evening Governor Lee presented his 2021-22 budget to the Tennessee General Assembly. We have conducted a preliminary analysis of the details of the Governor’s Budget and I wanted to outline how his proposed budget could affect our University, if approved by the Legislature.

Highlights of the budget as they relate to MTSU’s institutional needs and priorities are as follows:

• Net operating appropriations, which includes adjustments made through the funding formula, will increase by $1.0million.  The University will receive an additional $673,800 to cover group health insurance premium increases for a partial year.

• The Governor’s Budget included partial funding for a 4.0 percent salary pool for MTSU in the amount of $4.5 million.If the budget is approved, 2.0 percent of the salary pool would be applied retroactively to January 1, 2021.  As in years past, this is only partial funding and the University must fund the remaining pool from other university revenue sources.  Improving employee salaries has been my number one priority for several years and it is encouraging to see the Governor taking steps toward improvement.  I will work with our Board of Trustees to develop a compensation strategy that fairly allocates this funding to our employees.

• The Governor recommended $260.9 million in capital improvements funding for higher education.This included the over 92,000 square foot Applied Engineering Building. The capital outlay request will provide $50.5 million in state funding and require the University to raise $4.4 million through other sources, representing a total project cost of $54.9 million. 

• Proposing the largest capital maintenance budget in state history, the Governor recommended $153.3 million in capital maintenance funding for higher education, which includes funding for all seven (7) projects submitted by MTSU.These projects include campus-wide utilities repairs and replacement, multiple buildings elevator modernization projects, campus-wide life safety systems upgrades, Cope Building roof replacement, Science Building HVAC and exhaust system upgrades, College Heights electrical upgrades, and Tennessee Livestock roof repair and refurbishment.

• Non-recurring funding of $1.2 million was included in the budget for MTSU to assist with a 3+4 partnership we have with Meharry Medical College for a fast‐track program for select, qualified students to receive both an undergraduate degree from MTSU and a medical degree from Meharry.The funding is earmarked for financial aid for the students in this medical education program.
  
  
• MTSU requested, and the Governor included, $2.6 million for our new Data Science Pipeline initiative.This funding will enable partnerships between K-12 schools, higher education, and government and industry partners to identify needs and solutions in data science education.  This positions MTSU and the state of Tennessee to be leaders in data science by collaboratively building a complete education pipeline from K-12 through PhD. 

 Although we are appreciative of the Governor’s recommended funding for MTSU, the extra expenses and lost revenue caused by the pandemic will still have an impact on the University covering fixed costs increases (i.e. MTSU portion of salary increases, faculty promotions, utilities, software maintenance, etc.), increases in funding for scholarships, and funding new academic programs in the new year. The FOCUS Act, if you will remember, also gives THEC the authority to issue a binding tuition and mandatory fees range that the University must stay within when raising tuition and fees. While the preliminary recommendation is for a tuition increase in the range of 0 ‐ 2.0%, the final range will not be issued until early May by THEC. MTSU did not increase tuition or fees in 2020-21 academic year.

As the Legislature debates the final budget, we will continue to review additional information as it becomes available and incorporate the impact into the University’s budgeting process for the upcoming year. I will continue to communicate with the campus through our campus website and with email messages to keep you abreast of the General Assembly’s actions.  If approved, the new budget would take effect July 1, 2021.

Sincerely,
Sidney A. McPhee
President
Sidney.McPhee@mtsu.edu