The irony doesn’t escape budget officials at TTU. At the same time faculty and staff are planning to make serious cuts in their permanent budgets and a buyout program seeks to motivate a reduction in force, ideas for how temporary stimulus funding can be spent are being solicited on campus.

“The stimulus funding will be a short-term benefit, but we must plan for the long term, when the temporary money is gone and so is about 20 percent of our state appropriations,” says TTU President Bob Bell.

As described in an earlier budget article in Tech Times, the campus must be ready for serious changes in the budget despite a number of unknown factors. The stimulus funding is no exception. While TTU expects to receive about $4 million this fiscal year and another $12 million each of the next two years, that funding will come with specific restrictions from federal and state officials on how it can be spent.

“Stimulus money CANNOT be used to continue operating in the same fashion we are now,” says Bell. “In two years that funding will be gone, along with the $12 million in state funding that will be cut.”

Three types of stimulus funding will be available to higher education: 1) stabilization funds — to help schools like TTU as they reduce their operating budgets over the next two years; 2) competitive grants — to take advantage of stimulus dollars funneled through external agencies for research; and 3) workforce training.

The Office of Research and Graduate Studies will collect proposals and ideas for projects funded through stabilization (THEC-guided) dollars and state and federal (non-THEC guided) grants.

STABILIZATION (THEC-guided) FUNDING

The stabilization funding for TTU ($4 million in 2008-09, $12 million in 2009-10, and $12 million in 2010-11) will come from State Fiscal Stabilization Funds made available through a $53.6 billion appropriation to the U.S. Department of Education via the federal American Recovery & Reinvestment Act (ARRA). These funds will support public higher education institutions in fiscal years 2008-09, 2009-10 and 2010-11 and are being guided by THEC oversight.

“The funds provided for under the ARRA’s State Fiscal Stabilization section are non-recurring and must be spent on items that are of a one-time nature, that are likely to be phased out, or that are scheduled to be funded with non-state sources in future years,” states a memo from the Tennessee Higher Education Commission.

“It is THEC’s intent that the ARRA funds should assist an institution in adjusting its expenditures down to a level that reflects the reduced state appropriation base that is scheduled for 2009-10.”

About half of the stabilization funds will be used to help transition the university’s budget to the reduced state funding levels. The other half will be used for projects that either reduce expenses or enhance available revenues.

Specific instructions on how TTU and other public universities must manage the stabilization funding they will receive over the next few years are still being finalized by the Tennessee Higher Education Commission. However, some preliminary guidelines have been provided, including notice that any stimulus-funded projects must either:

1. reduce the university’s overall expenses at the end of the two years, or
2. enhance the university’s available revenues.

Other preliminary guidelines specify that the funds must be used for education and general expenditures and in such a way as to mitigate the need to raise tuition and fees. They specifically prohibit use of the funds to increase endowments, provide bonuses or pay increases, or to

• maintain systems, equipment or facilities;
• modernize, renovate or repair stadiums or other facilities primarily used for athletic events or other events for which admission is charged; or
• modernize, renovate or repair facilities related to sectarian instruction or religious worship or activities.

An issue still being reviewed by THEC is whether funding might be used for modernization, renovation or repair of facilities other than athletic or revenue-generating venues. Current consideration is that if allowed, those projects may require individual review and prior approval by THEC.

“Using this criteria as guidance, I want to involve our entire campus community in planning for the most effective use of these funds,” says Bell. “We have several critical projects and good ideas on the table already, but I invite everyone to consider suggestions for how this one-time, temporary funding can help make TTU stronger in the long term.”

Campus projects or ideas that would meet the outlined criteria may be submitted via the Stabilization (THEC-guided) Funding page at the Budget Central web site. All funded projects must indicate whether the expenditure is a non-recurring item or one that was formerly recurring but is intended to be phased out with non-recurring funds, according to the THEC memo.

In addition, projects guided by THEC will be expected to address 1) the number of jobs estimated saved or created with the funds; 2) the tuition and fee increases imposed by the schools; 3) the extent to which enrollment maintained, increased or decreased; and 4) a description of each project funded, including costs and expenditures.

COMPETITIVE AND NON-COMPETITIVE (Non-THEC-guided) FUNDING

The Research Office has also begun asking faculty and others to consider special research proposals that may benefit from stimulus money funneled through non-competitive state appropriations, competitive state appropriations and federal grants — all separate from the stabilization funds (see www.tntech.edu/research/arra.htm). Those proposals already collected through the Office of Research web site are not stabilization funds and are not bound by the guidelines listed above.

These funding opportunities may provide additional dollars beyond what the university is scheduled to receive through stabilization funds. They provide the possibility to enhance research efforts and academic programs through educational support.

Tech Times will continue to keep you informed about the stimulus funding and other budget topics as additional information becomes available.