NASHVILLE, Tenn. (WTVF) — Tennessee State University is proposing up to $13 million in staff cuts and capping scholarships for each new freshman class moving forward during the next five years.
Gov. Bill Lee's state budget provided very little about how to help TSU's financial situation, which could come in the form of a financial amendment in the legislature. The school was veering toward a financial crisis and nearing its ability to pay its bills.
However, TSU leaders came to the podium at the State Building Commission with the idea of using money set aside for capital funding appropriated by the state. Back in 2023, the legislature recognized that they had funded the university $544 million less over time than the other land grant university in the state — University of Tennessee-Knoxville.
"What are we doing to get ourselves out of this mess? said interim CFO Jim Grady said. "We are going to show you what that looks like over the next five years."
At the time, the state gave TSU $250 million in capital funding. The school has $500 million in deferred maintenance. Tucker suggested that the school start fundraising to help those capital costs. He wants a capital campaign to raise $100 million in two years.
"Without a sustaining model, it has an impact on recruiting talent," interim president Dwayne Tucker said. "We have families asking if they will be around in the years to come. I think this has shared accountability for everybody. We have to stop the shakedown of TSU. We have to cover our expenses more effectively. Given our history and how we got here, we don't have another chance to do this."
Over the next five years, the plan from the university showed it is having to regroup from more than a $90 million deficit.
What the cuts mean
Right now, the governor is recommending its normal allotment for TSU in next year's budget: $69 million. That includes the main campus, TSU McMinnville Center, TSU Cooperative Education, TSU McIntire-Stennis Forestry Research and the TSU Institute of Agriculture and Environmental Research.
Earlier in February, the TSU Board of Trustees met to listen to a consultant hired by the Tennessee Higher Education Commission about a process that would cut tenured faculty and remove degree programs. That process — a dense phrase called fiscal exigency — will not have to happen. However, the school said they will still make cuts to employees.
"For the fall experience, we will have a really good experience on the financial state," Tucker said. "We feel good that progress has been made there. One of the challenges we need to solve is a backlog of audits."
The university has already made millions in cuts in hopes of getting its financial house in order. In the middle of the fall, TSU laid off more than 100 staff members. The school also eliminated 117 contracts that duplicated services, saving $3.5 million.
Those cuts are about to get deeper.
- a cut to $18 to $20 million in scholarships
- a $6 to $7 million cut in on non-instructional staff
- a $5 to $6 million cut in instructional staff, which will sunset programs at the school
- a $3 to 4 million in non-personnel cost reduction, which includes the president and cabinet members
Tucker didn't indicate during the meeting what those programs were or when the cuts would happen. Current students already promised scholarship money will not be affected. Moving into the class of 2025, the school will have $31 million to give out to incoming freshmen, unlike in previous years.
However, TSU leaders said the school previously used maintenance and operating money to sustain scholarships started with federal money during the COVID-19 pandemic. Grady said cutting those scholarships would help place the school on a better financial footing
What state leadership said
The Comptroller and lawmakers suggested to the school that tuition adjustments needed to happen.
This year, around 6,310 students attend TSU — about 5,000 undergraduate and a little more than 1,000 graduate students. That is according to the school. The spring enrollment is outperforming by 500 students, Tucker said.
"It's remarkable what happens when you have competent leadership," Comptroller Jason Mumpower said.
House Speaker Rep. Cameron Sexton suggested raising the tuition rate for TSU. He said the administration cost at TSU was higher than most in the state.
Records obtained by NewsChannel 5 demonstrated that TSU is top-heavy in its administration compared to Tennessee Tech and East Tennessee State University, which are more comparable in size.
"How much money goes to the academics? The model has flipped," Sexton said. It's the opposite of what every other institution has been doing. As you move forward, I am happy to work with $150 million to be used for operating. There just needs to be some type of process for withdrawal. It would require legislation but we want to be in good faith that there needs to be benchmarks hit."
Tucker said he wanted a bit of flexibility so that TSU doesn't have to come down to the state capitol each month.
The background context
Lawmakers quietly gave TSU money in the fall to make payroll. That money was basically an advance on their 2025-2026 school year funds.
The U.S. Department of Education and the U.S. Department of Agriculture circled back in January after their letter in 2023. The two agencies wrote letters to many states informing governors their historically Black colleges had been underfunded. The state said half a billion was owed in 2022, while the federal government said that number is actually $2.1 billion.
You can tap to read the updated letter here.
President Donald Trump's administration has not made clear what it thinks of the letters given to schools across the country in 2023 and 2025.
TSU has the same funding status as the University of Tennessee-Knoxville in that the two were given resources for land and later should have been given the same state appropriations for agriculture extension offices and expanding their academic programs.
A data analysis I did more than a year ago showed that both raw figures of state dollars and per-student spending don't match each other, with the University of Tennessee flagship campus receiving more state funding.
The federal government number from the President Joe Biden administration was not mentioned at the meeting. It's not clear if that federal government figure will ever be resolved with the state.
Chris Davis and Levi Ismail contributed to this story.
Do you have more information about this story? You can email me at emily.west@newschannel5.com.
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