Higher Education Suffers as Tennesseans Say ‘No’ to New Taxes

Higher Education Suffers as Tennesseans Say ‘No’ to New Taxes
By David Hefner

NASHVILLE, Tenn.
For the last three years, Tennessee Gov. Don Sundquist has been in intense bouts with the state Legislature over his plan of increasing taxes as a way to better fund Tennessee’s 24 public colleges and universities. And each year, the Republican governor has come away battered and bruised in crushing defeats, and state schools have been forced to make due with bare-bone appropriations.
In Tennessee, home of country music, tobacco farmers and Bible-Belt politics, higher education funding is taking a back seat to other financial needs caused in part by the downturn in the economy and the state’s struggling health-care plan. This summer, in the governor’s failed attempt to increase college funding by $97 million, the state’s two higher education systems were forced to raise tuition by 15 percent, a national trend that has some experts worried about the “privatization” of public schools.
“What prevailed yesterday was a budget that fails to meet the needs of Tennesseans,” said Sundquist during an August press conference a day after his veto was overridden by the General Assembly. In overriding the governor’s veto, Tennessee lawmakers passed a $19.6 billion budget, raised no new taxes and spent $560 million of tobacco settlement funds.
“Reports will continue, however, about Tennessee’s unwillingness to invest in the future, about our low rankings in education and our even lower expectations for a better tomorrow,” Sundquist said.
Indeed, colleges and universities across the country are increasing tuition due to cutbacks in state funding, effectively making students take up the financial slack. Experts believe the trend is making it more difficult for low-income students to attend public schools.
Nationally, state money is accounting for less of total revenues of four-year public universities, while tuition is accounting for more. In 1988-89, state funds made up 39.9 percent of total revenues; in 1998-99, that number shrank to 31.5 percent, according to the American Association of State Colleges and Universities (AASCU). During that same time, in 1988-89, tuition accounted for 14.7 percent of total revenues for four-year public institutions; in 1998-99, the number rose to 18.4 percent.
“This really poses a challenge to institutions, state legislatures and governors,” says Travis Reindl, director of state policy for the AASCU.
“Anytime you increase tuition, you have to think about whether or not you’re pricing people out of higher education. And that’s particularly true for public colleges and universities. The rich are getting richer and the poor are getting poorer. And (tuition increases have) taken a real bite out of the poorest families.”
Tennessee has apparently already felt the bite of tuition hikes. Overall undergraduate enrollment in Tennessee’s public schools has dipped over the last three years, going from 170,902 in 1997 to 168,818 last year. But during that same period, Black undergraduate enrollment increased by 1,892 students, while White enrollment decreased by 5,171. The numbers were similar in professional and graduate schools: a decrease in both total enrollment and White enrollment but an increase in African American enrollment. Most of the growth in Black enrollment from 1997 to 2000 came from  historically Black Tennessee State University and the University of Memphis. TSU and the University of Memphis alone accounted for 1,474 more students during the three-year time period. That represents more than 75 percent of the total increase in Black enrollment during that period. That could begin to explain why overall enrollment among Blacks increased. But without income-based statistics on White students, it remains unclear whether tuition hikes in fact drove low-income Whites away.
However, in the last three years, tuition only increased between 3 percent and 8 percent. With this year’s double-digit increase, many schools are hoping for the best but bracing for the worst.
“This is the biggest increase that I’ve experienced since I’ve been in the system,” says Dr. John Cade, who has been dean of admissions and records for seven years at Tennessee State University, the only historically Black college in the Tennessee Board of Regents and the University of Tennessee System. 
“We’re hoping that our enrollment continues to increase. But due to the 15 percent tuition increase, one would expect some kind of effect on enrollment.”
The budget crunch has already led many college and university professors and administrators to leave the state for better paying jobs. Average salaries in Tennessee are anywhere from $3,500 to $7,500 lower than salaries in 15 neighboring Southern states, according to the Tennessee Higher Education Commission.
Tennessee, unlike many states, depends primarily on a sales tax to fund education. Many states use some local dollars and both sales and income taxes. In some states that don’t have income taxes, such as Florida, state lotteries have helped pick up the slack.
Tennessee lawmakers have consistently voted against a state lottery, but a measure passed this legislative session will give voters a chance to determine its fate in a ballot vote next year.
“In some ways Tennessee isn’t much different than other states and in some ways it is,” Reindl says. “Where Tennessee is standing alone is that it’s really crippled by some systemic problems of adequate taxation. This issue has haunted Tennessee for some time, and it’s finally reaching a breaking point. Something significant is going to have to be done.” 



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