Tennessee State University, the state’s only land grant university, signed a memorandum of understanding with the state designed to help bolster the school’s finances. (Photo: John Partipilo/Tennessee Lookout)
Tennessee State University inked an operating agreement with the state Tuesday to bolster finances after nearly a year of upheaval over shortfalls.
Days after the TSU Board of Trustees approved a 6% increase in tuition and fees for the next school year, TSU and state officials signed a memorandum of understanding allowing the university to use $96 million for operations over three years, money initially approved for campus maintenance.
The agreement with the state’s Finance and Administration Office and the Comptroller’s Office puts into effect a state law enabling TSU to redirect unused capital funds for operations as long as it meets certain requirements.
At the request of Gov. Bill Lee, the legislature approved $250 million for TSU three years ago for facility improvements at the historically Black college in North Nashville. The money could not be used for dormitory projects, even though the university has a campus housing shortage.
Under the new deal, TSU will use most of the money for operations and $55 million for campus projects, including electrical grids and new Food and Animal & Environmental Science buildings.
“It not only provides crucial cash flow to ensure the university’s financial sustainability but also allows us to invest in enriching the student experience and strengthening our capacity to attract both students and qualified employees,” interim President Dwayne Tucker said in a statement.
The State Building Commission approved a $43 million infusion into TSU’s operating budget last November to make payroll and prop up the university for the rest of the budget year. That included some of the capital funding allotted in 2022.
Tennessee Comptroller Jason Mumpower, who has been leading the state’s efforts to improve TSU’s financial standing, agreed with the 6% tuition and fee increase, which would raise costs by $270 per semester.
Mumpower said he signed the agreement because he has confidence in TSU’s new leadership “and their ability to understand and navigate the institution’s challenges.”He has said repeatedly that TSU needs to set an enrollment figure and tuition rate that will help it “return to financial health.”
Last year, Mumpower went as far as to say TSU should sell the Avon Williams Campus in downtown Nashville and property at John Tune Airport to make ends meet.
TSU officials disagreed with the proposal to sell property and under the direction of Tucker requested approval of $154 million remaining from a campus grant to keep operating. University officials wanted another $300 million in capital funding because a land grant university funding study determined the state shorted the university by $544 million over the course of a century. A subsequent federal study showed TSU was cut short by $2.1 billion over about 30 years.
Faced with a burgeoning enrollment, TSU was forced to make a last-minute request of the Building Commission three years ago to house students in hotels and a nearby church, which led to Senate hearings and a move to vacate the Board of Trustees and push former President Glenda Glover out of office.
The university ran into financial trouble after starting an aggressive scholarship program on the heels of the COVID pandemic to respond to student demand. TSU used $37 million from a federal grant to pay for scholarships when enrollment jumped to 8,026 in fall 2022 before it fell back to 7,254 in fall 2023.
Once federal funds ran out, the university had to find other sources, such as $19.6 million in tornado insurance money. The university hit dire straits because of the increased cost of serving more students without enough revenue to balance increased expenses.
Glover stepped down last year, but the interim president who took her place – before Tucker – resigned in the fall when state leaders found out he signed two $800,000 consulting contracts with Glover.
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