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KNOXVILLE — The University of Tennessee Board of Trustees approved a $1.591 billion budget for fiscal year 2008 that calls for raises for faculty and staff, $153 million in new construction and a tuition increase of 6 percent.

UT President John Petersen told board members about the successful legislative session, which paved the way for progress on key initiatives like faculty and staff compensation, new research and economic development efforts and growing of student enrollment. See

The fiscal year 2008 budget includes a 3 percent across-the-board raise for all UT employees, as well as an additional 2 percent salary pool for merit, market and equity increases.

“We appreciate the strong support from the Governor and legislature for higher education. The outcome reflects the commitment we set last fall to make faculty and staff salaries our first priority,” UT President John Petersen said.

“We are also pleased about funding to move forward with key efforts like our biofuels project and development of a research-focused Knoxville campus so we can play a key role in solving the nation’s most difficult challenges while we enhance Tennessee’s workforce and economy.”

Petersen noted that for the second year in a row, state appropriations have included additional operating funds ($8.7 million for FY 08), which help provide for growing student enrollment and help cover ever-increasing utility, technology and library materials costs, which typically rise at rates much higher than inflation.

Additional operating dollars will be used by the Knoxville campus to enhance access to the university by adding $1 million to two scholarships -– the Tennessee Pledge and the Tennessee Promise -– to ensure that all qualified students can attend, regardless of income.

Undergraduate tuition this fall for in-state and out-of-state students will increase by $290 to $5,120 a year in Knoxville, by $224 to $3,972 a year in Chattanooga and by $234 to $4,150 a year in Martin. Additional annual student fees the board approved are:

-Knoxville — A $20 increase to the transportation fee to cover extensive growth of the campus “T” transit service.

-Chattanooga — A $130 increase in the program and services fees to expand the Wellness Center and enhance student health programs, including counseling services. Part of the fee was approved by the board in 2006, but will take effect this fall. Also, a $20 “green” environmental fee to support campus energy efficiency programs, which was approved by student referendum.

-Martin — A $6 increase in the student activity fee and a $100 increase in the athletic fee. Students approved by referendum the athletic fee to upgrade facilities and programs.

Changes to graduate and professional programs and other course fees that were approved can be found at

More than $153 million in capital improvements funds -– the largest amount ever received from the state -– will fund infrastructure to begin development of the Cherokee Campus in Knoxville and make possible a new music building in Knoxville and a new library in Chattanooga. An additional $22 million appropriation for capital maintenance will fund repairs and renovations across the state.

The General Assembly appropriated $8.25 million and $40.7 million in capital funds for the university’s biofuels initiative. This will fund a testing facility and start-up costs for bio-mass fuel production, a key component in Tennessee’s alternative fuel strategy.

“We have had a good year and we have been successful with windows of opportunity that have allowed us to partner and share our expertise with projects that can have a large impact on the state of Tennessee and the nation,” Petersen said. “In this next year, we will be involved in developing the state’s master plan for education — a priority identified by the Governor. As colleges and universities work together to effectively meet the state’s economic and workforce needs in the future -– we can truly solidify our service to the state.”

The employee compensation package for more than 11,000 full- and part-time employees includes an across-the-board 3 percent pay increase for all employees or $900, whichever is greater, pro-rated for part-time employees. The university will fund a 2 percent salary pool to be distributed based on merit, market and equity.

In other action, the board:

-Heard positive reports related to the university’s Campaign for Tennessee -– a seven-year fundraising effort designed to help meet the university’s strategic goals through enhancing resources. The first two “quiet phase” years of the campaign yielded $157 million in 2005 and $271 million in 2006. UT Vice President for Development Henry Nemcik reported an even stronger momentum under way for 2007, noting that a formal campaign launch is set for spring 2008.

-Approved nearly $2.7 million for programs across the state to continue UT’s progress in enhancing the diversity of students and faculty. This action follows the end of the longstanding Geier lawsuit, which designated state funds specifically for recruitment of African American students, faculty and staff. Initiatives are now broader with the goal of recruiting faculty and students from diverse cultures and backgrounds.

-Approved a motion from the Finance and Administration Committee to sell the university-owned Chancellor’s home in Memphis. The motion directs the administration to establish a housing allowance for the next Chancellor of the UT Health Science Center. A search is under way to fill that post.

-Approved a proposed intercollegiate program between the College of Architecture and Design and the College of Agricultural Sciences and Natural Resources in Knoxville for a new master of landscape architecture -– a program that currently does not exist in Tennessee. Officials reported that many of Tennessee’s students enroll in other programs out of state to obtain the advanced degree and a large portion of the contracts for work in Tennessee are sent to out-of-state practitioners.

-Approved a proposal from Chattanooga Chancellor Roger Brown to establish a pilot program setting a regional tuition rate for junior and senior undergraduates who live in seven counties contiguous to Tennessee. The program, which will be reviewed annually, will allow these students to pay in-state rates, plus 25 percent of their out-of-state fee difference. Brown said the university can’t fulfill its mission to be a primary provider of higher education for people of the metropolitan area without flexibility for nearby residents of Georgia and Alabama. The Georgia counties are Catoosa, Dade, Fannin, Murray, Walker and Whitfield. Jackson County, Alabama, also will be included.

-Approved renaming of the UT Health Science Center building at 930 Madison Ave. in Memphis in honor of Dr. Ralph S. Hamilton. A Knoxville native, Hamilton received his medical degree from UT Memphis in 1952. He is a professor of ophthalmology in the College of Medicine and former chair of the department. He has served on UT’s Development Council and made significant contributions of time and resources.

-Heard a positive evaluation of Petersen’s third full year as president. Led by Vice Chair Andrea Loughry, the process and final report resulted from extensive interviews with students, faculty, administrators and alumni and development leaders.

For the full budget summary, see

Karen Collins, (865) 974-5186 or (865) 216-6862,