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CHATTANOOGA, Tenn. — The University of Tennessee Board of Trustees discussed new budget challenges for 2008-09 related to growing needs for facilities, faculty and staff compensation and operating funds at its winter board meeting held in Chattanooga Wednesday.

State revenue shortfalls this year have led to fewer dollars recommended for UT and higher education institutions in general, UT President John Petersen explained.

Trustee committee meetings began Tuesday and concluded Wednesday afternoon with the full board meeting at the University Center on the Chattanooga campus.

The president told trustees about the impact of inflation, increased operating costs and the university’s role in funding the recommended 2-percent, across-the-board raise for higher education employees.

Trustees will consider the budget at their annual meeting set for June 19-20, 2008. Wednesday’s overview took into account the governor’s recommendations as well as tuition ranges suggested by the Tennessee Higher Education Commission earlier this year.

The budget overview can be found at

Total state funds for higher education will not be approved by the General Assembly until the end of the current legislative session. The governor recommended for UT $10.3 million to cover part of the 2-percent raise; $1 million for the Mouse Genome project at the UT Health Science Center; $3 million for Regional Biocontainment Laboratory equipment in Memphis; and $21.5 million for capital maintenance projects.

Petersen noted that the state budget process is ongoing but presented tuition increase scenarios that have been released by THEC that range from 7 to 9 percent for the Knoxville campus and 5 to 7 percent at Chattanooga and Martin campuses and the UT Health Science Center.

“Compensation continues to be a high priority, as it should be so that we can continue to recruit and retain our very best faculty and staff,” said Petersen. “Our students deserve the very best we can provide and a high quality of instruction that will prepare them as best we can to compete in a global economy.”

Petersen said that while progress has been made on compensation issues with the General Assembly, work continues and it remains a top institutional priority. He noted the practice over recent years of awarding a flat rate for employees who earn less than $30,000 a year. In the past 10 years, the minimum starting salary has increased by 32.7 percent.

Along with budget challenges, Petersen noted progress and opportunities for the next year in improving student retention and enhancing articulation agreements as well as online education programs, both of which make it easier to obtain a degree.

In other action, the board:

– Voted to accept a revision to the capital outlay priority list for 2008-09 that was initially approved by the board in November 2007. President Petersen requested the change that removes the Nash Building and Crowe Building renovations at the UT Health Science Center as priorities Nos. 1 and 5. The updated list asks for a new $80 million research building at UTHSC as the top priority. The new research facility would contain 200,000 gross square feet of space, and the university is exploring alternative methods of privatized delivery and financing. The request for revision has already been sent to the Tennessee Higher Education Commission. The capital outlay priority list is available at

– Approved the limited duration appointment of Dr. Hershel P. Wall as chancellor and vice president for health affairs for UTHSC. He has been serving as interim chancellor since the departure of former Chancellor William F. Owen Jr. in 2007.

– Approved a motion to affirm the UT system’s role and the relationship between the campuses and operations that include the Institute of Agriculture, Cherokee Farm and UT (Knoxville) Athletics. The board was presented with information that was intended to clarify responsibility in areas that relate to Oak Ridge National Laboratory, Human Resources, Information Technology and Construction Management. The report is available at

– Approved an amendment to one article of the university’s bylaws, as approved by the board’s Trusteeship Committee. The amendment deals with changing the name of the board’s Outreach Committee to Research, Outreach and Economic Development. The change was requested to better reflect the strategic focus on economic development.

– Referred back to the Trusteeship Committee another proposed amendment that would change which positions on the senior administrative staff are required to be elected by the board as officers of the university, among other changes.

– Approved a request from the Institute of Agriculture to increase the class size in the College of Veterinary Medicine by 15 students. Between 2005 and 2008, the college received 700 applications for 70 slots. Each student earning a DVM degree receives an average of two to four job offers upon graduation. Beginning this fall, the new class will have 85 students.

– Approved a request to reclassify the Early Childhood Education concentration at UT Chattanooga to a full major in which students would earn a bachelor of science in Early Childhood Education. Chattanooga Chancellor Roger Brown said the change helps meet a growing need for teachers skilled at educating students at the Pre-K level. Brown said the growing program will play a key role in the state’s initiative to provide education to students before kindergarten.

– Approved a revision to the UT Knoxville faculty handbook on non-tenure track joint appointments to more effectively describe the responsibilities of faculty members who have joint appointments with Oak Ridge National Laboratory or another entity.

– Received an overview about a new gift annuity program being established by the UT Foundation. The program will allow for the issuance of immediate- and deferred-payment charitable gift annuities. The minimum age for annuitants at the time annuity payments commence shall be 60 for immediate and deferred annuities.

– Recognized a significant gift from Jane and Lowry Kline to UT Knoxville’s School of Music. The gift will establish eight undergraduate scholarships to enhance the school’s ability to recruit highly qualified and musically gifted students. The program complements the school’s plans for a new state-of-the-art facility.

The Lookout Mountain, Tenn., couple and Knoxville alumni serve as co-chairs of the UT Knoxville College of Arts and Science’s campaign committee. Jane received a bachelor’s and a master’s degree in music, and Lowry received a bachelor’s degree in political science as well as a law degree. The Klines established the fund based on the impact of scholarships on their own university experiences.

“We’ve never forgotten how helpful that was to us, and it has always been a priority in our thinking to provide scholarships if we were ever able to do so,” said Jane Kline. “Lowry and I have always surrounded ourselves with music of all kinds. When I think about all the music in our lives, I can’t imagine what could replace it.”

The Klines’ gift is part of UT’s Campaign for Tennessee, the most ambitious effort in UT’s 213-year history that will formally launch in April and conclude in 2011.

Click here to view archived video of the Board meeting.