Tennessee Higher Education Commission FY2025-26 Appropriation Recommendations

THEC FINANCE & OPERATIONS COMMITTEE REGULAR CALENDAR II. FY2025-26 Operating State Appropriation Recommendations (Action Item)

FY2025-26 Appropriation Recommendation $40.0M $2.3M $71.8M $12.0M $24.6M to fund outcomes formula units and TCATs to address growth in cost drivers at specialized units to invest in statewide system priorities to meet increased demand for the Tennessee Student Assistance Award to fund agency requests

Outcomes Funding $40.0M to fund outcomes formula units and TCATs

Outcome Productivity CCs Community College Outcomes Breakdown One Year Change Three Year Change Progression metrics rebounding from pandemic dips. 12 hours 24 hours 36 hours Associate Degrees 1-2 Year Certificates <1yr Certificates Dual Enrollment Transfers with 12 hours Job Placements Workforce Training Hours Awards per 100 FTE Dual enrollment continuing to grow. Over 1.1 million workforce training contact hours in 2023-24.

Focus Population Productivity CCs Community College Outcomes Breakdown Students Accumulating 12 hours One Year Change Three Year Change Starting to regain student populations lost during the pandemic. Students Accumulating 24 hours Students Accumulating 36 hours Associate Degrees 1-2 Year Certificates <1yr Certificates

Outcome Productivity - Universities One Year Percent Change Three Year Percent Change Progression metrics rebounding from pandemic dips. University Outcomes Breakdown Students Accumulating 30 hours Students Accumulating 60 hours Students Accumulating 90 hours Bachelors and Associate Degrees Masters/Ed Specialists Degrees Graduate awards continuing to grow. Doctoral/Law Degrees Strong investments in research and service. Research and Service Degrees per 100 FTE Six-Year Graduation Rate

Focus Population Productivity Universities One Year Percent Change Three Year Percent Change University Outcomes Breakdown Starting to regain student populations lost during the pandemic. Students Accumulating 30 hours Students Accumulating 60 hours Students Accumulating 90 hours Bachelors and Associate Degrees

Share of Outcomes Funding Universities Community Colleges 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 27.30% 27.62% 27.32% 26.76% 26.01% 25.80% Austin Peay 4.71% 4.98% 5.11% 5.22% 5.11% 5.04% East Tennessee 6.49% 6.55% 6.61% 6.66% 6.74% 6.67% Middle Tennessee 9.80% 9.60% 9.60% 9.54% 9.62% 9.57% Tennessee State 3.81% 3.64% 3.59% 3.64% 3.53% 3.51% Tennessee Tech 5.28% 5.25% 5.20% 5.20% 5.29% 5.26% University of Memphis 11.41% 11.36% 11.48% 11.60% 11.73% 11.86% UT Chattanooga 5.48% 5.45% 5.46% 5.44% 5.49% 5.42% UT Knoxville 22.57% 22.48% 22.54% 22.79% 23.32% 23.75% UT Martin 3.14% 3.07% 3.10% 3.15% 3.17% 3.12%

Specialized Units $2.3M to address growth in cost drivers at specialized units

Specialized Units Medical Education East Tennessee State University College of Medicine Family Practice College of Pharmacy University of Tennessee College of Vet Medicine Research and Public Service University of Tennessee System Agricultural Experiment Station Agricultural Extension Service Space Institute Institute for Public Service Tennessee Language Center Institute for Public Service County Technical Assistance Service Municipal Technical Advisory Service Tennessee State University McMinnville Center Institute of Ag. And Environmental Research Cooperative Extension McIntire-Stennis Forestry Research Health Science Center Other Specialized Units University of Tennessee System UT Southern University-Wide Administration Tennessee Board of Regents Administration Tennessee Student Assistance Corporation Tennessee Higher Education Commission

Medical Unit Funding Historical Formula Instruction/Training Medical Students Based on Year Residents Institutional Support Academic Support Student Services Libraries Staff Benefits Equipment Research and Public Service Utilities Maintenance and Operation FY2025-26 Formula Maintenance and Operation Equipment Utilities Libraries Supplies

Strategic Initiatives $71.8M to invest in statewide system priorities

Land Grant Matching Ensure two-to-one matching funding for each federal land grant: $4.8M Recurring | Tennessee State University Agriculture Experiment Station $2.7M Recurring | Tennessee State University Agriculture Extension Service $36,000 Recurring | Tennessee State University McIntire-Stennis Forestry Research

Medical Unit Modernization Ensure appropriate and up-to-date equipment at each medical unit: $7.0M Non-Recurring | East Tennessee State University Medical Units $2.5M Non-Recurring | University of Tennessee College of Veterinary Medicine $7.8M Non-Recurring | University of Tennessee Health Science Center

Specialized Units $2.5M Recurring | East Tennessee State University College of Pharmacy Increase recurring base appropriation to align funding levels and ensure student access and affordability. $3.0M Recurring | University of Tennessee Institute of Agriculture Invest in precision livestock farming to expand skills in artificial intelligence and data science. This support includes faculty in research, extension, and teaching; research scientists; and technical support staff.

Strategic Initiatives $6.5M | Tennessee Board of Regents Expanding the Workforce Pipeline in Tennessee Launch Tennessee Accelerates Workforce Center, develop workforce data system, and foster collaboration with colleges and businesses. $35.0M Non-Recurring | Statewide Cybersecurity Bolster cybersecurity infrastructure at Tennessee s colleges and universities to improve prevention and response systems.

Agency Requests $12.0M Tennessee Student Assistance Award $24.6M agency requests

Questions? $40.0M $2.3M $71.8M $12.0M $24.6M to fund outcomes formula units and TCATs to address growth in cost drivers at specialized units to invest in statewide system priorities to meet increased demand for the Tennessee Student Assistance Award to fund agency requests