ETSU increases tuition, preserves rainy day funds

This story has been corrected to note ETSU has invested more than $26.5 million in new salary dollars from 2022-26 and that 290 faculty members would receive increases. East Tennessee State University Board of Trustees approved new budgets Thursday that include tuition and fee increases, employee salary enhancements, campus maintenance projects and a policy framework for handling a future financial crisis as university leaders cited inflation and rising operational costs. The May Board of Trustees meeting focused heavily on the university's fiscal year 2027 budget and the financial pressures facing higher education institutions across Tennessee. "This is the hardest board meeting this board has," ETSU President Brian Noland said. "It's the hardest board meeting any board has because it's the meeting where you approve tuition, fees, tenure, promotion and budget." University leaders said the budget was built amid rising costs tied to salaries, benefits, utilities and efforts to remain competitive in recruiting faculty, staff and graduate students. At a March 31 Finance and Administration Committee meeting, Chief Financial Officer and Vice President for Business and Finance Christy Graham said higher education expenses are increasing faster than general inflation while state funding has not kept pace. Although Gov. Bill Lee's proposed budget included about $4.4 million in additional funding for ETSU, adjustments through Tennessee's outcomes-based funding formula reduced the university's increase to roughly $1.3 million. For in-state undergraduate student taking 15 credit hours, total tuition and mandatory fees will be $11,468 per year, which is an increase of $474, or 4.31%, over the year. "If we were to raise fees to keep pace with all inflationary costs, it would have been 8.2%," Noland said. "So clearly, as an institution, we're taking steps to throttle expenditures and to be more efficient to live within the budget that we have." Noland pointed to tuition increases occurring at universities across the state, saying even institutions experiencing rapid enrollment growth still face inflationary pressures because personnel costs make up the majority of university spending. Noland said the university's operating budget totaled about $420 million, with roughly 43% generated through tuition and another 43% coming from state appropriations. Officials said 71% of the budget is allocated toward salaries and benefits. Noland also emphasized the university's reserve fund, saying ETSU has invested more than $33 million into reserves as trustees continue working toward a goal of maintaining reserves equal to 10% of educational and general expenses. "We continued to move towards building that rainy day fund because at some point, the rain that's falling on colleges in the north and in the Midwest will make its way here," he said. Trustees also reviewed summer maintenance and capital projects planned across campus. Projects include a complete renovation of Yoakley Hall, new pickleball courts, a modular classroom behind Alexander Hall and continued renovations to Brown Hall. Officials said the pickleball courts, Alexander Hall classroom and Brown Hall Phase I are all expected to be completed by early August, while Brown Hall Phase II is expected to begin by spring 2027. "The goal is to bring our faculty up to the benchmark average," Noland said. Noland said ETSU has invested more than $26.5 million in salary increases between 2022 and 2026 and will add another $1.5 million in faculty market salary adjustments effective May 1. Staff members are expected to receive flat salary enhancements of about $700, while 290 faculty members will receive flat increases in addition to market adjustments averaging around $2,300. Also included on the agenda was a proposed Financial Exigency Policy. The policy would replace an existing Tennessee Board of Regents policy and establish procedures for declaring a financial emergency if the university could no longer balance its budget through normal measures. Under the proposal, a declaration of financial exigency could allow extraordinary actions, including the termination of existing academic and non-academic appointments, if the university faced an imminent financial crisis.