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THEC committee transmits revised FY26 operating budgets amid questions on TSU and redistribution
Summary
The committee voted to transmit revised 2025–26 operating budgets after a staff presentation showing roughly $5.3 billion in planned revenues and $5.4 billion in expenditures, shifts in the share of state appropriations vs. tuition, and discussion of Tennessee State University monitoring and formula redistribution pressures.
THEC staff presented the transmission of the revised 2025–26 operating budgets to the Finance & Operations Committee on Feb. 19, 2026. Russell Van Zimerman, director of fiscal policy, said the public institutions’ revised operating plans show roughly $5.3 billion in revenues and $5.4 billion in expenditures, with the difference bridged by prior‑year reserves. Van Zimerman noted state appropriations now make up about 43% of institutional revenue, a roughly 7 percentage‑point increase versus a prior period, reducing tuition’s share of total revenue.
Staff discussed tuition discounting practices and net tuition revenue per FTE as metrics for fiscal health. Van Zimerman called out Tennessee State University specifically, saying the university’s discount rate in the revised operating budget fell to about 39% from roughly 51% a year earlier — a shift staff has monitored in coordination with the university and other state financial officers.
Commissioners pressed staff on ongoing reporting from TSU; Director Gentile and staff said they receive periodic updates (quarterly briefings involving TSU, the comptroller and Finance & Administration), and that TSU recently hired a new chief financial officer, April Robinson. Commissioners requested additional periodic reporting to the committee so commissioners who are not on the TSU information stream receive updates.
Van Zimerman also highlighted long‑running work on the outcomes‑based funding formula, telling the committee that redistribution inside the formula has grown substantially — from about $6 million annually in the formula’s early years to roughly $18.5 million in the FY27 proposal — and that the committee will continue deliberations with the statutory review group on possible adjustments.
After discussion, the committee voted to transmit the revised FY26 operating budgets to the full commission (motion moved by Commissioner Matlock, seconded by Commissioner Stafford; roll call recorded six ayes). Staff will provide follow‑up reporting on TSU and other items to the committee.
