THEC seeks outcomes funding and warns of structural lottery shortfall; committee supports a small recurring market-adjustment request

An official representing the Tennessee Higher Education Commission presented the agency’s budget priorities and flagged what the agency said could be a structural deficit in lottery-funded programs.

The presenter said THEC requested $74 million in new money to fully fund the outcomes-based funding formula and sought $350 million in capital maintenance funding for institutions. On student aid, the commission requested $12 million for the Tennessee Student Assistance Award (TSAA) to serve an estimated additional 6,500 students; the witness said that without the $12 million, "6,500 fewer would be served than if they had that $12,000,000." The agency also described a set of recurring and nonrecurring youth and completion programs grouped under a "Career Start Here" initiative intended to boost advising, coaching and completion supports in underresourced high schools and community colleges.

On the lottery, the witness said projections show a potential structural deficit in future years of lottery-supported programs and promised a follow-up memo that will analyze all 13 lottery-funded programs and potential adjustments. Committee members asked questions about the outcomes-based formula, dual enrollment, and the composition of lottery revenues. Senator Hensley moved, and the committee approved by voice, circulation of a letter asking the Finance Committee to add $300,000 recurring to THEC for targeted staff market adjustments; the committee recorded the letter and the budget motion was forwarded to finance with a positive recommendation.