Tennessee State University leaders propose further staff cuts, repurposing state funds
Tennessee State University President Dwayne Tucker presented a five-year financial plan to top state leaders Wednesday as he continues an effort to steer the university out of dire financial circumstances.
The historically Black, public university in Nashville will face a financial shortfall as early as May, according to Tucker, who took over as interim president in December after a year of major leadership upheavals, layoffs and budget cuts at TSU.
Tucker and the university's financial consultant presented the plan, dubbed "a bridge to sustainability," to the State Building Commission. It includes plans to reduce TSU's budget deficit by $32-37 million over the next two fiscal years through further staff cuts, scholarship caps, hiring freezes and other cost reductions.
It also includes a request to revise a law to let TSU expand how it uses the remainder of $250 million the state appropriated in 2023 for infrastructure projects at the school. If approved, the remaining $154.5 million in that fund would support TSU over the next five years as it works to regain financial stability.
"We believe this allows TSU the stability to get back on our feet financially," Jim Grady, a financial consultant from Alvarez & Marsal, told the commission. "It also allows us the opportunity for all our stakeholders to keep us honest about what we're doing."
Grady also told the commission, which includes high-ranking Republicans like Lt. Gov. Randy McNally, House Speaker Cameron Sexton and Comptroller Jason Mumpower, that a large draw on TSU's budget is due to honoring a flurry of scholarships promised to incoming students by previous TSU leaders. That will cost a total of $18-20 million in the years to come as those students complete their degrees.
"We intend to keep the promise that we made to students," Grady said.
However, Grady and Tucker explained that TSU will rein in scholarships for future classes, starting with incoming freshman in fall 2025. The university will cap scholarships at 20% of the gross tuition and fee revenue generated by new freshmen.
Other parts of the plan to cut up to $37 million from TSU's budget include reductions in non-instructional staff that would save $6-7 million and instructional staff cuts that would account for another $5-6 million. An additional $3-4 million would come from cost reductions in areas like maintenance, security and other general operating costs.
"There are some hard decisions that need to be made," Grady said.
Tucker, a longtime businessman, temporarily stepped away from his role as the CEO of LEAD Public Schools, a network of charter schools, to lead TSU. He also resigned his post on the TSU board, where he had served since April. His term runs until June 30. The TSU board plans to relaunched its search for a permanent president this year, with the goal of appointing a new leader who would start on July 1.
The $250 million in state funds was allocated for TSU after Tennessee's Office of Legislative Budget Analysis released a report in 2021 that revealed the state underfunded TSU by up to $544 million over the course of several decades. In 2023, the U.S. Department of Education and U.S. Department of Agriculture sent a letter to Gov. Bill Lee calculating that underfunding was $2.1 billion. Advocates have long pressed for that underfunding to be restored.
Tucker referenced the $544 million figure multiple times during the Wednesday meeting. He said repurposing the remaining $154 million from the state's initial restoration of funding is a starting point. In the future, Tucker said, he hopes to discuss how the final $294 million can be provided to TSU.
More: How the state underfunded Tennessee State University by $2 billion
Tucker previously went before the State Building Commission on Dec. 16, his first official day in office.
During that meeting, McNally pressed Tucker to explore financial exigency for TSU, an extensive and extreme measure that would allow the university to cut programs and fire tenured faculty, if needed. Mumpower also urged TSU to consider selling its downtown campus and a plot it owns at the John C. Tune airport. Tucker fielded their questions and said he'd work through the holidays to formulate a plan.
Mumpower leveled criticism at previous TSU leadership during the December meeting and again on Wednesday. However, he also praised Tucker and his team for their transparency and plans to steady TSU.
"It's remarkable what can happen when competent leadership is in place," Mumpower said Wednesday.
Mumpower also spoke directly to several TSU student leaders in the meeting Wednesday and said he'd like to visit campus and have lunch with them to hear about their experience.
TSU: State Democrats criticize comptroller for 'aggressive' questions to university leaders
Sexton said he is willing to work with state lawmakers on revising how TSU can use the $154.5 million left in its capital improvements fund. However, he also said he'd like to see it drawn down incrementally, with benchmarks in place to release more funds as the next five years unfold.
Tucker said he is open to that, depending on what the benchmarks are.
"We just want a little more flexibility to … run a business while we establish credibility," Tucker said.
During the meeting, Tucker also highlighted the progress TSU has made since the last time he faced the commission. He said the university completed a financial exigency training with staff, streamlined how top TSU leaders meet and collaborate, restructured its business and finance department and its financial aid office, and resolved past audit findings. It also saw 600 more students than expected enroll for the spring 2025 semester.
Commission members praised Tucker and his team for their dedication, professionalism and financial plan.
"All this contributes to the sense that TSU is here for the long term," Jim Bryson, Commissioner of Finance and Administration, said. "I believe that TSU is getting stronger every day that you're at the helm."
This story has been updated to add photos.
Reach reporter Rachel Wegner at RAwegner@tennessean.com or follow her on Bluesky @RachelAnnWegner.
This article originally appeared on Nashville Tennessean: TSU leaders propose millions in cuts, layoffs to avoid shortfall
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