Tennessee State requests to use $154M in building funds for operations

by Sam Stockard, Tennessee Lookout
February 20, 2025

Tennessee State University officials are asking the State Building Commission to let them shift $154 million to daily campus operations after the funds were originally approved for building projects.

The university’s interim President Dwayne Tucker told the State Building Commission Wednesday that TSU’s five-year “sustainability plan” calls for reducing scholarships and trimming employee expenses by up to $17 million.

TSU wants to “reset the culture” and prove it can be more “transparent,” Tucker told the commission.

The university doesn’t need another cash injection to make it through May, Tucker said, after state officials authorized a $43 million infusion into its operating budget last November to make payroll and prop it up for the rest of the year.

But to keep TSU running, university officials are requesting approval to use $154 million remaining from a $250 million campus improvements grant. 

In addition, a university consultant said TSU could request nearly $300 million in capital funding after a land grant university funding study committee determined the state shorted TSU by $544 million over the course of a century. 

“At some point, it has to be put in a budget,” Tucker said, though he wasn’t asking for approval Wednesday. He added later that the university isn’t “expecting the full enchilada to be served” without meeting some performance goals.

A subsequent federal study showed TSU was shorted by $2.1 billion over some 30 years, but Tucker didn’t mention that figure Wednesday.

To bolster TSU’s financial situation, Tucker also said he plans to announce a $100 million fundraising drive for the next two years. 

The State Building Commission took no action Wednesday on TSU’s request or its financial plan.

House Speaker Cameron Sexton, a member of the Building Commission, suggested the university consider changing its tuition rates to expedite a financial turnaround.

Lt. Gov. Randy McNally, chairman of the commission, said in a statement afterward the TSU turnaround plan is a good starting point but declined to commit to supporting the funding requests.

“While some of the expectations about what TSU is owed by the state need to be right-sized, I believe the legislature has found a reliable partner in President Tucker. While there are still hurdles to clear and a long way to go, I am more optimistic that better days are ahead for TSU than I have been in quite some time,” McNally said.

TSU was forced to make a last-minute request of the Building Commission three years ago to house students in hotels and a nearby church, which led to Senate hearings and a move to vacate the Board of Trustees and push former President Glenda Glover out of office.

The university ran into financial trouble after starting an aggressive scholarship program on the heels of the COVID pandemic when large numbers of students wanted to attend a historically Black university. TSU used $37 million from a federal grant to pay for scholarships when enrollment jumped to 8,026 in fall 2022 before it fell back to 7,254 in fall 2023. 

Once federal funds ran out, the university had to find other sources, such as $19.6 million in tornado insurance money. The university hit dire straits because of the increased cost of serving more students without enough revenue to balance increased expenses.

TSU is honoring the scholarships for students who remained enrolled at the university but is trimming scholarships over the next five years as part of its new operating plan.

Building Commission members were upset last fall when they found out the interim president before Tucker signed two $800,000 consulting contracts with Glover.

Tennessee Lookout is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Tennessee Lookout maintains editorial independence. Contact Editor Holly McCall for questions: info@tennesseelookout.com.

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