Dear Colleague,

As you have watched the legislative consideration of Tennessee's fiscal
needs and its state tax structure, you have seen that no  resolution has
been possible.  Tennessee is in serious budget imbalance.  Either
significant new revenue must be added to the state's treasury - or serious
cuts must be made to the current level of appropriations/spending before
passing a budget for 2002-2003.

For the past several months the legislature has considered several
variations of increasing taxes/revenue.  Last week, the nearly last attempt
to create new revenue failed in the House.  Now, the House
Finance  Committee has been instructed to move to the other alternative.

While legislator after legislator told us that the D O G S budget was not
their choice and would never pass, the House Finance Committee is now
asking every part of the state to tell them what will be cut in order to
accomplish the DOGS.

President Eli Fly is sending a memo to every faculty and staff member in
the University system telling us he (and perhaps the campus chancellors)
will have to tell the House Finance Committee this coming Thursday how it
will cut $50,000,000!

A little over $4,000,000 of that $50,000,000 will be cut in
Chattanooga.  The President is facing the challenge that House members want
to know if cutting $50,000,000 - or about 12% - of the total university
budget would cause serious problems for the University of Tennessee.  The
President (and perhaps chancellors or other unit heads as well) will face
trying to convince the legislative leadership that such cuts are more
drastic to Tennessee than raising taxes would be.

It is a tough challenge.  The President is correct that cuts of such
magnitude mean program closures, not only no more movement toward "average"
compensation, but possibly layoffs and other interruptions in our progress
as well.

At UTC, although referencing the drastic DOGS potential regularly,  we did
not ask the Vice Chancellors to present to the University Budget Committee
exactly where, what and who such drastic cuts would injure in crippling the
achievement of the university mission.  I have indicated to the President
that UTC can, as always, provide the information on what damage would be
done to UTC by such cuts.  We will hope that the legislature will
acknowledge that detailed, but unnamed program cuts and different ways of
doing business at the university will be sufficient for their purposes.

It is not my intention to specify names of programs or individuals or
schedules that will have to be modified if the DOGS budget must be
inflicted on Tennesseans.   Yet, legislators will need enough information
to be sure that we cannot just easily absorb a $4,000,000 loss and do
business as usual.

The next budget - with revenue enhancement or spending cuts - may likely be
considered June 19th.  The last day of the session is June 30th.

The University Budget Committee will need to meet as quickly as possible to
deal with the realities of the new budget.  At its worst, we are looking at
$4,000,000 lost to our use.  At the last meeting of the University Budget
Committee, we were looking at zero new dollars appropriated for education
and general support of our university mission.  As usual, we will look
together at the tough options facing us, and we will choose the best
options and strategies for achieving our academic mission.

I truly regret to send such potentially bad news - $4,000,000 cut is not
just something that we can ignore or effortlessly absorb.
Our hope is that if legislators see the harm that a "no new revenue budget"
does to our state, they will reluctantly return to last ditch consideration
of some new revenue to replace the deleted one-time and other fund balances
that face Tennessee.

Bill