TN TAX BATTLE: NO NEW (INCOME TAX)MONEY, NO READING INITIATIVE (EDUCRAT WHINE ALERT)

NASHVILLE - Gov. Don Sundquist's reading initiative, the most expensive new program in his budget proposal, will remain unfunded for the second straight year unless the legislature passes a tax bill to help raise money for it, lawmakers said Wednesday.

The Senate Education Committee voted unanimously to recommend to the Senate Finance Committee that it limit education spending next year to this year's level and whatever is needed to accommodate enrollment growth. This year's Basic Education Program appropriation is about $2.4 billion.

Any new spending, including pay raises for teachers and the reading initiative, would be made contingent on money raised through new or increased taxes.

Lawmakers are debating a couple of tax bills as they seek a solution to the anticipated $480 million shortfall in the current budget year, which ends June 30. It would take an estimated $880 million in new revenue next year to fund the same level of services provided this year.

Last year, Sundquist's reading initiative was approved and signed into law, but funding was cut because of the budget shortfall and it was never implemented.

The reading initiative would make preschool mandatory for 4-year-olds and ensure every child could read at his grade level by the third grade. It also would help lagging seventh- and eighth-graders to catch up to their peers, and improve teacher quality.

A revised version of the reading initiative bill is pending in the legislature; the Senate committee's action would make passage of it moot unless new money is found.

The committee also recommended that the reading initiative and other new spending proposals be funded individually by priority, depending upon how much new revenue is raised.

The reading initiative, if fully funded, would cost $70 million in state dollars the first year. A recently passed federal education program would provide $20 million; that money will be spent regardless of the outcome of the tax debate.

Sundquist also proposed a 2.5 percent pay raise for teachers at a cost of $40 million.

Committee chairman Sen. Randy McNally (R-Oak Ridge) said he thinks that is more important than the reading initiative, but the committee couldn't recommend it because it didn't know if there would be enough money.

"The best way for us to do it would have been to know how much revenue we have and then operate off of that," McNally said. "That's part of the problem we have. We're dealing with programs first and the budget later. It could be they get nothing, part of it, or all of it."

'Pricing students out of...education'

By Ruma Banerji banerji@gomemphis.com May 16, 2002

Louise Cooper is already $120,000 in debt for school.

The out-of-state costs the Virginia native paid for graduate work at universities in Kentucky and now at the University of Memphis - where she pays roughly $16,000 in tuition, room and board per year - have forced her loans and debt to skyrocket.

She can't afford to borrow much more money, she says, so she's not happy to hear about the 16.7 percent tuition increase that could hit the U of M this fall if the legislature passes the budget proposal before them.

"I can only afford to take nine credit hours, or three classes, as it is," Cooper, 33, said. "If tuition would increase that much, it would mean I would have to drop classes and take only two classes a semester, which would slow me down and make me eligible for less loan money."

The latest proposal would cut $93.3 million from colleges and universities across the state. If it passed, the U of M would have to raise tuition 16.7 percent - or roughly $500 more a year - and Southwest Tennessee Community College would have to raise tuition 26.7 percent - or roughly $400 a year - to make up for the cuts.

The possible tuition increases were released at a meeting Monday of the Tennessee Board of Regents, which oversees six universities, including the U of M, 13 community colleges, including Southwest, and two technical schools.

Financial aid officials at the U of M and Southwest said Wednesday that any more drastic tuition hikes will hurt students, forcing them to get more loans, fall further into debt and consider dropping school altogether.

"It's definitely pricing students out of higher education," said Dan Miller, director of financial aid at Southwest. "We're scaring them off with talk of all these increases. They get worried they won't be able to pay for school, and they decide against coming to school at all."

At Southwest, 46 percent of the school's 12,000 students rely on financial aid. Roughly 15 percent of those who receive aid are low-income students who qualify for the highest amount in federal grants.

Southwest sophomore Keisha Townes, 26, grimaced when she heard of the possible tuition increase Wednesday. She said she wouldn't let the extra $400 it might cost her to go to school deter her from ultimately getting a nursing degree.

"It would be tough to pay for school, but I'd work more or something," Townes said. "School is too important. You can't get a decent job out there without a college education. I know; I tried."

Miller said the school's middle-income students are likely to suffer most if these increases come through. These are mostly nontraditional students - average age 26-33 - who have full-time jobs, usually don't qualify for much aid because of their salaries, but have families to support and real bills to pay, Miller said.

"The neediest students will receive lots of money from the feds and the state, but it's the middle-income students that will hurt the most," he said. "Their income isn't increasing at the rate of tuition. So, if something's got to give, it'll be school."

At the University of Memphis, about 60 percent of the school's 20,330 students rely on some type of financial aid to pay for school, said the school's financial aid director, Robert Boone. In the 2000-01 academic year, the most recent numbers available, U of M students took out $83 million in federal, state and institutional loans, grants and scholarships.

More increases will force already financially strapped students to get more loans and fall deeper in debt, he said.

"For people who already have financial need and have to increase their indebtedness it is not good," Boone said. "It's going to be bad for out-of-state students particularly. Even if they get everything federal grants have to offer, they'll be lucky if it covers tuition alone. It's hard to say how many students will just give up and not attend school, but some attrition is expected."

- Ruma Banerji: 529-2596

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