John Hutcheson

Staff reductions, academic cuts and program reviews are under way on college campuses nationwide, and few higher education leaders see the financial outlook improving soon, a new study shows.

Two-thirds of the nation's public research universities, including those in Tennessee and Georgia, are rethinking the way they do business after 85 percent of institutions reported a decrease in state funding, according to a report by the Association of Public and Land Grant Universities published this month.

"The magnitude of the current cuts due to the global recession and the cumulative effects of two decades of declining financial support make the current situation especially precarious," said David Shulenburg, vice president for academic affairs at the association.

Public universities in Tennessee and Georgia could be forced to weather another round of budget cuts as projections for state tax revenues worsen, officials said.

The University of Tennessee system, which oversees the Knoxville, Martin and Chattanooga campuses, faces a $66 million budget shortfall when federal stimulus funding runs out in 2011. UT Interim President Jan Simek has said the system could eliminate about 700 filled and unfilled positions within the next two years.

Richard Brown, vice chancellor for finance and operations at the University of Tennessee at Chattanooga, said the school has eliminated 90 positions and $8 million from its budget since 2008. But UTC is preparing for the possibility of another mid-year budget reduction, he said.

"The governor is already sending signals that revenue projections for the state are way down," Dr. Brown said. "I am hoping things will remain stable ... but I cannot predict that."

Gov. Phil Bredesen and top aides said this week that they are preparing for a "worst-case" budget scenario next year in which up to $1 billion must be slashed.

Eighty percent of universities nationwide have reduced their staff and more than half have cut funding for student services, campus infrastructure and technology, the Association of Public and Land Grant Universities study shows.

"We are apprehensive about the future, although we know the demand for our services is likely to increase," said John Hutcheson, vice president for academic affairs at Dalton State College in Dalton, Ga.

At its meeting today in Atlanta, the University System of Georgia Board of Regents voted to cut $176 million from its 2010 budget. Officials already have trimmed $275 million from the 2009 budget, said Diane Payne, a spokeswoman for the Georgia system.

To reduce costs, employees at the University of Georgia and Dalton State College are required to take six furlough days before June 30, 2010, she said.

Students at the University of Georgia will pay an additional $100-per-semester special fee, and students at Dalton State College will pay an additional $50-per-semester fee, she said.

"We are bracing for tough times," said Dr. Hutcheson. "The recession has shown no real signs of turning around. State revenues are still going down. These fees that have been imposed are suppose to expire in 2012, but who knows what 2012 will look like?"

Students walk across campus at the University of Tennessee Thursday, Aug. 25, 2005, in Knoxville, Tenn. (AP Photo/Wade Payne)

More than 50 percent of universities surveyed in the Association of Public and Land Grant Universities study said they believed more cuts in state appropriations were likely, and 53 percent were pessimistic about their institution's fiscal future during the next 18 months.

"The picture painted by survey respondents is dreary," the study reads.

At UTC, Dr. Brown said it is difficult to plan in uncertain times.

"We are asking people to do a whole lot more with less," he said. "Class sizes are larger, and we are relying more on part-time faculty."

State funding for higher education will be greatly affected by the amount of tax revenue generated during the holiday months of November and December, Dr. Brown said.