President John Petersen announced in an e-mail on December 18, 2008, that he and his executive staff would take a voluntary 5 percent pay cut effective January 1, 2009, which would save $436,000, and that they would also relinquish their university vehicles. The cuts included the pay of chancellors and the directors of men’s and women’s athletics as well as the salaries of vice presidents. The money saved would provide a small offset to the $66 million projected budget reduction. He also announced (December 9, 2008) a mandatory freeze on renovations and purchases of furniture and equipment, postponement of new academic programs, and cancellation of all nonessential staff travel.
In early January 2009, Petersen told the Effectiveness and Efficiency Committee of the board of trustees that in addition to the UT system cuts of $66 million announced for the 2009–10 year, an additional 5 percent cut was projected. Peterson proposed a couple remedies for the budget cuts, including the removal of the 12-hour tuition cap for UT Students, and possibly eliminating 700 jobs within the UT system. A tuition cap meant that the most a full-time student could be charged for tuition was 12 hours. So, even if a student is taking over 12 credit hours, they would only be charged for 12 credit hours. Neither of these remedies would be approved by the board of trustees.
At the board of trustees meeting in February, Chancellor Jimmy Cheek set forth the plan and consequences for the Knoxville Campus from the 20 percent reduction in state appropriation (13.9 percent from the last year’s budget and 5.7 percent in the current year) in the face of an anticipated increase of $10 million in fixed costs. To cover the increased fixed costs would require a 7 percent tuition increase, and the campus was basing its plan on a 9 percent tuition increase.
The plan, based on a 9 percent tuition increase, required elimination of 326 jobs (204 of which were filled), and reduced the capacity to teach students by 7 percent. Under the plan, 51,933 student credit hours would be lost, about 16,657 classroom seats would be eliminated, and 3,740 students would require a longer time to graduate.
Cheek also indicated that nearly a dozen undergraduate and graduate programs—including German, Russian, Italian, art history, religious studies, geology, and public administration—were currently under review because of low performance rates.
In March Governor Bredesen announced that federal stimulus funds would be used to assist higher education and to avert an immediate crisis.
After President Petersen’s resignation on February 18, Interim President Jan Simek additionally announced that two vice presidencies, one for science and technology and one for strategic planning, would be eliminated and the functions would be redistributed within the system.