Tennessee State University, the state’s only land grant university, has signed a memorandum of understanding with the state designed to strengthen the school’s finances. (Photo: John Partipilo/Tennessee Lookout)

Tennessee State closed its operating agreement with the state on Tuesday, bolstering its finances after nearly a year of upsurge in shortfall.

A few days after the TSU board approved a 6% increase in tuition and fees for the next grade, TSU and state officials signed the memorandum that was first approved for campus maintenance, allowing the university to spend $96 million over three years.

The agreement with the state’s finance administration office and the Director’s Office implements state laws that allow TSU to redirect unused capital funds for operation, as long as certain requirements are met.

At the request of Gov. Bill Lee, Congress approved $250 million to TSU for facility improvements at North Nashville’s historic Black College three years ago. Despite the lack of housing on campus, the university was unable to spend money on dorm projects.

Under the new contract, TSU will spend $55 million on campus projects that include the electric grid and new food and animal and environmental science buildings to operate most of the money.

“It not only provides important cash flows to ensure the financial sustainability of the university, but it also enriches the student’s experience and strengthens its ability to attract both students and qualified employees,” interim president Dwayne Tucker said in a statement.

The state representative at the time of sale of Tennessee State University’s real estate is

The state’s Building Committee approved an infusion of $43 million into TSU’s operating budget last November, and paid a salary calculation, supporting the university for the rest of the budget year. This included some of the capital funds allocated in 2022.

Tennessee Secretary Jason Mumpour, who leads the state’s efforts to improve TSU’s financial position, agreed to an increase in tuition and fees of 6%, which will increase by $270 per semester.

Mumpower said he signed the contract because he is confident in TSU’s new leadership. TSU has repeatedly stated that it will need to set up registrations and tuition fees that will help you “return to financial health.”

Last year, Mumpower said TSU would need to sell its Avon Williams campus in downtown Nashville and sell real estate at John Tune Airport.

TSU officials opposed the proposal to sell the property and, under Tucker’s direction, requested approval of $154 million remaining from the campus grant to continue operating. University officials were seeking an additional $300 million in capital funding after a Land Grant University funding survey determined that the state had reduced $544 million over a century. Subsequent federal studies showed TSU had a $2.1 billion shortfall in about 30 years.

Faced with a burgeoning registration, TSU was forced to make last-minute requests by the Building Committee to accommodate students from the hotel and nearby church three years ago.

The university encountered financial troubles after launching an aggressive scholarship program in the heels of the Covid pandemic to meet student demand. TSU spent $37 million from federal grants to pay for the scholarship when registrations jumped to 8,026 before registrations returned to 7,254 in fall 2022 in fall 2023.

Once federal funds ran out, the university had to find other sources, including $19.6 million in tornado insurance. The university was a hit with Dire Straits as the costs of serving more students who didn’t earn enough to balance the increased costs increased.

Glover resigned last year, but the interim president who replaced Tucker before her resigned in the fall when he learned that the state leader had signed two $800,000 consulting agreements with Glover.