Haslam: Healthcare Costs Driving Up Tuition

Governor Bill Haslam today attributed dramatic tuition hikes to a longterm rise in healthcare costs. Haslam spoke at a board meeting of the University of Tennessee, whose flagship campus in Knoxville is raising tuition by almost 800 dollars a year.

UT officials say this year marks the first budget in which student fees make up a bigger part than money from the state. Haslam acknowledges the rising tuition stems from state cuts, saying the percentage of the budget going to universities has been falling for decades.

“So the fair question to ask is ‘Well, what’s going on? Over 30, 40 years, why is the state giving dwindling funds as a percentage of its budget to higher ed?’ And the real simple answer is ‘healthcare.’ As healthcare costs have expanded as a portion of the state’s budget, something had to give.”

Haslam went on that while the state expects revenues to go up next year, if healthcare costs rise faster, “you can figure out what happens.”


Raw audio of Haslam’s remarks on healthcare:

(direct MP3 download here)

While stimulus dollars (blue) reflect a temporary spike, base appropriations (green) have declined drastically, with student dollars (red) filling the void.

HASLAM: “It’s our strong hope you won’t see those kind of cuts to higher ed anymore going forward, but everybody needs to understand the pressure that’s on the state’s budget is coming from the healthcare side of it. As it grows, if healthcare costs keep going up 8 or 10 percent a year, and our revenues are increasing 3 percent, you can figure out what happens. That’s why we’re spending a whole lot of time in state government working on controlling spending on healthcare costs, whether it be TennCare or our own employees’ healthcare, because if you don’t, the reverberations throughout the budget are huge.”

You can view the materials and a recorded webcast from the UT board meeting at this link.

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