The Tennessee Higher Education Commission (THEC) is responsible for the annual development and adoption of specific policies and formulas for the equitable distribution of monies in the area of educational instruction and academic support, including libraries. Two formulas are applied to determine funding: Full-Time Equated (FTE) enrollment determines the funding needs of the organization based on number of full-time students, and Performance-Based Funding is based on the institution's ability to demonstrate improved standards of performance, measured through outcomes assessment such as student test scores and placement of graduates. Each of the formulas pose financial dilemmas for the Tennessee State University (TSU) library. While FTE may be equitable for funding classroom instruction, "half-time" students may require as many library resources as full-time students. Performance funding has little direct reference to the library's main mission, to provide the resources necessary for improving instructional quality. In addition, while the library was allocated a certain stated amount of funding in the annual TSU budget, the full sum is never received by the library, while other TSU departments receive the full funding allocated. A better job of "selling" the library is mandated. (Contains 10 references.) (SWC)