Legislative session produces mixed outcome for higher education

Overall funding increased, but $1.1 billion in construction bonds failed

By Ralph K.M. Haurwitz
Austin American-Statesman
Sunday, June 05, 2005

The legislative session that concluded last week produced mixed results for higher education.

Lawmakers allocated $13 billion in state tax money and fees for the next two years. That's $491 million, or 4 percent, more than current spending. The state's colleges and universities were relieved for the most part, considering early indications that general appropriations might be reduced, as they had been two years ago.

On the other hand, a separate authorization of $1.1 billion in bonds for campus construction projects fizzled at the last minute. Casualties included the University of Texas at Austin, which had hoped to receive $75 million to reconstruct the Experimental Science Building, currently operating at half capacity with makeshift natural gas piping, and Texas State University's Round Rock Higher Education Center, which was in line for $35 million.

"This is going to force campuses to dramatically rethink some of their expansion plans," said Raymund Paredes, the state's commissioner of higher education. "I don't think it mortally hurts any institution."

Here's an overview of legislative action — and inaction — on tuition, financial aid, automatic admission and other matters:

  • Tuition-setting authority: The Senate passed legislation that would have prevented UT-Austin from raising tuition. Senators also approved a measure that would have returned tuition-setting authority to the Legislature in 2008. (Lawmakers two years ago ceded some of that power to university governing boards.) But the House refused to go along with either plan.
  • Automatic admission: Sen. Royce West, D-Dallas, firmly supported a 1997 law that allows Texas students graduating in the top 10 percent of their high school class to attend any public college or university in the state. That was until the waning days of the session, when West conceded that adjustments are needed to boost capacity for other students at UT-Austin. By then it was too late to strike a compromise, but lawmakers agreed to work toward a resolution when they meet in 2007.
  • Financial aid: The strings attached to state grants got tighter for students at private colleges. New recipients will have to maintain a 2.5 grade-point average on a 4.0 scale, and they will have to carry at least 24 credits a year. Private colleges objected on grounds of fairness: Students who are not receiving such aid because their families are wealthier don't have to keep up a 2.5 average. In addition, studies show that poorer students earn lower grades, said Carol McDonald, president of the Independent Colleges and Universities of Texas Inc. Such arguments swayed the House but not the Senate. Students at public colleges who receive state grants already must maintain a 2.5 average.
  • New campuses: Lawmakers approved legislation that will convert a Texas A&M satellite campus at Killeen into a stand-alone university when its full-time enrollment reaches 1,000 students, fewer than a third of the number usually required. An A&M satellite at San Antonio will get stand-alone status when its enrollment reaches 2,500, although future approval of construction bonds would lower the threshold to 1,000.
  • Graduate medical education: Lawmakers earmarked $3.6 million for the next two years to help medical schools create more positions for residents in pediatrics, family practice and other basic fields. "We think this is a large step forward," UT System Chancellor Mark Yudof said. "The more residents we have, the more likely it is we can keep our residents in the state when they practice."
  • Emerging technology: About $100 million — a third of the amount sought by Gov. Rick Perry — was set aside to recruit top scientists and engineers to Texas universities, foster collaboration between universities and the private sector, and match federal and private money. Officials hope to add another $100 million from the state's rainy day fund.
  • UT-Austin's budget: Campus officials calculate that they are getting $19.4 million more in general appropriations for the next two years. Subtracting higher longevity and retirement pay mandated by the Legislature leaves $14.2 million in new money, they said. Officials plan to use the money for scholarships, raises for faculty and staff, and for UT's Bureau of Economic Geology. "While we're certainly pleased with the new money, it certainly isn't for this campus the bonanza some have made it out to be," said Kevin Hegarty, UT's vice president and chief financial officer. Even with tuition scheduled to rise about 4 percent in the fall, "it's going to be tough to avoid future increases," he said, adding that any such increase would be modest.
  • Tuition revenue bonds: Campuses initially put forth requests for $3.2 billion in bonding authority for construction projects. That was whittled down to $1.1 billion. Although such bonds are guaranteed by tuition, the interest and principal are typically paid by the state with general revenue. But a House-Senate conference committee's final proposal didn't sit well with some lawmakers. One reason: The $75 million for UT-Austin's science building was included in the plan, but A&M's flagship campus in College Station wouldn't have received a penny. The measure died, but higher education officials hope that the matter will be addressed if the governor calls a special session.
  • Student regents: Students have been trying for more than 30 years to get a voice on university governing boards. Two proposals with essentially identical language were passed, adding a student regent to each of the state's 10 public university governing boards. The student regents will have no vote but can attend and participate in meetings, including private sessions. The governor will make the appointments with advice from chancellors and student government groups.

rhaurwitz@statesman.com; 445-3604