Senate OKs increase in tuition

Bill allows deregulation after 2005

Houston Chronicle Austin Bureau
May 28, 2003

AUSTIN -- The Senate on Tuesday approved legislation to increase university tuition by as much as $46 per credit hour over the next two years and give university regents the opportunity to set their own tuition levels after 2005.

The increase, if upheld in end-of-session negotiations with the House and approved by Gov. Rick Perry, would allow tuition to rise to a maximum of $142 per credit hour by the fall of 2004. It is now $92.

The Senate, which had previously signaled opposition to deregulating tuition, agreed 23-8 to give university governing boards that authority after 2005, subject to state oversight, as part of an agreement with the House on the new state budget.

It wasn't known, however, if the Senate's plan would meet Speaker Tom Craddick's demand for complete tuition deregulation. As part of last weekend's budget negotiations with Senate leaders, Craddick insisted on giving university governing boards the authority to set tuition in return for agreeing with the Senate to add $500 million to higher education appropriations in the new $118 billion budget.

Fearing budget cuts in the face of a $9.9 billion revenue shortfall, University of Texas officials have actively lobbied for the authority to set tuition higher than allowed by the Legislature.

The Senate tuition plan, devised by Sen. Florence Shapiro, R-Plano, chairwoman of the Senate Education Committee, would allow deregulation in 2005 for universities meeting certain standards, including student performance and minority enrollment goals. The Texas Higher Education Coordinating Board would decide if a university met those standards.

The Senate also created a 10-member legislative oversight committee to monitor the law.

Shapiro's bill, a rewrite of House Bill 3015, a tuition measure previously approved by the House, also would require that universities set aside 40 percent of the revenue from tuition increases for work grants and other forms of student aid.

The House version of the bill also would allow tuition increases of as much as $46 per credit hour over the next two years. And it would allow one year of deregulation -- in 2005 -- but not subject to the Senate restrictions.

Sen. John Whitmire, D-Houston, said he feared tuition deregulation would create two types of universities, "a Neiman Marcus and a Wal-Mart." And Sen. Juan Hinojosa, D-McAllen, said he was concerned that the state was "putting the deficit on middle-class families."

Shapiro said different universities have different funding needs. She said "tuition flexibility," as she called it, could help the state meet the growing costs of higher education.

Shapiro accepted an amendment by Whitmire that sunsets deregulation in 2007, which would force the Legislature to reconsider the issue then.

Previously, Shapiro had said that deregulation needed to be studied more. But she agreed to the phase-in after Lt. Gov. David Dewhurst agreed to push for Senate approval of deregulation as part of the budget deal.

Shapiro said it was "anybody's guess" how the House would react to the Senate tuition plan, although the House, in its plan, fell short of the full and immediate deregulation, which Craddick has demanded.

A conference committee likely will be appointed by Craddick and Dewhurst to try to reach a compromise.

With the session ending Monday, restrictive deadlines were bearing down. Tuesday was the last day for the House to give tentative approval to major bills, and today is the last day for the Senate to approve major legislation.

Much of the work between now and Monday will occur in conference committees seeking compromises on dozens of unresolved issues, including regulation of homeowners insurance and medical malpractice limits.

The Senate also approved measures Tuesday crucial to bridging a $9.9 billion revenue shortfall and balancing a new budget without raising state taxes.

House Bill 7 would cut $1.45 billion from the current budget, and House Bill 3459 would save $2.6 billion over the next two years, primarily through accounting changes and deferring an $800 million payment to the public schools from August 2005 until September 2005.

Chronicle reporter Polly Ross Hughes contributed to this story.