Colleges facing budget ax

By W. Gardner Selby, Express-News Austin Bureau
San Antonio Express-News

AUSTIN — Lawmakers on Tuesday fielded ideas to raise $3.2 billion in savings or fees over the next two-year budget period, including proposals to halve or wipe out special appropriations to higher education and end certain grants to middle-class college students.

The proposals

The Legislative Budget Board's recommendations to slash $3.2 billion from the state budget include:

  • Cutting 5 percent of the budget from most state agencies, saving $600 million.
  • Charging nursing homes a fee of 6 percent of gross receipts, totaling nearly $350 million that might attract matching federal aid.
  • Charging state employees or retirees more for health insurance.
  • Requiring real estate agents to disclose actual sales prices and setting a $35 document filing fee, raising $10 million.
  • Cutting aid to UTSA by nearly $5 million, as part of a nearly $204 million reduction in grants to many universities.

The recommendations — plus a pitch for a nursing home "quality assurance" fee — are among 120 suggestions from the Legislative Budget Board that could be in play as members write the 2006-07 state budget.

John O'Brien, the board's deputy director, said $1.3 billion of the savings or revenue is tucked into a baseline budget proposed last week, with another $600 million in savings expected from a Republican leadership demand that most agencies ask for 5 percent less than their 2004-05 budgets.

Four years ago, the Senate approved a nursing home quality assurance fee intended to draw more federal money for nursing homes, but the fee perished after Gov. Rick Perry expressed qualms.

The board report suggests extending a fee levied on facilities for the mentally retarded and charging nursing homes a new fee of 6 percent of their gross receipts — similar to fees in 33 states — which would reap nearly $350 million that could be used to attract matching federal aid.

The report offers several recommendations to basically dun state employees or retirees for more of their health insurance costs.

It calls for real estate agents to disclose actual sales prices and for a related $35 document transfer fee.

Four of the state's largest universities — the University of Texas at Austin, Texas A&M University, Texas Tech University and the University of Houston — no longer should receive long-treasured special budget supplements, the report states.

Other four-year colleges, including UTSA, should see their special awards cut by half, the report states, altogether yielding nearly $204 million that could go to schools based on "objective formulas linked to educational workload."

UTSA's aid in the baseline budget would drop by nearly $5 million, or 4 percent, affecting recruiting and its ability to support star science and engineering faculty, UTSA spokesman Albert Carrizales said.

"We're already stretched," he said.

The report suggests limiting state grants for students enrolled in Texas private colleges to those who qualify for federal aid based on financial need, saving $49.2 million on top of $13 million in Tuition Equalization Grant cuts in the baseline budget.

Carol McDonald, president of the Independent Colleges and Universities of Texas, said 13,000 students attending private colleges could each lose $2,500 from annual financial aid packages with the change — possibly forcing them to leave for public institutions.

McDonald said families of TEG recipients have average annual incomes of less than $35,000.

"That's not exactly rolling in dough," she said, calling the proposal "penny-wise and pound foolish."

At least 12 career and technology courses that get additional money per student to cover extra costs are taught "in a manner almost identical" to regular education classes, the report states, and cutting the extra funding could save $14 million. The classes include introductions to business law, marketing, business communication, retailing and family health needs.

Linda Holcombe, executive director of the Texas Industrial Vocational Association, said school districts need the money to fund equipment.

The report suggests changing state law to require firms that receive money from the Texas Enterprise Fund to pay it all back if they fall short of meeting job creation and investment goals.

"If lawmakers try to hamstring the fund with too much red tape, companies aren't going to want to do business with Texas," a spokesman for Gov. Rick Perry said.

The budget board, chaired by Lt. Gov. David Dewhurst and House Speaker Tom Craddick, R-Midland, began doing the "performance reviews" two years ago when lawmakers shifted that function from Comptroller Carole Keeton Strayhorn's office, where it started in 1991.

Craddick and Dewhurst didn't immediately embrace any recommendations, with one aide saying it's "early to be out there championing every single one."

"They've done a credible job," Deputy Comptroller Billy Hamilton said. "It's open to debate whether we'd have had different or better ideas."

Of the recommendation on special appropriations to higher education, Hamilton said a similar idea was lofted by then-Comptroller John Sharp 13 years ago — and fell flat.

"I still have knots on my head from that one," Hamilton said.