Good afternoon.   I am J.B. Milliken, Chancellor of The University of Texas System, and I am pleased to present the 2022-2023 budget priorities of the UT System Board of Regents. 

It has been two years since I sat before you—in person—as a new Chancellor (and Texan).  I am happy to be back with you, but like you, wish we were all in person again.  These are unusual and unprecedented times, but I could not be more proud of how our leadership, faculty, staff and especially students have risen to the challenge of operating effectively, if not perfectly, during this global pandemic.  Our institutions have successfully continued to provide education, research and health care to serve the people of Texas.

In a remarkable transition, our academic institutions pivoted last March to remote learning, enabling tens of thousands of students to graduate or continue their progress towards a degree.  And while this was a great success for American and Texas higher education, it also magnified the challenges we face with availability of internet access, whether because of broadband limitations, subscription costs, or hardware ownership.   As a state, we must address the need for all students to be able to access education, and online learning will only be more important at all levels in the future.

The dramatic spring transition was followed by an even more remarkable shift this fall, as each UT institution executes a thoughtful, comprehensive plan to offer education on campus and online.   Through a combination of testing, limited and distanced physical presence, health and safety practices and use of educational technology, our campuses have remained among the safest places in the state.   We were convinced it was necessary to reopen and welcome students this fall because of what we know about who suffers most when courses are offered only remotely and there is no meaningful student engagement. That Texans were hungry for this opportunity is demonstrated by a system-wide fall enrollment increase of over two percent, quite different from what is being experienced across the country.    

Challenges at our health institutions were no less significant.  Early in the pandemic, we paused elective surgeries and implemented protocols consistent with the Governor’s Executive Orders.  Our institutions were and remain on the front lines of delivering COVID-19 testing and treatment. As of this month, UT institutions have processed well over half a million tests -- 8% of the state’s total to date. And in a dramatic shift, UT health institutions embraced telemedicine, conducting more than 500,000 visits during a time when, in 2019, they conducted fewer than 1,000.  If there can be said to be silver linings in this difficult time, the successful and dramatic rise in telemedicine is certainly one.  To serve the health care needs of our rapidly growing state, it is important we do everything we can to build on this experience, not regress after the COVID threat ebbs. 

Our research enterprise has been just as engaged in the response to COVID, with projects ranging from the 3D printing of ventilators to therapeutics and vaccine development. About 17% of our research is state funded and we could not have been as responsive without the state’s continued investment in important research.

Across the UT System, we are proud to have played a significant role in serving Texas during this challenge, but our activities required major expenditures.

As of last report, UT institutions have spent $154.6 million, and suffered $811.2 million in lost revenue due to COVID.  Funding from the CARES Act provided some vital early relief, but it has fallen well short of making our institutions whole.  Moreover, our GAI’s were asked to take a 5% reduction in 2020-2021, which amounted to roughly an additional $80 million cut.  We very much appreciated that our Health Related Institutions did not receive a similar reduction in 2020.

Our institutions’ LAR’s included a 5% reduction for both GAIs and HRIs. Several of our institutions have requested restoration of cuts or assistance with COVID losses and those will be addressed by our presidents today.

The UT System’s budget priorities for the 2022-2023 Legislative Session are as follows

• First, formula funding.  It is the foundation that supports higher education in Texas, and it is critical that it keep pace with enrollment growth and inflation.
• Continuation of the four new mission specific formulas at UTSW, UTH Houston, UTMB, UT Health San Antonio.
• Continued funding non-formula support items, which enable our institutions to achieve a wide range of goals and initiatives.
• Continued support of state’s research formulas and programs, the value of which was demonstrated during the pandemic.
• The creation of a medical degree program at UT Tyler, which will provide much-needed improvement in health outcomes in East Texas.
• Increased support for student financial aid, including the TEXAS Grant Program.
• And finally, while the UT System has not formally requested Tuition Revenue Bonds (TRBs), UT institutions have significant capital needs that should be addressed if possible.

Thank you for the opportunity for the UT System presidents and me to testify today.