Dear Friend,

The Texas Legislature recently completed its 84^th Session, and overall it was a very positive session for higher education and for the UT System in particular. In this month’s Chancellor’s Message, I’d like to take you through some of the UT System’s top priorities heading into the session, and tell you what we ultimately achieved on each, with some faring far better than others.

Support for Construction of Classrooms and Laboratories for Students

Here we have very good news. For the first time in almost a decade, the Legislature approved Tuition Revenue Bonds (TRBs) to help finance the construction of new buildings and the repair or rehabilitation of older facilities at Texas institutions of higher education. The state pays the cost of the debt service on bonds that pay for part of the project, with the balance coming from the Permanent University Fund, the institution’s revenues, or philanthropy. Of the $3.1 billion in Legislature-approved bonds, $923 million will flow to UT campuses, with every one of our universities and health institutions landing at least one major project. 

Better Basic Funding

In addition to TRBs, we sought an increase in basic funding support from the state, and here too we were successful. While TRBs fund construction or repair projects, formula funding from the state (driven largely by enrollment) helps pay for basic operating expenses. Bucking the recent trend of declining state support, the Legislature increased the amount of money flowing through its formulas in the next two-year period, resulting in a $282 million (8.9%) increase in funding for UT System general academic institutions and a $134 million (7.6%) increase for UT System health-related institutions.

The Legislature also appropriated $104 million in special item funding for UT System institutions over and above formula funding, including $30 million for the UT Rio Grande Valley School of Medicine.  

Research Funding

Here too the news is quite positive. Governor Abbott has made increased support of higher education research one of his top priorities, and I’m pleased to say the Legislature followed his lead, reorganizing and increasing research funding across the spectrum of Texas universities.  The Legislature appropriated $147 million to the Texas Research University Fund, which supports research at Texas’ top-tier research universities, UT Austin and Texas A&M. It appropriated another $117 million to the Core Research Support Fund, which supports research at our state’s emerging research institutions, including the four in the UT System, UT Arlington, UT Dallas, UT El Paso and UT San Antonio. And it appropriated $14 million for the Comprehensive Research Fund, to support research at all other general academic teaching institutions.

The Legislature also appropriated $138 million for the Texas Research Incentive Program (TRIP), which provides matching funds based on the amount an emerging research institution raises in private gifts and endowments to enhance research activities.

Finally, the Legislature passed a bill creating the Governor’s University Research Initiative, the purpose of which is to attract world-class researchers, such as Nobel Laureates and members of the National Academies of Sciences, Engineering and Medicine to Texas’ public general academic or health-related institutions. While other states are cutting back, our Legislature approved $40 million in matching funds for this purpose. I have directed the presidents of our institutions to move swiftly to identify qualified candidates so that we can take advantage of this unique opportunity to bolster the brainpower and prestige of our campuses.

Support for Student Success with Financial Aid

As part of the overall budget bill, the Legislature increased funding for TEXAS (Towards EXcellence, Access and Success) Grants, the state’s primary financial aid vehicle for qualified high school graduates with financial need, by $63 million, for a total appropriation of $715 million for the biennium. Great news for our students!

Building the Health Care Workforce

In Texas, Graduate Medical Education (GME), also known as residencies, are funded from a variety of sources, including the state. This session, the Legislature increased its contribution to GME in a number of ways. It increased the formula funding of GME by $20.2 million, provided $53 million for expansion of GME, and established a $300 million permanent endowment for GME by repurposing dedicated revenue from a dissolved program. Supporting Texas residencies is particularly important, because statistics show that doctors educated and trained in Texas tend to stay and practice medicine in Texas.

Improving the Health of Texas

The Legislature also authorized the Texas Health Improvement Network (THIN), an initiative spearheaded by Dr. David Lakey, the former head of the Texas Department of Health Services, whom we recently hired as UT System Associate Vice Chancellor for Population Health and senior vice president at The University of Texas Health Science Center at Tyler. THIN is a network of faculty and other Texas health professionals that will work to develop initiatives, policies, and best practices to address major health care challenges in Texas, including health disparities and health care cost containment.

The UT System Board of Regents previously committed $5 million to fund Dr. Lakey’s efforts to develop a strategic plan to improve the health of Texas, of which THIN will be a key component.  The Legislature has now authorized THIN, created it by law and directed the UT System to coordinate it.

Funding or Limiting the Cost of the Hazlewood Tuition Exemption for Veterans and Their Families

Here is an issue where we were disappointed that the Legislature did not take action. As many of you know, the Hazlewood Act exempts veterans from paying tuition and mandatory fees at public institutions of higher education. Six years ago, the Legislature began allowing veterans to pass their unused benefits – up to 150 semester credit hours – to their children. This is the most generous benefit of its kind in the country, and it’s expensive. Last year, the cost of the exemption for all institutions of higher education was $169 million – with $42 million attributable to UT System institutions. With no increase in funding from the state, or changes to program eligibility, we expect the cost to UT System institutions to approach $100 million in the next few years.

While there was much discussion, and there was in fact a small increase in funding, the Legislature chose ultimately not to revise the program in this session. But our legislators are certainly aware of the challenge, and I’m sure they will revisit the issue in 2017.

Addressing Guns on Our Campuses

Finally, I would be remiss not to mention an issue that has received a lot of attention—the Legislature’s action that permits license holders to carry concealed handguns into buildings on public university campuses. It’s no secret that I thought this legislation, on balance, would make campuses less safe. So naturally, we were disappointed it passed. But we were heartened by the Legislature’s recognizing that our campuses have very specific safety considerations, and its giving us the latitude to do what is necessary to keep our students, faculty and staff safe and secure. As I have said many times, that is my top priority as Chancellor.

At this link, you can see my communication to our System executive officers and our campus presidents concerning implementation of the campus carry legislation.

Conclusion

This was my first opportunity to really engage in the Texas legislative process, and I’d like to close this update by expressing great respect for the men and women of our Legislature. Our lawmaking process takes a heavy toll on everyone involved. For 140 days, our representatives put in extremely long hours, for very little pay. By necessity, they make many difficult choices in a very compressed period of time. And they do it because they love their state, and sincerely believe their ideas represent the best way forward. You may not agree with all their legislation, but I hope you agree with me that their commitment, sacrifice and hard work are to be commended.

In addition to Governor Abbott, Lieutenant Governor Patrick and Speaker of the House Joe Straus, I personally thank State Senator Jane Nelson, Chairman of the Senate Finance Committee, and State Representative John Otto, Chairman of the House Appropriations Committee, for passing a budget that was so beneficial to higher education. I also want to thank State Senator Kel Seliger and State Representative John Zerwas, for their stellar leadership in chairing their respective chambers’ higher education committees.

Thanks to all of you for reading, of course. I’ll write again next month. In the meantime, you can read my weekly blog here, and follow me on Twitter.

And thanks, as always, for your continued support.

Bill McRaven

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