Regents to consider plan to provide more support to campus presidents and keep student tuition flat

AUSTIN – The University of Texas System Board of Regents this week will vote on an unprecedented plan that will provide even more support to academic campuses than they would have received through requested tuition increases for in-state students.

In May, the Board of Regents unanimously voted against raising in-state tuition at the system’s nine academic institutions but directed Chancellor Francisco G. Cigarroa, M.D., and Executive Vice Chancellor for Business Affairs Scott Kelley to develop a proposal to provide campuses with at least as much support as their proposed tuition increases would have generated.

The proposal being recommended by the chancellor to the Board of Regents on Thursday (Aug. 21) would send $28.2 million in additional recurring funding from the Available University Fund (AUF) to UT Austin and shift audit functions and the cost of certain other System-wide insurance programs, digital library services and information technology at UT’s eight other academic campuses to the UT System. This will free up more than $31 million for the institutions, providing an additional $13 million in recurring support over the $18 million in projected revenue that would have resulted solely through that proposed tuition increases.

“The economic challenges that campuses are facing are very real, but we don’t want to increase revenue by burdening students and their families with escalating tuition and fees,” Cigarroa said.

Most in-state undergraduate students at UT institutions have seen little to no increase in tuition since fall 2012 and no increases in mandatory fees since 2011. The UT System is relatively unique in its ability to hold the line on tuition while at the same time making major investments in expanding student programs, recruiting top faculty and building new facilities.

“I am very grateful to the Board of Regents and the chancellor for finding a way to provide recurring funding that we can invest in our students, our faculty and our campus. I appreciate their support,” UT Dallas President David Daniel said. “I look forward to continuing to work with the board and the chancellor to address the need for facilities and other resources required to serve our students at the level of excellence they have come to expect.”  

Regents Chairman Paul Foster said he is pleased with the proposal because “supporting our presidents and the vision they have for their institutions is a top priority of our Board. We want to provide all of our campuses with the resources to be world-class institutions but not at the expense of students and families when possible.”

The UT System’s ability to keep tuition flat over the past few years is largely because of the Permanent University Fund (PUF), an endowment established by the Texas Constitution in 1876 for the benefit of the UT and Texas A&M systems of higher education. Since its inception, billions of dollars have been deposited into the PUF endowment from oil and gas royalties, mineral leases and other bonuses generated from the exploration and development of about 2.1 million acres of land in West Texas.

Each year a distribution from the PUF is made to the AUF to support UT and A&M institutions. Constitutionally, UT Austin and UT System are the only UT institutions allowed to directly receive AUF money to fund operations. The UT System can use AUF money to provide central oversight such as audit services, to pay debt on capital projects at its institutions and to pay for System-wide contracts and services.

Kelley, the vice chancellor for business affairs, is proposing to take 48 audit personnel currently working at the eight UT campuses and make them UT System employees. As UT System employees, the salaries of the audit personnel can be funded by the AUF and free up resources at the campuses. The employees would see little change and would remain on their campuses but would report to the UT System Audit Office.

“This is actually a smart move in more ways than one,” Kelley said. “If anything, this will make our auditors even more independent, which is important in the roles they fill.”

About The University of Texas System

Educating students, providing care for patients, conducting groundbreaking research and serving the needs of Texans and the nation for more than 130 years, The University of Texas System is one of the largest public university systems in the United States, with nine academic universities, six health institutions and a fall 2013 enrollment of more than 213,000. The UT System confers more than one-third of the state’s undergraduate degrees, educates two-thirds of the state’s health care professionals annually and accounts for almost 70 percent of all research funds awarded to public universities in Texas. The UT System has an annual operating budget of $14.6 billion (FY 2014) including $3 billion in sponsored programs funded by federal, state, local and private sources. With about 90,000 employees, the UT System is one of the largest employers in the state.