financing higher education in texas - legislative primer
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LEGISLATIVE BUDGET BOARD
Legislative Primer
FEBRUARY 2013 SUBMITTED TO THE 83RD TEXAS LEGISLATURE
LEGISLATIVE BUDGET BOARD STAFF FIFTH EDITION
Financing Higher Education in Texas
Financing Higher Education In Texas
Legislative Primer
LEGISLATIVE BUDGET BOARD STAFF FIFTH EDITION
SUBMITTED TO THE 83RD TEXAS LEGISLATURE FEBRUARY 2013
Report Contributors
Higher Education Team
Sarah Keyton Manager Daniel Estrada Senior Analyst Demetrio Hernandez Analyst
Emily Hoff man Analyst Kris Kavanaugh Analyst
Greg Owens Analyst Rick Travis Senior Analyst
This report can also be found on the Legislative Budget Boardrsquos website httpwwwlbbstatetxus
CONTENTS
INTRODUCTION 1
FUNDING GENERAL ACADEMICS INSTITUTIONS
FUNDING HEALTH-RELATED INSTITUTIONS
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW 5
FORMULA FUNDING 6
NON-FORMULA FUNDING 9
OTHER NON-FORMULA FUNDING 13
OVERVIEW 15
FORMULA FUNDING 15
NON-FORMULA FUNDING 19
OVERVIEW 21
COMMUNITY COLLEGES 22
TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES 23
FUNDING TEXAS AampM SYSTEM AGENCIES 25
APPENDIX A FREQUENTLY ASKED QUESTIONS 27
APPENDIX B TUITION AND FEE PROVISIONS31
APPENDIX C GLOSSARY37
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 39
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET43
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 i
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD ii
INTRODUCTION
The Texas public higher education system encompasses 38 general academic teaching institutions (including law schools) 50 community and junior college districts one technical college system with four main campuses three lower-division state colleges and nine health-related institutions which operate a total of eight state medical schools three dental schools two pharmacy schools and other allied health and nursing units In addition there are seven agencies that are components of the Texas AampM University System
Private institutions in Texas include 38 four year colleges and universities two junior colleges one medical school and one accredited independent law school
Public institutions serve about 91 percent of the approximately 14 million students enrolled in higher education in Texas
The Texas Higher Education Coordinating Board (THECB) was established in 1965 and is composed of nine members appointed by the Governor for staggered six-year terms THECB provides leadership and coordination for the Texas higher education system to promote excellence in higher education
THECBrsquos responsibilities include assessing Texasrsquo system of higher education and developing recommendations for
FIGURE 1 HISTORICAL SPENDING FOR HIGHER EDUCATION 2002ndash03 TO 2012ndash13 BIENNIA
improvements to the Governor the Legislature and institutions THECB reviews and recommends changes in formulas regarding the allocation of state funds to public institutions to limit duplication of academic programs and unnecessary construction projects THECB also promotes access to high quality programs at diff erent institutional levels and oversees the statersquos student financial aid programs
The Eighty-second Legislature 2011 appropriated $221 billion in the General Appropriations Act (GAA) for the 2012ndash13 biennium to support Texas higher education a 25 percent decrease from the 2010ndash11 biennium (Figure 1) Figure 2 illustrates the sources of revenue also referred to as methods of finance for the $221 billion in state appropriations Generally only small portions of the Federal Funds received by institutions of higher education are reflected in the General Appropriations Act (GAA)
State funds are allocated to public institutions and agencies of higher education in a number of ways
bull direct appropriations through funding formulas and other direct appropriations based on identifi ed needs
bull indirect appropriations not made directly to an institution in its portion of the appropriations bill but used to cover costs related to the institutionrsquos staff
ESTIMATED ESTIMATED ESTIMATED ESTIMATED ESTIMATED BUDGETED BUDGETED BUDGETED BUDGETED BUDGETED APPROPRIATED
IN MILLIONS 2002ndash03 2004ndash05 2006ndash07 2008ndash09 2010ndash11 2012ndash13
General Revenue Funds $102337 $101944 $111762 $127216 $129966 $121723
General RevenuendashDedicated $20675 $23962 $21467 $22578 $24889 $24947 Funds
Other Funds $32494 $40530 $50023 $61974 $64674 $70298
Federal Funds $2674 $3397 $3331 $3090 $6941 $3944
TOTAL HIGHER $158180 $169833 $186583 $214858 $226470 $220912 EDUCATION
Percentage of Statewide Total
137 134 129 125 120 127
STATEWIDE TOTAL $1156786 $1267102 $1450594 $1721315 $1875165 $1734842 ALL ARTICLES
Includes $3269 in ARRA funds SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 1
INTRODUCTION
FIGURE 2 METHODS OF FINANCE FOR HIGHER EDUCATION INSTITUTIONS ndash INCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
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HGLFDWHG)XQGV )HGHUDO)XQGV
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2WKHU)XQGV
)
SOURCE Legislative Budget Board
for health insurance retirement benefits and social security and
bull other indirect appropriations which are subsequently allocated to an institution such as the Available University Fund
The $221 billion appropriation includes funds trusteed to THECB for distribution to institutions For the 2012ndash13 biennium THECB received more than $10013 million in trusteed funds The majority of these funds are allocated for student financial assistance Those remaining provide funding for the Baylor College of Medicine incentives for the general academic institutions and the Texas Research Incentive Program
Figure 3 shows the percentage of state funding appropriated to the various types of institutions excluding the allocation for employee insurance and retirement benefi ts
State appropriations to THECB that benefi t private institutions include financial assistance programs (eg Tuition Equalizations Grants B-On-Time and related programs) for Texas residents attending approved private institutions per student funding at the Baylor College of Medicine and grant funds from the Advanced Research Program a competitive grant program
Within a group such as general academic institutions state appropriations are allocated in a consistent manner Diff erent
FIGURE 3 APPROPRIATION BY TYPE OF INSTITUTION ndash EXCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
ampRPPXQLWDQG7HFKQLFDOampROOHJHV
HQHUDO$FDGHPLFV
+HDOWKUHODWHG
2WKHU+LJKHU(GXFDWLRQ
$06HUYLFHV
SOURCE Legislative Budget Board
groups of institutions such as general academic institutions and community colleges differ in how the Legislature allocates state appropriations For example all general academic institutions receive funding generated from Instruction and Operations and Infrastructure formulas while community colleges have one formula for Instruction and Administration
While the General Revenue Fundrsquos portion of direct appropriations to institutions is ldquosum certainrdquo the appropriation of Patient Income and Other Educational and General Income (primarily tuition) is ldquoestimatedrdquo Th is means that if patient income or tuition revenue generated by an institution is greater than the amount included in the GAA the institution can spend at a level beyond the amounts in the GAA If an institution generates less tuition revenue it must spend less
The GAA establishes a key distinction for higher education entities differentiating them from other state agencies Statute (Texas Education Code Section 61059(k)) calls for each higher education institution to receive a lump sum appropriation for base funding The GAA expands this concept and provides each higher education institution with one lump sum appropriation For each institution the GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Th is information reflects how the state funds are ldquoallocatedrdquo not how they must be spent Higher education institutions are not bound to spend their appropriation within the specifi ed
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 2
INTRODUCTION
strategy as are regular state agencies An exception to this is debt service on tuition revenue bonds Section 6 Rider 9 in the Higher Education Special Provisions GAA page III-233 limits the use of debt service to pay debt service for tuition revenue bonds Any amount of an appropriation not spent must be returned to the General Revenue Fund at the end of the fi scal year
There are some limitations on how institutions can spend appropriated funds The Texas Constitution (Article VII Section 18(i) and 17 (j)) prohibits with limited exceptions the use of General Revenue Funds for construction projects However the Texas Legislature by two-thirds vote in each house may opt to use General Revenue Funds for construction projects if there is a natural disaster or demonstrated need for the project
Also GAA (Section 6 Rider 8b) Special Provisions Relating Only to State Agencies of Higher Education (page III-233) prohibits the use of appropriated funds for auxiliary purposes such as athletics and parking Section 54 of the Special Provisions (page III-246) also restricts the use of funds in the Research Development Strategy to purposes defi ned in Texas Education Code Section 62091 Communityjunior colleges can spend General Revenue Funds only for instruction and administrative costs (Texas Education Code Section 130003(c))
This report presents the different ways that public institutions and agencies allocate state appropriations and highlights the flexibility with which these appropriations may be expended References to appropriated funds are based on the Eighty-second Legislature Regular Session 2011 2012ndash13 biennium GAA as adjusted for certain appropriations made in Article IX (General Provisions) of the GAA contingency appropriations other bills making appropriations in fi scal years 2012 and 2013 and Governor vetoes Amounts for fiscal year 2011 have been adjusted for the Supplemental Appropriations Bill House Bill 4 Eighty-second Legislature Regular Session 2011 and Senate Bill 2 First Called Session 2011 Each category of institutionmdashgeneral academic health-related community and technical colleges and Texas AampM System agenciesmdashis presented separately Th e only THECB funds detailed in this report are funds that have been distributed to public institutions
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 3
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 4
FUNDING GENERAL ACADEMIC INSTITUTIONS
OVERVIEW General academic institutions are listed in the Texas Education Code (61003) Figure 4 lists the institutions and their enrollments All of the institutions have common goals of instruction research and public service however each has a unique set of academic offerings and a unique regional or statewide mission
General academic institutions receive direct appropriations via funding formulas and non-formula appropriations Direct appropriations are identified in the informational strategies of each institutionrsquos bill pattern in the General Appropriations Act (GAA) As mentioned earlier appropriations are made to institutions as a lump sum Th e informational strategies reflect how state funds are ldquoallocatedrdquo not how they must be spent This means that with a few exceptions higher education entities unlike other state agencies are not required to spend appropriations within a specified funding strategy
The appropriation levels in each strategy refl ect diff erent revenue sources such as General Revenue Funds General RevenuendashDedicated Funds (mostly tuition and fee revenue) and Other Funds These revenue sources are referred to as the ldquomethod of fi nancerdquo Figure 5 illustrates the method of finance for $74 billion in appropriations for general academic institutions including a number of the indirect appropriations referenced in the next paragraph but does not include appropriations for employee retirement benefi ts
There are also appropriations that benefit institutions that are not reflected in the bill pattern of individual institutions including the Higher Education Fund the Available National Research University Fund Available University Fund certain employee benefits and funds trusteed to the Texas Higher Education Coordinating Board (THECB)
Figure 6 presents the percentage of funding related to each of these direct and indirect appropriations All of these appropriations are further described in the following pages
In addition general academic institutions have access to funds not reflected in the state appropriations process Examples of this include indirect cost recovery certain tuition and fees such as ldquodesignated tuitionrdquo and ldquoincidental feesrdquo (both are described in Appendix B) auxiliary operations (ie revenue from athletics student services fees bookstore and parking) and grants and gifts
FIGURE 4 PUBLIC GENERAL ACADEMIC INSTITUTIONS CERTIFIED FALL 2011 HEADCOUNT
INSTITUTION HEADCOUNT
Angelo State University 7077
Lamar University 14021
Midwestern State University 5811
Prairie View AampM University 8425
Sam Houston State University 17527
Stephen F Austin State University 12702
Sul Ross State University 1985
Sul Ross State University Rio Grande College 971
Tarleton State University 9893
Texas AampM International University 7037
Texas AampM University 49861
Texas AampM University ndash Central Texas 2096
Texas AampM University at Galveston 2035
Texas AampM University ndash Commerce 10726
Texas AampM University ndash Corpus Christi 10162
Texas AampM University ndash Kingsville 6731
Texas AampM University ndash San Antonio 3554
Texas AampM University ndash Texarkana 1907
Texas Southern University 9730
Texas State University ndash San Marcos 34087
Texas Tech University 32149
Texas Womanrsquos University 14503
The University of Texas at Arlington 33439
The University of Texas at Austin 51112
The University of Texas at Brownsville 8625
The University of Texas at Dallas 18864
The University of Texas at El Paso 22582
The University of Texas at San Antonio 30968
The University of Texas at Tyler 6628
The University of Texas of the Permian Basin 3831
The University of Texas ndash Pan American 19034
University of Houston 39820
University of Houston ndash Clear Lake 8185
University of Houston ndash Downtown 12918
University of Houston ndash Victoria 4330
University of North Texas 35694
University of North Texas at Dallas 2032
West Texas AampM University 7886
STATEWIDE TOTALS 568938 SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 5
FUNDING GENERAL ACADEMIC INSTITUTIONS
HQHUDO5HYHQXH)XQGV
FIGURE 5 METHOD OF FINANCE FOR GENERAL ACADEMICS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
727$ 021
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HGLFDWHG)XQGV
2WKHU)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING Nearly 573 percent of state appropriations for general academic institutions are allocated via two funding formulas and two supplements Instruction and Operations Formula Teaching Experience Supplement Infrastructure Formula
and Small Institution Supplement The formulas and supplements are direct appropriations and are primarily based on enrollment
The formula appropriations consist of General Revenue Funds and some Other Educational and General Income (Other EampG) Other EampG includes specific tuition and fee revenue (see Appendix B for a listing of tuition and fee provisions) The inclusion of certain tuition and fee revenue in the formula funding calculation is referred to as an ldquoAll Funds methodologyrdquo to formula funding Th e most significant tuition revenue included in the formula calculation is tuition charged in accordance with Texas Education Code Section 54051 Interim Tuition Rates (referred to as statutory tuition) The statutory tuition rate for the 2012ndash13 academic year is $50 per semester credit hour for Texas residents Th e corresponding tuition rate for a nonresident student is the average nonresident tuition charged to a Texas resident at a public university in each of the five most populous states
Of the $40 billion allocated by the general academic formulas and supplements nearly 728 percent consists of General Revenue Funds with the remainder consisting of General RevenuendashDedicated Funds (Other EampG)
A portion of Other EampG income is set aside for specifi c purposes or allocated to non-formula based strategies in the
FIGURE 6 APPROPRIATIONS FOR GENERAL ACADEMIC INSTITUTIONS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
QIUDVWUXFWXUH)RUPXOD +ROG+DUPOHVV 727$ 021 )RUPXODDQG
1RQ)RUPXOD7HDFKLQJ([SHULHQFH
QVWUXFWLRQamp 2SHUDWLRQV)RUPXOD
ampDSLWDO)XQGV
QVWLWXWLRQDO
(QKDQFHPHQW
6SHFLDOWHPV
ampRQVWLWXWLRQDO)XQGV
5HVHDUFKHYHORSPHQW)XQG
+LJKHU(GXFDWLRQURXSQVXUDQFH2WKHU1RQIRUPXODWHPV
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 6
FUNDING GENERAL ACADEMIC INSTITUTIONS
institutionrsquos bill pattern For example institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) TPEG are grants designed to help students cover their tuition fees and textbook costs when these expenses exceed a certain portion of their familiesrsquo contributions to their educations This set-aside revenue is not part of the tuition and fee revenue used to calculate the funding formulas
INSTRUCTION AND OPERATIONS FORMULA
About 815 percent of formula funds flow through the Instruction and Operations Formula ($32716 million for the 2012ndash13 biennium) and Teaching Experience Supplement ($957 million for the 2012ndash13 biennium) Th e Instruction and Operations formula is calculated as follows
Semester Credit Hours X ProgramLevel Weight X Rate (5371)
Semester credit hours (SCH) are a measurement of how many classes (and the number of students enrolled in those classes) an institution delivers The formula calculation for a biennium uses a ldquobase periodrdquo of SCH The ldquobase periodrdquo used for the 2012ndash13 biennium was the combination of summer 2010 fall 2010 and spring 2011
SCH is weighted by discipline (eg nursing is weighted more than liberal arts) and by level (ie lower and upper division masters doctoral and professional) For instance a lower division liberal arts course receives a weight of 10 A doctoral level liberal arts course receives a weight of 923 A nursing lower division course receives a weight of 203 A doctoral nursing course receives a weight of 925 Beginning with the 2006ndash07 GAA the basis for the weights per discipline was shifted to an aggregation of actual costs based on institutions Annual Financial Reports Currently THECB uses a rolling three year average to adjust the weights each biennium
THECB recommends a rate based on its recommended weights and program enhancements The legislature sets the weights and the rate in the Higher Education Special Provisions of the GAA (page III-238) In practice the legislature has set the rate based on available funding including consideration of enrollment changes and other factors Figure 7 illustrates the Instruction and Operations Formula allocation to institutions
FIGURE 7 DISTRIBUTION OF INSTRUCTION AND OPERATIONS FORMULA 2012ndash13 BIENNIUM
727$ 021
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7H[DV$ amp 08QLYHUVLW
2WKHUHQHUDO$FDGHPLFV
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
TEACHING EXPERIENCE SUPPLEMENT
For the 2012ndash13 biennium an additional weight of ten percent is added to lower-division and upper-division semester credit hours taught by tenured and tenure-track faculty The 2012ndash13 GAA includes the following language ldquoFurthermore it is the intent of the Legislature that the weight shall increase by 10 percent per biennium up to 50 percentrdquo (Special Provisions Relating Only to State Agencies of Higher Education Sec 28 page III-238 2012ndash13 GAA)
The Teaching Experience Supplement is calculated as follows
Semester Credit Hours X ProgramLevel Weight Supplement (10) X Rate (5371)
The Teaching Experience Supplement was 5 percent during the 1998ndash99 and 2000ndash01 biennia Th e Seventy-seventh Legislature 2001 increased the supplement to the current 10 percent in 2002ndash03 biennium
INFRASTRUCTURE FORMULA
Almost 16 percent of formula funds flow through the Infrastructure Formula and Small Institution Supplement ($6768 million for the 2012ndash13 biennium) In addition to
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 7
FUNDING GENERAL ACADEMIC INSTITUTIONS
the universities the State Colleges and components of Texas State Technical College also receive infrastructure formula appropriations This formula uses a statewide infrastructure rate which is set in the GAA The statewide infrastructure rate is divided into two rates an Adjusted Utility Rate and an All Other Rate As with the SCH rate the legislature has set the rate based on available funding including consideration of changes in institutional space and other factors
The Infrastructure Formula is calculated as follows
(Adjusted Utility Rate + All Other Rates) X Predicted Square Feet
The Adjusted Utility Rate is 52 percent of the statewide infrastructure rate The 52 percent reflects the percentage of infrastructure formula funds that institutions historically spent on utilities A statewide utility rate is determined and then adjusted for each institution to reflect utility costs relative to other institutions
The All Other Rate is 48 percent of the statewide infrastructure rate and remains constant among institutions It accounts for physical plant grounds maintenance and custodial services
THECBrsquos Space Projection Model for Higher Education Institutions in Texas (space model) estimates square footage for each institution The objective of the space model projection is to calculate the amount of space an institution needs based on the following
bull number program and level of semester credit hours
bull number of faculty non-faculty students programs and library holdings and
bull research and current EampG expenditures
Figure 8 illustrates the Infrastructure Formula allocation to institutions The similarity of the allocation to the Instruction and Operations Formula allocation demonstrates the influence of enrollment on both formula allocations
SMALL INSTITUTION SUPPLEMENT
Prior to the Eighty-fi rst Legislature (2009) general academic institutions with enrollments of less than 5000 received a $750000 annual Small Institution Supplement However the Eighty-first Legislature increased the enrollment threshold to 10000 students and implemented a phase-out
FIGURE 8 DISTRIBUTION OF INFRASTRUCTURE FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
2WKHUHQHUDO$FDGHPLFV
7H[DV$ amp M 8QLYHUVLW
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
(based on the number of students) of the supplement between 5000 and 10000 students for the 2012ndash13 biennium (see Figure 9) This supplement recognizes that institutions have a minimum cost of operation that may not be covered by funds generated through the formulas
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $414 million in General Revenue hold harmless funding for aff ected institutions to minimize the effect of reduced formula funding as a result of overall enrollment declines or declines in upper-division or graduate enrollment Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment than other institutions or a change in utility costs Th e Eighty-second Legislature 2011 provided $444 million in a hold harmless based on total General Revenue Funds (formula and non-formula) for the 2012ndash13 biennium
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 8
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 9 SMALL INSTITUTION SUPPLEMENT RECIPIENTS
The University of Texas at Brownsville
The University of Texas of the Permian Basin
The University of Texas at Tyler
Texas AampM University at Galveston
Prairie View AampM University
Tarleton State University
Texas AampM University ndash Central Texas
Texas AampM University ndash Kingsville
Texas AampM University ndash San Antonio
Texas AampM International University
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston ndash Clear Lake
University of Houston ndash Victoria
Midwestern State University
University of North Texas at Dallas
Texas Southern University
Angelo State University
Sul Ross State University
Sul Ross State University ndash Rio Grande College
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Waco
Texas State Technical College ndash Marshall
Lamar Institute of Technology
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
SOURCE Legislative Budget Board
NON-FORMULA FUNDING
SPECIAL ITEMS
Special Item appropriations to the institutions total $4836 million for the 2012ndash13 biennium In 2012ndash13 $69 million was appropriated to system offices for special items These are direct appropriations to institutions for projects that are not funded by formula but are specifi cally identifi ed by the legislature as needing support An institution is not required to spend the amount identified in a Special Item strategy for that particular project but expenditure reports indicate that institutions often use an entire appropriation along with additional funding for the related project
The majority of special item funding is through the Institutional Enhancement strategy Institutional Enhancement is a $2204 million appropriation for the 2012ndash13 biennium This is a direct appropriation to institutions and was established by the Seventy-sixth Legislature 1999 for the 2000ndash01 biennium Th e fi rst Institutional Enhancement appropriation was based on a consolidation of certain Special Item appropriations in 1999 and an additional $1 million per year was appropriated for each institution Examples of consolidated special items are items that could be funded through the formulas such as general institutional academic and research support
For the 2002ndash03 biennium there was an additional $1 million increase in appropriations for most institutions and a $15 million increase for selected institutions in South Texas and the border region Institutions that benefi ted signifi cantly from the Seventy-seventh Legislaturersquos new University Research and Texas Excellence Funds (House Bill 1839 Seventy-seventh Legislature 2001) or from the Permanent University Fund (PUF) ldquoexcellence fundingrdquo did not receive an increase in Institutional Enhancement funds for the 2002ndash03 biennium
Other Special Items total $2632 million in appropriations for the 2012ndash13 biennium and include the following institutional and instructional support public service items research items other than general research support funding for separate campuses and accreditation program items
TEXAS COMPETITIVE KNOWLEDGE FUND
The Texas Competitive Knowledge Fund (TCKF) is authorized by the General Appropriations Act (GAA) (2012ndash13 Biennium) Article III Higher Education Special Provisions Section 56 The GAA prescribes that this funding will be used to support faculty for the purpose of instructional excellence and research Funding was first allocated in these strategies by the Legislature for the 2008ndash09 biennium
Current institutions receiving TCKF appropriations include The University of Texas at Austin Texas AampM University University of Houston Texas Tech University and Th e University of Texas at Dallas Institutions are allocated funding appropriated to the TCKF based on average research expenditures for the previous three-year period Th e Eighty-second Legislature Regular Session 2011 appropriated $935 million in Texas Competitive Knowledge Fund strategies directly to the institutions This funding level provides approximately $07 million to each institution for every $100 million in research expenditures In practice
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 9
FUNDING GENERAL ACADEMIC INSTITUTIONS
when institutions have first received distributions from the fund appropriations have been reduced from the institutionrsquos special item strategies In subsequent biennia the institution continues to receive appropriations from the TCKF and the reduction in special items is not specifi cally restored
RESEARCH DEVELOPMENT FUND
The Research Development Fund was created by House Bill 3526 Seventy-eighth Legislature Regular Session 2003 and replaced the Texas Excellence and University Research Funds effective September 1 2005 The intent was to combine the Texas Excellence Fund and University Research Fund into a new fund applying a uniform allocation methodology based on a three-year average of each institutionrsquos restricted research expenditures Th e Eighty-fi rst Legislature allocated $653 million (Figure 10) in the 2012ndash13 biennium to individual institutions to fund objectives identical to the Research Development Fund (Section 62091)
TEXAS RESEARCH INCENTIVE PROGRAM
Th e Eighty-first Legislature Regular Session 2009 established the Texas Research Incentive Program (TRIP) at THECB to match state appropriations with certain gifts and endowments received by emerging research universities Th e goal of this $178 million a year program is to create more Tier One universities in Texas
PERFORMANCE INCENTIVE INITIATIVE
The Eightieth Legislature 2007 appropriated $100 million in fiscal year 2009 to THECB to establish a Higher Education Performance Incentive Initiative The funding was for ldquoimprovement in teaching and educational excellence at Texas public general academic institutionsrdquo THECB distributed $80 million for increases in degrees awarded with special weights given to critical fields and at-risk students The remaining $20 million was used to fund scholarships for students graduating in the top 10 percent of their high school class
Th e Eighty-first Legislature Regular Session 2009 maintained the $80 million for the higher education performance incentive initiative (funded by the American Recovery and Reinvestment Act) and increased funding for the Top Ten Percent scholarship program by $34 million bringing total appropriations for the program to $54 million
There were no performance funding incentives for the 2012ndash13 biennium For the 2012ndash13 biennium $396
FIGURE 10 RESEARCH DEVELOPMENT FUND ALLOCATIONS
2012ndash13 BIENNIAL RDF
INSTITUTION ALLOCATION
The University of Texas at Arlington $6032754
The University of Texas at Dallas 8425486
The University of Texas at El Paso 6925040
The University of Texas at Pan American 1147838
The University of Texas at Brownsville 902512
The University of Texas of the Permian Basin 306408
The University of Texas at San Antonio 5491296
The University of Texas at Tyler 434072
Texas AampM University at Galveston 600342
Tarleton State University 1586396
Texas AampM University ndash Corpus Christi 2212356
Texas AampM University ndash Kingsville 1846206
Texas AampM International University 253246
West Texas AampM University 681752
Texas AampM Commerce 436752
Texas AampM Texarkana 9008
University of Houston 10705472
University of Houston ndash Clear Lake 10392
University of Houston ndash Downtown 10248
University of Houston ndash Victoria 2254
Midwestern State University 30066
University of North Texas 2495448
Stephen F Austin University 895696
Texas Southern University 338580
Texas Tech University 8327602
Texas Womanrsquos University 266152
Angelo State University 123176
Lamar University 820010
Sam Houston State University 362574
Texas State University ndash San Marcos 3121164
Sul Ross State University 304040
TOTAL $65296738
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 10
FUNDING GENERAL ACADEMIC INSTITUTIONS
million is appropriated to the Top Ten Percent Scholarship Program
HOLD HARMLESS FUNDING
The Eighty-second Legislature 2011 provided $444 million in General Revenue Funds hold harmless funding for aff ected institutions to minimize the effect of reduced formula and special item funding Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment that other institutions or a change in utility costs
CAPITAL FUNDS
In addition to the constitutional funds discussed in the next subsection there are three types of state appropriation for capital funds tuition revenue bonds Skiles Act revenue bonds and lease payments Almost all of the direct appropriations to institutions related to capital funds are for debt service on tuition revenue bonds
A $5931 million General Revenue Funds appropriation was made for tuition revenue bond debt service for the 2012ndash13 biennium
Tuition revenue bonds must be authorized in statute Once an authorization is made institutions issue bonds and make related debt payments with tuition revenue Th e Texas Public Finance Authority issues tuition revenue bonds for Midwestern State University Stephen F Austin University Texas Southern University and the Texas State Technical Colleges Legislative practice has been to use General Revenue Funds to reimburse institutions for the costs related to this debt service
The legislature first authorized tuition revenue bonds in 1971 In some instances the authorization was a lump sum for the benefit of specific institutions During the Seventy-eighth Legislature 2003 $2689 million in tuition revenue bonds was authorized for specific projects at various higher education institutions The Seventy-ninth Legislature Th ird Called Session 2005 adopted House Bill 153 which authorized the issuance of $1858 billion in tuition revenue bonds for forty-four different institutions Only one tuition revenue bond (House Bill 1775) was adopted by the Eightieth Legislature 2007 for a $13 million nursing building at Stephen F Austin University Th e Eighty-fi rst Legislature 2009 authorized one tuition revenue bond for Texas AampM University at Galveston The Eighty-second Legislature 2011 did not authorize any new tuition revenue bonds
The authority for Skiles Act Revenue Bonds was repealed in 1997 It had allowed institutions to pledge up to $5 from each enrolled student for each regular semester to the payment of bonds authorized under the governing boardrsquos general authority to sell revenue bonds Institutions use their Other Educational and General Income (General Revenuendash Dedicated Funds) to pay the debt service on these previously authorized bonds This is a $10 million appropriation for the 2012ndash13 biennium
Three general academic institutions receive a $3 million General Revenue Fund appropriation for lease payments to community colleges for facilities
CONSTITUTIONAL FUNDS
These funds are appropriated separately in the GAA and not directly appropriated to the institutions (see Appendix D)
The Available University Fund (AUF) established in Section 18 Article VII Texas Constitution consists of the surface income and investment proceeds from the Permanent University Fund (PUF) a state endowment with land grants totaling 21 million acres
Distributions to the AUF consist of investment returns from PUF assets surface income from PUF lands and interest earned on AUF balances For the 2012ndash13 biennium investment returns were $12200 million surface income was $398 million and interest income was $59 million Income from the sale of PUF lands and the lease of mineral interest is retained in the PUF and invested
The total 2012ndash13 estimated appropriation for the AUF is $12660 million The Constitution appropriates two-thirds of the AUF to The University of Texas System and one-third to the Texas AampM University System The two systems may use the AUF for capital purposes (debt service on PUF bonds) for most of their institutions and ldquofor the support and maintenancerdquo of other institutions listed Entities authorized to receive funding for ldquosupport and maintenancerdquo which is now commonly referred to as ldquoAUF Excellence Fundingrdquo are the two system offi ces The University of Texas at Austin Texas AampM University and Prairie View AampM University The systemsrsquo boards of regents determine allocations to individual institutions including health-related institutions and the amounts for ldquoExcellencerdquo Figure 11 lists the recipients and the type of support they received
The Higher Education Fund (HEF) as authorized in Section 17 Article VII Texas Constitution benefits institutions of higher education not eligible for the AUF (see Figure 12)
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 11
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 11 PARTICIPANTS IN THE AVAILABLE UNIVERSITY FUND
EXCELLENCE AND DEBT SERVICE FUNDS
The University of Texas System
The Texas AampM University System
The University of Texas at Austin
Texas AampM University
Prairie View AampM University
DEBT SERVICE ONLY
The University of Texas System Components
The University of Texas at Arlington
The University of Texas at Dallas
The University of Texas at El Paso
The University of Texas of Permian Basin
The University of Texas at San Antonio
The University of Texas at Tyler
The University of Texas Southwestern Medical Center
The University of Texas Medical Branch at Galveston
The University of Texas Health Science Center at Houston
The University of Texas Health Science Center at San Antonio
The University of Texas Health Science Center at Tyler
The University of Texas MD Anderson Cancer Center
Texas AampM University System Components
Texas AampM University at Galveston
Texas AampM University at Tarleton
Texas AampM University ndash San Antonio
Texas AampM University ndash Central Texas
Texas AampM University System Health Science Center
Texas AgriLife Research
Texas AgriLife Extension Service
Texas Engineering Experiment Station
Texas Engineering Extension Service
Texas Transportation Institute
Texas Forest Service
SOURCE Legislative Budget Board
FIGURE 12 PARTICIPANTS IN THE HIGHER EDUCATION FUND
The University of Texas System Components
The University of Texas ndash Pan American
Texas AampM University System Components
Texas AampM University ndash Corpus Christi
Texas AampM International University
Texas AampM University ndash Kingsville
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston System Components
University of Houston
University of Houston ndash Clearlake
University of Houston ndash Downtown
University of Houston ndash Victoria
Independent Institutions
Midwestern State University
Stephen F Austin State University
Texas Southern University
Texas Womanrsquos University
University of North Texas System Components
University of North Texas Health Science Center at Fort Worth
University of North Texas
Texas Tech University System Components
Texas Tech University Health Sciences Center
Angelo State University
Texas State University System Components
Lamar University
Sam Houston State University
Texas State University ndash San Marcos
Sul Ross State University
Sul Ross State Rio Grande College
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
Lamar Institute of Technology
Texas State Technical College System Components
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Marshall
Texas State Technical College ndash Waco
The University of North Texas at Dallas receives its allocation through the University of North Texas SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 12
FUNDING GENERAL ACADEMIC INSTITUTIONS
The HEF is supported by General Revenue Fund appropriations
The distribution of the $525 million HEF appropriation for 2012ndash13 is provided for in statute (Texas Education Code Section 62021) The Constitution calls for a re-allocation of HEF funds every ten years The Seventy-ninth Legislature Regular Session fulfilled this requirement with the enactment of House Bill 3001
The Constitution also allows the legislature to adjust the decennial allocations every five years Th e Eighty-fi rst Legislature Regular Session 2011 exercised this authority by enacting House Bill 51 which adjusted the formula allocation for the HEF funds for fiscal years 2009 through 2015
To maintain the equitable distribution of the HEF appropriation House Bill 51 also corrected the distribution of fiscal year 2009 and 2010 HEF allocations by using revised formula calculations Using these revised formula calculations House Bill 51 factored in updated data elements to generate the annual HEF allocations for the fi ve-year period starting in fiscal year 2011
HEF funds must be used for capital purposes Institutions may use HEF allocations for debt service on HEF bonds or as cash
In 1995 the Texas Constitution was amended to authorize the creation and funding of a dedicated HEF corpus known as the Permanent Higher Education Fund (PHEF) Th is corpus was separate from the annual HEF allocation of General Revenue Funds The PHEF was intended to become a permanent endowment to support non-PUF eligible institutions but never reached its targeted value of $2 billion
The PHEF corpus of $5159 million was rededicated with the enactment of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) The balance of the PHEF was transferred to the NRUF on January 1 2010 and the authorization for the PHEF expired Proposition 4 also allowed the legislature to appropriate some or all of the total returns from the NRUF to provide a source of funding to enable emerging research universities to achieve national prominence
The Eighty-second Legislature 2011 appropriated $124 million in estimated NRUF proceeds to eligible institutions in the 2012ndash13 biennium
House Bill 1000 Eighty-second Legislature Regular Session 2011 established the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution in designated as an emerging research university within the Higher Education Coordinating Boardrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fi scal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of the institutions research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs Texas Tech University and the University of Houston are the only two institutions that received funding through this program in 2012
HIGHER EDUCATION GROUP INSURANCE (HEGI)
The $4631 million General Revenue Fund appropriation for higher education group insurance (HEGI) is not a direct appropriation in the institutionsrsquo bill patterns It is appropriated in a separate section of the GAA entitled ldquoHigher Education Employees Group Insurance Contributionsrdquo This appropriation is intended to help institutions cover the cost of health insurance premiums for institution employees whose salaries are paid from the General Revenue Fund Because The University of Texas and Texas AampM University Systems operate their own health insurance programs they each receive separate appropriations The remaining institutions are included in the program operated by the Employees Retirement System (ERS)
The HEGI appropriation is sum-certain That is the Statersquos General Revenue Fund contributions are limited to each institutionrsquos number of employees enrolled in the health insurance program as of December 1 2012 However the GAA allows ERS The University of Texas and Texas AampM University Systems to transfer HEGI appropriations among institutions within their respective group insurance programs to address shortfalls in General Revenue Funds related to group insurance premiums
SOCIAL SECURITY BENEFITS
An appropriation for social security is included in the GAA at the end of Article III It is an estimated General Revenue
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 13
FUNDING GENERAL ACADEMIC INSTITUTIONS
Fund appropriation to provide the employer matching funds for employees of institutions of higher education (Th is appropriation amount is not included in Figure 3 on page 2)
STAFF GROUP INSURANCE
Staff group insurance is for staff whose salaries are not paid with General Revenue Funds (GR) The appropriation is based on an estimation of the number of non-GR funded employees at an institution as of December 1 2010 Th e total appropriation for all general academic institutions is $1766 million for the 2012ndash13 biennium The method of finance is Other Educational and General Income (which is classified as General RevenuendashDedicated Funds)
RETIREMENT CONTRIBUTIONS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and top administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees participate in TRS a defi ned benefit plan The state funds retirement contributions for TRS equal to 60 percent of an employeersquos salary in fiscal year 2012 and 64 percent in 2013 State contributions for ORP are equal to 60 percent of an employeersquos salary in fiscal years 2012 and 2013 (Th ese appropriation amounts are not included in Figure 3 on page 2)
OTHER NON-FORMULA FUNDING
WORKERSrsquo COMPENSATION
Changes in the structure of the statewide workersrsquo compensation system resulted in most institutions receiving General Revenue Fund appropriations for Workersrsquo Compensation starting in 2006ndash07 However Th e University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool
UNEMPLOYMENT COMPENSATION
Most components of The University of Texas and Texas AampM University Systems have this strategy because they operate their own risk pools Th ese institutions receive General Revenue Fund appropriations for unemployment compensation insurance The appropriation for the 2012ndash13 biennium is $05 million in General Revenue Funds Th e Texas Workforce Commission receives an appropriation to
cover unemployment benefi ts for former state employees for all other higher education institutions
TEXAS PUBLIC EDUCATION GRANTS
According to statute (Texas Education Code Chapter 56 Subchapter C and Texas Education Code Section 54051 [Statutory Tuition]) institutions must set aside a portion of tuition revenue for Texas Public Education Grants (TPEG) Fifteen percent of each resident studentrsquos tuition and 3 percent of each nonresident studentrsquos tuition are set aside for financial aid to students at the institution Texas Education Code Section 56033 provides guidelines on the allocation of TPEG revenue The GAA includes an estimate of the amount of TPEG revenue each institution will generate Th is $2111 million estimated appropriation is considered Other Educational and General Income which are classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
Indirect costs as defined by The Comptroller of Public Accounts are ldquoincurred for a common or joint purpose benefiting more than one cost objectiverdquo Institutions negotiate a percentage of a federal grant for indirect costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
The Seventy-eighth Legislature 2003 allowed universities to retain 100 percent of indirect costs income from research grants and contracts to encourage further research projects conducted by universities
ORGANIZED ACTIVITIES
Organized Activities are activities or enterprises connected with instructional departments whose primary function is training for students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training Revenue from Organized Activities is classified as General RevenuendashDedicated Funds Other EampG Income For the 2012ndash13 biennium $503 million is appropriated for Organized Activities
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 14
FUNDING HEALTH-RELATED INSTITUTIONS
OVERVIEW Appropriations for the nine health-related institutions are similar in structure to the appropriations for general academic institutions There are formula and non-formula funding appropriations made directly to the institutions as well as appropriations that benefit the institutions but are not included in the institutionsrsquo bill patterns such as the Available University Fund certain staff benefi ts and funds trusteed at the Texas Higher Education Coordinating Board (THECB) While health-related institutions do not receive appropriations from the Research Development Fund they share many other types of appropriations similar to general academic institution appropriations Th ose appropriations will be briefly restated in this section of the report Figure 13 lists the institutions and their enrollment
FIGURE 13 PUBLIC HEALTH-RELATED INSTITUTIONS CERTIFIED HEADCOUNT FALL 2011
INSTITUTION HEADCOUNT
UT Southwestern Medical Center 2467
UT Medical Branch at Galveston 2660
UT Health Science Center at Houston 4485
UT Health Science Center at San Antonio 3273
UT M D Anderson Cancer Center 248
UT Health Science Center at Tyler NA
Texas AampM University System Health Science 1958 Center
University of North Texas Health Science 1567 Center at Fort Worth
Texas Tech University Health Sciences Center 3590
Statewide Totals 20248
SOURCE Higher Education Coordinating Board
Like other higher education institutions the appropriations for health-related institutions are a lump sum and funding strategies are presented for informational purposes in the General Appropriations Act (GAA) The funding strategies in a health-related institutionrsquos bill pattern represent how state funds are allocated but not how they must be spent Also certain methods of finance in the appropriation are estimated This means that if for example patient income for an institution is above the amount included in the GAA
the institution can spend more than the amount listed in the GAA
Also health-related institutions have access to an estimated $109 billion outside the appropriations process in 2012ndash13 Examples of this include certain tuition revenue indirect lost recovery grants and gifts
Figure 14 illustrates the 2012ndash13 method of finance for $85 billion in appropriations for health-related institutions including a number of the indirect appropriations but it does not include appropriations for retirement benefi ts
FIGURE 14 METHOD OF FINANCE FOR HEALTH-RELATED INSTITUTIONS 2012ndash13 BIENNIUM
727$ 021
HQHUDO
2WKHU)XQGV3DWLHQWQFRPH
5HYHQXH)XQGV
HQHUDO5HYHQXHsup2HGLFDWHG)XQGV13
Including some tuition and fees SOURCE Legislative Budget Board
FORMULA FUNDING The three primary funding formulas for health-related institutions are Instruction and Operations support Infrastructure support and Research Enhancement Th e University of Texas MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler have additional formula allocations to accommodate their unique missions Each health-related institution also receives formula funding for graduate medical education
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 15
FUNDING HEALTH-RELATED INSTITUTIONS
General Revenue funding and some Other Educational and General Income (Other EampG is classified as General RevenuendashDedicated) fund the formulas Like general academic institutions certain tuition revenue is used in the calculation of the Instruction and Operation support and Infrastructure support formulas Of the $15 billion that is allocated by the health-related institutionsrsquo primary formulas 939 percent is from the General Revenue Fund and the remaining 61 percent is from General RevenuendashDedicated Funds (tuition and fee revenue)
Some tuition and fee income is set aside for specifi c purposes Some specific amounts are unavailable for formula purposes and consequently are not a formula method of fi nance For example health-related institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) and Medical Loans
INSTRUCTION AND OPERATIONS SUPPORT FORMULA
The Instruction and Operations (IampO) support formula represents nearly 755 percent of the primary formula funds for health-related institutions ($9282 million for the 2012ndash13 biennium) It is intended to fund items such as faculty salaries departmental operating expenses instructional administration and libraries It is allocated on a per full-time student equivalent (FTSE) basis with a funding weight predicated on the instructional program of the student This formula applies to all health-related
institutions except The University of Texas Health Science Center at Tyler which did not offer education instruction during the base period for the 2012ndash13 biennium
Figure 15 illustrates the Instruction and Operations support formula among the eight health-related institutions
The Instruction and Operations support formula is calculated as follows
(FTSE X Program Weight X $8874) + SmallMultiple Campus Supplement
FTSE is weighted by discipline For example medicine (4753) is weighted more than pharmacy (1670) Allied Health is assigned a weight of 1000
The Legislature sets the weights and the rate ($8874 adjusted for the 2012ndash13 biennium) in the Higher Education Special Provisions of the GAA (Sec 29 page III-239 and 240) The rate is calculated based on the available revenue for the formula and the number of FTSEs
Programs with enrollments less than 200 receive a Small Campus Supplement (see Figure 16)
FIGURE 15 DISTRIBUTION OF INSTRUCTION AND OPERATIONS SUPPORT FORMULA 2012ndash13 BIENNIUM
727$ 021870$QGHUVRQ 7H[DV$ amp 0+HDOWKampDQFHUampHQWHU 6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV 87+HDOWK6FLHQFHampHQWHUDW6DQ
DW)WRUWK
+HDOWK6FLHQFHampHQWHU$QWRQLR
87+HDOWK6FLHQFH 7H[DV7HFK8QLYHUVLW+HDOWKampHQWHUDW+RXVWRQ 6FLHQFHVampHQWHU
876RXWKZHVWHUQ0HGLFDOampHQWHU
870HGLFDOUDQFK DWDOYHVWRQ
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 16
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 16 SMALL CAMPUS SUPPLEMENT RECIPIENTS
The University of Texas Southwestern Medical Center
No
The University of Texas Medical Branch at Galveston
Yes
The University of Texas Health Science Center at Houston
Yes
The University of Texas Health Science Center at San Antonio
Yes
The University of Texas MD Anderson Cancer Center
No
The University of Texas Health Science Center at Tyler
NA
Texas AampM Health Science Center Yes
University of North Texas Health Science Center at Fort Worth
No
Texas Tech University Health Sciences Center Yes
SOURCE Legislative Budget Board
INFRASTRUCTURE SUPPORT FORMULA
The Infrastructure support formula is 194 percent of the primary formula funding and is intended for utilities and physical plant support ($2383 million for the 2012ndash13 biennium) This formula calculation is similar to that for general academic institutions but includes only one rate ($655) for all institutions except The University of Texas
FIGURE 17 DISTRIBUTION OF INFRASTRUCTURE SUPPORT FORMULA 2012ndash13 BIENNIUM
MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler which have another rate ($625)
THECBrsquos space model predicts square footage for each institution The space model projection is based on the following
bull number and level of FTE students
bull number of faculty
bull single or multiple programs and campuses
bull actual clinical space and
bull research and current EampG expenditures
Because the space projection model does not account for hospital space separate infrastructure funding for hospital space is included in the total funding for hospital and patient-care activities at The University of Texas Medical Branch at Galveston The University of Texas MD Anderson Cancer Center and The University of Texas Health Science Center at Tyler
Figure 17 illustrates the Infrastructure Support Formula allocation to institutions among the nine health-related institutions
727$ 021
87+HDOWK6FLHQFHampHQWHUDW6DQ 870$QGHUVRQampDQFHUampHQWHU$QWRQLR
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW
+RXVWRQ 7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK6FLHQFHVampHQWHU
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 17
FUNDING HEALTH-RELATED INSTITUTIONS
RESEARCH FORMULA
Health-related institutions generate state appropriations to support research through General Revenue Funds in the Research Enhancement formula ($629 million for the 2012ndash13 biennium) The Research Enhancement formula accounts for 51 percent of the primary formula funds and is funded entirely from the General Revenue Fund
The allocation is based on the amount of research generated by each institution
$1412500 + (110 X Research
Expenditures)
This provides a base Institutions report for all institutions current research
regardless of research expenditures to volume THECB
Figure 18 illustrates the Research Enhancement formula allocation to the institutions among the nine health-related institutions
GRADUATE MEDICAL EDUCATION
The Seventy-ninth Legislature 2005 established a new formula for funding graduate medical education in the 2006ndash07 GAA For 2012ndash13 the funding totals $46 million
FIGURE 18 DISTRIBUTION OF RESEARCH ENHANCEMENT FORMULA 2012ndash13 BIENNIUM
727$ 021
870$QGHUVRQampDQFHUampHQWHU
(an additional $109 million is appropriated to the Baylor College of Medicine through the THECB) and provides $4436 per medical resident each year
Figure 19 illustrates the Graduate Medical Education formula allocation to institutions among the nine health related institutions and Baylor College of Medicine
CHEST DISEASE CENTER FORMULA
The Chest Disease Center operations formula which was established during the 2010ndash11 biennium applies only to The University of Texas Health Science Center at Tyler Th e University of Texas Health Science Center at Tyler has a statutory mission to conduct research develop diagnostic and treatment techniques provide training and teaching programs and provide diagnosis and treatment of inpatients and outpatients with respiratory diseases The Chest Disease Center formula is based on the number of primary chest disease patients the institution served Approximately $472 million in General Revenue Funds are appropriated for the 2012ndash13 biennium
CANCER CENTER OPERATIONS FORMULA
The Eightieth Legislature 2007 established in the GAA an Operations formula for funding The University of Texas MD Anderson Cancer Center The University of Texas MD Anderson Cancer Center has a statutory mission to eliminate cancer through patient care research education
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR
7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ 8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
870HGLFDOUDQFKDWDOYHVWRQ 7H[DV7HFK8QLYHUVLW+HDOWK876RXWKZHVWHUQ0HGLFDOampHQWHU
6FLHQFHVampHQWHU
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 18
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 19 DISTRIBUTION OF GRADUATE MEDICAL EDUCATION FORMULA 2012ndash13 BIENNIUM
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
727$ 02187+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR 870$QGHUVRQampDQFHUampHQWHU
87+HDOWK6FLHQFHampHQWHUDW7OHU
7H[DV$ amp 08QLYHULVW6VWHP +HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK 6FLHQFHVampHQWHU
DORUampROOHJHRI0HGLFLQH
and prevention The Operations formula funding is based on the total number of Texas cancer patients the institution served The Operations formula growth in funding may not exceed the average growth in funding for health-related institutions in the Instruction and Operations support formula for the current biennium For the 2012ndash13 biennium this funding formula provided $2125 million in General Revenue Funds
NON-FORMULA FUNDING
PATIENT CARE ACTIVITIES
Some institutions conduct patient care activities generally medical or dental For the 2012ndash13 biennium the estimated appropriation for Patient Income was $56 billion Th e hospital and clinic revenues earned through patient care activities are considered Other Funds which are part of Educational and General Income (not to be confused with Other Educational and General Income which is another subset of Educational and General Income) General Revenue funding supplements patient-care income to varying degrees at each institution Patient Income is an estimated appropriation and is spread across an institutionrsquos funding strategies however it is not used in the calculation of the formulas
INSTITUTIONAL ENHANCEMENT
Institutional Enhancement is a General Revenue Fund appropriation that started in the 2000ndash01 biennium It is designed to allow each institution to address its unique needs and diseconomies of scale at institutions with smaller campuses The total institutional enhancement appropriation for the 2012ndash13 biennium was $42 million which includes $407 million in General Revenue Funds and $16 million in Patient Income
SPECIAL ITEMS
Special items are activities that are not generally funded through the formulas and typically represent an institutionrsquos special needs or areas of expertise The $3107 million in General Revenue Funds for the 2012ndash13 biennium funds items such as residency programs academic outreach programs public service items and research items other than general research support Institutions propose and justify special items and request an amount for each on an ad hoc basis Special items generally remain constant from biennium to biennium unless the item was a one-time expense (eg tornado damage repairs) or the institution has not used the funding for the intended purpose
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 19
FUNDING HEALTH-RELATED INSTITUTIONS
CONSTITUTIONAL FUNDS
These funds are not directly appropriated to institutions in the GAA In other words these funds are not found in a strategy within an institutionrsquos bill pattern
Health-related institutions are eligible for funding from the Available University Fund ($146 million in Other Funds allocated to these institutions by system offices for the 2012ndash 13 biennium) and the Higher Education Fund ($257 million in General Revenue Funds appropriated for the 2012ndash13 biennium) which are presented in detail in the ldquoFunding General Academic Institutionsrdquo section of this report
CAPITAL FUNDS
Just like general academic institutions tuition revenue bonds ($1665 million in General Revenue Funds for related debt service in the 2012ndash13 biennium) are also used to fund capital projects at health-related institutions A detailed presentation of tuition revenue bonds is in the ldquoFunding General Academic Institutionsrdquo section The University of Texas Medical Branch at Galveston and The University of Texas MD Anderson Cancer Center also have separate appropriations for capital projects that are funded primarily with Patient Income
EMPLOYEE BENEFITS
Like general academic institutions health-related institutions benefit from direct and indirect state appropriations related to employee benefi ts The indirect appropriations include Higher Education Group Insurance ($2339 million in General Revenue Funds for the 2012ndash13 biennium) Retirement Contributions and Social Security Benefi ts (all presented in the ldquoFunding General Academic Institutionsrdquo section) The direct appropriations include Staff Group Insurance
For the 2012ndash13 biennium the Workersrsquo Compensation and Unemployment Compensation strategies (all presented in the ldquoFunding General Academic Institutionsrdquo section) are funded directly with General Revenue Funds and General RevenuendashDedicated Funds However The University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool The University of Texas and Texas AampM Systems also manage their own unemployment compensation coverage while all other institutions receive coverage from
the Texas Workforce Commission which receives an appropriation to cover unemployment benefi ts
TEXAS PUBLIC EDUCATION GRANTS
Health-related institutions similar to general academic institutions are subject to the Texas Education Code (sect56031 et al) provision requiring a portion of tuition revenue be set aside to fund Texas Public Education Grants (TPEG) For the 2012ndash13 biennium the estimated TPEG appropriation is $188 million This revenue is considered Other Education and General Income which is classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
As mentioned earlier in this section Indirect Cost Recovery was removed from the GAA for the 2010ndash11 biennium however the individual institution still receives the funds
TOBACCO SETTLEMENT
House Bill 1945 Seventy-sixth Legislature 1999 established the Permanent Health Fund for health-related institutions of Higher Education the Permanent Fund for Minority Health Research and Education the Permanent Fund for Higher Education Nursing Allied Health and Other Health Related Programs and 13 permanent endowments for individual institutions of higher education The $769 million in estimated interest earnings from the endowments for 2012ndash13 (based on estimated interest earnings of 45 percent each year) were appropriated to the health-related institutions
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 20
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW Public two-year lower-level institutions include 50 community and junior college districts four Texas State Technical College (TSTC) campuses and three Lamar State Colleges These institutions were appropriated $22 billion in state funding for the 2012ndash13 biennium Preliminary fall FIGURE 20 TWO-YEAR INSTITUTION FUNDING MECHANISMS 2012ndash13 BIENNIUM
2011 enrollment at these institutions totaled 789713 Figure 20 illustrates the funding mechanisms for these institutions Community colleges accounted for 983 percent of this enrollment total while the Texas State Technical and Lamar State Colleges composed the remaining portion
COMMUNITY COLLEGES
Instruction and Administration General Revenue Funds from the state are based on contact hour driven formulas for two-year institutions Tuition and fee revenues and local tax revenues augment state General Revenue Funds for these costs
Academic Courses Approximately 82 percent of the total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 18 percent of the total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant The state provides no funding for physical plant operations and maintenance Local taxing districts are expected to provide support for physical plant needs Community colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011
Facilities Local communities must provide facilities Community colleges are not eligible to receive Higher Education Fund (HEF) allocations Available University Fund allocations or state tuition revenue bonds
Employee Benefits While community college employees are locally-employed community colleges participate in the Employee Retirement System (ERS) Group Benefits Program for health benefi ts and the Teacher Retirement System(TRS) and Optional Retirement Program (ORP) for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits
Tuition Fee Revenues Tuition and fee revenues are considered institutional funds and are not appropriated by the state Tuition rates vary by institution In 2012 the statewide tuition rates plus fees averaged $73 per semester credit hour but varied from $34 to $208 per semester credit hour
Local Tax Revenue Community Colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011 Local tax revenues are expected to provide support for physical plant needs and augment state General Revenue Funds for instruction and administration costs
SOURCE Legislative Budget Board
TSTCLAMAR COLLEGES
Instruction and Administration General Revenue Funds from the state are based on formulas for two-year institutions Tuition and fee revenues augment General Revenue Funds for these costs
Academic Courses Approximately 39 percent at the Lamar colleges and 28 percent at Texas State Technical College (TSTC) of total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 61 percent at the Lamar colleges and 72 percent at TSTC of total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant State funding based on the formula for general academic institutions The Lamar colleges will receive approximately $71 million and TSTC will receive $157 million in General Revenue Funds for physical plant and utilities in the 2012ndash13 biennium
Facilities The Lamar colleges receive approximately $42 million annually from HEF funds and TSTC receives almost $58 million annually The HEF monies are used to acquire land construct and equip buildings provide major building repair or rehabilitation and acquire capital equipment and library materials
Employee Benefits Both the Lamar colleges and TSTC institutions participate in ERSrsquo Group Benefits Program for health benefits and the TRS and ORP programs for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits of those employees having their salaries paid with General Revenue Funds
Tuition Fee Revenues Certain tuition revenue is appropriated by the state In 2012 for resident students average tuition plus fees was $139 per semester credit hour at the Lamar colleges and $150 per semester credit hour at TSTC
FINANCING HIGHER EDUCATION IN TEXAS ndash ID690 LEGISLATIVE BUDGET BOARD 21
FUNDING COMMUNITY AND TECHNICAL COLLEGES
These institutions are primarily funded based on student contact hours A contact hour is a standard unit of measure that represents an hour of scheduled academic and technical instruction given to students during a semester Community and junior college districts generate almost 958 percent of the state-funded contact hours at two-year institutions TSTC components generate approximately 29 percent of the contact hours and the three Lamar State Colleges account for the 13 percent
COMMUNITY COLLEGES Over 99 percent of the direct appropriations to community colleges are from the General Revenue Fund and are generated through a funding formula The remaining direct appropriations are for isolated ldquospecial itemsrdquo including appropriations for the Southwest Collegiate Institute for the Deaf which is part of the appropriation for Howard College The Texas Education Code Section 130003(a) calls for state appropriations to public community colleges to ldquosupplement local funds for the proper support maintenance operation and improvement of those public junior colleges of Texas that meet the standards prescribed by the chapterrdquo Further Education Code Section 130003(c) indicates that state funds must be used ldquoexclusively for the purpose of paying salaries of instructional and administrative forceshellip and the purchase of supplies and materials for instructional purposesrdquo
Consistent with statute community colleges have their own Instruction and Administration Formula which is funded by General Revenue Funds and based on ldquostudent contact hoursrdquo Unlike general academic institution formulas this formula does not include tuition and fee revenue as part of the method of fi nance
The Eighty-second Legislature 2011 also provided $45 million to certain districts through a new small institution supplemental formula A district is eligible for the supplement if it makes a significantly above-average effort to generate tax income while at the same time experiencing below-average tax revenue and does not have a number of contact hours that exceeds the statewide median Th e Eighty-second Legislature appropriated each eligible district $05 million for the 2012ndash13 biennium
No state funding is provided for physical plant operations and maintenance or for facilities that is supported by local tax eff ort
Three community colleges receive weighted semester credit hour formula funding for a Bachelor of Applied Technology degree program
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $153 million in General Revenue formula hold harmless funding for aff ected community colleges to minimize the effect of reduced formula funding as a result of overall contact hour declines The Eighty-second Legislature 2011 did not provide any hold harmless funding in the 2012ndash13 biennium
Property taxes tuition and fees are other major sources of revenue for community colleges Figure 21 illustrates the estimated sources of funding for community colleges Th e state appropriations in Figure 21 include all formula special item Higher Education Group Insurance appropriations and retirement benefi t appropriations
FIGURE 21 MAJOR SOURCES OF COMMUNITY COLLEGESrsquo OPERATING REVENUE IN BILLIONS FISCAL YEAR 2011
727$ 21
6WDWHampRQWULEXWLRQV
URVV7XLWLRQDQG)HHV
3URSHUW7D[HV
)HGHUDO)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING
The basis of the formula starts with the Texas Higher Education Coordinating Board (THECB) Report of Fundable Operating Expenses (RFOE) (formally called the All Funds Expenditure Report) The study includes all expenditures for instruction and administration (facilities costs are not included) in 26 program areas THECB uses the expenditure data to determine the median cost in the 26 program areasmdashthe ldquoratesrdquo for contact hours in those disciplines THECB then makes a recommendation for
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 22
FUNDING COMMUNITY AND TECHNICAL COLLEGES
funding based on the rates Over the years THECB has used various methodologies as the basis for its funding recommendations Because the RFOE takes into account all funds (state appropriations plus tuition and tax revenue which are not appropriated) THECBrsquos recommendation for state funding has generally not equaled 100 percent of the rates
The amount of the appropriation is a legislative decision based on funds available The appropriation is allocated to the colleges according to each districtrsquos pro-rata share of THECB recommendations
HIGHER EDUCATION GROUP INSURANCE (HEGI)
Like state institutions of higher education community colleges receive General Revenue Fund contributions for group insurance However since community college employees are local not state employees state contributions for health benefits are fully discretionary Other agencies and institutions of higher education report employee eligibility for General Revenue-funded group health insurance benefi ts only if the employeersquos salary is directly paid with General Revenue Funds However in the past community colleges tended to base eligibility for General Revenue-funded benefits if the employeersquos job function fell under an approved ldquoelement of costrdquo This practice caused community colleges to report eligibility for state funded health benefits in a manner that did not always match the source of the employeersquos salary
This practice led to the Governorrsquos veto of the Group Health Insurance appropriation for fiscal year 2009 ($154 million) at the end of the Eightieth Legislative session However an agreement to restore the vetoed funds was reached and returned directly to the districts in House Bill 4586 Eighty-first Legislature Regular Session 2009
The Eight-Second Legislature 2011 allowed community colleges to receive General Revenue Fund contributions for employees whose job function fell under an approved ldquoelement of costrdquo However the Legislature only funded 42 percent of the premium costs for these employees
OTHER STAFF BENEFITS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and certain administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees
participate in TRS a defi ned benefit plan In both instances the state funds retirement contributions equal 60 and 64 percent of an employeersquos salary in fiscal year 2012 and fi scal year 2013 respectively (These appropriation amounts are not included in Figure 2 on page 3)
DRAMATIC ENROLLMENT GROWTH
Since the 1996ndash97 biennium public community colleges have received ldquoDramatic Enrollment Growth Fundingrdquo For the 2000ndash01 biennium this was expanded to include Texas State Technical Colleges and Lamar State Colleges (Lamars) The appropriation was made to THECB Rider 13 page IIIshy53 General Appropriations Act (2010ndash11 Biennium) provided guidelines for distributing this funding
For the 2010ndash11 biennium THECB is authorized to allocate up to $175 million per year to schools experiencing a growth rate of five percent or greater in 2010 and eight percent or greater in 2011 The Eighty-second Legislature 2011 did not provide any dramatic enrollment growth funding in the 2012-13 biennium
OTHER TRUSTEED FUNDS
Students at community colleges also benefi t from Texas Educational Opportunity Grants the student fi nancial aid program appropriation that is allocated by THECB
TEXAS STATE TECHNICAL COLLEGE LAMAR STATE COLLEGES The Texas State Technical Colleges (TSTC) and Lamar State Colleges are allocated a majority of their appropriation via two formulas the Instruction and Administration Formula for two-year institutions and the Infrastructure Formula for general academic institutions Similar to general academic institutions the tuition revenue for these colleges is included in the appropriations bill
Contact hours for vocationaltechnical courses represent approximately 61 percent of total contact hours at the Lamar State Colleges and 72 percent at TSTC institutions Th e remaining contact hours are generated from academic and continuing education courses
Facilities funding is available from the Higher Education Fund for both TSTC and the Lamars State Colleges and both have received Tuition Revenue Bond authorizations
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 23
FUNDING COMMUNITY AND TECHNICAL COLLEGES
The Community Colleges section of this report includes subsections on Higher Education Group Insurance Other Staff Benefits and Dramatic Enrollment Growth Th ese three subsections apply to appropriations for Texas State Technical Colleges and the Lamar State Colleges as well
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 24
FUNDING TEXAS AampM SYSTEM AGENCIES
There are seven research and service agencies that are administered by the Texas AampM University System Th e system agenciesrsquo missions differ from other institutions of higher education in that each system agency focuses on one or two of the three traditional missions of higher education institutions research extension and service (Figure 22)
FIGURE 22 TEXAS AampM SYSTEM AGENCIES MISSIONS AND FUNCTIONS
STATUTORY AUTHORITY MISSIONFUNCTIONS
For the 2012ndash13 biennium the total direct appropriations for Texas AampM System (System) agencies are $8897 million In addition to state appropriations the System agencies receive some Federal Funds that are not included in the General Appropriations Act and have access to private funds While System agencies have significant portions of their Other Funds and Federal Funds appropriated the appropriations are estimated and actual income from these funding sources is subject to signifi cant variation
Texas AampM AgriLife Education Conducts research in the agricultural environmental and life sciences Goals include Research Code Title III enhancing the competitiveness of agricultural industries and natural resource conservation
Chapter 88 Research highlights bioenergy irrigation efficiency and the use of distillerrsquos grain in feedlots Administers the honey bee regulation and feed and fertilizer programs
Texas AampM AgriLife Education Provides training and educational programs including 4-H through extension agents Extension Service Code Title III serving every county in Texas and supported by federal state and county funds Provides
Chapter 88 wildlife and insect management services including feral hog abatement and boll weevil eradication
Texas AampM Education Conducts engineering and technology research with a focus on interdisciplinary research Engineering Code Title III based on statewide priorities Research highlights energy independence effi ciency and Experiment Station Chapter 88 conservation alternative energy and national security
Texas AampM Education Conducts transportation related research and develops technology Approximately 50 Transportation Code Title III percent of research expenditures from interagency contracts are contracted from the Texas Institute Chapter 88 Department of Transportation
Texas AampM Education Provides training technical assistance and emergency response to enhance public Engineering Code Title III safety security and economic growth Operates the Brayden Fire Training Field and the Extension Service Chapter 88 Emergency Operations Training Center Texas Task Force 1 is deployed for emergency
response and search and rescue operations
Texas AampM Forest Education Provides incident management teams and emergency response as well as wildfire Service Code Title III prevention detection and suppression services The Texas Wildfire Protection Plan is
Chapter 88 the agencyrsquos wildfire response model Administers the Rural Volunteer Fire Department Assistance Program which gives grants to local fire departments for equipment and training
Texas AampM Veterinary Education Provides fee-based veterinary medical diagnostic services which contribute to an animal Medical Diagnostic Code Title III and zoonotic disease surveillance system Responds to potential high consequence andor Laboratory Chapter 88 emerging disease events Develops new diagnostic testing technologies
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 25
FUNDING TEXAS AampM SYSTEM AGENCIES
FIGURE 23 TEXAS AampM SYSTEM AGENCIES COMPARED TO INSTITUTIONS OF HIGHER EDUCATION
SIMILARITIES
FUNDING
Both Texas AampM System (System) agencies and institutions of higher education have considerable flexibility in their budgeting and financial operations (ldquolump sumrdquo appropriations)
Both are eligible to receive proceeds from the Permanent University Fund
Both are considered to be institutions of higher education for purposes of employee group health insurance
Both System agencies and institutions of higher education generate and keep 100 percent of indirect cost recovery from research and other grants
PERFORMANCE MEASURES
OPERATIONS
Like other institutions of higher education System agencies are not required to submit operating budgets or strategic plans
Both are statutorily embedded within the Texas AampM Systemrsquos institutional framework
SOURCE Legislative Budget Board
DIFFERENCES
General academic health-related and two-year institutions receive formula funding while System agencies do not
Texas AampM System agencies do not generate revenue in the same manner or amount of other higher education institutions
Performance measures for the System agencies are agency-specific while performance measures for other higher education institutions are standardized
In several ways state funding for System agencies is similar to funding for higher education institutions System agencies have considerable flexibility in their budgeting and fi nancial operations because they receive lump-sum appropriations in the same manner as other institutions of higher education They are eligible to receive funds from the Permanent University Fund (PUF) (They were allocated $153 million from the PUF for debt service in the 2012ndash13 biennium) System agencies are also funded in the same manner as other institutions of higher education with regard to staff benefi ts including employee group health insurance contributions
However there are several funding diff erences between System agencies and other higher education institutions Most significantly System agencies do not receive formula-based funding Also while some System agencies may charge fees for their services they do not generate tuition and fees in the same manner or quantity as other institutions of higher education
As is the case with all institutions the System agencies keep 100 percent of their respective indirect cost recovery income
because this income is derived from earnings on federal grants and is held outside the treasury
For the 2012ndash13 biennium funding associated with infrastructure expenses and utilities for System agencies inside Brazos County is equal to the infrastructure rate (as determined by the General Academic formulas on page 6) for Texas AampM University
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 26
APPENDIX A FREQUENTLY ASKED QUESTIONS
Q What are the limitations on how institutions spend state appropriations
A Generally speaking institutions have great fl exibility in spending appropriated funds however some limitations do exist depending on the source of revenue Appropriated revenue includes General Revenue Funds General Revenuendash Dedicated Funds (mostly tuition and fee income) Other Funds (including Patient Income) and Federal Funds (for certain Texas AampM System Agencies) Th e Texas Constitution (Article VII Section 18(i) and 17(j)) prohibits with limited exceptions the use of General Revenue Funds for acquiring land or for construction projects An exception occurs when the legislature by two-thirds vote in each house expressly determines that there is a demonstrated need for the project
Various provisions in the 2012ndash13 General Appropriations Act (GAA) Higher Education Special Provisions restrict state appropriations These restrictions include the following
bull Section 6 (Rider 8b) which prohibits the use of appropriated funds for auxiliary enterprises
bull Section 6 (Rider 9) which limits the use of these funds to pay debt service for statutorily authorized tuition revenue bonds Any such appropriation not spent must be returned to the General Revenue Fund at the end of the year
bull Section 9 which prohibits the use of appropriated funds for intercollegiate athletics purposes and
bull Section 54 which limits the use of the Research Development Fund to those defined in Education Code Section 62091
Q Would an increase in tuition revenue replace a corresponding amount in General Revenue Funds or would the revenue remain within the institution
A The result depends on how the Legislature responds
For instance assume that the Eight-second Legislature 2011 changed the statute to require institutions to charge nonresident tuition in circumstances where they had previously waived the nonresident tuition rate For the 2012ndash13 biennium institutions would benefit fully from the
increase in tuition revenue (This assumes the formula calculation would not include a projected increase in tuition)
However institutional appropriations in the 2014ndash15 biennium now depend on that legislation passed in the Eighty-third Legislature 2013 Assuming the same number of students (semester credit hours) enroll regardless of changes in tuition policy and that the result of charging nonresident tuition generated $100 million in additional tuition revenue there are three options
1 Reduce General Revenue Funds (GR) in the formulas by $100 million In this scenario the formula rate stays the same and every dollar increase in tuition revenue results in a dollar decrease in GRmdashinstitutional funding does not increase
2 Keep GR the same and run the additional tuition revenue through the formulas Th e formula funding rate would increase and every institution would receive more funds including those institutions that generated no additional tuition revenue
3 Keep GR formula appropriations at the same level and let individual institutions keep the additional tuition revenue they generated outside the formula allocation
Q Are all tuition and fee revenues collected by institutions of higher education included in the appropriations bill
A No None of the tuition and fee revenues collected by community colleges are appropriated
For general academic institutions an estimate of the revenue from certain tuitions and fees such as statutory tuition (Education Code 54051 Tuition Rates) board authorized tuition (Education Code 54008 Tuition Rate Set by Governing Board) Laboratory Fees (Education Code 54501) and certain other fees are appropriated in the GAA as General Revenue FundsndashDedicated Estimated Other Educational and General Income There are a number of other tuitions and fees that are not included in the GAA and therefore not referred to as state funding Such tuitions and fees include but are not limited to designated tuition (Education Code 540513 Redesignation of Building Use Fee) and Incidental Fees (Education Code 54504) Federal
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 27
APPENDIX A FREQUENTLY ASKED QUESTIONS
Funds are also not appropriated to the general academic and health-related institutions
Q Is a decrease in enrollment the only reason an institution would be eligible for formula funding hold harmless
A No Each session the Legislature makes a determination of whether it will make an appropriation for formula hold harmless A decrease in total enrollment is one reason an institution could be eligible for the funding Because the semester credit hours (general academic institutions) full-time student equivalents (health-related institutions) used in the formulas are based on weights (discipline program and course level) a change in the type of student enrollment regardless of total enrollment could also make an institution eligible for hold harmless funding
Q What are Educational and General Funds
A ldquoOther Educational and General Incomerdquo is a subset of ldquoEducational and General Incomerdquo The following are included in the Education Code (51009(c)) defi nition for ldquoEducational and General Fundsrdquo net tuition special course fees charged under Education Code 54051(e) and (l) lab fees student teaching fees hospital and clinic fees organized activity fees and proceeds from the sale of educational and general equipment
Q What does it mean to be a Tier One institution
A The Tier One reference is often derived from the Carnegie Foundation for the Advancement of Teachingrsquos prior system for classifying institutions of higher education As part of the 1994 version of the Carnegie Classification there were four categories for doctorate granting institutions Research Universities I Research Universities II Doctoral Universities I and Doctoral Universities II ldquoTier Onerdquo was synonymous with Research Universities I Such institutions had to off er a full range of baccalaureate programs award 50 or more doctoral degrees each year and receive annually at least $40 million or more in federal research funds Two institutions in Texas (The University of Texas at Austin and Texas AampM University) met these criteria The 2000 version of the Carnegie Classification collapsed the categories for doctorate granting institutions from four to two Doctoral Research UniversitiesmdashExtensive and DoctoralResearch UniversitiesmdashIntensive Six public institutions in Texas (Texas AampM University Texas Tech University University of Houston University of North Texas The University of Texas at Arlington and The University of Texas at Austin) meet the criteria for DoctoralResearch Universitiesmdash
Extensive In 2005 however the classifi cation structure returned to a more restricted top tier of institutions classifi ed as ldquoResearch Universities (very high research activity)rdquo Both The University of Texas at Austin and Texas AampM University are now counted in this category but any reference to Tier One usually refers to the 1994 Carnegie Classifi cation
Q What is the space model What is the base number of square feet needed
A In 1992 the Texas Higher Education Coordinating Board approved the Space Projection Model for Higher Education Institutions in Texas for public universities to assess the net assignable square feet (NASF) of educational and general space an institution needs There are fi ve categories incorporated into the model teaching library research offi ce and support space Space needs for auxiliary purposes such as dormitories or athletics are not included in the model Square footage amounts are assigned based on a number of elements within each category including the number of students and their program levels and the amount of research expenditures The space model was fi rst incorporated into the funding formulas for general academic institutions in 1997
Q What are ldquoOrganized Activitiesrdquo
A General academic institutions have a funding strategy titled ldquoOrganized Activitiesrdquo These are activities or enterprises that are connected with instructional departments Th ey are intended primarily to give training to students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training
Q What are tuition revenue bonds
A Established in 1971 under Education Code 5513 tuition revenue bonds are bonds (not to exceed 50 years) issued by institutions of higher education for the purpose of ldquoproviding funds to acquire purchase construct improve enlarge andor equip any property buildings structures activities services operations or other facilities for and on behalf of its institution or institutions or any branch of branches thereofrdquo Each institutionsystem is authorized and required to pay debt service on its bonds Although the authorization and issuance of the bonds is not contingent on an appropriation by the state for related debt service the Legislature has provided General Revenue Funds to reimburse institutions for costs related to debt service However in the 2004ndash05 GAA the legislature changed this practice and only provided General Revenue Fund reimbursements for interest
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 28
APPENDIX A FREQUENTLY ASKED QUESTIONS
on bonds issued after March 31 2003 The 2006ndash07 GAA renewed the practice of reimbursing institutions for the costs related to debt service The 2008ndash09 GAA and 2010-11 GAA continues this practice
Q What Is Proportionality
A Pursuant to Section 608 of Article IX of the 2012ndash13 GAA the legislative intent of proportionality is to ldquomaximize balances in the General Revenue Fundrdquo by harmonizing salary funding source with benefits funding source Th is effectively means the Legislature limits its General Revenue Fund contributions for benefits only to those employees having salaries paid with General Revenue Funds As such proportionality requires employee health and retirement benefits be paid in ldquoproportionrdquo to the funding source of salaries To this end institutions are obligated to submit the Accounting Policy Statement 011 Benefits Proportional by Fund (APS 011) report to the Comptroller Th is document provides a structure by which state and local contributions are ldquosettled uprdquo in light of the fiscal years fund proportionality
Q What Is the National Research University Fund
A In 1995 the Texas Constitution was amended to authorize the creation and funding of the Permanent Higher Education Fund (PHEF) The PHEF was intended eventually to become a permanent endowment to support non-Permanent University Fund eligible institutions However the PHEF corpus was rededicated with the voter passage of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) In 2009 Proposition 4 transferred the balance of the PHEF to the credit of the NRUF as of January 1 2010 and repealed the constitutional authorization for the PHEF
The NRUF is intended to provide a source of funding to enable emerging research universities in Texas to achieve national prominence as major research universities Article VII of the Texas Constitution authorizes the Legislature to appropriate some or all of the total return on all investment assets of the NRUF for the purposes of the fund except for two caveats (1) the Legislature may not increase distributions from the fund if the purchasing power of investment assets for any rolling 10-year period is not preserved and (2) the amount appropriated from the proceeds of the NRUF corpus in any fiscal year must be capped at 7 percent of the investment assetsrsquo average net fair market value Until the NRUF has been invested long enough to determine its purchasing power over a 10-year period the Legislature is
authorized to use other means of preserving the purchasing power of the fund
House Bill 1000 Eighty-second Legislature Regular Session 2011 establishes the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution is designated as an emerging research university within the THECBrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fiscal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of institutionrsquos research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 29
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 30
APPENDIX B TUITION AND FEE PROVISIONS
VTCA Texas Education Code Section 54003 states No institution of higher education may collect from students attending the institution any tuition fee or charge of any kind except as permitted by lawhellip
The laws governing tuition and fees at institutions of higher education are found in Education Code Section 54 including a limited number of rules that relate to tuition and fees charged by junior and community colleges Education Code Section 54 includes statutes regarding statewide tuition and fee authority rules regarding residency for tuition and fee purposes and various exemptions for tuition and fees from nonresidency status Also it includes specific fee authority for individual institutions Figure B1 provides a listing of tuition and fee authorizations in Education Code Section 54 but does not include the items presented below or the various exemption and waiver provisions (Details about each provision can be found at httpwwwcapitolstate txus) Th ere are isolated instances outside Chapter 54 whereby the boards of regents are authorized to charge for specific services provided to students
This appendix highlights some of the more prominent tuition and fee provisions and indicates whether the related revenue is or is not included in the General Appropriations Act (GAA)
INCLUDED IN THE GENERAL APPROPRIATIONS ACT Tuition and fee revenue included in the GAA as General Revenue DedicatedndashFunds is referenced as ldquoOther Education and General Incomerdquo The amounts are ldquoEstimatedrdquo so whatever amount of revenue generated is the actual amount available to the institution to spend
54051 Tuition Rates (statutory tuition) In conjunction with Section 540512 Interim Tuition Rates resident tuition for undergraduate students reached $50 per semester credit hour in the 2005ndash06 academic year (the 2006 state fi scal year) Tuition for nonresident students at general academic medical and dental institutions is based on the average of nonresident tuition rates in the five most populous states other than Texas The Texas Higher Education Coordinating Board must make this computation each academic year
54008 Tuition Rate Set by Governing Board (also known as board authorized tuition) Applies to graduate programs Subsection (d) specifies that it is not to be used in the GAA as an offset to General Revenue Funds It is distributed across formula strategies after the formula calculation
54501 Laboratory Fees The fee amount must be sufficient to cover the general costs of laboratory materials and supplies used by a student It is not to be less than $2 or more than $30 per semester and it must not exceed the actual cost of materials and supplies
NOT INCLUDED IN THE GENERAL APPROPRIATIONS ACT 540513 Designated Tuition Statute defi nes designated tuition as an institutional fund which means the revenue is not considered part of ldquoeducational and general fundsrdquo Th e governing board can waive designated tuition for a student (see 54261) Statute specifies that this revenue not be used in the GAA as a way to offset General Revenue
54503 Student Services Fees This is intended for activities which are separate from the regularly scheduled academic functions of the institution and directly involve or benefi t students Except for The University of Texas at Austin (see 54513) and components of the University of Houston System (see 545061) the maximum of all compulsory student services cannot exceed $250 per semester It is kept separate from educational and general funds
54504 Incidental Fees The governing board sets the fee which must reasonably reflect the actual cost of the materials or services for which the fee is collected Examples of unearned fees include late registration library fi nes microfilming fees thesis or doctoral manuscript reproduction or filing fees and bad check charges
5516 Board Responsibility The governing board is authorized to ldquofix and collect rentals rates and chargesrdquo
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 31
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54006 Refund or Adjustment of Tuition and Mandatory Fees for Dropped Courses and Student Withdrawals
540065 Tuition Rebate for Certain Undergraduates
54007 Option to Pay Tuition by Installment
540071 Authority of Institution to Provide Payment Options for Student with Delayed Financial Aid
54009 Increase in Tuition Rate or Fees
54010 Reduction in Tuition
54011 Tuition Limit in Cases of Concurrent Enrollment
54012 Tuition Rates for Certain Doctoral Students
54014 Tuition for Repeated or Excessive Undergraduate Hours
54015 Billing and Notifi cation for Tuition
54016 Fixed Tuition Rate Program for Certain Transfer Students at General Academic Teaching Institutions
54052ndash54057 Residency Provisions
542031 Dependent Children of Residents Who are Members of Armed Forces Deployed on Combat Duty
54204 Children of Disabled Firefighters and Law Enforcement Officers
542041 Disabled Peace Officers
54205 Blind Deaf Students
54206 Foreign Service Officers
54208 Firefighters Enrolled in Fire Science Courses
542081 Peace Officers Enrolled in Certain Courses
54211 Faculty and Dependents
54212 Teaching and Research Assistant
54213 Scholarship Student
54214 Biomedical Research Program Scholarship Student
54221 The University of Texas System Science and Technology Development Management and Transfer
54222 Economic Development and Diversification
54223 Tuition Rates for Olympic Athletes
54231 Resident of Boarding State or Nation or Participant in Student Exchange Program Tuition
54232 NATO Agreement
54233 Academic Common Market
54241 Military Personnel and Dependents
54331 Students from other Nations of the American Hemisphere
54341 Veterans and Other Military Personnel Dependents
54342 Prisoners of War
54343 Children of Prisoners of War or Persons Missing in Action
54344 Participants in Military Funerals
54345 Assistance for Tuition and Fees for Members of State Military Forces
54351 Children of Disabled Firefighters and Law Enforcement Officers
54352 Disabled Peace Officers Optional Exemption
54353 Firefighters and Peace Officers Enrolled in Certain Courses
543531 Firefighters Enrolled in Fire Science Courses
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 32
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54354 Education Benefits for Certain Survivors
54355 Children of Professional Nursing Program Faculty
54356 Preceptors for Professional Nursing Education Programs
54363 Educational Aids
54364 Blind Deaf Students
54365 Senior Citizens Optional Benefit
545011 Charges and Fees for Certain Payments
54502 General Deposits
545021 Student Deposit Fund Composition and Uses
545025 Proration of Fees
545031 Student Fee Advisory Committee
545032 Student Fee Advisory Committee the Texas AampM University System
545041 Environmental Service Fee
54505 Vehicle Registration Fees and Other Fees Related to Parking and Traffic
54506 Fees and Charges for Services to the Public the University of Houston System
545061 Student Services Fees the University of Houston System
545062 Student Fees Advisory Committee the University of Houston System
54507 Group Hospital and Medical Services Fees Texas AampM University System
54508 Medical Services Fee Texas Tech University System Components
545081 Medical Services Fee University of North Texas System Institutions
545082 Medical Services Fee Midwestern State University
545085 Medical Services Fee Texas Womanrsquos University
545089 Medical Services Fee Texas State University System Components
5450891 Medical Services Fee The University of Texas System Components
54509 Student Recreation Fee Texas Tech University System Components
545091 Student Recreational Facility Fee University of North Texas
54510 Student Recreational Sports Fee The University of Texas at Austin
54511 Student Fees for Bus Service Texas State University
545111 Environmental Service Fee Southwest Texas State University
54512 Shuttle Bus Fee The University of Texas at Arlington
545121 Intercollegiate Athletic Fee The University of Texas at Arlington
545122 Recreational Facility Fee The University of Texas at Arlington
54513 Student Service Fees The University of Texas at Austin
545131 International Education Fee The University of Texas at Austin
545132 International Education Fee
545133 Martin Luther King Jr Statue Fee The University of Texas at Austin
545134 Washington DC Internship Education Fee
545135 Barbara Jordan and Cesar Chavez Statues Fee The University of Texas at Austin
54515 Student Union Fee
54518 University Center Fee Midwestern State University
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 33
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54519 Student Union Fee North Texas State University
545191 Intercollegiate Athletic Fee University of North Texas
54520 University Center Student Fee Stephen F Austin State University
545201 Recreational Sports Fee Stephen F Austin State University
54521 Student Center Facility Fees Texas AampM University System
54522 Student Center Fees Texas Southern University
545221 Recreational Facility Fee Texas Southern University
545222 Medical Services Fee Texas Southern University
545223 Intercollegiate Athletics Fee Texas Southern University
54523 Student Center Fees Texas State University System
545241 Student Union Fees Texas Tech University System
54525 Fees for Student Centers Texas Womanrsquos University
545251 Student Fitness and Recreational Fee Texas Womanrsquos University
54526 Student Fees for University Centers the University of Houston
54527 Student Fees for University Center Facilities the University of Houston-Downtown College
54528 Recreational Facility Fee the University of Houston
54529 Student Union Fee The University of Texas at Arlington
54530 Student Union Fees The University of Texas at Austin
54531 Student Union Building Fees The University of Texas at Dallas
545311 Transportation Fee The University of Texas at Dallas
545312 Student Services Building Fee The University of Texas at Dallas
545313 Intramural and Intercollegiate Athletics Fee The University of Texas at Dallas
54532 Student Union Building Fees The University of Texas at San Antonio
545321 Transportation Fee The University of Texas at San Antonio
545322 Intercollegiate Athletics Fee The University of Texas at San Antonio
54533 Student Union Fees The University of Texas of the Permian Basin
545331 Intercollegiate Athletic Fee The University of Texas of the Permian Basin
545332 Fees for Student Services Building The University of Texas of the Permian Basin
54534 Arts and Performance Center Fee The University of Texas at Tyler
545341 Student Recreational Facility Fee The University of Texas at Tyler
545342 Intercollegiate Athletics Fee The University of Texas at Tyler
545343 Student Union Fee The University of Texas at Tyler
54535 Student Union Fee The University of Texas at El Paso
54536 Fees for Student Health Services Building The University of Texas at Austin
54537 Fees for Student Services Building The University of Texas at Austin
545371 Gregory Gymnasium Renovation Fee The University of Texas at Austin
545372 Aquatics Center Fee The University of Texas at Austin
54538 Recreational Sports Fee Texas State University System
545381 Intercollegiate Athletics Fee Certain Institutions in Texas State University System
545382 Intercollegiate Athletics Fee Texas State University ndash San Marcos
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 34
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54539 Recreational Sports Fee the Texas AampM University System
545391 Intercollegiate Athletics Fee Texas AampM University ndash Corpus Christi
545392 Intercollegiate Athletics Fee Texas AampM University ndash Kingsville
545393 Intercollegiate Athletics Fee Prairie View AampM University
545394 Intercollegiate Athletics Fee Tarleton State University
545395 Intercollegiate Athletics Fee Texas AampM International University
545396 Intercollegiate Athletics Fees West Texas AampM University
545397 Intercollegiate Athletics Fees Texas AampM University ndash Commerce
545398 Student Endowment Fund Fee Texas AampM University ndash Corpus Christi
54540 Student Center Fee University of Houston ndash Clear Lake
54541 Recreational Facility Fee The University of Texas at El Paso
54542 Student Union Building Fee The University of Texas ndash Pan American
545421 Sports Recreation and Wellness Facility Fee The University of Texas ndash Pan American
54543 Recreational Facility Fee The University of Texas at San Antonio
54544 Recreational Facility Fee The University of Texas at Dallas
545441 Student Recreational and Health Facilities Fee Midwestern State University
545442 Intercollegiate Athletics Fee Midwestern State University
54545 Fees for Continuing Education Courses
54546 Student Union Fees The University of Texas at Brownsville
54550 Wellness Recreational and Fitness Complex Fee The University of Texas at Brownsville
54551 Intercollegiate Athletics Fee The University of Texas at Brownsville
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 35
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 36
APPENDIX C GLOSSARY
APPROPRIATION METHODOLOGIES Direct Appropriation The actual appropriation either estimated or sum certain listed in that institutionrsquos portion of the General Appropriations Act (GAA)
Indirect Appropriation An appropriation made on behalf of an institution but not listed in that institutionrsquos portion of the GAA Examples include appropriations to the Available University Fund the Higher Education Fund and the Higher Education Coordinating Board all of which are ultimately allocated to institutions
Estimated Appropriation An estimated appropriation is a figure in the GAA that best reflects the information available about the revenue source but the amount available for an institution to spend is contingent on the amount of revenue actually generated If the actual amount of revenue is less than the estimated amount the institution is limited to the lower amount If more revenue is generated than the estimated amount the institution can spend the higher amount
Sum Certain Appropriation A sum certain appropriation in the GAA means that an institution is limited to spend no more than the level of appropriation noted in the institutionrsquos bill pattern in the GAA
Lump Sum Appropriation Texas Education Code Section 61059(k) calls for flexibility in funds appropriated to higher education institutions A lump sum appropriation is a single amount that is unrestricted which means that it can be used for any variety of strategies The GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Higher education institutions are not required to spend their appropriation within specified strategies One exception to this is the Tuition Revenue Bond strategy which represents the appropriation related to debt service on related bonds and must be spent as appropriated or it is reverted to the treasury
METHODS OF FINANCE General Revenue (GR) The non-dedicated portion of the General Revenue Fund is the statersquos primary operating fund Most state tax revenue many state fees and various other sources of revenue are deposited as non-dedicated General Revenue Funds
General RevenuendashDedicated (GRndashD) This is the dedicated portion of General Revenue Funds For higher education institutions the bulk of General RevenuendashDedicated Fund appropriations consist of tuition and fee revenue generated by the institutions These include the tuition and fee revenue included as ldquoOther Educational and General Incomerdquo (defined below) ldquoboard authorized tuitionrdquo (Texas Education Code Section 54008)
Other Funds State funds not included in General Revenue Funds or General RevenuendashDedicated Funds For institutions of higher education these include the Available University Fund and Patient Income generated by health-related institutions
FUND TYPES Educational and General Income Th e Texas Education Code (51009(c)) definition for ldquoEducational and General Fundsrdquo includes (a) net tuition (b) special course fees charged under Education Code Section 54051(e) and (l) (c) lab fees (d) student teaching fees (e) hospital and clinic fees (f ) organized activity fees and (g) proceeds from the sale of educational and general equipment
Institutional Funds Texas Education Code Section 51009(b) defines institutional funds as those that are not ldquoeducational and general fundsrdquo An example of an institutional fund is ldquodesignated tuitionrdquo (Texas Education Code Section 540513) These funds are not included in the GAA
Local Funds Texas Education Code Section 51009(a) defines local funds as net tuition certain special course fees lab fees student teaching fees hospital and clinic fees organized activity fees proceeds from the sale of educational and general equipment and indirect cost recovery fees Th is revenue is accounted for as ldquoeducational and general fundsrdquo and is included in the GAA
Other Educational and General Income The GAA includes some tuition and fees collected by institutions of higher education (General RevenuendashDedicated Funds) Th e revenue from tuition and fees such as statutory tuition (see texas Education Code Section 54051 Tuition Rates) board authorized tuition (see Texas Education Code Section 54008 Tuition Rate Set by Governing Board) Laboratory
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 37
APPENDIX C GLOSSARY
Fees (Texas Education Code Section 54501) and certain other fees are considered Other Educational and General Income (Other EampG) and are appropriated in the GAA as General RevenuendashDedicated Funds Other Educational and General Income is a subset of Educational and General Income (EampG Income)
Patient Income Health-related institutions that operate hospitals or dental clinics generate patient income from services rendered It is allocated as a method of finance to the related institution across a range of strategies in the institutionrsquos bill pattern (Other Funds) For the 2010ndash11 biennium more than $48 billion in patient income was appropriated making it the largest method of fi nance for health-related institutions
OTHER ITEMS Indirect Cost Recovery Institutions negotiate a percentage of a grant with the federal government for Indirect Costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 38
FI
GU
RE
D1
CO
MPA
RIS
ON
OF
CO
NST
ITU
TIO
NA
L A
ND
RES
EARC
H F
UN
DS
201
2ndash13
BIE
NN
IUM
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Avai
labl
e $1
061
4 m
illio
nTe
xas
Con
stitu
tion
hellip
for
Texa
s C
onst
itutio
nU
nive
rsity
the
purp
ose
of a
cqui
ring
Fund
(E
stim
ated
) la
nd
con
stru
ctin
g an
dFo
r su
ppor
t and
equi
ppin
g bu
ildin
gsm
aint
enan
ce
UT
Aus
tin
or o
ther
per
man
ent
Texa
s A
ampM
Uni
vers
ity
impr
ovem
ents
maj
orP
rairi
e Vi
ew U
nive
rsity
UT
repa
ir an
d re
habi
litat
ion
Sys
tem
Aamp
M S
yste
mof
bui
ldin
gs a
nd o
ther
perm
anen
t im
prov
emen
ts
For d
ebt s
ervi
ce
All
acqu
iring
cap
ital
com
pone
nts
incl
udin
g th
eeq
uipm
ent a
nd li
brar
yTA
MU
Sys
tem
Age
ncie
s bo
oks
and
libra
ryex
cept
Tex
as V
eter
inar
y m
ater
ials
and
refu
ndin
gM
edic
al D
iagn
ostic
bond
s or
not
es is
sued
Labo
rato
ry (w
hich
per
unde
r thi
s S
ectio
n
Edu
catio
n C
ode
Sec
tion
887
01 i
s a
stat
e ag
ency
Als
o
for
the
purp
ose
unde
r the
juris
dict
ion
of th
e su
ppor
t and
and
supe
rvis
ion
of th
em
aint
enan
ce o
f The
Tex
as
boar
d)
and
excl
udin
gA
ampM
Uni
vers
ity S
yste
mU
T P
an A
mer
ican
and
UT
adm
inis
tratio
n T
exas
Aamp
M
Bro
wns
ville
(bec
ause
they
Uni
vers
ity a
nd P
rairi
e re
ceiv
e H
EF
allo
catio
ns -
View
Aamp
M U
nive
rsity
and
an
inst
itutio
n ca
nnot
rece
ive
The
Uni
vers
ity o
f Tex
as a
t bo
th A
UF
and
HE
F do
llars
) A
ustin
and
The
Uni
vers
ity
of T
exas
Sys
tem
Hig
her
$525
0 m
illio
nTo
sup
port
inst
itutio
ns
Arti
cle
VII
Sec
tion
17(c
)E
duca
tion
inel
igib
le fo
r AU
F su
ppor
t pr
ovid
es a
n al
low
ance
toFu
nd
add
a ne
w in
stitu
tion
by a
Arti
cle
VII
Sec
tion
23
vote
of b
oth
hous
es o
f17
(a)
fo
r the
pur
pose
the
Legi
slat
ure
if th
e ne
wof
acq
uirin
g la
nd
inst
itutio
n is
out
side
the
UT
cons
truct
ing
and
equi
ppin
gan
d A
ampM
Sys
tem
s
build
ings
m
ajor
repa
ir
acq
uisi
tion
of c
apita
leq
uipm
ent
oth
erpe
rman
ent i
mpr
ovem
ents
or
cap
ital e
quip
men
t use
djo
intly
for e
duca
tiona
l and
gene
ral a
ctiv
ities
Arti
cle
VII
Sec
tion
18(a
-j) o
f the
Tex
as
Con
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Arti
cle
VII
Sec
tion
17(a
-l) o
f the
Tex
as
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
620
02
Gen
eral
App
ropr
iatio
nsA
ct
Texa
s C
onst
itutio
n re
quire
s 1
3 of
the
annu
al
AU
F pr
ocee
ds b
e tra
nsfe
rred
to th
e Te
xas
Aamp
M U
nive
rsity
Sys
tem
E
ach
Sys
tem
offi
cede
term
ines
how
to a
ppor
tion
its s
hare
of t
heA
UF
betw
een
debt
ser
vice
and
sup
port
and
mai
nten
ance
w
ithin
gui
delin
es s
pecifi e
d by
the
Texa
s C
onst
itutio
n
Arti
cle
VII
Sec
tion
17(a
) req
uire
s th
e H
EF
beal
loca
ted
usin
g an
equ
itabl
e fo
rmul
a d
efi n
edin
the
Edu
catio
n C
ode
(Sec
tion
620
21) a
sT
he a
lloca
tion
of fu
nds
unde
r thi
s su
bsec
tion
ism
ade
in a
ccor
danc
e w
ith a
n eq
uita
ble
form
ula
cons
istin
g of
the
follo
win
g el
emen
ts
spac
e defi c
it fa
cilit
ies
cond
ition
ins
titut
iona
l com
plex
ity
and
a se
para
te a
lloca
tion
for
the
Texa
s S
tate
Te
chni
cal C
olle
ge S
yste
m
THE
CB
adm
inis
ters
the
HE
F fo
rmul
a re
allo
catio
nad
viso
ry p
roce
ss
Edu
catio
n C
ode
(Sec
tion
620
21) p
rovi
des
a by
-in
stitu
tion
brea
kout
of a
nnua
l HE
F ap
prop
riatio
ns
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 39
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Nat
iona
l $1
24
mill
ion
Res
earc
hU
nive
rsity
(E
stim
ated
)Fu
nd
Res
earc
h $6
53
mill
ion
Dev
elop
men
tFu
nd
Texa
s $9
35
mill
ion
Com
petit
ive
Kno
wle
dge
Fund
Arti
cle
VII
Sec
tion
20(a
)
for t
he p
urpo
se o
f pr
ovid
ing
a de
dica
ted
inde
pend
ent
and
equi
tabl
eso
urce
of f
undi
ng to
enab
le e
mer
ging
rese
arch
univ
ersi
ties
in th
is s
tate
to a
chie
ve n
atio
nal
prom
inen
ce a
s m
ajor
rese
arch
uni
vers
ities
Arti
cle
VII
Sec
tion
20 (h
)
onl
y fo
r the
sup
port
and
mai
nten
ance
of
educ
atio
nal a
nd g
ener
alac
tiviti
es th
at p
rom
ote
incr
ease
d re
sear
chca
paci
ty a
t the
uni
vers
ity
Edu
catio
n C
ode
Sec
tion
hellipto
pro
mot
e62
091
in
crea
sed
rese
arch
capa
city
at e
ligib
le g
ener
alac
adem
ic te
achi
ngin
stitu
tions
Sec
tion
56 o
f Hig
her
Edu
catio
n S
peci
alP
rovi
sion
s G
AA
201
2ndash13
bi
enni
um
hellipto
sup
port
facu
lty fo
r the
pur
pose
of
inst
ruct
iona
l exc
elle
nce
and
rese
arch
Des
igna
ted
an e
mer
ging
rese
arch
uni
vers
ity b
yTe
xas
Hig
her E
duca
tion
Coo
rdin
atin
g B
oard
R
epor
ts a
t lea
st $
45 m
illio
nin
rest
ricte
d re
sear
chex
pend
iture
s in
eac
h of
the
last
2 y
ears
P
lus
four
of t
he fo
llow
ing
addi
tiona
l crit
eria
1)
End
owm
ents
gt $
400
mill
ion
2) P
rodu
ces
gt 20
0 P
hDs
per y
ear
3) S
elec
tive
ente
ring
Fres
hmen
cla
ss
4) M
embe
r of P
hi B
eta
Kap
pa o
r equ
ival
ent
5) P
osse
sses
hig
h qu
ality
facu
lty a
nd6)
Dem
onst
rate
dco
mm
itmen
t to
high
-qua
lity
grad
uate
edu
catio
n
Edu
catio
n C
ode
Sec
tion
Elig
ible
inst
itutio
n62
092
m
eans
a g
ener
al a
cade
mic
teac
hing
inst
itutio
n a
sdefi n
ed b
y S
ectio
n 61
003
ot
her t
han
The
Uni
vers
ity o
f Te
xas
at A
ustin
Tex
as A
ampM
U
nive
rsity
or P
rairi
e Vi
ew
Aamp
M U
nive
rsity
Uni
vers
ity o
f Tex
as a
t A
ustin
Uni
vers
ity o
f Tex
as
at D
alla
s T
exas
Aamp
M
Uni
vers
ity T
exas
Tec
h U
nive
rsity
Uni
vers
ity o
f H
oust
on
Arti
cle
VII
Sec
tion
20 (a
-h)
of th
e Te
xas
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
621
41
Gen
eral
App
ropr
iatio
nA
ct
Edu
catio
n C
ode
Sec
tion
Not
e th
e62
091
RD
F as
a s
tand
-alo
neap
prop
riatio
n ite
m h
asno
t bee
n fu
nded
sin
ceth
e 20
06ndash0
7 bi
enni
um
How
ever
fun
ds c
alle
d th
e R
DF
have
bee
nap
prop
riate
d di
rect
lyin
to th
e bi
ll pa
ttern
s of
each
elig
ible
Gen
eral
Aca
dem
ic In
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Edu
catio
n C
ode
Sec
tion
621
46 (c
)
o
fth
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for
dist
ribut
ion
in a
sta
tefi s
cal y
ear
each
elig
ible
in
stitu
tion
is e
ntitl
ed to
a d
istri
butio
n in
an
amou
nteq
ual t
o th
e su
m o
fon
e-se
vent
h of
the
tota
l am
ount
app
ropr
iate
d(1
)an
dan
equ
al s
hare
of a
ny a
mou
nt re
mai
ning
afte
r(2
)di
strib
utio
ns a
re c
alcu
late
d un
der S
ubdi
visi
on (1
)no
t to
exce
ed a
n am
ount
equ
al to
one
-four
th o
fth
at re
mai
ning
am
ount
Edu
catio
n C
ode
Sec
tion
621
46 (e
)If
the
num
ber o
f ins
titut
ions
that
are
elig
ible
for
dist
ribut
ions
in a
sta
tefi s
cal y
ear i
s m
ore
than
four
eac
h el
igib
le in
stitu
tion
is e
ntitl
ed to
an
equa
l sh
are
of th
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for d
istri
butio
n in
thatfi s
cal y
ear
Edu
catio
n C
ode
Sec
tion
620
95
The
am
ount
shal
l be
appo
rtion
ed a
mon
g th
e el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of
rest
ricte
d re
sear
ch fu
nds
expe
nded
by
each
inst
itutio
n pe
r yea
r for
the
thre
e pr
eced
ing
stat
efi s
cal y
ears
The
2012
ndash13
appr
opria
tion
prov
ided
abo
ut $
07
mill
ion
to e
ach
elig
ible
inst
itutio
n fo
r eve
ry $
100
mill
ion
in u
nres
trict
ed re
sear
ch e
xpen
ditu
res
asav
erag
ed o
ver a
3-y
ear p
erio
d
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 40
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Res
earc
h N
one
U
nive
rsity
D
evel
opm
ent
Fund
Texa
s $3
56
mill
ion
Res
earc
hIn
cent
ive
Pro
gram
SO
UR
CE L
egis
lativ
e B
udge
t Boa
rd
Texa
s E
duca
tion
Cod
e S
ectio
n 62
051
to
pro
vide
fund
ing
tore
sear
ch u
nive
rsiti
esan
d em
ergi
ng re
sear
chun
iver
sitie
s fo
r the
recr
uitm
ent a
nd re
tent
ion
of h
ighl
y qu
alifi
ed fa
culty
an
d th
e en
hanc
emen
t of
rese
arch
pro
duct
ivity
at
thos
e un
iver
sitie
s
Edu
catio
n C
ode
Sec
tion
hellipto
pro
vide
621
22
mat
chin
g fu
nds
to a
ssis
tel
igib
le in
stitu
tions
inle
vera
ging
priv
ate
gifts
for t
he e
nhan
cem
ent o
fre
sear
ch p
rodu
ctiv
ity a
ndfa
culty
recr
uitm
ent
Edu
catio
n C
ode
Sec
tion
620
51
Elig
ible
inst
itutio
nm
eans
an
inst
itutio
nof
hig
her e
duca
tion
desi
gnat
ed a
s a
rese
arch
univ
ersi
ty o
r em
ergi
ngre
sear
ch u
nive
rsity
und
erth
e co
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
E
ligib
le62
121
in
stitu
tion
mea
ns a
nin
stitu
tion
of h
ighe
red
ucat
ion
desi
gnat
ed a
san
em
ergi
ng re
sear
chun
iver
sity
und
er th
eco
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
620
51
Edu
catio
n C
ode
Sec
tion
(Hou
se B
ill 5
162
121
Eig
hty-fi r
st R
egul
ar
Ses
sion
)
Edu
catio
n C
ode
Sec
tion
620
53
t
o el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of t
otal
rese
arch
fund
s ex
pend
ed b
y ea
ch in
stitu
tion
annu
ally
dur
ing
the
thre
e m
ost r
ecen
t sta
tefi s
cal
year
s a
ccor
ding
to th
e fo
llow
ing
rate
s
at le
ast $
1 m
illio
n fo
r eve
ry $
10 m
illio
n of
(1)
the
aver
age
annu
al a
mou
nt o
f tho
se re
sear
chfu
nds
expe
nded
by
the
inst
itutio
n if
that
ave
rage
amou
nt fo
r the
inst
itutio
n is
$50
mill
ion
or m
ore
and
at le
ast $
500
000
for e
very
$10
mill
ion
of(2
)th
e av
erag
e an
nual
am
ount
of t
hose
rese
arch
fund
s ex
pend
ed b
y th
e in
stitu
tion
if th
at a
vera
geam
ount
for t
he in
stitu
tion
is le
ss th
an $
50 m
illio
n
Edu
catio
n C
ode
Sec
tion
621
23
hellipis
ent
itled
to re
ceiv
e o
ut o
f fun
ds a
ppro
pria
ted
for t
hepu
rpos
es o
f the
pro
gram
for t
hatfi
sca
l yea
r a
mat
chin
g gr
ant i
n an
am
ount
det
erm
ined
acco
rdin
g to
the
follo
win
g ra
tes
50 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(1)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$10
000
0 or
mor
e bu
t not
mor
eth
an $
999
999
75 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(2)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$1
mill
ion
or m
ore
but n
ot m
ore
than
$1
999
999
or
100
perc
ent o
f the
am
ount
of t
he g
ifts
and
(3)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$2
mill
ion
or m
ore
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 41
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 42
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $50119391873 $47339213388 ($2780178485) (55)
School for the Blind and Visually Impaired 93388870 41245345 (52143525) (558)
School for the Deaf 53083657 52695245 (388412) (07)
SUBTOTAL PUBLIC EDUCATION $50265864400 $47433153978 ($2832710422) (56)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1745695460 $1749380723 $3685263 02
Lamar Institute of Technology 27568721 28708990 1140269 41
Lamar University ndash Orange 18484576 19164769 680193 37
Lamar University ndash Port Arthur 23780405 22119709 (1660696) (70)
SUBTOTAL LAMAR STATE COLLEGES $69833702 $69993468 $159766 02
Texas State Technical College System $16493826 $5351461 ($11142365) (676) Administration
Texas State Technical College ndash Harlingen 50980986 49093510 (1887476) (37)
Texas State Technical College ndash West Texas 27965791 24970291 (2995500) (107)
Texas State Technical College ndash Marshall 11434368 10995468 (438900) (38)
Texas State Technical College ndash Waco 68111562 73596786 5485224 81
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$174986533 $164007516 ($10979017) (63)
SUBTOTAL TWO-YEAR INSTITUTIONS $1990515695 $1983381707 ($7133988) (04)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $19099360 $18147200 ($952160) (50)
The University of Texas at Arlington 275081581 288654156 13572575 49
The University of Texas at Austin 749518863 702739665 (46779198) (62)
The University of Texas at Dallas 230535884 223513862 (7022022) (30)
The University of Texas at El Paso 202195230 195511098 (6684132) (33)
The University of Texas ndash Pan American 169039177 162830092 (6209085) (37)
The University of Texas at Brownsville 61910963 57628718 (4282245) (69)
The University of Texas of the Permian Basin 58194080 59145561 951481 16
The University of Texas at San Antonio 273182023 260495772 (12686251) (46)
The University of Texas at Tyler 71137295 66147545 (4989750) (70)
Texas AampM University System Administrative and 20701573 4501868 (16199705) (783) General Offices
Texas AampM University 700537434 651599219 (48938215) (70)
Texas AampM University at Galveston 43799673 37773622 (6026051) (138)
Prairie View AampM University 134247361 122639379 (11607982) (86)
Tarleton State University 87292499 83950084 (3342415) (38)
Texas AampM University ndash Central Texas 29460313 30599703 1139390 39
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 43
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Corpus Christi $121534331 $110283074 ($11251257) (93)
Texas AampM University ndash Kingsville 82466491 75368253 (7098238) (86)
Texas AampM University ndash San Antonio 27154411 37125363 9970952 367
Texas AampM International University 83231209 73816324 (9414885) (113)
West Texas AampM University 79410486 72847023 (6563463) (83)
Texas AampM University ndash Commerce 99558312 89920628 (9637684) (97)
Texas AampM University ndash Texarkana 41409091 34754968 (6654123) (161)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 450003385 394815403 (55187982) (123)
University of Houston ndash Clear Lake 83394543 71849633 (11544910) (138)
University of Houston ndash Downtown 88104670 67926822 (20177848) (229)
University of Houston ndash Victoria 42631672 39786959 (2844713) (67)
Midwestern State University 54249721 48828454 (5421267) (100)
University of North Texas System Administration 9789067 6732226 (3056841) (312)
University of North Texas 302350602 296355351 (5995251) (20)
University of North Texas at Dallas 35156605 30478388 (4678217) (133)
Stephen F Austin State University 121843336 108728674 (13114662) (108)
Texas Southern University 174127907 150903873 (23224034) (133)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 368026094 357056343 (10969751) (30)
Angelo State University 68450875 64053866 (4397009) (64)
Texas Womans University 146639127 135140923 (11498204) (78)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 121909453 111926905 (9982548) (82)
Sam Houston State University 162684291 145338873 (17345418) (107)
Texas State University ndash San Marcos 261940220 254492644 (7447576) (28)
Sul Ross State University 34008142 37804020 3795878 112
Sul Ross State University Rio Grande College 13112804 12127383 (985421) (75)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$6217659551 $5853308379 ($364351172) (59)
HEALTH-RELATED INSTITUTIONS -
The University of Texas Southwestern Medical $339025963 $278284511 ($60741452) (179) Center
The University of Texas Medical Branch at 1252556677 1214546039 (38010638) (30) Galveston
The University of Texas Health Science Center at 356632008 347880533 (8751475) (25) Houston
The University of Texas Health Science Center at 357022348 319153560 (37868788) (106) San Antonio
The University of Texas MD Anderson Cancer 4614023153 5043439860 429416707 93 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 44
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center at $170568794 $176002869 $5434075 32 Tyler
Texas AampM University System Health Science 252705800 241434175 (11271625) (45) Center
University of North Texas Health Science Center 141974215 140131956 (1842259) (13) at Fort Worth
Texas Tech University Health Sciences Center 361096839 333314809 (27782030) (77)
SUBTOTAL HEALTH-RELATED INSTITUTIONS $7845605797 $8094188312 $248582515 32
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $137560226 $130327148 ($7233078) (53)
Texas AgriLife Extension Service 137837443 128253897 (9583546) (70)
Texas Engineering Experiment Station 249008314 268154320 19146006 77
Texas Transportation Institute 96056916 99288013 3231097 34
Texas Engineering Extension Service 164895453 161748713 (3146740) (19)
Texas Forest Service 108765979 196355520 87589541 805
Texas Veterinary Medical Diagnostic Laboratory 32693561 29601103 (3092458) (95)
SUBTOTAL TEXAS AampM UNIVERSITY $926817892 $1013728714 $86910822 94 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 1755022519 1301687813 (453334706) (258)
SUBTOTAL OTHER HIGHER EDUCATION $3339042471 $2900537481 ($438504990) (131)
SUBTOTAL HIGHER EDUCATION $20319641406 $19845144593 ($474496813) (23)
EMPLOYEE BENEFITS
Teacher Retirement System $4038146148 $3797393090 ($240753058) (60)
Optional Retirement Program 294169521 247905975 (46263546) (157)
Higher Education Employees Group Insurance 1068235618 968961950 (99273668) (93) Contributions
Retirement and Group Insurance 61823656 63645693 1822037 29
Social Security and Benefits Replacement Pay 560373470 577908771 17535301 31
SUBTOTAL EMPLOYEE BENEFITS $6022748413 $5655815479 ($366932934) (61)
DEBT SERVICE
Bond Debt Service Payments $7579835 $14567314 $6987479 922
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13483869 $19862644 $6378775 473
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION $76416008567 $72871348360 ($3544660207) (46) 1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 45
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $30322901124 $30476707526 $153806402 05
School for the Blind and Visually Impaired 28830574 29152947 322373 11
School for the Deaf 36111132 36216478 105346 03
SUBTOTAL PUBLIC EDUCATION $30387842830 $30542076951 $154234121 05
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1728790460 $1749380723 $20590263 12
Lamar Institute of Technology 20141881 21363652 1221771 61
Lamar University ndash Orange 13379584 13438359 58775 04
Lamar University ndash Port Arthur 18247526 16676606 (1570920) (86)
SUBTOTAL LAMAR STATE COLLEGES $51768991 $51478617 ($290374) (06)
Texas State Technical College System $16122329 $4603444 ($11518885) (714) Administration
Texas State Technical College ndash Harlingen 35862333 35177742 (684591) (19)
Texas State Technical College ndash West Texas 22972902 20195085 (2777817) (121)
Texas State Technical College ndash Marshall 8795246 8519429 (275817) (31)
Texas State Technical College ndash Waco 48458059 55190076 6732017 139
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$132210869 $123685776 ($8525093) (64)
SUBTOTAL TWO-YEAR INSTITUTIONS $1912770320 $1924545116 $11774796 06
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $16827250 $15931200 ($896050) (53)
The University of Texas at Arlington 171697428 183867794 12170366 71
The University of Texas at Austin 536034384 492544731 (43489653) (81)
The University of Texas at Dallas 142108554 148778381 6669827 47
The University of Texas at El Paso 142521273 137781712 (4739561) (33)
The University of Texas ndash Pan American 115707790 110889522 (4818268) (42)
The University of Texas at Brownsville 51100517 47424781 (3675736) (72)
The University of Texas of the Permian Basin 47639722 48816240 1176518 25
The University of Texas at San Antonio 186961792 178547264 (8414528) (45)
The University of Texas at Tyler 56673893 51804728 (4869165) (86)
Texas AampM University System Administrative 11478504 4473868 (7004636) (610) and General Offices
Texas AampM University 487991523 458011060 (29980463) (61)
Texas AampM University at Galveston 36736318 30964674 (5771644) (157)
Prairie View AampM University 102383638 90923868 (11459770) (112)
Tarleton State University 62999263 59464473 (3534790) (56)
Texas AampM University ndash Central Texas 24007601 25352928 1345327 56
Texas AampM University ndash Corpus Christi 93966271 81624416 (12341855) (131)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 46
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $60610859 $54030202 ($6580657) (109)
Texas AampM University ndash San Antonio 21438200 29287597 7849397 366
Texas AampM International University 67735925 58009521 (9726404) (144)
West Texas AampM University 57622391 53282160 (4340231) (75)
Texas AampM University ndash Commerce 67888967 66581226 (1307741) (19)
Texas AampM University ndash Texarkana 31084147 30370655 (713492) (23)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 311616152 257331674 (54284478) (174)
University of Houston ndash Clear Lake 58807555 46454050 (12353505) (210)
University of Houston ndash Downtown 56441987 39973395 (16468592) (292)
University of Houston ndash Victoria 32315073 27651821 (4663252) (144)
Midwestern State University 37434162 33382015 (4052147) (108)
University of North Texas System Administration 4789067 6732226 1943159 406
University of North Texas 194672599 191274119 (3398480) (17)
University of North Texas at Dallas 30330149 28165402 (2164747) (71)
Stephen F Austin State University 84817662 75640135 (9177527) (108)
Texas Southern University 125878414 104685201 (21193213) (168)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 261015662 253976808 (7038854) (27)
Angelo State University 48095474 45861337 (2234137) (46)
Texas Womans University 104666337 92467100 (12199237) (117)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 77990428 70849905 (7140523) (92)
Sam Houston State University 85061409 79609576 (5451833) (64)
Texas State University ndash San Marcos 168720167 164894925 (3825242) (23)
Sul Ross State University 28832045 32758471 3926426 136
Sul Ross State University Rio Grande College 10662338 9364932 (1297406) (122)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$4333902287 $4078804555 ($255097732) (59)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $286599806 $249279177 ($37320629) (130) Center
The University of Texas Medical Branch at 586704245 472189151 (114515094) (195) Galveston
The University of Texas Health Science Center 278466261 294281302 15815041 57 at Houston
The University of Texas Health Science Center 285919332 260615042 (25304290) (89) at San Antonio
The University of Texas MD Anderson Cancer 316274242 298435072 (17839170) (56) Center
The University of Texas Health Science Center 68656721 71856579 3199858 47 at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 47
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $205234148 $194402799 ($10831349) (53) Center
University of North Texas Health Science Center 120369543 113121832 (7247711) (60) at Fort Worth
Texas Tech University Health Sciences Center 308265168 291713120 (16552048) (54)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$2456489466 $2245894074 ($210595392) (86)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $108442641 $101233060 ($7209581) (66)
Texas AgriLife Extension Service 93421095 84437039 (8984056) (96)
Texas Engineering Experiment Station 27420670 27791758 371088 14
Texas Transportation Institute 1786250 1282500 (503750) (282)
Texas Engineering Extension Service 13423471 12388837 (1034634) (77)
Texas Forest Service 38994278 158979948 119985670 3077
Texas Veterinary Medical Diagnostic Laboratory 12326913 11519113 (807800) (66)
SUBTOTAL TEXAS AampM UNIVERSITY $295815318 $397632255 $101816937 344 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 1324025818 1053522035 (270503783) (204)
SUBTOTAL OTHER HIGHER EDUCATION $1849025818 $1578522035 ($270503783) (146)
SUBTOTAL HIGHER EDUCATION $10848003209 $10225398035 ($622605174) (57)
EMPLOYEE BENEFITS
Teacher Retirement System $3721648969 $3431139479 ($290509490) (78)
Optional Retirement Program 249841016 205341297 (44499719) (178)
Higher Education Employees Group Insurance 1066913010 967556924 (99356086) (93) Contributions
Retirement and Group Insurance 51589368 54070178 2480810 48
Social Security and Benefits Replacement Pay 456936472 471706602 14770130 32
SUBTOTAL EMPLOYEE BENEFITS $5546928835 $5129814480 ($417114355) (75)
DEBT SERVICE
Bond Debt Service Payments $7325020 $14248830 $6923810 945
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13229054 $19544160 $6315106 477
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$46796003928 $45916833626 ($879170302) (19)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 48
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $418569 $649000 $230431 551
School for the Blind and Visually Impaired 0 0 0 NA
School for the Deaf 0 0 0 NA
SUBTOTAL PUBLIC EDUCATION $418569 $649000 $230431 551
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 7026644 7345338 318694 45
Lamar University ndash Orange 4875929 5726410 850481 174
Lamar University ndash Port Arthur 4747409 5443103 695694 147
SUBTOTAL LAMAR STATE COLLEGES $16649982 $18514851 $1864869 112
Texas State Technical College System $371497 $748017 $376520 1014 Administration
Texas State Technical College ndash Harlingen 14268123 13915768 (352355) (25)
Texas State Technical College ndash West Texas 4573311 4775206 201895 44
Texas State Technical College ndash Marshall 2486999 2476039 (10960) (04)
Texas State Technical College ndash Waco 18496312 18406710 (89602) (05)
SUBTOTAL TEXAS STATE TECHNICAL $40196242 $40321740 $125498 03 COLLEGES
SUBTOTAL TWO-YEAR INSTITUTIONS $56846224 $58836591 $1990367 35
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 99544565 104786362 5241797 53
The University of Texas at Austin 203175074 210194934 7019860 35
The University of Texas at Dallas 73902392 74735481 833089 11
The University of Texas at El Paso 54257081 54959386 702305 13
The University of Texas ndash Pan American 50448111 51483144 1035033 21
The University of Texas at Brownsville 10270338 10203937 (66401) (06)
The University of Texas of the Permian Basin 10153771 10329321 175550 17
The University of Texas at San Antonio 78194498 81948508 3754010 48
The University of Texas at Tyler 13686400 14342817 656417 48
Texas AampM University System Administrative 9223069 28000 (9195069) (997) and General Offices
Texas AampM University 194931245 184789626 (10141619) (52)
Texas AampM University at Galveston 6714220 6808948 94728 14
Prairie View AampM University 31863723 31715511 (148212) (05)
Tarleton State University 23018364 24485611 1467247 64
Texas AampM University ndash Central Texas 5452712 5246775 (205937) (38)
Texas AampM University ndash Corpus Christi 26308558 28658658 2350100 89
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 49
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $20743629 $21338051 $594422 29
Texas AampM University ndash San Antonio 5716211 7837766 2121555 371
Texas AampM International University 14449349 15531029 1081680 75
West Texas AampM University 20857129 19564863 (1292266) (62)
Texas AampM University ndash Commerce 29344128 23339402 (6004726) (205)
Texas AampM University ndash Texarkana 4114223 4384313 270090 66
University of Houston System Administration 0 0 0 NA
University of Houston 129680228 137483729 7803501 60
University of Houston ndash Clear Lake 23417549 25395583 1978034 84
University of Houston ndash Downtown 30264387 27953427 (2310960) (76)
University of Houston ndash Victoria 9883366 12135138 2251772 228
Midwestern State University 15912994 15446439 (466555) (29)
University of North Texas System 0 0 0 NA Administration
University of North Texas 100805298 105081232 4275934 42
University of North Texas at Dallas 4826456 2312986 (2513470) (521)
Stephen F Austin State University 35525799 33088539 (2437260) (69)
Texas Southern University 47027769 46218672 (809097) (17)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 98116061 103079535 4963474 51
Angelo State University 17654127 18192529 538402 30
Texas Womans University 40098242 42673823 2575581 64
Texas State University System 0 0 0 NA
Lamar University 37445892 41077000 3631108 97
Sam Houston State University 71500172 65729297 (5770875) (81)
Texas State University ndash San Marcos 88567369 89597719 1030350 12
Sul Ross State University 4941096 5045549 104453 21
Sul Ross State University Rio Grande College 2342952 2762451 419499 179
SUBTOTAL GENERAL ACADEMIC $1744378547 $1759986091 $15607544 09 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $22514152 $18054614 ($4459538) (198) Center
The University of Texas Medical Branch at 23120930 24797153 1676223 72 Galveston
The University of Texas Health Science Center 35777999 35483172 (294827) (08) at Houston
The University of Texas Health Science Center 16488403 17234857 746454 45 at San Antonio
The University of Texas MD Anderson Cancer 48597071 55476185 6879114 142 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 50
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center $512055 $569200 $57145 112 at Tyler
Texas AampM University System Health Science 13306322 24908409 11602087 872 Center
University of North Texas Health Science 12596783 16295862 3699079 294 Center at Fort Worth
Texas Tech University Health Sciences Center 23553492 27695220 4141728 176
SUBTOTAL HEALTH-RELATED $196467207 $220514672 $24047465 122 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $950000 $950000 $0 NA
Texas AgriLife Extension Service 46992 18000 (28992) (617)
Texas Engineering Experiment Station 1785036 904418 (880618) (493)
Texas Transportation Institute 0 0 0 NA
Texas Engineering Extension Service 0 0 0 NA
Texas Forest Service 61388596 28912000 (32476596) (529)
Texas Veterinary Medical Diagnostic Laboratory 0 0 0 NA
SUBTOTAL TEXAS AampM UNIVERSITY SERVICES
$64170624 $30784418 ($33386206) (520)
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 111572621 87256791 (24315830) (218)
SUBTOTAL OTHER HIGHER EDUCATION $111572621 $87256791 ($24315830) (218)
SUBTOTAL HIGHER EDUCATION $2173435223 $2157378563 ($16056660) (07)
EMPLOYEE BENEFITS
Teacher Retirement System $188794770 $209600575 $20805805 110
Optional Retirement Program 44328505 42564678 (1763827) (40)
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 0 0 0 NA
Social Security and Benefits Replacement Pay 82274010 85153600 2879590 35
SUBTOTAL EMPLOYEE BENEFITS $315397285 $337318853 $21921568 70
DEBT SERVICE
Bond Debt Service Payments $0 $0 $0 NA
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $0 $0 $0 NA
TOTAL ARTICLE III ndash AGENCIES OF $2489251077 $2495346416 $6095339 02 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 51
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $13298491946 $10520619770 ($2777872176) (209)
School for the Blind and Visually Impaired 5430126 5855880 425754 78
School for the Deaf 4233990 2921862 (1312128) (310)
SUBTOTAL PUBLIC EDUCATION $13308156062 $10529397512 ($2778758550) (209)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $16905000 $0 ($16905000) (1000)
Lamar Institute of Technology 400196 0 (400196) (1000)
Lamar University ndash Orange 229063 0 (229063) (1000)
Lamar University ndash Port Arthur 785470 0 (785470) (1000)
SUBTOTAL LAMAR STATE COLLEGES $1414729 $0 ($1414729) (1000)
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 850530 0 (850530) (1000)
Texas State Technical College ndash West Texas 419578 0 (419578) (1000)
Texas State Technical College ndash Marshall 152123 0 (152123) (1000)
Texas State Technical College ndash Waco 1157191 0 (1157191) (1000)
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$2579422 $0 ($2579422) (1000)
SUBTOTAL TWO-YEAR INSTITUTIONS $20899151 $0 ($20899151) (1000)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 3839588 0 (3839588) (1000)
The University of Texas at Austin 10309405 0 (10309405) (1000)
The University of Texas at Dallas 14524938 0 (14524938) (1000)
The University of Texas at El Paso 2681876 0 (2681876) (1000)
The University of Texas ndash Pan American 2241274 0 (2241274) (1000)
The University of Texas at Brownsville 540108 0 (540108) (1000)
The University of Texas of the Permian Basin 400587 0 (400587) (1000)
The University of Texas at San Antonio 8025733 0 (8025733) (1000)
The University of Texas at Tyler 777002 0 (777002) (1000)
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 10292036 0 (10292036) (1000)
Texas AampM University at Galveston 349135 0 (349135) (1000)
Prairie View AampM University 0 0 0 NA
Tarleton State University 1274872 0 (1274872) (1000)
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 1259502 0 (1259502) (1000)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 52
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville 1112003 0 (1112003) (1000)
Texas AampM University ndash San Antonio $0 $0 $0 NA
Texas AampM International University 658885 0 (658885) (1000)
West Texas AampM University 930966 0 (930966) (1000)
Texas AampM University ndash Commerce 2325217 0 (2325217) (1000)
Texas AampM University ndash Texarkana 6210721 0 (6210721) (1000)
University of Houston System Administration 0 0 0 NA
University of Houston 8707005 0 (8707005) (1000)
University of Houston ndash Clear Lake 1169439 0 (1169439) (1000)
University of Houston ndash Downtown 1398296 0 (1398296) (1000)
University of Houston ndash Victoria 433233 0 (433233) (1000)
Midwestern State University 902565 0 (902565) (1000)
University of North Texas System Administration 5000000 0 (5000000) (1000)
University of North Texas 6872705 0 (6872705) (1000)
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 1499875 0 (1499875) (1000)
Texas Southern University 1221724 0 (1221724) (1000)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 8894371 0 (8894371) (1000)
Angelo State University 2701274 0 (2701274) (1000)
Texas Womans University 1874548 0 (1874548) (1000)
Texas State University System 0 0 0 NA
Lamar University 6473133 0 (6473133) (1000)
Sam Houston State University 6122710 0 (6122710) (1000)
Texas State University ndash San Marcos 4652684 0 (4652684) (1000)
Sul Ross State University 235001 0 (235001) (1000)
Sul Ross State University Rio Grande College 107514 0 (107514) (1000)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$126019925 $0 ($126019925) (1000)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $16614303 $0 ($16614303) (1000) Center
The University of Texas Medical Branch at 6745161 0 (6745161) (1000) Galveston
The University of Texas Health Science Center at 24173646 0 (24173646) (1000) Houston
The University of Texas Health Science Center at 19224332 0 (19224332) (1000) San Antonio
The University of Texas MD Anderson Cancer 634206 0 (634206) (1000) Center
The University of Texas Health Science Center 80210 0 (80210) (1000) at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 53
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $15014608 $0 ($15014608) (1000) Center
University of North Texas Health Science Center 3438054 0 (3438054) (1000) at Fort Worth
Texas Tech University Health Sciences Center 11075479 0 (11075479) (1000)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$96999999 $0 ($96999999) (1000)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $15933582 $15933582 $0 NA
Texas AgriLife Extension Service 25302708 25302708 0 NA
Texas Engineering Experiment Station 137281801 153857672 16575871 121
Texas Transportation Institute 17405197 18757193 1351996 78
Texas Engineering Extension Service 48387893 48387894 1 00
Texas Forest Service 7349101 7429568 80467 11
Texas Veterinary Medical Diagnostic Laboratory 594001 594000 (1) (00)
SUBTOTAL TEXAS AampM UNIVERSITY $252254283 $270262617 $18008334 71 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 197332508 123636426 (73696082) (373)
SUBTOTAL OTHER HIGHER EDUCATION $197332508 $123636426 ($73696082) (373)
SUBTOTAL HIGHER EDUCATION $693505866 $393899043 ($299606823) (432)
EMPLOYEE BENEFITS
Teacher Retirement System $0 $0 $0 NA
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 8832085 8286741 (545344) (62)
Social Security and Benefits Replacement Pay 3888441 3428099 (460342) (118)
SUBTOTAL EMPLOYEE BENEFITS $12720526 $11714840 ($1005686) (79)
DEBT SERVICE
Bond Debt Service Payments $253903 $318484 $64581 254
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $253903 $318484 $64581 254
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$14014636357 $10935329879 ($3079306478) (220)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 54
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $6497580234 $6341237092 ($156343142) (24)
School for the Blind and Visually Impaired 59128170 6236518 (52891652) (895)
School for the Deaf 12738535 13556905 818370 64
SUBTOTAL PUBLIC EDUCATION $6569446939 $6361030515 ($208416424) (32)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 0 0 0 NA
Lamar University ndash Orange 0 0 0 NA
Lamar University ndash Port Arthur 0 0 0 NA
SUBTOTAL LAMAR STATE COLLEGES $0 $0 $0 NA
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 0 0 0 NA
Texas State Technical College ndash West Texas 0 0 0 NA
Texas State Technical College ndash Marshall 0 0 0 NA
Texas State Technical College ndash Waco 0 0 0 NA
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$0 $0 $0 NA
SUBTOTAL TWO-YEAR INSTITUTIONS $0 $0 $0 NA
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $2272110 $2216000 ($56110) (25)
The University of Texas at Arlington 0 0 0 NA
The University of Texas at Austin 0 0 0 NA
The University of Texas at Dallas 0 0 0 NA
The University of Texas at El Paso 2735000 2770000 35000 13
The University of Texas ndash Pan American 642002 457426 (184576) (288)
The University of Texas at Brownsville 0 0 0 NA
The University of Texas of the Permian Basin 0 0 0 NA
The University of Texas at San Antonio 0 0 0 NA
The University of Texas at Tyler 0 0 0 NA
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 7322630 8798533 1475903 202
Texas AampM University at Galveston 0 0 0 NA
Prairie View AampM University 0 0 0 NA
Tarleton State University 0 0 0 NA
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 0 0 0 NA
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 55
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $0 $0 $0 NA
Texas AampM University ndash San Antonio 0 0 0 NA
Texas AampM International University 387050 275774 (111276) (287)
West Texas AampM University 0 0 0 NA
Texas AampM University ndash Commerce 0 0 0 NA
Texas AampM University ndash Texarkana 0 0 0 NA
University of Houston System Administration 0 0 0 NA
University of Houston 0 0 0 NA
University of Houston ndash Clear Lake 0 0 0 NA
University of Houston ndash Downtown 0 0 0 NA
University of Houston ndash Victoria 0 0 0 NA
Midwestern State University 0 0 0 NA
University of North Texas System Administration 0 0 0 NA
University of North Texas 0 0 0 NA
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 0 0 0 NA
Texas Southern University 0 0 0 NA
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 0 0 0 NA
Angelo State University 0 0 0 NA
Texas Womans University 0 0 0 NA
Texas State University System 0 0 0 NA
Lamar University 0 0 0 NA
Sam Houston State University 0 0 0 NA
Texas State University ndash San Marcos 0 0 0 NA
Sul Ross State University 0 0 0 NA
Sul Ross State University Rio Grande College 0 0 0 NA
SUBTOTAL GENERAL ACADEMIC $13358792 $14517733 $1158941 87 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $13297702 $10950720 ($2346982) (176) Center
The University of Texas Medical Branch at 635986341 717559735 81573394 128 Galveston
The University of Texas Health Science Center at 18214102 18116059 (98043) (05) Houston
The University of Texas Health Science Center at 35390281 41303661 5913380 167 San Antonio
The University of Texas MD Anderson Cancer 4248517634 4689528603 441010969 104 Center
The University of Texas Health Science Center 101319808 103577090 2257282 22 at Tyler
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 56
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $19150722 $22122967 $2972245 155 Center
University of North Texas Health Science Center 5569835 10714262 5144427 924 at Fort Worth
Texas Tech University Health Sciences Center 18202700 13906469 (4296231) (236)
SUBTOTAL HEALTH-RELATED $5095649125 $5627779566 $532130441 104 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $12234003 $12210506 ($23497) (02)
Texas AgriLife Extension Service 19066648 18496150 (570498) (30)
Texas Engineering Experiment Station 82520807 85600472 3079665 37
Texas Transportation Institute 76865469 79248320 2382851 31
Texas Engineering Extension Service 103084089 100971982 (2112107) (20)
Texas Forest Service 1034004 1034004 0 NA
Texas Veterinary Medical Diagnostic Laboratory 19772647 17487990 (2284657) (116)
SUBTOTAL TEXAS AampM UNIVERSITY $314577667 $315049424 $471757 01 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 122091572 37272561 (84819011) (695)
SUBTOTAL OTHER HIGHER EDUCATION $1181111524 $1111122229 ($69989295) (59)
SUBTOTAL HIGHER EDUCATION $6604697108 $7068468952 $463771844 70
EMPLOYEE BENEFITS
Teacher Retirement System $127702409 $156653036 $28950627 227
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 1322608 1405026 82418 62 Contributions
Retirement and Group Insurance 1402203 1288774 (113429) (81)
Social Security and Benefits Replacement Pay 17274547 17620470 345923 20
SUBTOTAL EMPLOYEE BENEFITS $147701767 $176967306 $29265539 198
DEBT SERVICE
Bond Debt Service Payments $912 $0 ($912) (1000)
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $912 $0 ($912) (1000)
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF $13116117205 $13523838439 $407721234 31 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 57
- INTRODUCTION
- FUNDING GENERAL ACADEMICS INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
- OTHER NON-FORMULA FUNDING
-
- FUNDING HEALTH-RELATED INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
-
- FUNDING COMMUNITY AND TECHNICAL COLLEGES
-
- OVERVIEW
- COMMUNITY COLLEGES
- TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES
-
- FUNDING TEXAS AampM SYSTEM AGENCIES
- APPENDIX A FREQUENTLY ASKED QUESTIONS
- APPENDIX B TUITION AND FEE PROVISIONS
- APPENDIX C GLOSSARY
- APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
- APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
-
Financing Higher Education In Texas
Legislative Primer
LEGISLATIVE BUDGET BOARD STAFF FIFTH EDITION
SUBMITTED TO THE 83RD TEXAS LEGISLATURE FEBRUARY 2013
Report Contributors
Higher Education Team
Sarah Keyton Manager Daniel Estrada Senior Analyst Demetrio Hernandez Analyst
Emily Hoff man Analyst Kris Kavanaugh Analyst
Greg Owens Analyst Rick Travis Senior Analyst
This report can also be found on the Legislative Budget Boardrsquos website httpwwwlbbstatetxus
CONTENTS
INTRODUCTION 1
FUNDING GENERAL ACADEMICS INSTITUTIONS
FUNDING HEALTH-RELATED INSTITUTIONS
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW 5
FORMULA FUNDING 6
NON-FORMULA FUNDING 9
OTHER NON-FORMULA FUNDING 13
OVERVIEW 15
FORMULA FUNDING 15
NON-FORMULA FUNDING 19
OVERVIEW 21
COMMUNITY COLLEGES 22
TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES 23
FUNDING TEXAS AampM SYSTEM AGENCIES 25
APPENDIX A FREQUENTLY ASKED QUESTIONS 27
APPENDIX B TUITION AND FEE PROVISIONS31
APPENDIX C GLOSSARY37
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 39
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET43
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 i
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD ii
INTRODUCTION
The Texas public higher education system encompasses 38 general academic teaching institutions (including law schools) 50 community and junior college districts one technical college system with four main campuses three lower-division state colleges and nine health-related institutions which operate a total of eight state medical schools three dental schools two pharmacy schools and other allied health and nursing units In addition there are seven agencies that are components of the Texas AampM University System
Private institutions in Texas include 38 four year colleges and universities two junior colleges one medical school and one accredited independent law school
Public institutions serve about 91 percent of the approximately 14 million students enrolled in higher education in Texas
The Texas Higher Education Coordinating Board (THECB) was established in 1965 and is composed of nine members appointed by the Governor for staggered six-year terms THECB provides leadership and coordination for the Texas higher education system to promote excellence in higher education
THECBrsquos responsibilities include assessing Texasrsquo system of higher education and developing recommendations for
FIGURE 1 HISTORICAL SPENDING FOR HIGHER EDUCATION 2002ndash03 TO 2012ndash13 BIENNIA
improvements to the Governor the Legislature and institutions THECB reviews and recommends changes in formulas regarding the allocation of state funds to public institutions to limit duplication of academic programs and unnecessary construction projects THECB also promotes access to high quality programs at diff erent institutional levels and oversees the statersquos student financial aid programs
The Eighty-second Legislature 2011 appropriated $221 billion in the General Appropriations Act (GAA) for the 2012ndash13 biennium to support Texas higher education a 25 percent decrease from the 2010ndash11 biennium (Figure 1) Figure 2 illustrates the sources of revenue also referred to as methods of finance for the $221 billion in state appropriations Generally only small portions of the Federal Funds received by institutions of higher education are reflected in the General Appropriations Act (GAA)
State funds are allocated to public institutions and agencies of higher education in a number of ways
bull direct appropriations through funding formulas and other direct appropriations based on identifi ed needs
bull indirect appropriations not made directly to an institution in its portion of the appropriations bill but used to cover costs related to the institutionrsquos staff
ESTIMATED ESTIMATED ESTIMATED ESTIMATED ESTIMATED BUDGETED BUDGETED BUDGETED BUDGETED BUDGETED APPROPRIATED
IN MILLIONS 2002ndash03 2004ndash05 2006ndash07 2008ndash09 2010ndash11 2012ndash13
General Revenue Funds $102337 $101944 $111762 $127216 $129966 $121723
General RevenuendashDedicated $20675 $23962 $21467 $22578 $24889 $24947 Funds
Other Funds $32494 $40530 $50023 $61974 $64674 $70298
Federal Funds $2674 $3397 $3331 $3090 $6941 $3944
TOTAL HIGHER $158180 $169833 $186583 $214858 $226470 $220912 EDUCATION
Percentage of Statewide Total
137 134 129 125 120 127
STATEWIDE TOTAL $1156786 $1267102 $1450594 $1721315 $1875165 $1734842 ALL ARTICLES
Includes $3269 in ARRA funds SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 1
INTRODUCTION
FIGURE 2 METHODS OF FINANCE FOR HIGHER EDUCATION INSTITUTIONS ndash INCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV )HGHUDO)XQGV
HQHUDO5HYHQXH)XQGV
2WKHU)XQGV
)
SOURCE Legislative Budget Board
for health insurance retirement benefits and social security and
bull other indirect appropriations which are subsequently allocated to an institution such as the Available University Fund
The $221 billion appropriation includes funds trusteed to THECB for distribution to institutions For the 2012ndash13 biennium THECB received more than $10013 million in trusteed funds The majority of these funds are allocated for student financial assistance Those remaining provide funding for the Baylor College of Medicine incentives for the general academic institutions and the Texas Research Incentive Program
Figure 3 shows the percentage of state funding appropriated to the various types of institutions excluding the allocation for employee insurance and retirement benefi ts
State appropriations to THECB that benefi t private institutions include financial assistance programs (eg Tuition Equalizations Grants B-On-Time and related programs) for Texas residents attending approved private institutions per student funding at the Baylor College of Medicine and grant funds from the Advanced Research Program a competitive grant program
Within a group such as general academic institutions state appropriations are allocated in a consistent manner Diff erent
FIGURE 3 APPROPRIATION BY TYPE OF INSTITUTION ndash EXCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
ampRPPXQLWDQG7HFKQLFDOampROOHJHV
HQHUDO$FDGHPLFV
+HDOWKUHODWHG
2WKHU+LJKHU(GXFDWLRQ
$06HUYLFHV
SOURCE Legislative Budget Board
groups of institutions such as general academic institutions and community colleges differ in how the Legislature allocates state appropriations For example all general academic institutions receive funding generated from Instruction and Operations and Infrastructure formulas while community colleges have one formula for Instruction and Administration
While the General Revenue Fundrsquos portion of direct appropriations to institutions is ldquosum certainrdquo the appropriation of Patient Income and Other Educational and General Income (primarily tuition) is ldquoestimatedrdquo Th is means that if patient income or tuition revenue generated by an institution is greater than the amount included in the GAA the institution can spend at a level beyond the amounts in the GAA If an institution generates less tuition revenue it must spend less
The GAA establishes a key distinction for higher education entities differentiating them from other state agencies Statute (Texas Education Code Section 61059(k)) calls for each higher education institution to receive a lump sum appropriation for base funding The GAA expands this concept and provides each higher education institution with one lump sum appropriation For each institution the GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Th is information reflects how the state funds are ldquoallocatedrdquo not how they must be spent Higher education institutions are not bound to spend their appropriation within the specifi ed
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 2
INTRODUCTION
strategy as are regular state agencies An exception to this is debt service on tuition revenue bonds Section 6 Rider 9 in the Higher Education Special Provisions GAA page III-233 limits the use of debt service to pay debt service for tuition revenue bonds Any amount of an appropriation not spent must be returned to the General Revenue Fund at the end of the fi scal year
There are some limitations on how institutions can spend appropriated funds The Texas Constitution (Article VII Section 18(i) and 17 (j)) prohibits with limited exceptions the use of General Revenue Funds for construction projects However the Texas Legislature by two-thirds vote in each house may opt to use General Revenue Funds for construction projects if there is a natural disaster or demonstrated need for the project
Also GAA (Section 6 Rider 8b) Special Provisions Relating Only to State Agencies of Higher Education (page III-233) prohibits the use of appropriated funds for auxiliary purposes such as athletics and parking Section 54 of the Special Provisions (page III-246) also restricts the use of funds in the Research Development Strategy to purposes defi ned in Texas Education Code Section 62091 Communityjunior colleges can spend General Revenue Funds only for instruction and administrative costs (Texas Education Code Section 130003(c))
This report presents the different ways that public institutions and agencies allocate state appropriations and highlights the flexibility with which these appropriations may be expended References to appropriated funds are based on the Eighty-second Legislature Regular Session 2011 2012ndash13 biennium GAA as adjusted for certain appropriations made in Article IX (General Provisions) of the GAA contingency appropriations other bills making appropriations in fi scal years 2012 and 2013 and Governor vetoes Amounts for fiscal year 2011 have been adjusted for the Supplemental Appropriations Bill House Bill 4 Eighty-second Legislature Regular Session 2011 and Senate Bill 2 First Called Session 2011 Each category of institutionmdashgeneral academic health-related community and technical colleges and Texas AampM System agenciesmdashis presented separately Th e only THECB funds detailed in this report are funds that have been distributed to public institutions
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 3
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 4
FUNDING GENERAL ACADEMIC INSTITUTIONS
OVERVIEW General academic institutions are listed in the Texas Education Code (61003) Figure 4 lists the institutions and their enrollments All of the institutions have common goals of instruction research and public service however each has a unique set of academic offerings and a unique regional or statewide mission
General academic institutions receive direct appropriations via funding formulas and non-formula appropriations Direct appropriations are identified in the informational strategies of each institutionrsquos bill pattern in the General Appropriations Act (GAA) As mentioned earlier appropriations are made to institutions as a lump sum Th e informational strategies reflect how state funds are ldquoallocatedrdquo not how they must be spent This means that with a few exceptions higher education entities unlike other state agencies are not required to spend appropriations within a specified funding strategy
The appropriation levels in each strategy refl ect diff erent revenue sources such as General Revenue Funds General RevenuendashDedicated Funds (mostly tuition and fee revenue) and Other Funds These revenue sources are referred to as the ldquomethod of fi nancerdquo Figure 5 illustrates the method of finance for $74 billion in appropriations for general academic institutions including a number of the indirect appropriations referenced in the next paragraph but does not include appropriations for employee retirement benefi ts
There are also appropriations that benefit institutions that are not reflected in the bill pattern of individual institutions including the Higher Education Fund the Available National Research University Fund Available University Fund certain employee benefits and funds trusteed to the Texas Higher Education Coordinating Board (THECB)
Figure 6 presents the percentage of funding related to each of these direct and indirect appropriations All of these appropriations are further described in the following pages
In addition general academic institutions have access to funds not reflected in the state appropriations process Examples of this include indirect cost recovery certain tuition and fees such as ldquodesignated tuitionrdquo and ldquoincidental feesrdquo (both are described in Appendix B) auxiliary operations (ie revenue from athletics student services fees bookstore and parking) and grants and gifts
FIGURE 4 PUBLIC GENERAL ACADEMIC INSTITUTIONS CERTIFIED FALL 2011 HEADCOUNT
INSTITUTION HEADCOUNT
Angelo State University 7077
Lamar University 14021
Midwestern State University 5811
Prairie View AampM University 8425
Sam Houston State University 17527
Stephen F Austin State University 12702
Sul Ross State University 1985
Sul Ross State University Rio Grande College 971
Tarleton State University 9893
Texas AampM International University 7037
Texas AampM University 49861
Texas AampM University ndash Central Texas 2096
Texas AampM University at Galveston 2035
Texas AampM University ndash Commerce 10726
Texas AampM University ndash Corpus Christi 10162
Texas AampM University ndash Kingsville 6731
Texas AampM University ndash San Antonio 3554
Texas AampM University ndash Texarkana 1907
Texas Southern University 9730
Texas State University ndash San Marcos 34087
Texas Tech University 32149
Texas Womanrsquos University 14503
The University of Texas at Arlington 33439
The University of Texas at Austin 51112
The University of Texas at Brownsville 8625
The University of Texas at Dallas 18864
The University of Texas at El Paso 22582
The University of Texas at San Antonio 30968
The University of Texas at Tyler 6628
The University of Texas of the Permian Basin 3831
The University of Texas ndash Pan American 19034
University of Houston 39820
University of Houston ndash Clear Lake 8185
University of Houston ndash Downtown 12918
University of Houston ndash Victoria 4330
University of North Texas 35694
University of North Texas at Dallas 2032
West Texas AampM University 7886
STATEWIDE TOTALS 568938 SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 5
FUNDING GENERAL ACADEMIC INSTITUTIONS
HQHUDO5HYHQXH)XQGV
FIGURE 5 METHOD OF FINANCE FOR GENERAL ACADEMICS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV
2WKHU)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING Nearly 573 percent of state appropriations for general academic institutions are allocated via two funding formulas and two supplements Instruction and Operations Formula Teaching Experience Supplement Infrastructure Formula
and Small Institution Supplement The formulas and supplements are direct appropriations and are primarily based on enrollment
The formula appropriations consist of General Revenue Funds and some Other Educational and General Income (Other EampG) Other EampG includes specific tuition and fee revenue (see Appendix B for a listing of tuition and fee provisions) The inclusion of certain tuition and fee revenue in the formula funding calculation is referred to as an ldquoAll Funds methodologyrdquo to formula funding Th e most significant tuition revenue included in the formula calculation is tuition charged in accordance with Texas Education Code Section 54051 Interim Tuition Rates (referred to as statutory tuition) The statutory tuition rate for the 2012ndash13 academic year is $50 per semester credit hour for Texas residents Th e corresponding tuition rate for a nonresident student is the average nonresident tuition charged to a Texas resident at a public university in each of the five most populous states
Of the $40 billion allocated by the general academic formulas and supplements nearly 728 percent consists of General Revenue Funds with the remainder consisting of General RevenuendashDedicated Funds (Other EampG)
A portion of Other EampG income is set aside for specifi c purposes or allocated to non-formula based strategies in the
FIGURE 6 APPROPRIATIONS FOR GENERAL ACADEMIC INSTITUTIONS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
QIUDVWUXFWXUH)RUPXOD +ROG+DUPOHVV 727$ 021 )RUPXODDQG
1RQ)RUPXOD7HDFKLQJ([SHULHQFH
QVWUXFWLRQamp 2SHUDWLRQV)RUPXOD
ampDSLWDO)XQGV
QVWLWXWLRQDO
(QKDQFHPHQW
6SHFLDOWHPV
ampRQVWLWXWLRQDO)XQGV
5HVHDUFKHYHORSPHQW)XQG
+LJKHU(GXFDWLRQURXSQVXUDQFH2WKHU1RQIRUPXODWHPV
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 6
FUNDING GENERAL ACADEMIC INSTITUTIONS
institutionrsquos bill pattern For example institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) TPEG are grants designed to help students cover their tuition fees and textbook costs when these expenses exceed a certain portion of their familiesrsquo contributions to their educations This set-aside revenue is not part of the tuition and fee revenue used to calculate the funding formulas
INSTRUCTION AND OPERATIONS FORMULA
About 815 percent of formula funds flow through the Instruction and Operations Formula ($32716 million for the 2012ndash13 biennium) and Teaching Experience Supplement ($957 million for the 2012ndash13 biennium) Th e Instruction and Operations formula is calculated as follows
Semester Credit Hours X ProgramLevel Weight X Rate (5371)
Semester credit hours (SCH) are a measurement of how many classes (and the number of students enrolled in those classes) an institution delivers The formula calculation for a biennium uses a ldquobase periodrdquo of SCH The ldquobase periodrdquo used for the 2012ndash13 biennium was the combination of summer 2010 fall 2010 and spring 2011
SCH is weighted by discipline (eg nursing is weighted more than liberal arts) and by level (ie lower and upper division masters doctoral and professional) For instance a lower division liberal arts course receives a weight of 10 A doctoral level liberal arts course receives a weight of 923 A nursing lower division course receives a weight of 203 A doctoral nursing course receives a weight of 925 Beginning with the 2006ndash07 GAA the basis for the weights per discipline was shifted to an aggregation of actual costs based on institutions Annual Financial Reports Currently THECB uses a rolling three year average to adjust the weights each biennium
THECB recommends a rate based on its recommended weights and program enhancements The legislature sets the weights and the rate in the Higher Education Special Provisions of the GAA (page III-238) In practice the legislature has set the rate based on available funding including consideration of enrollment changes and other factors Figure 7 illustrates the Instruction and Operations Formula allocation to institutions
FIGURE 7 DISTRIBUTION OF INSTRUCTION AND OPERATIONS FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
7H[DV$ amp 08QLYHUVLW
2WKHUHQHUDO$FDGHPLFV
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
TEACHING EXPERIENCE SUPPLEMENT
For the 2012ndash13 biennium an additional weight of ten percent is added to lower-division and upper-division semester credit hours taught by tenured and tenure-track faculty The 2012ndash13 GAA includes the following language ldquoFurthermore it is the intent of the Legislature that the weight shall increase by 10 percent per biennium up to 50 percentrdquo (Special Provisions Relating Only to State Agencies of Higher Education Sec 28 page III-238 2012ndash13 GAA)
The Teaching Experience Supplement is calculated as follows
Semester Credit Hours X ProgramLevel Weight Supplement (10) X Rate (5371)
The Teaching Experience Supplement was 5 percent during the 1998ndash99 and 2000ndash01 biennia Th e Seventy-seventh Legislature 2001 increased the supplement to the current 10 percent in 2002ndash03 biennium
INFRASTRUCTURE FORMULA
Almost 16 percent of formula funds flow through the Infrastructure Formula and Small Institution Supplement ($6768 million for the 2012ndash13 biennium) In addition to
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 7
FUNDING GENERAL ACADEMIC INSTITUTIONS
the universities the State Colleges and components of Texas State Technical College also receive infrastructure formula appropriations This formula uses a statewide infrastructure rate which is set in the GAA The statewide infrastructure rate is divided into two rates an Adjusted Utility Rate and an All Other Rate As with the SCH rate the legislature has set the rate based on available funding including consideration of changes in institutional space and other factors
The Infrastructure Formula is calculated as follows
(Adjusted Utility Rate + All Other Rates) X Predicted Square Feet
The Adjusted Utility Rate is 52 percent of the statewide infrastructure rate The 52 percent reflects the percentage of infrastructure formula funds that institutions historically spent on utilities A statewide utility rate is determined and then adjusted for each institution to reflect utility costs relative to other institutions
The All Other Rate is 48 percent of the statewide infrastructure rate and remains constant among institutions It accounts for physical plant grounds maintenance and custodial services
THECBrsquos Space Projection Model for Higher Education Institutions in Texas (space model) estimates square footage for each institution The objective of the space model projection is to calculate the amount of space an institution needs based on the following
bull number program and level of semester credit hours
bull number of faculty non-faculty students programs and library holdings and
bull research and current EampG expenditures
Figure 8 illustrates the Infrastructure Formula allocation to institutions The similarity of the allocation to the Instruction and Operations Formula allocation demonstrates the influence of enrollment on both formula allocations
SMALL INSTITUTION SUPPLEMENT
Prior to the Eighty-fi rst Legislature (2009) general academic institutions with enrollments of less than 5000 received a $750000 annual Small Institution Supplement However the Eighty-first Legislature increased the enrollment threshold to 10000 students and implemented a phase-out
FIGURE 8 DISTRIBUTION OF INFRASTRUCTURE FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
2WKHUHQHUDO$FDGHPLFV
7H[DV$ amp M 8QLYHUVLW
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
(based on the number of students) of the supplement between 5000 and 10000 students for the 2012ndash13 biennium (see Figure 9) This supplement recognizes that institutions have a minimum cost of operation that may not be covered by funds generated through the formulas
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $414 million in General Revenue hold harmless funding for aff ected institutions to minimize the effect of reduced formula funding as a result of overall enrollment declines or declines in upper-division or graduate enrollment Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment than other institutions or a change in utility costs Th e Eighty-second Legislature 2011 provided $444 million in a hold harmless based on total General Revenue Funds (formula and non-formula) for the 2012ndash13 biennium
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 8
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 9 SMALL INSTITUTION SUPPLEMENT RECIPIENTS
The University of Texas at Brownsville
The University of Texas of the Permian Basin
The University of Texas at Tyler
Texas AampM University at Galveston
Prairie View AampM University
Tarleton State University
Texas AampM University ndash Central Texas
Texas AampM University ndash Kingsville
Texas AampM University ndash San Antonio
Texas AampM International University
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston ndash Clear Lake
University of Houston ndash Victoria
Midwestern State University
University of North Texas at Dallas
Texas Southern University
Angelo State University
Sul Ross State University
Sul Ross State University ndash Rio Grande College
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Waco
Texas State Technical College ndash Marshall
Lamar Institute of Technology
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
SOURCE Legislative Budget Board
NON-FORMULA FUNDING
SPECIAL ITEMS
Special Item appropriations to the institutions total $4836 million for the 2012ndash13 biennium In 2012ndash13 $69 million was appropriated to system offices for special items These are direct appropriations to institutions for projects that are not funded by formula but are specifi cally identifi ed by the legislature as needing support An institution is not required to spend the amount identified in a Special Item strategy for that particular project but expenditure reports indicate that institutions often use an entire appropriation along with additional funding for the related project
The majority of special item funding is through the Institutional Enhancement strategy Institutional Enhancement is a $2204 million appropriation for the 2012ndash13 biennium This is a direct appropriation to institutions and was established by the Seventy-sixth Legislature 1999 for the 2000ndash01 biennium Th e fi rst Institutional Enhancement appropriation was based on a consolidation of certain Special Item appropriations in 1999 and an additional $1 million per year was appropriated for each institution Examples of consolidated special items are items that could be funded through the formulas such as general institutional academic and research support
For the 2002ndash03 biennium there was an additional $1 million increase in appropriations for most institutions and a $15 million increase for selected institutions in South Texas and the border region Institutions that benefi ted signifi cantly from the Seventy-seventh Legislaturersquos new University Research and Texas Excellence Funds (House Bill 1839 Seventy-seventh Legislature 2001) or from the Permanent University Fund (PUF) ldquoexcellence fundingrdquo did not receive an increase in Institutional Enhancement funds for the 2002ndash03 biennium
Other Special Items total $2632 million in appropriations for the 2012ndash13 biennium and include the following institutional and instructional support public service items research items other than general research support funding for separate campuses and accreditation program items
TEXAS COMPETITIVE KNOWLEDGE FUND
The Texas Competitive Knowledge Fund (TCKF) is authorized by the General Appropriations Act (GAA) (2012ndash13 Biennium) Article III Higher Education Special Provisions Section 56 The GAA prescribes that this funding will be used to support faculty for the purpose of instructional excellence and research Funding was first allocated in these strategies by the Legislature for the 2008ndash09 biennium
Current institutions receiving TCKF appropriations include The University of Texas at Austin Texas AampM University University of Houston Texas Tech University and Th e University of Texas at Dallas Institutions are allocated funding appropriated to the TCKF based on average research expenditures for the previous three-year period Th e Eighty-second Legislature Regular Session 2011 appropriated $935 million in Texas Competitive Knowledge Fund strategies directly to the institutions This funding level provides approximately $07 million to each institution for every $100 million in research expenditures In practice
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 9
FUNDING GENERAL ACADEMIC INSTITUTIONS
when institutions have first received distributions from the fund appropriations have been reduced from the institutionrsquos special item strategies In subsequent biennia the institution continues to receive appropriations from the TCKF and the reduction in special items is not specifi cally restored
RESEARCH DEVELOPMENT FUND
The Research Development Fund was created by House Bill 3526 Seventy-eighth Legislature Regular Session 2003 and replaced the Texas Excellence and University Research Funds effective September 1 2005 The intent was to combine the Texas Excellence Fund and University Research Fund into a new fund applying a uniform allocation methodology based on a three-year average of each institutionrsquos restricted research expenditures Th e Eighty-fi rst Legislature allocated $653 million (Figure 10) in the 2012ndash13 biennium to individual institutions to fund objectives identical to the Research Development Fund (Section 62091)
TEXAS RESEARCH INCENTIVE PROGRAM
Th e Eighty-first Legislature Regular Session 2009 established the Texas Research Incentive Program (TRIP) at THECB to match state appropriations with certain gifts and endowments received by emerging research universities Th e goal of this $178 million a year program is to create more Tier One universities in Texas
PERFORMANCE INCENTIVE INITIATIVE
The Eightieth Legislature 2007 appropriated $100 million in fiscal year 2009 to THECB to establish a Higher Education Performance Incentive Initiative The funding was for ldquoimprovement in teaching and educational excellence at Texas public general academic institutionsrdquo THECB distributed $80 million for increases in degrees awarded with special weights given to critical fields and at-risk students The remaining $20 million was used to fund scholarships for students graduating in the top 10 percent of their high school class
Th e Eighty-first Legislature Regular Session 2009 maintained the $80 million for the higher education performance incentive initiative (funded by the American Recovery and Reinvestment Act) and increased funding for the Top Ten Percent scholarship program by $34 million bringing total appropriations for the program to $54 million
There were no performance funding incentives for the 2012ndash13 biennium For the 2012ndash13 biennium $396
FIGURE 10 RESEARCH DEVELOPMENT FUND ALLOCATIONS
2012ndash13 BIENNIAL RDF
INSTITUTION ALLOCATION
The University of Texas at Arlington $6032754
The University of Texas at Dallas 8425486
The University of Texas at El Paso 6925040
The University of Texas at Pan American 1147838
The University of Texas at Brownsville 902512
The University of Texas of the Permian Basin 306408
The University of Texas at San Antonio 5491296
The University of Texas at Tyler 434072
Texas AampM University at Galveston 600342
Tarleton State University 1586396
Texas AampM University ndash Corpus Christi 2212356
Texas AampM University ndash Kingsville 1846206
Texas AampM International University 253246
West Texas AampM University 681752
Texas AampM Commerce 436752
Texas AampM Texarkana 9008
University of Houston 10705472
University of Houston ndash Clear Lake 10392
University of Houston ndash Downtown 10248
University of Houston ndash Victoria 2254
Midwestern State University 30066
University of North Texas 2495448
Stephen F Austin University 895696
Texas Southern University 338580
Texas Tech University 8327602
Texas Womanrsquos University 266152
Angelo State University 123176
Lamar University 820010
Sam Houston State University 362574
Texas State University ndash San Marcos 3121164
Sul Ross State University 304040
TOTAL $65296738
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 10
FUNDING GENERAL ACADEMIC INSTITUTIONS
million is appropriated to the Top Ten Percent Scholarship Program
HOLD HARMLESS FUNDING
The Eighty-second Legislature 2011 provided $444 million in General Revenue Funds hold harmless funding for aff ected institutions to minimize the effect of reduced formula and special item funding Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment that other institutions or a change in utility costs
CAPITAL FUNDS
In addition to the constitutional funds discussed in the next subsection there are three types of state appropriation for capital funds tuition revenue bonds Skiles Act revenue bonds and lease payments Almost all of the direct appropriations to institutions related to capital funds are for debt service on tuition revenue bonds
A $5931 million General Revenue Funds appropriation was made for tuition revenue bond debt service for the 2012ndash13 biennium
Tuition revenue bonds must be authorized in statute Once an authorization is made institutions issue bonds and make related debt payments with tuition revenue Th e Texas Public Finance Authority issues tuition revenue bonds for Midwestern State University Stephen F Austin University Texas Southern University and the Texas State Technical Colleges Legislative practice has been to use General Revenue Funds to reimburse institutions for the costs related to this debt service
The legislature first authorized tuition revenue bonds in 1971 In some instances the authorization was a lump sum for the benefit of specific institutions During the Seventy-eighth Legislature 2003 $2689 million in tuition revenue bonds was authorized for specific projects at various higher education institutions The Seventy-ninth Legislature Th ird Called Session 2005 adopted House Bill 153 which authorized the issuance of $1858 billion in tuition revenue bonds for forty-four different institutions Only one tuition revenue bond (House Bill 1775) was adopted by the Eightieth Legislature 2007 for a $13 million nursing building at Stephen F Austin University Th e Eighty-fi rst Legislature 2009 authorized one tuition revenue bond for Texas AampM University at Galveston The Eighty-second Legislature 2011 did not authorize any new tuition revenue bonds
The authority for Skiles Act Revenue Bonds was repealed in 1997 It had allowed institutions to pledge up to $5 from each enrolled student for each regular semester to the payment of bonds authorized under the governing boardrsquos general authority to sell revenue bonds Institutions use their Other Educational and General Income (General Revenuendash Dedicated Funds) to pay the debt service on these previously authorized bonds This is a $10 million appropriation for the 2012ndash13 biennium
Three general academic institutions receive a $3 million General Revenue Fund appropriation for lease payments to community colleges for facilities
CONSTITUTIONAL FUNDS
These funds are appropriated separately in the GAA and not directly appropriated to the institutions (see Appendix D)
The Available University Fund (AUF) established in Section 18 Article VII Texas Constitution consists of the surface income and investment proceeds from the Permanent University Fund (PUF) a state endowment with land grants totaling 21 million acres
Distributions to the AUF consist of investment returns from PUF assets surface income from PUF lands and interest earned on AUF balances For the 2012ndash13 biennium investment returns were $12200 million surface income was $398 million and interest income was $59 million Income from the sale of PUF lands and the lease of mineral interest is retained in the PUF and invested
The total 2012ndash13 estimated appropriation for the AUF is $12660 million The Constitution appropriates two-thirds of the AUF to The University of Texas System and one-third to the Texas AampM University System The two systems may use the AUF for capital purposes (debt service on PUF bonds) for most of their institutions and ldquofor the support and maintenancerdquo of other institutions listed Entities authorized to receive funding for ldquosupport and maintenancerdquo which is now commonly referred to as ldquoAUF Excellence Fundingrdquo are the two system offi ces The University of Texas at Austin Texas AampM University and Prairie View AampM University The systemsrsquo boards of regents determine allocations to individual institutions including health-related institutions and the amounts for ldquoExcellencerdquo Figure 11 lists the recipients and the type of support they received
The Higher Education Fund (HEF) as authorized in Section 17 Article VII Texas Constitution benefits institutions of higher education not eligible for the AUF (see Figure 12)
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 11
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 11 PARTICIPANTS IN THE AVAILABLE UNIVERSITY FUND
EXCELLENCE AND DEBT SERVICE FUNDS
The University of Texas System
The Texas AampM University System
The University of Texas at Austin
Texas AampM University
Prairie View AampM University
DEBT SERVICE ONLY
The University of Texas System Components
The University of Texas at Arlington
The University of Texas at Dallas
The University of Texas at El Paso
The University of Texas of Permian Basin
The University of Texas at San Antonio
The University of Texas at Tyler
The University of Texas Southwestern Medical Center
The University of Texas Medical Branch at Galveston
The University of Texas Health Science Center at Houston
The University of Texas Health Science Center at San Antonio
The University of Texas Health Science Center at Tyler
The University of Texas MD Anderson Cancer Center
Texas AampM University System Components
Texas AampM University at Galveston
Texas AampM University at Tarleton
Texas AampM University ndash San Antonio
Texas AampM University ndash Central Texas
Texas AampM University System Health Science Center
Texas AgriLife Research
Texas AgriLife Extension Service
Texas Engineering Experiment Station
Texas Engineering Extension Service
Texas Transportation Institute
Texas Forest Service
SOURCE Legislative Budget Board
FIGURE 12 PARTICIPANTS IN THE HIGHER EDUCATION FUND
The University of Texas System Components
The University of Texas ndash Pan American
Texas AampM University System Components
Texas AampM University ndash Corpus Christi
Texas AampM International University
Texas AampM University ndash Kingsville
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston System Components
University of Houston
University of Houston ndash Clearlake
University of Houston ndash Downtown
University of Houston ndash Victoria
Independent Institutions
Midwestern State University
Stephen F Austin State University
Texas Southern University
Texas Womanrsquos University
University of North Texas System Components
University of North Texas Health Science Center at Fort Worth
University of North Texas
Texas Tech University System Components
Texas Tech University Health Sciences Center
Angelo State University
Texas State University System Components
Lamar University
Sam Houston State University
Texas State University ndash San Marcos
Sul Ross State University
Sul Ross State Rio Grande College
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
Lamar Institute of Technology
Texas State Technical College System Components
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Marshall
Texas State Technical College ndash Waco
The University of North Texas at Dallas receives its allocation through the University of North Texas SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 12
FUNDING GENERAL ACADEMIC INSTITUTIONS
The HEF is supported by General Revenue Fund appropriations
The distribution of the $525 million HEF appropriation for 2012ndash13 is provided for in statute (Texas Education Code Section 62021) The Constitution calls for a re-allocation of HEF funds every ten years The Seventy-ninth Legislature Regular Session fulfilled this requirement with the enactment of House Bill 3001
The Constitution also allows the legislature to adjust the decennial allocations every five years Th e Eighty-fi rst Legislature Regular Session 2011 exercised this authority by enacting House Bill 51 which adjusted the formula allocation for the HEF funds for fiscal years 2009 through 2015
To maintain the equitable distribution of the HEF appropriation House Bill 51 also corrected the distribution of fiscal year 2009 and 2010 HEF allocations by using revised formula calculations Using these revised formula calculations House Bill 51 factored in updated data elements to generate the annual HEF allocations for the fi ve-year period starting in fiscal year 2011
HEF funds must be used for capital purposes Institutions may use HEF allocations for debt service on HEF bonds or as cash
In 1995 the Texas Constitution was amended to authorize the creation and funding of a dedicated HEF corpus known as the Permanent Higher Education Fund (PHEF) Th is corpus was separate from the annual HEF allocation of General Revenue Funds The PHEF was intended to become a permanent endowment to support non-PUF eligible institutions but never reached its targeted value of $2 billion
The PHEF corpus of $5159 million was rededicated with the enactment of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) The balance of the PHEF was transferred to the NRUF on January 1 2010 and the authorization for the PHEF expired Proposition 4 also allowed the legislature to appropriate some or all of the total returns from the NRUF to provide a source of funding to enable emerging research universities to achieve national prominence
The Eighty-second Legislature 2011 appropriated $124 million in estimated NRUF proceeds to eligible institutions in the 2012ndash13 biennium
House Bill 1000 Eighty-second Legislature Regular Session 2011 established the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution in designated as an emerging research university within the Higher Education Coordinating Boardrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fi scal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of the institutions research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs Texas Tech University and the University of Houston are the only two institutions that received funding through this program in 2012
HIGHER EDUCATION GROUP INSURANCE (HEGI)
The $4631 million General Revenue Fund appropriation for higher education group insurance (HEGI) is not a direct appropriation in the institutionsrsquo bill patterns It is appropriated in a separate section of the GAA entitled ldquoHigher Education Employees Group Insurance Contributionsrdquo This appropriation is intended to help institutions cover the cost of health insurance premiums for institution employees whose salaries are paid from the General Revenue Fund Because The University of Texas and Texas AampM University Systems operate their own health insurance programs they each receive separate appropriations The remaining institutions are included in the program operated by the Employees Retirement System (ERS)
The HEGI appropriation is sum-certain That is the Statersquos General Revenue Fund contributions are limited to each institutionrsquos number of employees enrolled in the health insurance program as of December 1 2012 However the GAA allows ERS The University of Texas and Texas AampM University Systems to transfer HEGI appropriations among institutions within their respective group insurance programs to address shortfalls in General Revenue Funds related to group insurance premiums
SOCIAL SECURITY BENEFITS
An appropriation for social security is included in the GAA at the end of Article III It is an estimated General Revenue
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 13
FUNDING GENERAL ACADEMIC INSTITUTIONS
Fund appropriation to provide the employer matching funds for employees of institutions of higher education (Th is appropriation amount is not included in Figure 3 on page 2)
STAFF GROUP INSURANCE
Staff group insurance is for staff whose salaries are not paid with General Revenue Funds (GR) The appropriation is based on an estimation of the number of non-GR funded employees at an institution as of December 1 2010 Th e total appropriation for all general academic institutions is $1766 million for the 2012ndash13 biennium The method of finance is Other Educational and General Income (which is classified as General RevenuendashDedicated Funds)
RETIREMENT CONTRIBUTIONS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and top administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees participate in TRS a defi ned benefit plan The state funds retirement contributions for TRS equal to 60 percent of an employeersquos salary in fiscal year 2012 and 64 percent in 2013 State contributions for ORP are equal to 60 percent of an employeersquos salary in fiscal years 2012 and 2013 (Th ese appropriation amounts are not included in Figure 3 on page 2)
OTHER NON-FORMULA FUNDING
WORKERSrsquo COMPENSATION
Changes in the structure of the statewide workersrsquo compensation system resulted in most institutions receiving General Revenue Fund appropriations for Workersrsquo Compensation starting in 2006ndash07 However Th e University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool
UNEMPLOYMENT COMPENSATION
Most components of The University of Texas and Texas AampM University Systems have this strategy because they operate their own risk pools Th ese institutions receive General Revenue Fund appropriations for unemployment compensation insurance The appropriation for the 2012ndash13 biennium is $05 million in General Revenue Funds Th e Texas Workforce Commission receives an appropriation to
cover unemployment benefi ts for former state employees for all other higher education institutions
TEXAS PUBLIC EDUCATION GRANTS
According to statute (Texas Education Code Chapter 56 Subchapter C and Texas Education Code Section 54051 [Statutory Tuition]) institutions must set aside a portion of tuition revenue for Texas Public Education Grants (TPEG) Fifteen percent of each resident studentrsquos tuition and 3 percent of each nonresident studentrsquos tuition are set aside for financial aid to students at the institution Texas Education Code Section 56033 provides guidelines on the allocation of TPEG revenue The GAA includes an estimate of the amount of TPEG revenue each institution will generate Th is $2111 million estimated appropriation is considered Other Educational and General Income which are classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
Indirect costs as defined by The Comptroller of Public Accounts are ldquoincurred for a common or joint purpose benefiting more than one cost objectiverdquo Institutions negotiate a percentage of a federal grant for indirect costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
The Seventy-eighth Legislature 2003 allowed universities to retain 100 percent of indirect costs income from research grants and contracts to encourage further research projects conducted by universities
ORGANIZED ACTIVITIES
Organized Activities are activities or enterprises connected with instructional departments whose primary function is training for students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training Revenue from Organized Activities is classified as General RevenuendashDedicated Funds Other EampG Income For the 2012ndash13 biennium $503 million is appropriated for Organized Activities
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 14
FUNDING HEALTH-RELATED INSTITUTIONS
OVERVIEW Appropriations for the nine health-related institutions are similar in structure to the appropriations for general academic institutions There are formula and non-formula funding appropriations made directly to the institutions as well as appropriations that benefit the institutions but are not included in the institutionsrsquo bill patterns such as the Available University Fund certain staff benefi ts and funds trusteed at the Texas Higher Education Coordinating Board (THECB) While health-related institutions do not receive appropriations from the Research Development Fund they share many other types of appropriations similar to general academic institution appropriations Th ose appropriations will be briefly restated in this section of the report Figure 13 lists the institutions and their enrollment
FIGURE 13 PUBLIC HEALTH-RELATED INSTITUTIONS CERTIFIED HEADCOUNT FALL 2011
INSTITUTION HEADCOUNT
UT Southwestern Medical Center 2467
UT Medical Branch at Galveston 2660
UT Health Science Center at Houston 4485
UT Health Science Center at San Antonio 3273
UT M D Anderson Cancer Center 248
UT Health Science Center at Tyler NA
Texas AampM University System Health Science 1958 Center
University of North Texas Health Science 1567 Center at Fort Worth
Texas Tech University Health Sciences Center 3590
Statewide Totals 20248
SOURCE Higher Education Coordinating Board
Like other higher education institutions the appropriations for health-related institutions are a lump sum and funding strategies are presented for informational purposes in the General Appropriations Act (GAA) The funding strategies in a health-related institutionrsquos bill pattern represent how state funds are allocated but not how they must be spent Also certain methods of finance in the appropriation are estimated This means that if for example patient income for an institution is above the amount included in the GAA
the institution can spend more than the amount listed in the GAA
Also health-related institutions have access to an estimated $109 billion outside the appropriations process in 2012ndash13 Examples of this include certain tuition revenue indirect lost recovery grants and gifts
Figure 14 illustrates the 2012ndash13 method of finance for $85 billion in appropriations for health-related institutions including a number of the indirect appropriations but it does not include appropriations for retirement benefi ts
FIGURE 14 METHOD OF FINANCE FOR HEALTH-RELATED INSTITUTIONS 2012ndash13 BIENNIUM
727$ 021
HQHUDO
2WKHU)XQGV3DWLHQWQFRPH
5HYHQXH)XQGV
HQHUDO5HYHQXHsup2HGLFDWHG)XQGV13
Including some tuition and fees SOURCE Legislative Budget Board
FORMULA FUNDING The three primary funding formulas for health-related institutions are Instruction and Operations support Infrastructure support and Research Enhancement Th e University of Texas MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler have additional formula allocations to accommodate their unique missions Each health-related institution also receives formula funding for graduate medical education
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 15
FUNDING HEALTH-RELATED INSTITUTIONS
General Revenue funding and some Other Educational and General Income (Other EampG is classified as General RevenuendashDedicated) fund the formulas Like general academic institutions certain tuition revenue is used in the calculation of the Instruction and Operation support and Infrastructure support formulas Of the $15 billion that is allocated by the health-related institutionsrsquo primary formulas 939 percent is from the General Revenue Fund and the remaining 61 percent is from General RevenuendashDedicated Funds (tuition and fee revenue)
Some tuition and fee income is set aside for specifi c purposes Some specific amounts are unavailable for formula purposes and consequently are not a formula method of fi nance For example health-related institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) and Medical Loans
INSTRUCTION AND OPERATIONS SUPPORT FORMULA
The Instruction and Operations (IampO) support formula represents nearly 755 percent of the primary formula funds for health-related institutions ($9282 million for the 2012ndash13 biennium) It is intended to fund items such as faculty salaries departmental operating expenses instructional administration and libraries It is allocated on a per full-time student equivalent (FTSE) basis with a funding weight predicated on the instructional program of the student This formula applies to all health-related
institutions except The University of Texas Health Science Center at Tyler which did not offer education instruction during the base period for the 2012ndash13 biennium
Figure 15 illustrates the Instruction and Operations support formula among the eight health-related institutions
The Instruction and Operations support formula is calculated as follows
(FTSE X Program Weight X $8874) + SmallMultiple Campus Supplement
FTSE is weighted by discipline For example medicine (4753) is weighted more than pharmacy (1670) Allied Health is assigned a weight of 1000
The Legislature sets the weights and the rate ($8874 adjusted for the 2012ndash13 biennium) in the Higher Education Special Provisions of the GAA (Sec 29 page III-239 and 240) The rate is calculated based on the available revenue for the formula and the number of FTSEs
Programs with enrollments less than 200 receive a Small Campus Supplement (see Figure 16)
FIGURE 15 DISTRIBUTION OF INSTRUCTION AND OPERATIONS SUPPORT FORMULA 2012ndash13 BIENNIUM
727$ 021870$QGHUVRQ 7H[DV$ amp 0+HDOWKampDQFHUampHQWHU 6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV 87+HDOWK6FLHQFHampHQWHUDW6DQ
DW)WRUWK
+HDOWK6FLHQFHampHQWHU$QWRQLR
87+HDOWK6FLHQFH 7H[DV7HFK8QLYHUVLW+HDOWKampHQWHUDW+RXVWRQ 6FLHQFHVampHQWHU
876RXWKZHVWHUQ0HGLFDOampHQWHU
870HGLFDOUDQFK DWDOYHVWRQ
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 16
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 16 SMALL CAMPUS SUPPLEMENT RECIPIENTS
The University of Texas Southwestern Medical Center
No
The University of Texas Medical Branch at Galveston
Yes
The University of Texas Health Science Center at Houston
Yes
The University of Texas Health Science Center at San Antonio
Yes
The University of Texas MD Anderson Cancer Center
No
The University of Texas Health Science Center at Tyler
NA
Texas AampM Health Science Center Yes
University of North Texas Health Science Center at Fort Worth
No
Texas Tech University Health Sciences Center Yes
SOURCE Legislative Budget Board
INFRASTRUCTURE SUPPORT FORMULA
The Infrastructure support formula is 194 percent of the primary formula funding and is intended for utilities and physical plant support ($2383 million for the 2012ndash13 biennium) This formula calculation is similar to that for general academic institutions but includes only one rate ($655) for all institutions except The University of Texas
FIGURE 17 DISTRIBUTION OF INFRASTRUCTURE SUPPORT FORMULA 2012ndash13 BIENNIUM
MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler which have another rate ($625)
THECBrsquos space model predicts square footage for each institution The space model projection is based on the following
bull number and level of FTE students
bull number of faculty
bull single or multiple programs and campuses
bull actual clinical space and
bull research and current EampG expenditures
Because the space projection model does not account for hospital space separate infrastructure funding for hospital space is included in the total funding for hospital and patient-care activities at The University of Texas Medical Branch at Galveston The University of Texas MD Anderson Cancer Center and The University of Texas Health Science Center at Tyler
Figure 17 illustrates the Infrastructure Support Formula allocation to institutions among the nine health-related institutions
727$ 021
87+HDOWK6FLHQFHampHQWHUDW6DQ 870$QGHUVRQampDQFHUampHQWHU$QWRQLR
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW
+RXVWRQ 7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK6FLHQFHVampHQWHU
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 17
FUNDING HEALTH-RELATED INSTITUTIONS
RESEARCH FORMULA
Health-related institutions generate state appropriations to support research through General Revenue Funds in the Research Enhancement formula ($629 million for the 2012ndash13 biennium) The Research Enhancement formula accounts for 51 percent of the primary formula funds and is funded entirely from the General Revenue Fund
The allocation is based on the amount of research generated by each institution
$1412500 + (110 X Research
Expenditures)
This provides a base Institutions report for all institutions current research
regardless of research expenditures to volume THECB
Figure 18 illustrates the Research Enhancement formula allocation to the institutions among the nine health-related institutions
GRADUATE MEDICAL EDUCATION
The Seventy-ninth Legislature 2005 established a new formula for funding graduate medical education in the 2006ndash07 GAA For 2012ndash13 the funding totals $46 million
FIGURE 18 DISTRIBUTION OF RESEARCH ENHANCEMENT FORMULA 2012ndash13 BIENNIUM
727$ 021
870$QGHUVRQampDQFHUampHQWHU
(an additional $109 million is appropriated to the Baylor College of Medicine through the THECB) and provides $4436 per medical resident each year
Figure 19 illustrates the Graduate Medical Education formula allocation to institutions among the nine health related institutions and Baylor College of Medicine
CHEST DISEASE CENTER FORMULA
The Chest Disease Center operations formula which was established during the 2010ndash11 biennium applies only to The University of Texas Health Science Center at Tyler Th e University of Texas Health Science Center at Tyler has a statutory mission to conduct research develop diagnostic and treatment techniques provide training and teaching programs and provide diagnosis and treatment of inpatients and outpatients with respiratory diseases The Chest Disease Center formula is based on the number of primary chest disease patients the institution served Approximately $472 million in General Revenue Funds are appropriated for the 2012ndash13 biennium
CANCER CENTER OPERATIONS FORMULA
The Eightieth Legislature 2007 established in the GAA an Operations formula for funding The University of Texas MD Anderson Cancer Center The University of Texas MD Anderson Cancer Center has a statutory mission to eliminate cancer through patient care research education
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR
7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ 8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
870HGLFDOUDQFKDWDOYHVWRQ 7H[DV7HFK8QLYHUVLW+HDOWK876RXWKZHVWHUQ0HGLFDOampHQWHU
6FLHQFHVampHQWHU
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 18
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 19 DISTRIBUTION OF GRADUATE MEDICAL EDUCATION FORMULA 2012ndash13 BIENNIUM
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
727$ 02187+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR 870$QGHUVRQampDQFHUampHQWHU
87+HDOWK6FLHQFHampHQWHUDW7OHU
7H[DV$ amp 08QLYHULVW6VWHP +HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK 6FLHQFHVampHQWHU
DORUampROOHJHRI0HGLFLQH
and prevention The Operations formula funding is based on the total number of Texas cancer patients the institution served The Operations formula growth in funding may not exceed the average growth in funding for health-related institutions in the Instruction and Operations support formula for the current biennium For the 2012ndash13 biennium this funding formula provided $2125 million in General Revenue Funds
NON-FORMULA FUNDING
PATIENT CARE ACTIVITIES
Some institutions conduct patient care activities generally medical or dental For the 2012ndash13 biennium the estimated appropriation for Patient Income was $56 billion Th e hospital and clinic revenues earned through patient care activities are considered Other Funds which are part of Educational and General Income (not to be confused with Other Educational and General Income which is another subset of Educational and General Income) General Revenue funding supplements patient-care income to varying degrees at each institution Patient Income is an estimated appropriation and is spread across an institutionrsquos funding strategies however it is not used in the calculation of the formulas
INSTITUTIONAL ENHANCEMENT
Institutional Enhancement is a General Revenue Fund appropriation that started in the 2000ndash01 biennium It is designed to allow each institution to address its unique needs and diseconomies of scale at institutions with smaller campuses The total institutional enhancement appropriation for the 2012ndash13 biennium was $42 million which includes $407 million in General Revenue Funds and $16 million in Patient Income
SPECIAL ITEMS
Special items are activities that are not generally funded through the formulas and typically represent an institutionrsquos special needs or areas of expertise The $3107 million in General Revenue Funds for the 2012ndash13 biennium funds items such as residency programs academic outreach programs public service items and research items other than general research support Institutions propose and justify special items and request an amount for each on an ad hoc basis Special items generally remain constant from biennium to biennium unless the item was a one-time expense (eg tornado damage repairs) or the institution has not used the funding for the intended purpose
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 19
FUNDING HEALTH-RELATED INSTITUTIONS
CONSTITUTIONAL FUNDS
These funds are not directly appropriated to institutions in the GAA In other words these funds are not found in a strategy within an institutionrsquos bill pattern
Health-related institutions are eligible for funding from the Available University Fund ($146 million in Other Funds allocated to these institutions by system offices for the 2012ndash 13 biennium) and the Higher Education Fund ($257 million in General Revenue Funds appropriated for the 2012ndash13 biennium) which are presented in detail in the ldquoFunding General Academic Institutionsrdquo section of this report
CAPITAL FUNDS
Just like general academic institutions tuition revenue bonds ($1665 million in General Revenue Funds for related debt service in the 2012ndash13 biennium) are also used to fund capital projects at health-related institutions A detailed presentation of tuition revenue bonds is in the ldquoFunding General Academic Institutionsrdquo section The University of Texas Medical Branch at Galveston and The University of Texas MD Anderson Cancer Center also have separate appropriations for capital projects that are funded primarily with Patient Income
EMPLOYEE BENEFITS
Like general academic institutions health-related institutions benefit from direct and indirect state appropriations related to employee benefi ts The indirect appropriations include Higher Education Group Insurance ($2339 million in General Revenue Funds for the 2012ndash13 biennium) Retirement Contributions and Social Security Benefi ts (all presented in the ldquoFunding General Academic Institutionsrdquo section) The direct appropriations include Staff Group Insurance
For the 2012ndash13 biennium the Workersrsquo Compensation and Unemployment Compensation strategies (all presented in the ldquoFunding General Academic Institutionsrdquo section) are funded directly with General Revenue Funds and General RevenuendashDedicated Funds However The University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool The University of Texas and Texas AampM Systems also manage their own unemployment compensation coverage while all other institutions receive coverage from
the Texas Workforce Commission which receives an appropriation to cover unemployment benefi ts
TEXAS PUBLIC EDUCATION GRANTS
Health-related institutions similar to general academic institutions are subject to the Texas Education Code (sect56031 et al) provision requiring a portion of tuition revenue be set aside to fund Texas Public Education Grants (TPEG) For the 2012ndash13 biennium the estimated TPEG appropriation is $188 million This revenue is considered Other Education and General Income which is classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
As mentioned earlier in this section Indirect Cost Recovery was removed from the GAA for the 2010ndash11 biennium however the individual institution still receives the funds
TOBACCO SETTLEMENT
House Bill 1945 Seventy-sixth Legislature 1999 established the Permanent Health Fund for health-related institutions of Higher Education the Permanent Fund for Minority Health Research and Education the Permanent Fund for Higher Education Nursing Allied Health and Other Health Related Programs and 13 permanent endowments for individual institutions of higher education The $769 million in estimated interest earnings from the endowments for 2012ndash13 (based on estimated interest earnings of 45 percent each year) were appropriated to the health-related institutions
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 20
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW Public two-year lower-level institutions include 50 community and junior college districts four Texas State Technical College (TSTC) campuses and three Lamar State Colleges These institutions were appropriated $22 billion in state funding for the 2012ndash13 biennium Preliminary fall FIGURE 20 TWO-YEAR INSTITUTION FUNDING MECHANISMS 2012ndash13 BIENNIUM
2011 enrollment at these institutions totaled 789713 Figure 20 illustrates the funding mechanisms for these institutions Community colleges accounted for 983 percent of this enrollment total while the Texas State Technical and Lamar State Colleges composed the remaining portion
COMMUNITY COLLEGES
Instruction and Administration General Revenue Funds from the state are based on contact hour driven formulas for two-year institutions Tuition and fee revenues and local tax revenues augment state General Revenue Funds for these costs
Academic Courses Approximately 82 percent of the total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 18 percent of the total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant The state provides no funding for physical plant operations and maintenance Local taxing districts are expected to provide support for physical plant needs Community colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011
Facilities Local communities must provide facilities Community colleges are not eligible to receive Higher Education Fund (HEF) allocations Available University Fund allocations or state tuition revenue bonds
Employee Benefits While community college employees are locally-employed community colleges participate in the Employee Retirement System (ERS) Group Benefits Program for health benefi ts and the Teacher Retirement System(TRS) and Optional Retirement Program (ORP) for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits
Tuition Fee Revenues Tuition and fee revenues are considered institutional funds and are not appropriated by the state Tuition rates vary by institution In 2012 the statewide tuition rates plus fees averaged $73 per semester credit hour but varied from $34 to $208 per semester credit hour
Local Tax Revenue Community Colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011 Local tax revenues are expected to provide support for physical plant needs and augment state General Revenue Funds for instruction and administration costs
SOURCE Legislative Budget Board
TSTCLAMAR COLLEGES
Instruction and Administration General Revenue Funds from the state are based on formulas for two-year institutions Tuition and fee revenues augment General Revenue Funds for these costs
Academic Courses Approximately 39 percent at the Lamar colleges and 28 percent at Texas State Technical College (TSTC) of total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 61 percent at the Lamar colleges and 72 percent at TSTC of total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant State funding based on the formula for general academic institutions The Lamar colleges will receive approximately $71 million and TSTC will receive $157 million in General Revenue Funds for physical plant and utilities in the 2012ndash13 biennium
Facilities The Lamar colleges receive approximately $42 million annually from HEF funds and TSTC receives almost $58 million annually The HEF monies are used to acquire land construct and equip buildings provide major building repair or rehabilitation and acquire capital equipment and library materials
Employee Benefits Both the Lamar colleges and TSTC institutions participate in ERSrsquo Group Benefits Program for health benefits and the TRS and ORP programs for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits of those employees having their salaries paid with General Revenue Funds
Tuition Fee Revenues Certain tuition revenue is appropriated by the state In 2012 for resident students average tuition plus fees was $139 per semester credit hour at the Lamar colleges and $150 per semester credit hour at TSTC
FINANCING HIGHER EDUCATION IN TEXAS ndash ID690 LEGISLATIVE BUDGET BOARD 21
FUNDING COMMUNITY AND TECHNICAL COLLEGES
These institutions are primarily funded based on student contact hours A contact hour is a standard unit of measure that represents an hour of scheduled academic and technical instruction given to students during a semester Community and junior college districts generate almost 958 percent of the state-funded contact hours at two-year institutions TSTC components generate approximately 29 percent of the contact hours and the three Lamar State Colleges account for the 13 percent
COMMUNITY COLLEGES Over 99 percent of the direct appropriations to community colleges are from the General Revenue Fund and are generated through a funding formula The remaining direct appropriations are for isolated ldquospecial itemsrdquo including appropriations for the Southwest Collegiate Institute for the Deaf which is part of the appropriation for Howard College The Texas Education Code Section 130003(a) calls for state appropriations to public community colleges to ldquosupplement local funds for the proper support maintenance operation and improvement of those public junior colleges of Texas that meet the standards prescribed by the chapterrdquo Further Education Code Section 130003(c) indicates that state funds must be used ldquoexclusively for the purpose of paying salaries of instructional and administrative forceshellip and the purchase of supplies and materials for instructional purposesrdquo
Consistent with statute community colleges have their own Instruction and Administration Formula which is funded by General Revenue Funds and based on ldquostudent contact hoursrdquo Unlike general academic institution formulas this formula does not include tuition and fee revenue as part of the method of fi nance
The Eighty-second Legislature 2011 also provided $45 million to certain districts through a new small institution supplemental formula A district is eligible for the supplement if it makes a significantly above-average effort to generate tax income while at the same time experiencing below-average tax revenue and does not have a number of contact hours that exceeds the statewide median Th e Eighty-second Legislature appropriated each eligible district $05 million for the 2012ndash13 biennium
No state funding is provided for physical plant operations and maintenance or for facilities that is supported by local tax eff ort
Three community colleges receive weighted semester credit hour formula funding for a Bachelor of Applied Technology degree program
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $153 million in General Revenue formula hold harmless funding for aff ected community colleges to minimize the effect of reduced formula funding as a result of overall contact hour declines The Eighty-second Legislature 2011 did not provide any hold harmless funding in the 2012ndash13 biennium
Property taxes tuition and fees are other major sources of revenue for community colleges Figure 21 illustrates the estimated sources of funding for community colleges Th e state appropriations in Figure 21 include all formula special item Higher Education Group Insurance appropriations and retirement benefi t appropriations
FIGURE 21 MAJOR SOURCES OF COMMUNITY COLLEGESrsquo OPERATING REVENUE IN BILLIONS FISCAL YEAR 2011
727$ 21
6WDWHampRQWULEXWLRQV
URVV7XLWLRQDQG)HHV
3URSHUW7D[HV
)HGHUDO)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING
The basis of the formula starts with the Texas Higher Education Coordinating Board (THECB) Report of Fundable Operating Expenses (RFOE) (formally called the All Funds Expenditure Report) The study includes all expenditures for instruction and administration (facilities costs are not included) in 26 program areas THECB uses the expenditure data to determine the median cost in the 26 program areasmdashthe ldquoratesrdquo for contact hours in those disciplines THECB then makes a recommendation for
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 22
FUNDING COMMUNITY AND TECHNICAL COLLEGES
funding based on the rates Over the years THECB has used various methodologies as the basis for its funding recommendations Because the RFOE takes into account all funds (state appropriations plus tuition and tax revenue which are not appropriated) THECBrsquos recommendation for state funding has generally not equaled 100 percent of the rates
The amount of the appropriation is a legislative decision based on funds available The appropriation is allocated to the colleges according to each districtrsquos pro-rata share of THECB recommendations
HIGHER EDUCATION GROUP INSURANCE (HEGI)
Like state institutions of higher education community colleges receive General Revenue Fund contributions for group insurance However since community college employees are local not state employees state contributions for health benefits are fully discretionary Other agencies and institutions of higher education report employee eligibility for General Revenue-funded group health insurance benefi ts only if the employeersquos salary is directly paid with General Revenue Funds However in the past community colleges tended to base eligibility for General Revenue-funded benefits if the employeersquos job function fell under an approved ldquoelement of costrdquo This practice caused community colleges to report eligibility for state funded health benefits in a manner that did not always match the source of the employeersquos salary
This practice led to the Governorrsquos veto of the Group Health Insurance appropriation for fiscal year 2009 ($154 million) at the end of the Eightieth Legislative session However an agreement to restore the vetoed funds was reached and returned directly to the districts in House Bill 4586 Eighty-first Legislature Regular Session 2009
The Eight-Second Legislature 2011 allowed community colleges to receive General Revenue Fund contributions for employees whose job function fell under an approved ldquoelement of costrdquo However the Legislature only funded 42 percent of the premium costs for these employees
OTHER STAFF BENEFITS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and certain administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees
participate in TRS a defi ned benefit plan In both instances the state funds retirement contributions equal 60 and 64 percent of an employeersquos salary in fiscal year 2012 and fi scal year 2013 respectively (These appropriation amounts are not included in Figure 2 on page 3)
DRAMATIC ENROLLMENT GROWTH
Since the 1996ndash97 biennium public community colleges have received ldquoDramatic Enrollment Growth Fundingrdquo For the 2000ndash01 biennium this was expanded to include Texas State Technical Colleges and Lamar State Colleges (Lamars) The appropriation was made to THECB Rider 13 page IIIshy53 General Appropriations Act (2010ndash11 Biennium) provided guidelines for distributing this funding
For the 2010ndash11 biennium THECB is authorized to allocate up to $175 million per year to schools experiencing a growth rate of five percent or greater in 2010 and eight percent or greater in 2011 The Eighty-second Legislature 2011 did not provide any dramatic enrollment growth funding in the 2012-13 biennium
OTHER TRUSTEED FUNDS
Students at community colleges also benefi t from Texas Educational Opportunity Grants the student fi nancial aid program appropriation that is allocated by THECB
TEXAS STATE TECHNICAL COLLEGE LAMAR STATE COLLEGES The Texas State Technical Colleges (TSTC) and Lamar State Colleges are allocated a majority of their appropriation via two formulas the Instruction and Administration Formula for two-year institutions and the Infrastructure Formula for general academic institutions Similar to general academic institutions the tuition revenue for these colleges is included in the appropriations bill
Contact hours for vocationaltechnical courses represent approximately 61 percent of total contact hours at the Lamar State Colleges and 72 percent at TSTC institutions Th e remaining contact hours are generated from academic and continuing education courses
Facilities funding is available from the Higher Education Fund for both TSTC and the Lamars State Colleges and both have received Tuition Revenue Bond authorizations
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 23
FUNDING COMMUNITY AND TECHNICAL COLLEGES
The Community Colleges section of this report includes subsections on Higher Education Group Insurance Other Staff Benefits and Dramatic Enrollment Growth Th ese three subsections apply to appropriations for Texas State Technical Colleges and the Lamar State Colleges as well
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 24
FUNDING TEXAS AampM SYSTEM AGENCIES
There are seven research and service agencies that are administered by the Texas AampM University System Th e system agenciesrsquo missions differ from other institutions of higher education in that each system agency focuses on one or two of the three traditional missions of higher education institutions research extension and service (Figure 22)
FIGURE 22 TEXAS AampM SYSTEM AGENCIES MISSIONS AND FUNCTIONS
STATUTORY AUTHORITY MISSIONFUNCTIONS
For the 2012ndash13 biennium the total direct appropriations for Texas AampM System (System) agencies are $8897 million In addition to state appropriations the System agencies receive some Federal Funds that are not included in the General Appropriations Act and have access to private funds While System agencies have significant portions of their Other Funds and Federal Funds appropriated the appropriations are estimated and actual income from these funding sources is subject to signifi cant variation
Texas AampM AgriLife Education Conducts research in the agricultural environmental and life sciences Goals include Research Code Title III enhancing the competitiveness of agricultural industries and natural resource conservation
Chapter 88 Research highlights bioenergy irrigation efficiency and the use of distillerrsquos grain in feedlots Administers the honey bee regulation and feed and fertilizer programs
Texas AampM AgriLife Education Provides training and educational programs including 4-H through extension agents Extension Service Code Title III serving every county in Texas and supported by federal state and county funds Provides
Chapter 88 wildlife and insect management services including feral hog abatement and boll weevil eradication
Texas AampM Education Conducts engineering and technology research with a focus on interdisciplinary research Engineering Code Title III based on statewide priorities Research highlights energy independence effi ciency and Experiment Station Chapter 88 conservation alternative energy and national security
Texas AampM Education Conducts transportation related research and develops technology Approximately 50 Transportation Code Title III percent of research expenditures from interagency contracts are contracted from the Texas Institute Chapter 88 Department of Transportation
Texas AampM Education Provides training technical assistance and emergency response to enhance public Engineering Code Title III safety security and economic growth Operates the Brayden Fire Training Field and the Extension Service Chapter 88 Emergency Operations Training Center Texas Task Force 1 is deployed for emergency
response and search and rescue operations
Texas AampM Forest Education Provides incident management teams and emergency response as well as wildfire Service Code Title III prevention detection and suppression services The Texas Wildfire Protection Plan is
Chapter 88 the agencyrsquos wildfire response model Administers the Rural Volunteer Fire Department Assistance Program which gives grants to local fire departments for equipment and training
Texas AampM Veterinary Education Provides fee-based veterinary medical diagnostic services which contribute to an animal Medical Diagnostic Code Title III and zoonotic disease surveillance system Responds to potential high consequence andor Laboratory Chapter 88 emerging disease events Develops new diagnostic testing technologies
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 25
FUNDING TEXAS AampM SYSTEM AGENCIES
FIGURE 23 TEXAS AampM SYSTEM AGENCIES COMPARED TO INSTITUTIONS OF HIGHER EDUCATION
SIMILARITIES
FUNDING
Both Texas AampM System (System) agencies and institutions of higher education have considerable flexibility in their budgeting and financial operations (ldquolump sumrdquo appropriations)
Both are eligible to receive proceeds from the Permanent University Fund
Both are considered to be institutions of higher education for purposes of employee group health insurance
Both System agencies and institutions of higher education generate and keep 100 percent of indirect cost recovery from research and other grants
PERFORMANCE MEASURES
OPERATIONS
Like other institutions of higher education System agencies are not required to submit operating budgets or strategic plans
Both are statutorily embedded within the Texas AampM Systemrsquos institutional framework
SOURCE Legislative Budget Board
DIFFERENCES
General academic health-related and two-year institutions receive formula funding while System agencies do not
Texas AampM System agencies do not generate revenue in the same manner or amount of other higher education institutions
Performance measures for the System agencies are agency-specific while performance measures for other higher education institutions are standardized
In several ways state funding for System agencies is similar to funding for higher education institutions System agencies have considerable flexibility in their budgeting and fi nancial operations because they receive lump-sum appropriations in the same manner as other institutions of higher education They are eligible to receive funds from the Permanent University Fund (PUF) (They were allocated $153 million from the PUF for debt service in the 2012ndash13 biennium) System agencies are also funded in the same manner as other institutions of higher education with regard to staff benefi ts including employee group health insurance contributions
However there are several funding diff erences between System agencies and other higher education institutions Most significantly System agencies do not receive formula-based funding Also while some System agencies may charge fees for their services they do not generate tuition and fees in the same manner or quantity as other institutions of higher education
As is the case with all institutions the System agencies keep 100 percent of their respective indirect cost recovery income
because this income is derived from earnings on federal grants and is held outside the treasury
For the 2012ndash13 biennium funding associated with infrastructure expenses and utilities for System agencies inside Brazos County is equal to the infrastructure rate (as determined by the General Academic formulas on page 6) for Texas AampM University
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 26
APPENDIX A FREQUENTLY ASKED QUESTIONS
Q What are the limitations on how institutions spend state appropriations
A Generally speaking institutions have great fl exibility in spending appropriated funds however some limitations do exist depending on the source of revenue Appropriated revenue includes General Revenue Funds General Revenuendash Dedicated Funds (mostly tuition and fee income) Other Funds (including Patient Income) and Federal Funds (for certain Texas AampM System Agencies) Th e Texas Constitution (Article VII Section 18(i) and 17(j)) prohibits with limited exceptions the use of General Revenue Funds for acquiring land or for construction projects An exception occurs when the legislature by two-thirds vote in each house expressly determines that there is a demonstrated need for the project
Various provisions in the 2012ndash13 General Appropriations Act (GAA) Higher Education Special Provisions restrict state appropriations These restrictions include the following
bull Section 6 (Rider 8b) which prohibits the use of appropriated funds for auxiliary enterprises
bull Section 6 (Rider 9) which limits the use of these funds to pay debt service for statutorily authorized tuition revenue bonds Any such appropriation not spent must be returned to the General Revenue Fund at the end of the year
bull Section 9 which prohibits the use of appropriated funds for intercollegiate athletics purposes and
bull Section 54 which limits the use of the Research Development Fund to those defined in Education Code Section 62091
Q Would an increase in tuition revenue replace a corresponding amount in General Revenue Funds or would the revenue remain within the institution
A The result depends on how the Legislature responds
For instance assume that the Eight-second Legislature 2011 changed the statute to require institutions to charge nonresident tuition in circumstances where they had previously waived the nonresident tuition rate For the 2012ndash13 biennium institutions would benefit fully from the
increase in tuition revenue (This assumes the formula calculation would not include a projected increase in tuition)
However institutional appropriations in the 2014ndash15 biennium now depend on that legislation passed in the Eighty-third Legislature 2013 Assuming the same number of students (semester credit hours) enroll regardless of changes in tuition policy and that the result of charging nonresident tuition generated $100 million in additional tuition revenue there are three options
1 Reduce General Revenue Funds (GR) in the formulas by $100 million In this scenario the formula rate stays the same and every dollar increase in tuition revenue results in a dollar decrease in GRmdashinstitutional funding does not increase
2 Keep GR the same and run the additional tuition revenue through the formulas Th e formula funding rate would increase and every institution would receive more funds including those institutions that generated no additional tuition revenue
3 Keep GR formula appropriations at the same level and let individual institutions keep the additional tuition revenue they generated outside the formula allocation
Q Are all tuition and fee revenues collected by institutions of higher education included in the appropriations bill
A No None of the tuition and fee revenues collected by community colleges are appropriated
For general academic institutions an estimate of the revenue from certain tuitions and fees such as statutory tuition (Education Code 54051 Tuition Rates) board authorized tuition (Education Code 54008 Tuition Rate Set by Governing Board) Laboratory Fees (Education Code 54501) and certain other fees are appropriated in the GAA as General Revenue FundsndashDedicated Estimated Other Educational and General Income There are a number of other tuitions and fees that are not included in the GAA and therefore not referred to as state funding Such tuitions and fees include but are not limited to designated tuition (Education Code 540513 Redesignation of Building Use Fee) and Incidental Fees (Education Code 54504) Federal
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 27
APPENDIX A FREQUENTLY ASKED QUESTIONS
Funds are also not appropriated to the general academic and health-related institutions
Q Is a decrease in enrollment the only reason an institution would be eligible for formula funding hold harmless
A No Each session the Legislature makes a determination of whether it will make an appropriation for formula hold harmless A decrease in total enrollment is one reason an institution could be eligible for the funding Because the semester credit hours (general academic institutions) full-time student equivalents (health-related institutions) used in the formulas are based on weights (discipline program and course level) a change in the type of student enrollment regardless of total enrollment could also make an institution eligible for hold harmless funding
Q What are Educational and General Funds
A ldquoOther Educational and General Incomerdquo is a subset of ldquoEducational and General Incomerdquo The following are included in the Education Code (51009(c)) defi nition for ldquoEducational and General Fundsrdquo net tuition special course fees charged under Education Code 54051(e) and (l) lab fees student teaching fees hospital and clinic fees organized activity fees and proceeds from the sale of educational and general equipment
Q What does it mean to be a Tier One institution
A The Tier One reference is often derived from the Carnegie Foundation for the Advancement of Teachingrsquos prior system for classifying institutions of higher education As part of the 1994 version of the Carnegie Classification there were four categories for doctorate granting institutions Research Universities I Research Universities II Doctoral Universities I and Doctoral Universities II ldquoTier Onerdquo was synonymous with Research Universities I Such institutions had to off er a full range of baccalaureate programs award 50 or more doctoral degrees each year and receive annually at least $40 million or more in federal research funds Two institutions in Texas (The University of Texas at Austin and Texas AampM University) met these criteria The 2000 version of the Carnegie Classification collapsed the categories for doctorate granting institutions from four to two Doctoral Research UniversitiesmdashExtensive and DoctoralResearch UniversitiesmdashIntensive Six public institutions in Texas (Texas AampM University Texas Tech University University of Houston University of North Texas The University of Texas at Arlington and The University of Texas at Austin) meet the criteria for DoctoralResearch Universitiesmdash
Extensive In 2005 however the classifi cation structure returned to a more restricted top tier of institutions classifi ed as ldquoResearch Universities (very high research activity)rdquo Both The University of Texas at Austin and Texas AampM University are now counted in this category but any reference to Tier One usually refers to the 1994 Carnegie Classifi cation
Q What is the space model What is the base number of square feet needed
A In 1992 the Texas Higher Education Coordinating Board approved the Space Projection Model for Higher Education Institutions in Texas for public universities to assess the net assignable square feet (NASF) of educational and general space an institution needs There are fi ve categories incorporated into the model teaching library research offi ce and support space Space needs for auxiliary purposes such as dormitories or athletics are not included in the model Square footage amounts are assigned based on a number of elements within each category including the number of students and their program levels and the amount of research expenditures The space model was fi rst incorporated into the funding formulas for general academic institutions in 1997
Q What are ldquoOrganized Activitiesrdquo
A General academic institutions have a funding strategy titled ldquoOrganized Activitiesrdquo These are activities or enterprises that are connected with instructional departments Th ey are intended primarily to give training to students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training
Q What are tuition revenue bonds
A Established in 1971 under Education Code 5513 tuition revenue bonds are bonds (not to exceed 50 years) issued by institutions of higher education for the purpose of ldquoproviding funds to acquire purchase construct improve enlarge andor equip any property buildings structures activities services operations or other facilities for and on behalf of its institution or institutions or any branch of branches thereofrdquo Each institutionsystem is authorized and required to pay debt service on its bonds Although the authorization and issuance of the bonds is not contingent on an appropriation by the state for related debt service the Legislature has provided General Revenue Funds to reimburse institutions for costs related to debt service However in the 2004ndash05 GAA the legislature changed this practice and only provided General Revenue Fund reimbursements for interest
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 28
APPENDIX A FREQUENTLY ASKED QUESTIONS
on bonds issued after March 31 2003 The 2006ndash07 GAA renewed the practice of reimbursing institutions for the costs related to debt service The 2008ndash09 GAA and 2010-11 GAA continues this practice
Q What Is Proportionality
A Pursuant to Section 608 of Article IX of the 2012ndash13 GAA the legislative intent of proportionality is to ldquomaximize balances in the General Revenue Fundrdquo by harmonizing salary funding source with benefits funding source Th is effectively means the Legislature limits its General Revenue Fund contributions for benefits only to those employees having salaries paid with General Revenue Funds As such proportionality requires employee health and retirement benefits be paid in ldquoproportionrdquo to the funding source of salaries To this end institutions are obligated to submit the Accounting Policy Statement 011 Benefits Proportional by Fund (APS 011) report to the Comptroller Th is document provides a structure by which state and local contributions are ldquosettled uprdquo in light of the fiscal years fund proportionality
Q What Is the National Research University Fund
A In 1995 the Texas Constitution was amended to authorize the creation and funding of the Permanent Higher Education Fund (PHEF) The PHEF was intended eventually to become a permanent endowment to support non-Permanent University Fund eligible institutions However the PHEF corpus was rededicated with the voter passage of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) In 2009 Proposition 4 transferred the balance of the PHEF to the credit of the NRUF as of January 1 2010 and repealed the constitutional authorization for the PHEF
The NRUF is intended to provide a source of funding to enable emerging research universities in Texas to achieve national prominence as major research universities Article VII of the Texas Constitution authorizes the Legislature to appropriate some or all of the total return on all investment assets of the NRUF for the purposes of the fund except for two caveats (1) the Legislature may not increase distributions from the fund if the purchasing power of investment assets for any rolling 10-year period is not preserved and (2) the amount appropriated from the proceeds of the NRUF corpus in any fiscal year must be capped at 7 percent of the investment assetsrsquo average net fair market value Until the NRUF has been invested long enough to determine its purchasing power over a 10-year period the Legislature is
authorized to use other means of preserving the purchasing power of the fund
House Bill 1000 Eighty-second Legislature Regular Session 2011 establishes the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution is designated as an emerging research university within the THECBrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fiscal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of institutionrsquos research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 29
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 30
APPENDIX B TUITION AND FEE PROVISIONS
VTCA Texas Education Code Section 54003 states No institution of higher education may collect from students attending the institution any tuition fee or charge of any kind except as permitted by lawhellip
The laws governing tuition and fees at institutions of higher education are found in Education Code Section 54 including a limited number of rules that relate to tuition and fees charged by junior and community colleges Education Code Section 54 includes statutes regarding statewide tuition and fee authority rules regarding residency for tuition and fee purposes and various exemptions for tuition and fees from nonresidency status Also it includes specific fee authority for individual institutions Figure B1 provides a listing of tuition and fee authorizations in Education Code Section 54 but does not include the items presented below or the various exemption and waiver provisions (Details about each provision can be found at httpwwwcapitolstate txus) Th ere are isolated instances outside Chapter 54 whereby the boards of regents are authorized to charge for specific services provided to students
This appendix highlights some of the more prominent tuition and fee provisions and indicates whether the related revenue is or is not included in the General Appropriations Act (GAA)
INCLUDED IN THE GENERAL APPROPRIATIONS ACT Tuition and fee revenue included in the GAA as General Revenue DedicatedndashFunds is referenced as ldquoOther Education and General Incomerdquo The amounts are ldquoEstimatedrdquo so whatever amount of revenue generated is the actual amount available to the institution to spend
54051 Tuition Rates (statutory tuition) In conjunction with Section 540512 Interim Tuition Rates resident tuition for undergraduate students reached $50 per semester credit hour in the 2005ndash06 academic year (the 2006 state fi scal year) Tuition for nonresident students at general academic medical and dental institutions is based on the average of nonresident tuition rates in the five most populous states other than Texas The Texas Higher Education Coordinating Board must make this computation each academic year
54008 Tuition Rate Set by Governing Board (also known as board authorized tuition) Applies to graduate programs Subsection (d) specifies that it is not to be used in the GAA as an offset to General Revenue Funds It is distributed across formula strategies after the formula calculation
54501 Laboratory Fees The fee amount must be sufficient to cover the general costs of laboratory materials and supplies used by a student It is not to be less than $2 or more than $30 per semester and it must not exceed the actual cost of materials and supplies
NOT INCLUDED IN THE GENERAL APPROPRIATIONS ACT 540513 Designated Tuition Statute defi nes designated tuition as an institutional fund which means the revenue is not considered part of ldquoeducational and general fundsrdquo Th e governing board can waive designated tuition for a student (see 54261) Statute specifies that this revenue not be used in the GAA as a way to offset General Revenue
54503 Student Services Fees This is intended for activities which are separate from the regularly scheduled academic functions of the institution and directly involve or benefi t students Except for The University of Texas at Austin (see 54513) and components of the University of Houston System (see 545061) the maximum of all compulsory student services cannot exceed $250 per semester It is kept separate from educational and general funds
54504 Incidental Fees The governing board sets the fee which must reasonably reflect the actual cost of the materials or services for which the fee is collected Examples of unearned fees include late registration library fi nes microfilming fees thesis or doctoral manuscript reproduction or filing fees and bad check charges
5516 Board Responsibility The governing board is authorized to ldquofix and collect rentals rates and chargesrdquo
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 31
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54006 Refund or Adjustment of Tuition and Mandatory Fees for Dropped Courses and Student Withdrawals
540065 Tuition Rebate for Certain Undergraduates
54007 Option to Pay Tuition by Installment
540071 Authority of Institution to Provide Payment Options for Student with Delayed Financial Aid
54009 Increase in Tuition Rate or Fees
54010 Reduction in Tuition
54011 Tuition Limit in Cases of Concurrent Enrollment
54012 Tuition Rates for Certain Doctoral Students
54014 Tuition for Repeated or Excessive Undergraduate Hours
54015 Billing and Notifi cation for Tuition
54016 Fixed Tuition Rate Program for Certain Transfer Students at General Academic Teaching Institutions
54052ndash54057 Residency Provisions
542031 Dependent Children of Residents Who are Members of Armed Forces Deployed on Combat Duty
54204 Children of Disabled Firefighters and Law Enforcement Officers
542041 Disabled Peace Officers
54205 Blind Deaf Students
54206 Foreign Service Officers
54208 Firefighters Enrolled in Fire Science Courses
542081 Peace Officers Enrolled in Certain Courses
54211 Faculty and Dependents
54212 Teaching and Research Assistant
54213 Scholarship Student
54214 Biomedical Research Program Scholarship Student
54221 The University of Texas System Science and Technology Development Management and Transfer
54222 Economic Development and Diversification
54223 Tuition Rates for Olympic Athletes
54231 Resident of Boarding State or Nation or Participant in Student Exchange Program Tuition
54232 NATO Agreement
54233 Academic Common Market
54241 Military Personnel and Dependents
54331 Students from other Nations of the American Hemisphere
54341 Veterans and Other Military Personnel Dependents
54342 Prisoners of War
54343 Children of Prisoners of War or Persons Missing in Action
54344 Participants in Military Funerals
54345 Assistance for Tuition and Fees for Members of State Military Forces
54351 Children of Disabled Firefighters and Law Enforcement Officers
54352 Disabled Peace Officers Optional Exemption
54353 Firefighters and Peace Officers Enrolled in Certain Courses
543531 Firefighters Enrolled in Fire Science Courses
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 32
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54354 Education Benefits for Certain Survivors
54355 Children of Professional Nursing Program Faculty
54356 Preceptors for Professional Nursing Education Programs
54363 Educational Aids
54364 Blind Deaf Students
54365 Senior Citizens Optional Benefit
545011 Charges and Fees for Certain Payments
54502 General Deposits
545021 Student Deposit Fund Composition and Uses
545025 Proration of Fees
545031 Student Fee Advisory Committee
545032 Student Fee Advisory Committee the Texas AampM University System
545041 Environmental Service Fee
54505 Vehicle Registration Fees and Other Fees Related to Parking and Traffic
54506 Fees and Charges for Services to the Public the University of Houston System
545061 Student Services Fees the University of Houston System
545062 Student Fees Advisory Committee the University of Houston System
54507 Group Hospital and Medical Services Fees Texas AampM University System
54508 Medical Services Fee Texas Tech University System Components
545081 Medical Services Fee University of North Texas System Institutions
545082 Medical Services Fee Midwestern State University
545085 Medical Services Fee Texas Womanrsquos University
545089 Medical Services Fee Texas State University System Components
5450891 Medical Services Fee The University of Texas System Components
54509 Student Recreation Fee Texas Tech University System Components
545091 Student Recreational Facility Fee University of North Texas
54510 Student Recreational Sports Fee The University of Texas at Austin
54511 Student Fees for Bus Service Texas State University
545111 Environmental Service Fee Southwest Texas State University
54512 Shuttle Bus Fee The University of Texas at Arlington
545121 Intercollegiate Athletic Fee The University of Texas at Arlington
545122 Recreational Facility Fee The University of Texas at Arlington
54513 Student Service Fees The University of Texas at Austin
545131 International Education Fee The University of Texas at Austin
545132 International Education Fee
545133 Martin Luther King Jr Statue Fee The University of Texas at Austin
545134 Washington DC Internship Education Fee
545135 Barbara Jordan and Cesar Chavez Statues Fee The University of Texas at Austin
54515 Student Union Fee
54518 University Center Fee Midwestern State University
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 33
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54519 Student Union Fee North Texas State University
545191 Intercollegiate Athletic Fee University of North Texas
54520 University Center Student Fee Stephen F Austin State University
545201 Recreational Sports Fee Stephen F Austin State University
54521 Student Center Facility Fees Texas AampM University System
54522 Student Center Fees Texas Southern University
545221 Recreational Facility Fee Texas Southern University
545222 Medical Services Fee Texas Southern University
545223 Intercollegiate Athletics Fee Texas Southern University
54523 Student Center Fees Texas State University System
545241 Student Union Fees Texas Tech University System
54525 Fees for Student Centers Texas Womanrsquos University
545251 Student Fitness and Recreational Fee Texas Womanrsquos University
54526 Student Fees for University Centers the University of Houston
54527 Student Fees for University Center Facilities the University of Houston-Downtown College
54528 Recreational Facility Fee the University of Houston
54529 Student Union Fee The University of Texas at Arlington
54530 Student Union Fees The University of Texas at Austin
54531 Student Union Building Fees The University of Texas at Dallas
545311 Transportation Fee The University of Texas at Dallas
545312 Student Services Building Fee The University of Texas at Dallas
545313 Intramural and Intercollegiate Athletics Fee The University of Texas at Dallas
54532 Student Union Building Fees The University of Texas at San Antonio
545321 Transportation Fee The University of Texas at San Antonio
545322 Intercollegiate Athletics Fee The University of Texas at San Antonio
54533 Student Union Fees The University of Texas of the Permian Basin
545331 Intercollegiate Athletic Fee The University of Texas of the Permian Basin
545332 Fees for Student Services Building The University of Texas of the Permian Basin
54534 Arts and Performance Center Fee The University of Texas at Tyler
545341 Student Recreational Facility Fee The University of Texas at Tyler
545342 Intercollegiate Athletics Fee The University of Texas at Tyler
545343 Student Union Fee The University of Texas at Tyler
54535 Student Union Fee The University of Texas at El Paso
54536 Fees for Student Health Services Building The University of Texas at Austin
54537 Fees for Student Services Building The University of Texas at Austin
545371 Gregory Gymnasium Renovation Fee The University of Texas at Austin
545372 Aquatics Center Fee The University of Texas at Austin
54538 Recreational Sports Fee Texas State University System
545381 Intercollegiate Athletics Fee Certain Institutions in Texas State University System
545382 Intercollegiate Athletics Fee Texas State University ndash San Marcos
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 34
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54539 Recreational Sports Fee the Texas AampM University System
545391 Intercollegiate Athletics Fee Texas AampM University ndash Corpus Christi
545392 Intercollegiate Athletics Fee Texas AampM University ndash Kingsville
545393 Intercollegiate Athletics Fee Prairie View AampM University
545394 Intercollegiate Athletics Fee Tarleton State University
545395 Intercollegiate Athletics Fee Texas AampM International University
545396 Intercollegiate Athletics Fees West Texas AampM University
545397 Intercollegiate Athletics Fees Texas AampM University ndash Commerce
545398 Student Endowment Fund Fee Texas AampM University ndash Corpus Christi
54540 Student Center Fee University of Houston ndash Clear Lake
54541 Recreational Facility Fee The University of Texas at El Paso
54542 Student Union Building Fee The University of Texas ndash Pan American
545421 Sports Recreation and Wellness Facility Fee The University of Texas ndash Pan American
54543 Recreational Facility Fee The University of Texas at San Antonio
54544 Recreational Facility Fee The University of Texas at Dallas
545441 Student Recreational and Health Facilities Fee Midwestern State University
545442 Intercollegiate Athletics Fee Midwestern State University
54545 Fees for Continuing Education Courses
54546 Student Union Fees The University of Texas at Brownsville
54550 Wellness Recreational and Fitness Complex Fee The University of Texas at Brownsville
54551 Intercollegiate Athletics Fee The University of Texas at Brownsville
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 35
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 36
APPENDIX C GLOSSARY
APPROPRIATION METHODOLOGIES Direct Appropriation The actual appropriation either estimated or sum certain listed in that institutionrsquos portion of the General Appropriations Act (GAA)
Indirect Appropriation An appropriation made on behalf of an institution but not listed in that institutionrsquos portion of the GAA Examples include appropriations to the Available University Fund the Higher Education Fund and the Higher Education Coordinating Board all of which are ultimately allocated to institutions
Estimated Appropriation An estimated appropriation is a figure in the GAA that best reflects the information available about the revenue source but the amount available for an institution to spend is contingent on the amount of revenue actually generated If the actual amount of revenue is less than the estimated amount the institution is limited to the lower amount If more revenue is generated than the estimated amount the institution can spend the higher amount
Sum Certain Appropriation A sum certain appropriation in the GAA means that an institution is limited to spend no more than the level of appropriation noted in the institutionrsquos bill pattern in the GAA
Lump Sum Appropriation Texas Education Code Section 61059(k) calls for flexibility in funds appropriated to higher education institutions A lump sum appropriation is a single amount that is unrestricted which means that it can be used for any variety of strategies The GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Higher education institutions are not required to spend their appropriation within specified strategies One exception to this is the Tuition Revenue Bond strategy which represents the appropriation related to debt service on related bonds and must be spent as appropriated or it is reverted to the treasury
METHODS OF FINANCE General Revenue (GR) The non-dedicated portion of the General Revenue Fund is the statersquos primary operating fund Most state tax revenue many state fees and various other sources of revenue are deposited as non-dedicated General Revenue Funds
General RevenuendashDedicated (GRndashD) This is the dedicated portion of General Revenue Funds For higher education institutions the bulk of General RevenuendashDedicated Fund appropriations consist of tuition and fee revenue generated by the institutions These include the tuition and fee revenue included as ldquoOther Educational and General Incomerdquo (defined below) ldquoboard authorized tuitionrdquo (Texas Education Code Section 54008)
Other Funds State funds not included in General Revenue Funds or General RevenuendashDedicated Funds For institutions of higher education these include the Available University Fund and Patient Income generated by health-related institutions
FUND TYPES Educational and General Income Th e Texas Education Code (51009(c)) definition for ldquoEducational and General Fundsrdquo includes (a) net tuition (b) special course fees charged under Education Code Section 54051(e) and (l) (c) lab fees (d) student teaching fees (e) hospital and clinic fees (f ) organized activity fees and (g) proceeds from the sale of educational and general equipment
Institutional Funds Texas Education Code Section 51009(b) defines institutional funds as those that are not ldquoeducational and general fundsrdquo An example of an institutional fund is ldquodesignated tuitionrdquo (Texas Education Code Section 540513) These funds are not included in the GAA
Local Funds Texas Education Code Section 51009(a) defines local funds as net tuition certain special course fees lab fees student teaching fees hospital and clinic fees organized activity fees proceeds from the sale of educational and general equipment and indirect cost recovery fees Th is revenue is accounted for as ldquoeducational and general fundsrdquo and is included in the GAA
Other Educational and General Income The GAA includes some tuition and fees collected by institutions of higher education (General RevenuendashDedicated Funds) Th e revenue from tuition and fees such as statutory tuition (see texas Education Code Section 54051 Tuition Rates) board authorized tuition (see Texas Education Code Section 54008 Tuition Rate Set by Governing Board) Laboratory
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 37
APPENDIX C GLOSSARY
Fees (Texas Education Code Section 54501) and certain other fees are considered Other Educational and General Income (Other EampG) and are appropriated in the GAA as General RevenuendashDedicated Funds Other Educational and General Income is a subset of Educational and General Income (EampG Income)
Patient Income Health-related institutions that operate hospitals or dental clinics generate patient income from services rendered It is allocated as a method of finance to the related institution across a range of strategies in the institutionrsquos bill pattern (Other Funds) For the 2010ndash11 biennium more than $48 billion in patient income was appropriated making it the largest method of fi nance for health-related institutions
OTHER ITEMS Indirect Cost Recovery Institutions negotiate a percentage of a grant with the federal government for Indirect Costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 38
FI
GU
RE
D1
CO
MPA
RIS
ON
OF
CO
NST
ITU
TIO
NA
L A
ND
RES
EARC
H F
UN
DS
201
2ndash13
BIE
NN
IUM
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Avai
labl
e $1
061
4 m
illio
nTe
xas
Con
stitu
tion
hellip
for
Texa
s C
onst
itutio
nU
nive
rsity
the
purp
ose
of a
cqui
ring
Fund
(E
stim
ated
) la
nd
con
stru
ctin
g an
dFo
r su
ppor
t and
equi
ppin
g bu
ildin
gsm
aint
enan
ce
UT
Aus
tin
or o
ther
per
man
ent
Texa
s A
ampM
Uni
vers
ity
impr
ovem
ents
maj
orP
rairi
e Vi
ew U
nive
rsity
UT
repa
ir an
d re
habi
litat
ion
Sys
tem
Aamp
M S
yste
mof
bui
ldin
gs a
nd o
ther
perm
anen
t im
prov
emen
ts
For d
ebt s
ervi
ce
All
acqu
iring
cap
ital
com
pone
nts
incl
udin
g th
eeq
uipm
ent a
nd li
brar
yTA
MU
Sys
tem
Age
ncie
s bo
oks
and
libra
ryex
cept
Tex
as V
eter
inar
y m
ater
ials
and
refu
ndin
gM
edic
al D
iagn
ostic
bond
s or
not
es is
sued
Labo
rato
ry (w
hich
per
unde
r thi
s S
ectio
n
Edu
catio
n C
ode
Sec
tion
887
01 i
s a
stat
e ag
ency
Als
o
for
the
purp
ose
unde
r the
juris
dict
ion
of th
e su
ppor
t and
and
supe
rvis
ion
of th
em
aint
enan
ce o
f The
Tex
as
boar
d)
and
excl
udin
gA
ampM
Uni
vers
ity S
yste
mU
T P
an A
mer
ican
and
UT
adm
inis
tratio
n T
exas
Aamp
M
Bro
wns
ville
(bec
ause
they
Uni
vers
ity a
nd P
rairi
e re
ceiv
e H
EF
allo
catio
ns -
View
Aamp
M U
nive
rsity
and
an
inst
itutio
n ca
nnot
rece
ive
The
Uni
vers
ity o
f Tex
as a
t bo
th A
UF
and
HE
F do
llars
) A
ustin
and
The
Uni
vers
ity
of T
exas
Sys
tem
Hig
her
$525
0 m
illio
nTo
sup
port
inst
itutio
ns
Arti
cle
VII
Sec
tion
17(c
)E
duca
tion
inel
igib
le fo
r AU
F su
ppor
t pr
ovid
es a
n al
low
ance
toFu
nd
add
a ne
w in
stitu
tion
by a
Arti
cle
VII
Sec
tion
23
vote
of b
oth
hous
es o
f17
(a)
fo
r the
pur
pose
the
Legi
slat
ure
if th
e ne
wof
acq
uirin
g la
nd
inst
itutio
n is
out
side
the
UT
cons
truct
ing
and
equi
ppin
gan
d A
ampM
Sys
tem
s
build
ings
m
ajor
repa
ir
acq
uisi
tion
of c
apita
leq
uipm
ent
oth
erpe
rman
ent i
mpr
ovem
ents
or
cap
ital e
quip
men
t use
djo
intly
for e
duca
tiona
l and
gene
ral a
ctiv
ities
Arti
cle
VII
Sec
tion
18(a
-j) o
f the
Tex
as
Con
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Arti
cle
VII
Sec
tion
17(a
-l) o
f the
Tex
as
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
620
02
Gen
eral
App
ropr
iatio
nsA
ct
Texa
s C
onst
itutio
n re
quire
s 1
3 of
the
annu
al
AU
F pr
ocee
ds b
e tra
nsfe
rred
to th
e Te
xas
Aamp
M U
nive
rsity
Sys
tem
E
ach
Sys
tem
offi
cede
term
ines
how
to a
ppor
tion
its s
hare
of t
heA
UF
betw
een
debt
ser
vice
and
sup
port
and
mai
nten
ance
w
ithin
gui
delin
es s
pecifi e
d by
the
Texa
s C
onst
itutio
n
Arti
cle
VII
Sec
tion
17(a
) req
uire
s th
e H
EF
beal
loca
ted
usin
g an
equ
itabl
e fo
rmul
a d
efi n
edin
the
Edu
catio
n C
ode
(Sec
tion
620
21) a
sT
he a
lloca
tion
of fu
nds
unde
r thi
s su
bsec
tion
ism
ade
in a
ccor
danc
e w
ith a
n eq
uita
ble
form
ula
cons
istin
g of
the
follo
win
g el
emen
ts
spac
e defi c
it fa
cilit
ies
cond
ition
ins
titut
iona
l com
plex
ity
and
a se
para
te a
lloca
tion
for
the
Texa
s S
tate
Te
chni
cal C
olle
ge S
yste
m
THE
CB
adm
inis
ters
the
HE
F fo
rmul
a re
allo
catio
nad
viso
ry p
roce
ss
Edu
catio
n C
ode
(Sec
tion
620
21) p
rovi
des
a by
-in
stitu
tion
brea
kout
of a
nnua
l HE
F ap
prop
riatio
ns
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 39
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Nat
iona
l $1
24
mill
ion
Res
earc
hU
nive
rsity
(E
stim
ated
)Fu
nd
Res
earc
h $6
53
mill
ion
Dev
elop
men
tFu
nd
Texa
s $9
35
mill
ion
Com
petit
ive
Kno
wle
dge
Fund
Arti
cle
VII
Sec
tion
20(a
)
for t
he p
urpo
se o
f pr
ovid
ing
a de
dica
ted
inde
pend
ent
and
equi
tabl
eso
urce
of f
undi
ng to
enab
le e
mer
ging
rese
arch
univ
ersi
ties
in th
is s
tate
to a
chie
ve n
atio
nal
prom
inen
ce a
s m
ajor
rese
arch
uni
vers
ities
Arti
cle
VII
Sec
tion
20 (h
)
onl
y fo
r the
sup
port
and
mai
nten
ance
of
educ
atio
nal a
nd g
ener
alac
tiviti
es th
at p
rom
ote
incr
ease
d re
sear
chca
paci
ty a
t the
uni
vers
ity
Edu
catio
n C
ode
Sec
tion
hellipto
pro
mot
e62
091
in
crea
sed
rese
arch
capa
city
at e
ligib
le g
ener
alac
adem
ic te
achi
ngin
stitu
tions
Sec
tion
56 o
f Hig
her
Edu
catio
n S
peci
alP
rovi
sion
s G
AA
201
2ndash13
bi
enni
um
hellipto
sup
port
facu
lty fo
r the
pur
pose
of
inst
ruct
iona
l exc
elle
nce
and
rese
arch
Des
igna
ted
an e
mer
ging
rese
arch
uni
vers
ity b
yTe
xas
Hig
her E
duca
tion
Coo
rdin
atin
g B
oard
R
epor
ts a
t lea
st $
45 m
illio
nin
rest
ricte
d re
sear
chex
pend
iture
s in
eac
h of
the
last
2 y
ears
P
lus
four
of t
he fo
llow
ing
addi
tiona
l crit
eria
1)
End
owm
ents
gt $
400
mill
ion
2) P
rodu
ces
gt 20
0 P
hDs
per y
ear
3) S
elec
tive
ente
ring
Fres
hmen
cla
ss
4) M
embe
r of P
hi B
eta
Kap
pa o
r equ
ival
ent
5) P
osse
sses
hig
h qu
ality
facu
lty a
nd6)
Dem
onst
rate
dco
mm
itmen
t to
high
-qua
lity
grad
uate
edu
catio
n
Edu
catio
n C
ode
Sec
tion
Elig
ible
inst
itutio
n62
092
m
eans
a g
ener
al a
cade
mic
teac
hing
inst
itutio
n a
sdefi n
ed b
y S
ectio
n 61
003
ot
her t
han
The
Uni
vers
ity o
f Te
xas
at A
ustin
Tex
as A
ampM
U
nive
rsity
or P
rairi
e Vi
ew
Aamp
M U
nive
rsity
Uni
vers
ity o
f Tex
as a
t A
ustin
Uni
vers
ity o
f Tex
as
at D
alla
s T
exas
Aamp
M
Uni
vers
ity T
exas
Tec
h U
nive
rsity
Uni
vers
ity o
f H
oust
on
Arti
cle
VII
Sec
tion
20 (a
-h)
of th
e Te
xas
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
621
41
Gen
eral
App
ropr
iatio
nA
ct
Edu
catio
n C
ode
Sec
tion
Not
e th
e62
091
RD
F as
a s
tand
-alo
neap
prop
riatio
n ite
m h
asno
t bee
n fu
nded
sin
ceth
e 20
06ndash0
7 bi
enni
um
How
ever
fun
ds c
alle
d th
e R
DF
have
bee
nap
prop
riate
d di
rect
lyin
to th
e bi
ll pa
ttern
s of
each
elig
ible
Gen
eral
Aca
dem
ic In
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Edu
catio
n C
ode
Sec
tion
621
46 (c
)
o
fth
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for
dist
ribut
ion
in a
sta
tefi s
cal y
ear
each
elig
ible
in
stitu
tion
is e
ntitl
ed to
a d
istri
butio
n in
an
amou
nteq
ual t
o th
e su
m o
fon
e-se
vent
h of
the
tota
l am
ount
app
ropr
iate
d(1
)an
dan
equ
al s
hare
of a
ny a
mou
nt re
mai
ning
afte
r(2
)di
strib
utio
ns a
re c
alcu
late
d un
der S
ubdi
visi
on (1
)no
t to
exce
ed a
n am
ount
equ
al to
one
-four
th o
fth
at re
mai
ning
am
ount
Edu
catio
n C
ode
Sec
tion
621
46 (e
)If
the
num
ber o
f ins
titut
ions
that
are
elig
ible
for
dist
ribut
ions
in a
sta
tefi s
cal y
ear i
s m
ore
than
four
eac
h el
igib
le in
stitu
tion
is e
ntitl
ed to
an
equa
l sh
are
of th
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for d
istri
butio
n in
thatfi s
cal y
ear
Edu
catio
n C
ode
Sec
tion
620
95
The
am
ount
shal
l be
appo
rtion
ed a
mon
g th
e el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of
rest
ricte
d re
sear
ch fu
nds
expe
nded
by
each
inst
itutio
n pe
r yea
r for
the
thre
e pr
eced
ing
stat
efi s
cal y
ears
The
2012
ndash13
appr
opria
tion
prov
ided
abo
ut $
07
mill
ion
to e
ach
elig
ible
inst
itutio
n fo
r eve
ry $
100
mill
ion
in u
nres
trict
ed re
sear
ch e
xpen
ditu
res
asav
erag
ed o
ver a
3-y
ear p
erio
d
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 40
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Res
earc
h N
one
U
nive
rsity
D
evel
opm
ent
Fund
Texa
s $3
56
mill
ion
Res
earc
hIn
cent
ive
Pro
gram
SO
UR
CE L
egis
lativ
e B
udge
t Boa
rd
Texa
s E
duca
tion
Cod
e S
ectio
n 62
051
to
pro
vide
fund
ing
tore
sear
ch u
nive
rsiti
esan
d em
ergi
ng re
sear
chun
iver
sitie
s fo
r the
recr
uitm
ent a
nd re
tent
ion
of h
ighl
y qu
alifi
ed fa
culty
an
d th
e en
hanc
emen
t of
rese
arch
pro
duct
ivity
at
thos
e un
iver
sitie
s
Edu
catio
n C
ode
Sec
tion
hellipto
pro
vide
621
22
mat
chin
g fu
nds
to a
ssis
tel
igib
le in
stitu
tions
inle
vera
ging
priv
ate
gifts
for t
he e
nhan
cem
ent o
fre
sear
ch p
rodu
ctiv
ity a
ndfa
culty
recr
uitm
ent
Edu
catio
n C
ode
Sec
tion
620
51
Elig
ible
inst
itutio
nm
eans
an
inst
itutio
nof
hig
her e
duca
tion
desi
gnat
ed a
s a
rese
arch
univ
ersi
ty o
r em
ergi
ngre
sear
ch u
nive
rsity
und
erth
e co
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
E
ligib
le62
121
in
stitu
tion
mea
ns a
nin
stitu
tion
of h
ighe
red
ucat
ion
desi
gnat
ed a
san
em
ergi
ng re
sear
chun
iver
sity
und
er th
eco
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
620
51
Edu
catio
n C
ode
Sec
tion
(Hou
se B
ill 5
162
121
Eig
hty-fi r
st R
egul
ar
Ses
sion
)
Edu
catio
n C
ode
Sec
tion
620
53
t
o el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of t
otal
rese
arch
fund
s ex
pend
ed b
y ea
ch in
stitu
tion
annu
ally
dur
ing
the
thre
e m
ost r
ecen
t sta
tefi s
cal
year
s a
ccor
ding
to th
e fo
llow
ing
rate
s
at le
ast $
1 m
illio
n fo
r eve
ry $
10 m
illio
n of
(1)
the
aver
age
annu
al a
mou
nt o
f tho
se re
sear
chfu
nds
expe
nded
by
the
inst
itutio
n if
that
ave
rage
amou
nt fo
r the
inst
itutio
n is
$50
mill
ion
or m
ore
and
at le
ast $
500
000
for e
very
$10
mill
ion
of(2
)th
e av
erag
e an
nual
am
ount
of t
hose
rese
arch
fund
s ex
pend
ed b
y th
e in
stitu
tion
if th
at a
vera
geam
ount
for t
he in
stitu
tion
is le
ss th
an $
50 m
illio
n
Edu
catio
n C
ode
Sec
tion
621
23
hellipis
ent
itled
to re
ceiv
e o
ut o
f fun
ds a
ppro
pria
ted
for t
hepu
rpos
es o
f the
pro
gram
for t
hatfi
sca
l yea
r a
mat
chin
g gr
ant i
n an
am
ount
det
erm
ined
acco
rdin
g to
the
follo
win
g ra
tes
50 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(1)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$10
000
0 or
mor
e bu
t not
mor
eth
an $
999
999
75 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(2)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$1
mill
ion
or m
ore
but n
ot m
ore
than
$1
999
999
or
100
perc
ent o
f the
am
ount
of t
he g
ifts
and
(3)
endo
wm
ents
if t
he to
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APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 41
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 42
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $50119391873 $47339213388 ($2780178485) (55)
School for the Blind and Visually Impaired 93388870 41245345 (52143525) (558)
School for the Deaf 53083657 52695245 (388412) (07)
SUBTOTAL PUBLIC EDUCATION $50265864400 $47433153978 ($2832710422) (56)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1745695460 $1749380723 $3685263 02
Lamar Institute of Technology 27568721 28708990 1140269 41
Lamar University ndash Orange 18484576 19164769 680193 37
Lamar University ndash Port Arthur 23780405 22119709 (1660696) (70)
SUBTOTAL LAMAR STATE COLLEGES $69833702 $69993468 $159766 02
Texas State Technical College System $16493826 $5351461 ($11142365) (676) Administration
Texas State Technical College ndash Harlingen 50980986 49093510 (1887476) (37)
Texas State Technical College ndash West Texas 27965791 24970291 (2995500) (107)
Texas State Technical College ndash Marshall 11434368 10995468 (438900) (38)
Texas State Technical College ndash Waco 68111562 73596786 5485224 81
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$174986533 $164007516 ($10979017) (63)
SUBTOTAL TWO-YEAR INSTITUTIONS $1990515695 $1983381707 ($7133988) (04)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $19099360 $18147200 ($952160) (50)
The University of Texas at Arlington 275081581 288654156 13572575 49
The University of Texas at Austin 749518863 702739665 (46779198) (62)
The University of Texas at Dallas 230535884 223513862 (7022022) (30)
The University of Texas at El Paso 202195230 195511098 (6684132) (33)
The University of Texas ndash Pan American 169039177 162830092 (6209085) (37)
The University of Texas at Brownsville 61910963 57628718 (4282245) (69)
The University of Texas of the Permian Basin 58194080 59145561 951481 16
The University of Texas at San Antonio 273182023 260495772 (12686251) (46)
The University of Texas at Tyler 71137295 66147545 (4989750) (70)
Texas AampM University System Administrative and 20701573 4501868 (16199705) (783) General Offices
Texas AampM University 700537434 651599219 (48938215) (70)
Texas AampM University at Galveston 43799673 37773622 (6026051) (138)
Prairie View AampM University 134247361 122639379 (11607982) (86)
Tarleton State University 87292499 83950084 (3342415) (38)
Texas AampM University ndash Central Texas 29460313 30599703 1139390 39
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 43
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Corpus Christi $121534331 $110283074 ($11251257) (93)
Texas AampM University ndash Kingsville 82466491 75368253 (7098238) (86)
Texas AampM University ndash San Antonio 27154411 37125363 9970952 367
Texas AampM International University 83231209 73816324 (9414885) (113)
West Texas AampM University 79410486 72847023 (6563463) (83)
Texas AampM University ndash Commerce 99558312 89920628 (9637684) (97)
Texas AampM University ndash Texarkana 41409091 34754968 (6654123) (161)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 450003385 394815403 (55187982) (123)
University of Houston ndash Clear Lake 83394543 71849633 (11544910) (138)
University of Houston ndash Downtown 88104670 67926822 (20177848) (229)
University of Houston ndash Victoria 42631672 39786959 (2844713) (67)
Midwestern State University 54249721 48828454 (5421267) (100)
University of North Texas System Administration 9789067 6732226 (3056841) (312)
University of North Texas 302350602 296355351 (5995251) (20)
University of North Texas at Dallas 35156605 30478388 (4678217) (133)
Stephen F Austin State University 121843336 108728674 (13114662) (108)
Texas Southern University 174127907 150903873 (23224034) (133)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 368026094 357056343 (10969751) (30)
Angelo State University 68450875 64053866 (4397009) (64)
Texas Womans University 146639127 135140923 (11498204) (78)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 121909453 111926905 (9982548) (82)
Sam Houston State University 162684291 145338873 (17345418) (107)
Texas State University ndash San Marcos 261940220 254492644 (7447576) (28)
Sul Ross State University 34008142 37804020 3795878 112
Sul Ross State University Rio Grande College 13112804 12127383 (985421) (75)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$6217659551 $5853308379 ($364351172) (59)
HEALTH-RELATED INSTITUTIONS -
The University of Texas Southwestern Medical $339025963 $278284511 ($60741452) (179) Center
The University of Texas Medical Branch at 1252556677 1214546039 (38010638) (30) Galveston
The University of Texas Health Science Center at 356632008 347880533 (8751475) (25) Houston
The University of Texas Health Science Center at 357022348 319153560 (37868788) (106) San Antonio
The University of Texas MD Anderson Cancer 4614023153 5043439860 429416707 93 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 44
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center at $170568794 $176002869 $5434075 32 Tyler
Texas AampM University System Health Science 252705800 241434175 (11271625) (45) Center
University of North Texas Health Science Center 141974215 140131956 (1842259) (13) at Fort Worth
Texas Tech University Health Sciences Center 361096839 333314809 (27782030) (77)
SUBTOTAL HEALTH-RELATED INSTITUTIONS $7845605797 $8094188312 $248582515 32
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $137560226 $130327148 ($7233078) (53)
Texas AgriLife Extension Service 137837443 128253897 (9583546) (70)
Texas Engineering Experiment Station 249008314 268154320 19146006 77
Texas Transportation Institute 96056916 99288013 3231097 34
Texas Engineering Extension Service 164895453 161748713 (3146740) (19)
Texas Forest Service 108765979 196355520 87589541 805
Texas Veterinary Medical Diagnostic Laboratory 32693561 29601103 (3092458) (95)
SUBTOTAL TEXAS AampM UNIVERSITY $926817892 $1013728714 $86910822 94 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 1755022519 1301687813 (453334706) (258)
SUBTOTAL OTHER HIGHER EDUCATION $3339042471 $2900537481 ($438504990) (131)
SUBTOTAL HIGHER EDUCATION $20319641406 $19845144593 ($474496813) (23)
EMPLOYEE BENEFITS
Teacher Retirement System $4038146148 $3797393090 ($240753058) (60)
Optional Retirement Program 294169521 247905975 (46263546) (157)
Higher Education Employees Group Insurance 1068235618 968961950 (99273668) (93) Contributions
Retirement and Group Insurance 61823656 63645693 1822037 29
Social Security and Benefits Replacement Pay 560373470 577908771 17535301 31
SUBTOTAL EMPLOYEE BENEFITS $6022748413 $5655815479 ($366932934) (61)
DEBT SERVICE
Bond Debt Service Payments $7579835 $14567314 $6987479 922
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13483869 $19862644 $6378775 473
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION $76416008567 $72871348360 ($3544660207) (46) 1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 45
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $30322901124 $30476707526 $153806402 05
School for the Blind and Visually Impaired 28830574 29152947 322373 11
School for the Deaf 36111132 36216478 105346 03
SUBTOTAL PUBLIC EDUCATION $30387842830 $30542076951 $154234121 05
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1728790460 $1749380723 $20590263 12
Lamar Institute of Technology 20141881 21363652 1221771 61
Lamar University ndash Orange 13379584 13438359 58775 04
Lamar University ndash Port Arthur 18247526 16676606 (1570920) (86)
SUBTOTAL LAMAR STATE COLLEGES $51768991 $51478617 ($290374) (06)
Texas State Technical College System $16122329 $4603444 ($11518885) (714) Administration
Texas State Technical College ndash Harlingen 35862333 35177742 (684591) (19)
Texas State Technical College ndash West Texas 22972902 20195085 (2777817) (121)
Texas State Technical College ndash Marshall 8795246 8519429 (275817) (31)
Texas State Technical College ndash Waco 48458059 55190076 6732017 139
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$132210869 $123685776 ($8525093) (64)
SUBTOTAL TWO-YEAR INSTITUTIONS $1912770320 $1924545116 $11774796 06
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $16827250 $15931200 ($896050) (53)
The University of Texas at Arlington 171697428 183867794 12170366 71
The University of Texas at Austin 536034384 492544731 (43489653) (81)
The University of Texas at Dallas 142108554 148778381 6669827 47
The University of Texas at El Paso 142521273 137781712 (4739561) (33)
The University of Texas ndash Pan American 115707790 110889522 (4818268) (42)
The University of Texas at Brownsville 51100517 47424781 (3675736) (72)
The University of Texas of the Permian Basin 47639722 48816240 1176518 25
The University of Texas at San Antonio 186961792 178547264 (8414528) (45)
The University of Texas at Tyler 56673893 51804728 (4869165) (86)
Texas AampM University System Administrative 11478504 4473868 (7004636) (610) and General Offices
Texas AampM University 487991523 458011060 (29980463) (61)
Texas AampM University at Galveston 36736318 30964674 (5771644) (157)
Prairie View AampM University 102383638 90923868 (11459770) (112)
Tarleton State University 62999263 59464473 (3534790) (56)
Texas AampM University ndash Central Texas 24007601 25352928 1345327 56
Texas AampM University ndash Corpus Christi 93966271 81624416 (12341855) (131)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 46
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $60610859 $54030202 ($6580657) (109)
Texas AampM University ndash San Antonio 21438200 29287597 7849397 366
Texas AampM International University 67735925 58009521 (9726404) (144)
West Texas AampM University 57622391 53282160 (4340231) (75)
Texas AampM University ndash Commerce 67888967 66581226 (1307741) (19)
Texas AampM University ndash Texarkana 31084147 30370655 (713492) (23)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 311616152 257331674 (54284478) (174)
University of Houston ndash Clear Lake 58807555 46454050 (12353505) (210)
University of Houston ndash Downtown 56441987 39973395 (16468592) (292)
University of Houston ndash Victoria 32315073 27651821 (4663252) (144)
Midwestern State University 37434162 33382015 (4052147) (108)
University of North Texas System Administration 4789067 6732226 1943159 406
University of North Texas 194672599 191274119 (3398480) (17)
University of North Texas at Dallas 30330149 28165402 (2164747) (71)
Stephen F Austin State University 84817662 75640135 (9177527) (108)
Texas Southern University 125878414 104685201 (21193213) (168)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 261015662 253976808 (7038854) (27)
Angelo State University 48095474 45861337 (2234137) (46)
Texas Womans University 104666337 92467100 (12199237) (117)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 77990428 70849905 (7140523) (92)
Sam Houston State University 85061409 79609576 (5451833) (64)
Texas State University ndash San Marcos 168720167 164894925 (3825242) (23)
Sul Ross State University 28832045 32758471 3926426 136
Sul Ross State University Rio Grande College 10662338 9364932 (1297406) (122)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$4333902287 $4078804555 ($255097732) (59)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $286599806 $249279177 ($37320629) (130) Center
The University of Texas Medical Branch at 586704245 472189151 (114515094) (195) Galveston
The University of Texas Health Science Center 278466261 294281302 15815041 57 at Houston
The University of Texas Health Science Center 285919332 260615042 (25304290) (89) at San Antonio
The University of Texas MD Anderson Cancer 316274242 298435072 (17839170) (56) Center
The University of Texas Health Science Center 68656721 71856579 3199858 47 at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 47
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $205234148 $194402799 ($10831349) (53) Center
University of North Texas Health Science Center 120369543 113121832 (7247711) (60) at Fort Worth
Texas Tech University Health Sciences Center 308265168 291713120 (16552048) (54)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$2456489466 $2245894074 ($210595392) (86)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $108442641 $101233060 ($7209581) (66)
Texas AgriLife Extension Service 93421095 84437039 (8984056) (96)
Texas Engineering Experiment Station 27420670 27791758 371088 14
Texas Transportation Institute 1786250 1282500 (503750) (282)
Texas Engineering Extension Service 13423471 12388837 (1034634) (77)
Texas Forest Service 38994278 158979948 119985670 3077
Texas Veterinary Medical Diagnostic Laboratory 12326913 11519113 (807800) (66)
SUBTOTAL TEXAS AampM UNIVERSITY $295815318 $397632255 $101816937 344 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 1324025818 1053522035 (270503783) (204)
SUBTOTAL OTHER HIGHER EDUCATION $1849025818 $1578522035 ($270503783) (146)
SUBTOTAL HIGHER EDUCATION $10848003209 $10225398035 ($622605174) (57)
EMPLOYEE BENEFITS
Teacher Retirement System $3721648969 $3431139479 ($290509490) (78)
Optional Retirement Program 249841016 205341297 (44499719) (178)
Higher Education Employees Group Insurance 1066913010 967556924 (99356086) (93) Contributions
Retirement and Group Insurance 51589368 54070178 2480810 48
Social Security and Benefits Replacement Pay 456936472 471706602 14770130 32
SUBTOTAL EMPLOYEE BENEFITS $5546928835 $5129814480 ($417114355) (75)
DEBT SERVICE
Bond Debt Service Payments $7325020 $14248830 $6923810 945
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13229054 $19544160 $6315106 477
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$46796003928 $45916833626 ($879170302) (19)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 48
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $418569 $649000 $230431 551
School for the Blind and Visually Impaired 0 0 0 NA
School for the Deaf 0 0 0 NA
SUBTOTAL PUBLIC EDUCATION $418569 $649000 $230431 551
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 7026644 7345338 318694 45
Lamar University ndash Orange 4875929 5726410 850481 174
Lamar University ndash Port Arthur 4747409 5443103 695694 147
SUBTOTAL LAMAR STATE COLLEGES $16649982 $18514851 $1864869 112
Texas State Technical College System $371497 $748017 $376520 1014 Administration
Texas State Technical College ndash Harlingen 14268123 13915768 (352355) (25)
Texas State Technical College ndash West Texas 4573311 4775206 201895 44
Texas State Technical College ndash Marshall 2486999 2476039 (10960) (04)
Texas State Technical College ndash Waco 18496312 18406710 (89602) (05)
SUBTOTAL TEXAS STATE TECHNICAL $40196242 $40321740 $125498 03 COLLEGES
SUBTOTAL TWO-YEAR INSTITUTIONS $56846224 $58836591 $1990367 35
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 99544565 104786362 5241797 53
The University of Texas at Austin 203175074 210194934 7019860 35
The University of Texas at Dallas 73902392 74735481 833089 11
The University of Texas at El Paso 54257081 54959386 702305 13
The University of Texas ndash Pan American 50448111 51483144 1035033 21
The University of Texas at Brownsville 10270338 10203937 (66401) (06)
The University of Texas of the Permian Basin 10153771 10329321 175550 17
The University of Texas at San Antonio 78194498 81948508 3754010 48
The University of Texas at Tyler 13686400 14342817 656417 48
Texas AampM University System Administrative 9223069 28000 (9195069) (997) and General Offices
Texas AampM University 194931245 184789626 (10141619) (52)
Texas AampM University at Galveston 6714220 6808948 94728 14
Prairie View AampM University 31863723 31715511 (148212) (05)
Tarleton State University 23018364 24485611 1467247 64
Texas AampM University ndash Central Texas 5452712 5246775 (205937) (38)
Texas AampM University ndash Corpus Christi 26308558 28658658 2350100 89
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 49
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $20743629 $21338051 $594422 29
Texas AampM University ndash San Antonio 5716211 7837766 2121555 371
Texas AampM International University 14449349 15531029 1081680 75
West Texas AampM University 20857129 19564863 (1292266) (62)
Texas AampM University ndash Commerce 29344128 23339402 (6004726) (205)
Texas AampM University ndash Texarkana 4114223 4384313 270090 66
University of Houston System Administration 0 0 0 NA
University of Houston 129680228 137483729 7803501 60
University of Houston ndash Clear Lake 23417549 25395583 1978034 84
University of Houston ndash Downtown 30264387 27953427 (2310960) (76)
University of Houston ndash Victoria 9883366 12135138 2251772 228
Midwestern State University 15912994 15446439 (466555) (29)
University of North Texas System 0 0 0 NA Administration
University of North Texas 100805298 105081232 4275934 42
University of North Texas at Dallas 4826456 2312986 (2513470) (521)
Stephen F Austin State University 35525799 33088539 (2437260) (69)
Texas Southern University 47027769 46218672 (809097) (17)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 98116061 103079535 4963474 51
Angelo State University 17654127 18192529 538402 30
Texas Womans University 40098242 42673823 2575581 64
Texas State University System 0 0 0 NA
Lamar University 37445892 41077000 3631108 97
Sam Houston State University 71500172 65729297 (5770875) (81)
Texas State University ndash San Marcos 88567369 89597719 1030350 12
Sul Ross State University 4941096 5045549 104453 21
Sul Ross State University Rio Grande College 2342952 2762451 419499 179
SUBTOTAL GENERAL ACADEMIC $1744378547 $1759986091 $15607544 09 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $22514152 $18054614 ($4459538) (198) Center
The University of Texas Medical Branch at 23120930 24797153 1676223 72 Galveston
The University of Texas Health Science Center 35777999 35483172 (294827) (08) at Houston
The University of Texas Health Science Center 16488403 17234857 746454 45 at San Antonio
The University of Texas MD Anderson Cancer 48597071 55476185 6879114 142 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 50
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center $512055 $569200 $57145 112 at Tyler
Texas AampM University System Health Science 13306322 24908409 11602087 872 Center
University of North Texas Health Science 12596783 16295862 3699079 294 Center at Fort Worth
Texas Tech University Health Sciences Center 23553492 27695220 4141728 176
SUBTOTAL HEALTH-RELATED $196467207 $220514672 $24047465 122 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $950000 $950000 $0 NA
Texas AgriLife Extension Service 46992 18000 (28992) (617)
Texas Engineering Experiment Station 1785036 904418 (880618) (493)
Texas Transportation Institute 0 0 0 NA
Texas Engineering Extension Service 0 0 0 NA
Texas Forest Service 61388596 28912000 (32476596) (529)
Texas Veterinary Medical Diagnostic Laboratory 0 0 0 NA
SUBTOTAL TEXAS AampM UNIVERSITY SERVICES
$64170624 $30784418 ($33386206) (520)
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 111572621 87256791 (24315830) (218)
SUBTOTAL OTHER HIGHER EDUCATION $111572621 $87256791 ($24315830) (218)
SUBTOTAL HIGHER EDUCATION $2173435223 $2157378563 ($16056660) (07)
EMPLOYEE BENEFITS
Teacher Retirement System $188794770 $209600575 $20805805 110
Optional Retirement Program 44328505 42564678 (1763827) (40)
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 0 0 0 NA
Social Security and Benefits Replacement Pay 82274010 85153600 2879590 35
SUBTOTAL EMPLOYEE BENEFITS $315397285 $337318853 $21921568 70
DEBT SERVICE
Bond Debt Service Payments $0 $0 $0 NA
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $0 $0 $0 NA
TOTAL ARTICLE III ndash AGENCIES OF $2489251077 $2495346416 $6095339 02 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 51
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $13298491946 $10520619770 ($2777872176) (209)
School for the Blind and Visually Impaired 5430126 5855880 425754 78
School for the Deaf 4233990 2921862 (1312128) (310)
SUBTOTAL PUBLIC EDUCATION $13308156062 $10529397512 ($2778758550) (209)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $16905000 $0 ($16905000) (1000)
Lamar Institute of Technology 400196 0 (400196) (1000)
Lamar University ndash Orange 229063 0 (229063) (1000)
Lamar University ndash Port Arthur 785470 0 (785470) (1000)
SUBTOTAL LAMAR STATE COLLEGES $1414729 $0 ($1414729) (1000)
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 850530 0 (850530) (1000)
Texas State Technical College ndash West Texas 419578 0 (419578) (1000)
Texas State Technical College ndash Marshall 152123 0 (152123) (1000)
Texas State Technical College ndash Waco 1157191 0 (1157191) (1000)
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$2579422 $0 ($2579422) (1000)
SUBTOTAL TWO-YEAR INSTITUTIONS $20899151 $0 ($20899151) (1000)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 3839588 0 (3839588) (1000)
The University of Texas at Austin 10309405 0 (10309405) (1000)
The University of Texas at Dallas 14524938 0 (14524938) (1000)
The University of Texas at El Paso 2681876 0 (2681876) (1000)
The University of Texas ndash Pan American 2241274 0 (2241274) (1000)
The University of Texas at Brownsville 540108 0 (540108) (1000)
The University of Texas of the Permian Basin 400587 0 (400587) (1000)
The University of Texas at San Antonio 8025733 0 (8025733) (1000)
The University of Texas at Tyler 777002 0 (777002) (1000)
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 10292036 0 (10292036) (1000)
Texas AampM University at Galveston 349135 0 (349135) (1000)
Prairie View AampM University 0 0 0 NA
Tarleton State University 1274872 0 (1274872) (1000)
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 1259502 0 (1259502) (1000)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 52
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville 1112003 0 (1112003) (1000)
Texas AampM University ndash San Antonio $0 $0 $0 NA
Texas AampM International University 658885 0 (658885) (1000)
West Texas AampM University 930966 0 (930966) (1000)
Texas AampM University ndash Commerce 2325217 0 (2325217) (1000)
Texas AampM University ndash Texarkana 6210721 0 (6210721) (1000)
University of Houston System Administration 0 0 0 NA
University of Houston 8707005 0 (8707005) (1000)
University of Houston ndash Clear Lake 1169439 0 (1169439) (1000)
University of Houston ndash Downtown 1398296 0 (1398296) (1000)
University of Houston ndash Victoria 433233 0 (433233) (1000)
Midwestern State University 902565 0 (902565) (1000)
University of North Texas System Administration 5000000 0 (5000000) (1000)
University of North Texas 6872705 0 (6872705) (1000)
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 1499875 0 (1499875) (1000)
Texas Southern University 1221724 0 (1221724) (1000)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 8894371 0 (8894371) (1000)
Angelo State University 2701274 0 (2701274) (1000)
Texas Womans University 1874548 0 (1874548) (1000)
Texas State University System 0 0 0 NA
Lamar University 6473133 0 (6473133) (1000)
Sam Houston State University 6122710 0 (6122710) (1000)
Texas State University ndash San Marcos 4652684 0 (4652684) (1000)
Sul Ross State University 235001 0 (235001) (1000)
Sul Ross State University Rio Grande College 107514 0 (107514) (1000)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$126019925 $0 ($126019925) (1000)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $16614303 $0 ($16614303) (1000) Center
The University of Texas Medical Branch at 6745161 0 (6745161) (1000) Galveston
The University of Texas Health Science Center at 24173646 0 (24173646) (1000) Houston
The University of Texas Health Science Center at 19224332 0 (19224332) (1000) San Antonio
The University of Texas MD Anderson Cancer 634206 0 (634206) (1000) Center
The University of Texas Health Science Center 80210 0 (80210) (1000) at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 53
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $15014608 $0 ($15014608) (1000) Center
University of North Texas Health Science Center 3438054 0 (3438054) (1000) at Fort Worth
Texas Tech University Health Sciences Center 11075479 0 (11075479) (1000)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$96999999 $0 ($96999999) (1000)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $15933582 $15933582 $0 NA
Texas AgriLife Extension Service 25302708 25302708 0 NA
Texas Engineering Experiment Station 137281801 153857672 16575871 121
Texas Transportation Institute 17405197 18757193 1351996 78
Texas Engineering Extension Service 48387893 48387894 1 00
Texas Forest Service 7349101 7429568 80467 11
Texas Veterinary Medical Diagnostic Laboratory 594001 594000 (1) (00)
SUBTOTAL TEXAS AampM UNIVERSITY $252254283 $270262617 $18008334 71 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 197332508 123636426 (73696082) (373)
SUBTOTAL OTHER HIGHER EDUCATION $197332508 $123636426 ($73696082) (373)
SUBTOTAL HIGHER EDUCATION $693505866 $393899043 ($299606823) (432)
EMPLOYEE BENEFITS
Teacher Retirement System $0 $0 $0 NA
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 8832085 8286741 (545344) (62)
Social Security and Benefits Replacement Pay 3888441 3428099 (460342) (118)
SUBTOTAL EMPLOYEE BENEFITS $12720526 $11714840 ($1005686) (79)
DEBT SERVICE
Bond Debt Service Payments $253903 $318484 $64581 254
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $253903 $318484 $64581 254
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$14014636357 $10935329879 ($3079306478) (220)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 54
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $6497580234 $6341237092 ($156343142) (24)
School for the Blind and Visually Impaired 59128170 6236518 (52891652) (895)
School for the Deaf 12738535 13556905 818370 64
SUBTOTAL PUBLIC EDUCATION $6569446939 $6361030515 ($208416424) (32)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 0 0 0 NA
Lamar University ndash Orange 0 0 0 NA
Lamar University ndash Port Arthur 0 0 0 NA
SUBTOTAL LAMAR STATE COLLEGES $0 $0 $0 NA
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 0 0 0 NA
Texas State Technical College ndash West Texas 0 0 0 NA
Texas State Technical College ndash Marshall 0 0 0 NA
Texas State Technical College ndash Waco 0 0 0 NA
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$0 $0 $0 NA
SUBTOTAL TWO-YEAR INSTITUTIONS $0 $0 $0 NA
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $2272110 $2216000 ($56110) (25)
The University of Texas at Arlington 0 0 0 NA
The University of Texas at Austin 0 0 0 NA
The University of Texas at Dallas 0 0 0 NA
The University of Texas at El Paso 2735000 2770000 35000 13
The University of Texas ndash Pan American 642002 457426 (184576) (288)
The University of Texas at Brownsville 0 0 0 NA
The University of Texas of the Permian Basin 0 0 0 NA
The University of Texas at San Antonio 0 0 0 NA
The University of Texas at Tyler 0 0 0 NA
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 7322630 8798533 1475903 202
Texas AampM University at Galveston 0 0 0 NA
Prairie View AampM University 0 0 0 NA
Tarleton State University 0 0 0 NA
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 0 0 0 NA
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 55
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $0 $0 $0 NA
Texas AampM University ndash San Antonio 0 0 0 NA
Texas AampM International University 387050 275774 (111276) (287)
West Texas AampM University 0 0 0 NA
Texas AampM University ndash Commerce 0 0 0 NA
Texas AampM University ndash Texarkana 0 0 0 NA
University of Houston System Administration 0 0 0 NA
University of Houston 0 0 0 NA
University of Houston ndash Clear Lake 0 0 0 NA
University of Houston ndash Downtown 0 0 0 NA
University of Houston ndash Victoria 0 0 0 NA
Midwestern State University 0 0 0 NA
University of North Texas System Administration 0 0 0 NA
University of North Texas 0 0 0 NA
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 0 0 0 NA
Texas Southern University 0 0 0 NA
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 0 0 0 NA
Angelo State University 0 0 0 NA
Texas Womans University 0 0 0 NA
Texas State University System 0 0 0 NA
Lamar University 0 0 0 NA
Sam Houston State University 0 0 0 NA
Texas State University ndash San Marcos 0 0 0 NA
Sul Ross State University 0 0 0 NA
Sul Ross State University Rio Grande College 0 0 0 NA
SUBTOTAL GENERAL ACADEMIC $13358792 $14517733 $1158941 87 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $13297702 $10950720 ($2346982) (176) Center
The University of Texas Medical Branch at 635986341 717559735 81573394 128 Galveston
The University of Texas Health Science Center at 18214102 18116059 (98043) (05) Houston
The University of Texas Health Science Center at 35390281 41303661 5913380 167 San Antonio
The University of Texas MD Anderson Cancer 4248517634 4689528603 441010969 104 Center
The University of Texas Health Science Center 101319808 103577090 2257282 22 at Tyler
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 56
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $19150722 $22122967 $2972245 155 Center
University of North Texas Health Science Center 5569835 10714262 5144427 924 at Fort Worth
Texas Tech University Health Sciences Center 18202700 13906469 (4296231) (236)
SUBTOTAL HEALTH-RELATED $5095649125 $5627779566 $532130441 104 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $12234003 $12210506 ($23497) (02)
Texas AgriLife Extension Service 19066648 18496150 (570498) (30)
Texas Engineering Experiment Station 82520807 85600472 3079665 37
Texas Transportation Institute 76865469 79248320 2382851 31
Texas Engineering Extension Service 103084089 100971982 (2112107) (20)
Texas Forest Service 1034004 1034004 0 NA
Texas Veterinary Medical Diagnostic Laboratory 19772647 17487990 (2284657) (116)
SUBTOTAL TEXAS AampM UNIVERSITY $314577667 $315049424 $471757 01 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 122091572 37272561 (84819011) (695)
SUBTOTAL OTHER HIGHER EDUCATION $1181111524 $1111122229 ($69989295) (59)
SUBTOTAL HIGHER EDUCATION $6604697108 $7068468952 $463771844 70
EMPLOYEE BENEFITS
Teacher Retirement System $127702409 $156653036 $28950627 227
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 1322608 1405026 82418 62 Contributions
Retirement and Group Insurance 1402203 1288774 (113429) (81)
Social Security and Benefits Replacement Pay 17274547 17620470 345923 20
SUBTOTAL EMPLOYEE BENEFITS $147701767 $176967306 $29265539 198
DEBT SERVICE
Bond Debt Service Payments $912 $0 ($912) (1000)
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $912 $0 ($912) (1000)
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF $13116117205 $13523838439 $407721234 31 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 57
- INTRODUCTION
- FUNDING GENERAL ACADEMICS INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
- OTHER NON-FORMULA FUNDING
-
- FUNDING HEALTH-RELATED INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
-
- FUNDING COMMUNITY AND TECHNICAL COLLEGES
-
- OVERVIEW
- COMMUNITY COLLEGES
- TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES
-
- FUNDING TEXAS AampM SYSTEM AGENCIES
- APPENDIX A FREQUENTLY ASKED QUESTIONS
- APPENDIX B TUITION AND FEE PROVISIONS
- APPENDIX C GLOSSARY
- APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
- APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
-
Report Contributors
Higher Education Team
Sarah Keyton Manager Daniel Estrada Senior Analyst Demetrio Hernandez Analyst
Emily Hoff man Analyst Kris Kavanaugh Analyst
Greg Owens Analyst Rick Travis Senior Analyst
This report can also be found on the Legislative Budget Boardrsquos website httpwwwlbbstatetxus
CONTENTS
INTRODUCTION 1
FUNDING GENERAL ACADEMICS INSTITUTIONS
FUNDING HEALTH-RELATED INSTITUTIONS
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW 5
FORMULA FUNDING 6
NON-FORMULA FUNDING 9
OTHER NON-FORMULA FUNDING 13
OVERVIEW 15
FORMULA FUNDING 15
NON-FORMULA FUNDING 19
OVERVIEW 21
COMMUNITY COLLEGES 22
TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES 23
FUNDING TEXAS AampM SYSTEM AGENCIES 25
APPENDIX A FREQUENTLY ASKED QUESTIONS 27
APPENDIX B TUITION AND FEE PROVISIONS31
APPENDIX C GLOSSARY37
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 39
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET43
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 i
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD ii
INTRODUCTION
The Texas public higher education system encompasses 38 general academic teaching institutions (including law schools) 50 community and junior college districts one technical college system with four main campuses three lower-division state colleges and nine health-related institutions which operate a total of eight state medical schools three dental schools two pharmacy schools and other allied health and nursing units In addition there are seven agencies that are components of the Texas AampM University System
Private institutions in Texas include 38 four year colleges and universities two junior colleges one medical school and one accredited independent law school
Public institutions serve about 91 percent of the approximately 14 million students enrolled in higher education in Texas
The Texas Higher Education Coordinating Board (THECB) was established in 1965 and is composed of nine members appointed by the Governor for staggered six-year terms THECB provides leadership and coordination for the Texas higher education system to promote excellence in higher education
THECBrsquos responsibilities include assessing Texasrsquo system of higher education and developing recommendations for
FIGURE 1 HISTORICAL SPENDING FOR HIGHER EDUCATION 2002ndash03 TO 2012ndash13 BIENNIA
improvements to the Governor the Legislature and institutions THECB reviews and recommends changes in formulas regarding the allocation of state funds to public institutions to limit duplication of academic programs and unnecessary construction projects THECB also promotes access to high quality programs at diff erent institutional levels and oversees the statersquos student financial aid programs
The Eighty-second Legislature 2011 appropriated $221 billion in the General Appropriations Act (GAA) for the 2012ndash13 biennium to support Texas higher education a 25 percent decrease from the 2010ndash11 biennium (Figure 1) Figure 2 illustrates the sources of revenue also referred to as methods of finance for the $221 billion in state appropriations Generally only small portions of the Federal Funds received by institutions of higher education are reflected in the General Appropriations Act (GAA)
State funds are allocated to public institutions and agencies of higher education in a number of ways
bull direct appropriations through funding formulas and other direct appropriations based on identifi ed needs
bull indirect appropriations not made directly to an institution in its portion of the appropriations bill but used to cover costs related to the institutionrsquos staff
ESTIMATED ESTIMATED ESTIMATED ESTIMATED ESTIMATED BUDGETED BUDGETED BUDGETED BUDGETED BUDGETED APPROPRIATED
IN MILLIONS 2002ndash03 2004ndash05 2006ndash07 2008ndash09 2010ndash11 2012ndash13
General Revenue Funds $102337 $101944 $111762 $127216 $129966 $121723
General RevenuendashDedicated $20675 $23962 $21467 $22578 $24889 $24947 Funds
Other Funds $32494 $40530 $50023 $61974 $64674 $70298
Federal Funds $2674 $3397 $3331 $3090 $6941 $3944
TOTAL HIGHER $158180 $169833 $186583 $214858 $226470 $220912 EDUCATION
Percentage of Statewide Total
137 134 129 125 120 127
STATEWIDE TOTAL $1156786 $1267102 $1450594 $1721315 $1875165 $1734842 ALL ARTICLES
Includes $3269 in ARRA funds SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 1
INTRODUCTION
FIGURE 2 METHODS OF FINANCE FOR HIGHER EDUCATION INSTITUTIONS ndash INCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV )HGHUDO)XQGV
HQHUDO5HYHQXH)XQGV
2WKHU)XQGV
)
SOURCE Legislative Budget Board
for health insurance retirement benefits and social security and
bull other indirect appropriations which are subsequently allocated to an institution such as the Available University Fund
The $221 billion appropriation includes funds trusteed to THECB for distribution to institutions For the 2012ndash13 biennium THECB received more than $10013 million in trusteed funds The majority of these funds are allocated for student financial assistance Those remaining provide funding for the Baylor College of Medicine incentives for the general academic institutions and the Texas Research Incentive Program
Figure 3 shows the percentage of state funding appropriated to the various types of institutions excluding the allocation for employee insurance and retirement benefi ts
State appropriations to THECB that benefi t private institutions include financial assistance programs (eg Tuition Equalizations Grants B-On-Time and related programs) for Texas residents attending approved private institutions per student funding at the Baylor College of Medicine and grant funds from the Advanced Research Program a competitive grant program
Within a group such as general academic institutions state appropriations are allocated in a consistent manner Diff erent
FIGURE 3 APPROPRIATION BY TYPE OF INSTITUTION ndash EXCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
ampRPPXQLWDQG7HFKQLFDOampROOHJHV
HQHUDO$FDGHPLFV
+HDOWKUHODWHG
2WKHU+LJKHU(GXFDWLRQ
$06HUYLFHV
SOURCE Legislative Budget Board
groups of institutions such as general academic institutions and community colleges differ in how the Legislature allocates state appropriations For example all general academic institutions receive funding generated from Instruction and Operations and Infrastructure formulas while community colleges have one formula for Instruction and Administration
While the General Revenue Fundrsquos portion of direct appropriations to institutions is ldquosum certainrdquo the appropriation of Patient Income and Other Educational and General Income (primarily tuition) is ldquoestimatedrdquo Th is means that if patient income or tuition revenue generated by an institution is greater than the amount included in the GAA the institution can spend at a level beyond the amounts in the GAA If an institution generates less tuition revenue it must spend less
The GAA establishes a key distinction for higher education entities differentiating them from other state agencies Statute (Texas Education Code Section 61059(k)) calls for each higher education institution to receive a lump sum appropriation for base funding The GAA expands this concept and provides each higher education institution with one lump sum appropriation For each institution the GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Th is information reflects how the state funds are ldquoallocatedrdquo not how they must be spent Higher education institutions are not bound to spend their appropriation within the specifi ed
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 2
INTRODUCTION
strategy as are regular state agencies An exception to this is debt service on tuition revenue bonds Section 6 Rider 9 in the Higher Education Special Provisions GAA page III-233 limits the use of debt service to pay debt service for tuition revenue bonds Any amount of an appropriation not spent must be returned to the General Revenue Fund at the end of the fi scal year
There are some limitations on how institutions can spend appropriated funds The Texas Constitution (Article VII Section 18(i) and 17 (j)) prohibits with limited exceptions the use of General Revenue Funds for construction projects However the Texas Legislature by two-thirds vote in each house may opt to use General Revenue Funds for construction projects if there is a natural disaster or demonstrated need for the project
Also GAA (Section 6 Rider 8b) Special Provisions Relating Only to State Agencies of Higher Education (page III-233) prohibits the use of appropriated funds for auxiliary purposes such as athletics and parking Section 54 of the Special Provisions (page III-246) also restricts the use of funds in the Research Development Strategy to purposes defi ned in Texas Education Code Section 62091 Communityjunior colleges can spend General Revenue Funds only for instruction and administrative costs (Texas Education Code Section 130003(c))
This report presents the different ways that public institutions and agencies allocate state appropriations and highlights the flexibility with which these appropriations may be expended References to appropriated funds are based on the Eighty-second Legislature Regular Session 2011 2012ndash13 biennium GAA as adjusted for certain appropriations made in Article IX (General Provisions) of the GAA contingency appropriations other bills making appropriations in fi scal years 2012 and 2013 and Governor vetoes Amounts for fiscal year 2011 have been adjusted for the Supplemental Appropriations Bill House Bill 4 Eighty-second Legislature Regular Session 2011 and Senate Bill 2 First Called Session 2011 Each category of institutionmdashgeneral academic health-related community and technical colleges and Texas AampM System agenciesmdashis presented separately Th e only THECB funds detailed in this report are funds that have been distributed to public institutions
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 3
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 4
FUNDING GENERAL ACADEMIC INSTITUTIONS
OVERVIEW General academic institutions are listed in the Texas Education Code (61003) Figure 4 lists the institutions and their enrollments All of the institutions have common goals of instruction research and public service however each has a unique set of academic offerings and a unique regional or statewide mission
General academic institutions receive direct appropriations via funding formulas and non-formula appropriations Direct appropriations are identified in the informational strategies of each institutionrsquos bill pattern in the General Appropriations Act (GAA) As mentioned earlier appropriations are made to institutions as a lump sum Th e informational strategies reflect how state funds are ldquoallocatedrdquo not how they must be spent This means that with a few exceptions higher education entities unlike other state agencies are not required to spend appropriations within a specified funding strategy
The appropriation levels in each strategy refl ect diff erent revenue sources such as General Revenue Funds General RevenuendashDedicated Funds (mostly tuition and fee revenue) and Other Funds These revenue sources are referred to as the ldquomethod of fi nancerdquo Figure 5 illustrates the method of finance for $74 billion in appropriations for general academic institutions including a number of the indirect appropriations referenced in the next paragraph but does not include appropriations for employee retirement benefi ts
There are also appropriations that benefit institutions that are not reflected in the bill pattern of individual institutions including the Higher Education Fund the Available National Research University Fund Available University Fund certain employee benefits and funds trusteed to the Texas Higher Education Coordinating Board (THECB)
Figure 6 presents the percentage of funding related to each of these direct and indirect appropriations All of these appropriations are further described in the following pages
In addition general academic institutions have access to funds not reflected in the state appropriations process Examples of this include indirect cost recovery certain tuition and fees such as ldquodesignated tuitionrdquo and ldquoincidental feesrdquo (both are described in Appendix B) auxiliary operations (ie revenue from athletics student services fees bookstore and parking) and grants and gifts
FIGURE 4 PUBLIC GENERAL ACADEMIC INSTITUTIONS CERTIFIED FALL 2011 HEADCOUNT
INSTITUTION HEADCOUNT
Angelo State University 7077
Lamar University 14021
Midwestern State University 5811
Prairie View AampM University 8425
Sam Houston State University 17527
Stephen F Austin State University 12702
Sul Ross State University 1985
Sul Ross State University Rio Grande College 971
Tarleton State University 9893
Texas AampM International University 7037
Texas AampM University 49861
Texas AampM University ndash Central Texas 2096
Texas AampM University at Galveston 2035
Texas AampM University ndash Commerce 10726
Texas AampM University ndash Corpus Christi 10162
Texas AampM University ndash Kingsville 6731
Texas AampM University ndash San Antonio 3554
Texas AampM University ndash Texarkana 1907
Texas Southern University 9730
Texas State University ndash San Marcos 34087
Texas Tech University 32149
Texas Womanrsquos University 14503
The University of Texas at Arlington 33439
The University of Texas at Austin 51112
The University of Texas at Brownsville 8625
The University of Texas at Dallas 18864
The University of Texas at El Paso 22582
The University of Texas at San Antonio 30968
The University of Texas at Tyler 6628
The University of Texas of the Permian Basin 3831
The University of Texas ndash Pan American 19034
University of Houston 39820
University of Houston ndash Clear Lake 8185
University of Houston ndash Downtown 12918
University of Houston ndash Victoria 4330
University of North Texas 35694
University of North Texas at Dallas 2032
West Texas AampM University 7886
STATEWIDE TOTALS 568938 SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 5
FUNDING GENERAL ACADEMIC INSTITUTIONS
HQHUDO5HYHQXH)XQGV
FIGURE 5 METHOD OF FINANCE FOR GENERAL ACADEMICS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV
2WKHU)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING Nearly 573 percent of state appropriations for general academic institutions are allocated via two funding formulas and two supplements Instruction and Operations Formula Teaching Experience Supplement Infrastructure Formula
and Small Institution Supplement The formulas and supplements are direct appropriations and are primarily based on enrollment
The formula appropriations consist of General Revenue Funds and some Other Educational and General Income (Other EampG) Other EampG includes specific tuition and fee revenue (see Appendix B for a listing of tuition and fee provisions) The inclusion of certain tuition and fee revenue in the formula funding calculation is referred to as an ldquoAll Funds methodologyrdquo to formula funding Th e most significant tuition revenue included in the formula calculation is tuition charged in accordance with Texas Education Code Section 54051 Interim Tuition Rates (referred to as statutory tuition) The statutory tuition rate for the 2012ndash13 academic year is $50 per semester credit hour for Texas residents Th e corresponding tuition rate for a nonresident student is the average nonresident tuition charged to a Texas resident at a public university in each of the five most populous states
Of the $40 billion allocated by the general academic formulas and supplements nearly 728 percent consists of General Revenue Funds with the remainder consisting of General RevenuendashDedicated Funds (Other EampG)
A portion of Other EampG income is set aside for specifi c purposes or allocated to non-formula based strategies in the
FIGURE 6 APPROPRIATIONS FOR GENERAL ACADEMIC INSTITUTIONS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
QIUDVWUXFWXUH)RUPXOD +ROG+DUPOHVV 727$ 021 )RUPXODDQG
1RQ)RUPXOD7HDFKLQJ([SHULHQFH
QVWUXFWLRQamp 2SHUDWLRQV)RUPXOD
ampDSLWDO)XQGV
QVWLWXWLRQDO
(QKDQFHPHQW
6SHFLDOWHPV
ampRQVWLWXWLRQDO)XQGV
5HVHDUFKHYHORSPHQW)XQG
+LJKHU(GXFDWLRQURXSQVXUDQFH2WKHU1RQIRUPXODWHPV
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 6
FUNDING GENERAL ACADEMIC INSTITUTIONS
institutionrsquos bill pattern For example institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) TPEG are grants designed to help students cover their tuition fees and textbook costs when these expenses exceed a certain portion of their familiesrsquo contributions to their educations This set-aside revenue is not part of the tuition and fee revenue used to calculate the funding formulas
INSTRUCTION AND OPERATIONS FORMULA
About 815 percent of formula funds flow through the Instruction and Operations Formula ($32716 million for the 2012ndash13 biennium) and Teaching Experience Supplement ($957 million for the 2012ndash13 biennium) Th e Instruction and Operations formula is calculated as follows
Semester Credit Hours X ProgramLevel Weight X Rate (5371)
Semester credit hours (SCH) are a measurement of how many classes (and the number of students enrolled in those classes) an institution delivers The formula calculation for a biennium uses a ldquobase periodrdquo of SCH The ldquobase periodrdquo used for the 2012ndash13 biennium was the combination of summer 2010 fall 2010 and spring 2011
SCH is weighted by discipline (eg nursing is weighted more than liberal arts) and by level (ie lower and upper division masters doctoral and professional) For instance a lower division liberal arts course receives a weight of 10 A doctoral level liberal arts course receives a weight of 923 A nursing lower division course receives a weight of 203 A doctoral nursing course receives a weight of 925 Beginning with the 2006ndash07 GAA the basis for the weights per discipline was shifted to an aggregation of actual costs based on institutions Annual Financial Reports Currently THECB uses a rolling three year average to adjust the weights each biennium
THECB recommends a rate based on its recommended weights and program enhancements The legislature sets the weights and the rate in the Higher Education Special Provisions of the GAA (page III-238) In practice the legislature has set the rate based on available funding including consideration of enrollment changes and other factors Figure 7 illustrates the Instruction and Operations Formula allocation to institutions
FIGURE 7 DISTRIBUTION OF INSTRUCTION AND OPERATIONS FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
7H[DV$ amp 08QLYHUVLW
2WKHUHQHUDO$FDGHPLFV
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
TEACHING EXPERIENCE SUPPLEMENT
For the 2012ndash13 biennium an additional weight of ten percent is added to lower-division and upper-division semester credit hours taught by tenured and tenure-track faculty The 2012ndash13 GAA includes the following language ldquoFurthermore it is the intent of the Legislature that the weight shall increase by 10 percent per biennium up to 50 percentrdquo (Special Provisions Relating Only to State Agencies of Higher Education Sec 28 page III-238 2012ndash13 GAA)
The Teaching Experience Supplement is calculated as follows
Semester Credit Hours X ProgramLevel Weight Supplement (10) X Rate (5371)
The Teaching Experience Supplement was 5 percent during the 1998ndash99 and 2000ndash01 biennia Th e Seventy-seventh Legislature 2001 increased the supplement to the current 10 percent in 2002ndash03 biennium
INFRASTRUCTURE FORMULA
Almost 16 percent of formula funds flow through the Infrastructure Formula and Small Institution Supplement ($6768 million for the 2012ndash13 biennium) In addition to
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 7
FUNDING GENERAL ACADEMIC INSTITUTIONS
the universities the State Colleges and components of Texas State Technical College also receive infrastructure formula appropriations This formula uses a statewide infrastructure rate which is set in the GAA The statewide infrastructure rate is divided into two rates an Adjusted Utility Rate and an All Other Rate As with the SCH rate the legislature has set the rate based on available funding including consideration of changes in institutional space and other factors
The Infrastructure Formula is calculated as follows
(Adjusted Utility Rate + All Other Rates) X Predicted Square Feet
The Adjusted Utility Rate is 52 percent of the statewide infrastructure rate The 52 percent reflects the percentage of infrastructure formula funds that institutions historically spent on utilities A statewide utility rate is determined and then adjusted for each institution to reflect utility costs relative to other institutions
The All Other Rate is 48 percent of the statewide infrastructure rate and remains constant among institutions It accounts for physical plant grounds maintenance and custodial services
THECBrsquos Space Projection Model for Higher Education Institutions in Texas (space model) estimates square footage for each institution The objective of the space model projection is to calculate the amount of space an institution needs based on the following
bull number program and level of semester credit hours
bull number of faculty non-faculty students programs and library holdings and
bull research and current EampG expenditures
Figure 8 illustrates the Infrastructure Formula allocation to institutions The similarity of the allocation to the Instruction and Operations Formula allocation demonstrates the influence of enrollment on both formula allocations
SMALL INSTITUTION SUPPLEMENT
Prior to the Eighty-fi rst Legislature (2009) general academic institutions with enrollments of less than 5000 received a $750000 annual Small Institution Supplement However the Eighty-first Legislature increased the enrollment threshold to 10000 students and implemented a phase-out
FIGURE 8 DISTRIBUTION OF INFRASTRUCTURE FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
2WKHUHQHUDO$FDGHPLFV
7H[DV$ amp M 8QLYHUVLW
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
(based on the number of students) of the supplement between 5000 and 10000 students for the 2012ndash13 biennium (see Figure 9) This supplement recognizes that institutions have a minimum cost of operation that may not be covered by funds generated through the formulas
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $414 million in General Revenue hold harmless funding for aff ected institutions to minimize the effect of reduced formula funding as a result of overall enrollment declines or declines in upper-division or graduate enrollment Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment than other institutions or a change in utility costs Th e Eighty-second Legislature 2011 provided $444 million in a hold harmless based on total General Revenue Funds (formula and non-formula) for the 2012ndash13 biennium
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 8
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 9 SMALL INSTITUTION SUPPLEMENT RECIPIENTS
The University of Texas at Brownsville
The University of Texas of the Permian Basin
The University of Texas at Tyler
Texas AampM University at Galveston
Prairie View AampM University
Tarleton State University
Texas AampM University ndash Central Texas
Texas AampM University ndash Kingsville
Texas AampM University ndash San Antonio
Texas AampM International University
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston ndash Clear Lake
University of Houston ndash Victoria
Midwestern State University
University of North Texas at Dallas
Texas Southern University
Angelo State University
Sul Ross State University
Sul Ross State University ndash Rio Grande College
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Waco
Texas State Technical College ndash Marshall
Lamar Institute of Technology
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
SOURCE Legislative Budget Board
NON-FORMULA FUNDING
SPECIAL ITEMS
Special Item appropriations to the institutions total $4836 million for the 2012ndash13 biennium In 2012ndash13 $69 million was appropriated to system offices for special items These are direct appropriations to institutions for projects that are not funded by formula but are specifi cally identifi ed by the legislature as needing support An institution is not required to spend the amount identified in a Special Item strategy for that particular project but expenditure reports indicate that institutions often use an entire appropriation along with additional funding for the related project
The majority of special item funding is through the Institutional Enhancement strategy Institutional Enhancement is a $2204 million appropriation for the 2012ndash13 biennium This is a direct appropriation to institutions and was established by the Seventy-sixth Legislature 1999 for the 2000ndash01 biennium Th e fi rst Institutional Enhancement appropriation was based on a consolidation of certain Special Item appropriations in 1999 and an additional $1 million per year was appropriated for each institution Examples of consolidated special items are items that could be funded through the formulas such as general institutional academic and research support
For the 2002ndash03 biennium there was an additional $1 million increase in appropriations for most institutions and a $15 million increase for selected institutions in South Texas and the border region Institutions that benefi ted signifi cantly from the Seventy-seventh Legislaturersquos new University Research and Texas Excellence Funds (House Bill 1839 Seventy-seventh Legislature 2001) or from the Permanent University Fund (PUF) ldquoexcellence fundingrdquo did not receive an increase in Institutional Enhancement funds for the 2002ndash03 biennium
Other Special Items total $2632 million in appropriations for the 2012ndash13 biennium and include the following institutional and instructional support public service items research items other than general research support funding for separate campuses and accreditation program items
TEXAS COMPETITIVE KNOWLEDGE FUND
The Texas Competitive Knowledge Fund (TCKF) is authorized by the General Appropriations Act (GAA) (2012ndash13 Biennium) Article III Higher Education Special Provisions Section 56 The GAA prescribes that this funding will be used to support faculty for the purpose of instructional excellence and research Funding was first allocated in these strategies by the Legislature for the 2008ndash09 biennium
Current institutions receiving TCKF appropriations include The University of Texas at Austin Texas AampM University University of Houston Texas Tech University and Th e University of Texas at Dallas Institutions are allocated funding appropriated to the TCKF based on average research expenditures for the previous three-year period Th e Eighty-second Legislature Regular Session 2011 appropriated $935 million in Texas Competitive Knowledge Fund strategies directly to the institutions This funding level provides approximately $07 million to each institution for every $100 million in research expenditures In practice
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 9
FUNDING GENERAL ACADEMIC INSTITUTIONS
when institutions have first received distributions from the fund appropriations have been reduced from the institutionrsquos special item strategies In subsequent biennia the institution continues to receive appropriations from the TCKF and the reduction in special items is not specifi cally restored
RESEARCH DEVELOPMENT FUND
The Research Development Fund was created by House Bill 3526 Seventy-eighth Legislature Regular Session 2003 and replaced the Texas Excellence and University Research Funds effective September 1 2005 The intent was to combine the Texas Excellence Fund and University Research Fund into a new fund applying a uniform allocation methodology based on a three-year average of each institutionrsquos restricted research expenditures Th e Eighty-fi rst Legislature allocated $653 million (Figure 10) in the 2012ndash13 biennium to individual institutions to fund objectives identical to the Research Development Fund (Section 62091)
TEXAS RESEARCH INCENTIVE PROGRAM
Th e Eighty-first Legislature Regular Session 2009 established the Texas Research Incentive Program (TRIP) at THECB to match state appropriations with certain gifts and endowments received by emerging research universities Th e goal of this $178 million a year program is to create more Tier One universities in Texas
PERFORMANCE INCENTIVE INITIATIVE
The Eightieth Legislature 2007 appropriated $100 million in fiscal year 2009 to THECB to establish a Higher Education Performance Incentive Initiative The funding was for ldquoimprovement in teaching and educational excellence at Texas public general academic institutionsrdquo THECB distributed $80 million for increases in degrees awarded with special weights given to critical fields and at-risk students The remaining $20 million was used to fund scholarships for students graduating in the top 10 percent of their high school class
Th e Eighty-first Legislature Regular Session 2009 maintained the $80 million for the higher education performance incentive initiative (funded by the American Recovery and Reinvestment Act) and increased funding for the Top Ten Percent scholarship program by $34 million bringing total appropriations for the program to $54 million
There were no performance funding incentives for the 2012ndash13 biennium For the 2012ndash13 biennium $396
FIGURE 10 RESEARCH DEVELOPMENT FUND ALLOCATIONS
2012ndash13 BIENNIAL RDF
INSTITUTION ALLOCATION
The University of Texas at Arlington $6032754
The University of Texas at Dallas 8425486
The University of Texas at El Paso 6925040
The University of Texas at Pan American 1147838
The University of Texas at Brownsville 902512
The University of Texas of the Permian Basin 306408
The University of Texas at San Antonio 5491296
The University of Texas at Tyler 434072
Texas AampM University at Galveston 600342
Tarleton State University 1586396
Texas AampM University ndash Corpus Christi 2212356
Texas AampM University ndash Kingsville 1846206
Texas AampM International University 253246
West Texas AampM University 681752
Texas AampM Commerce 436752
Texas AampM Texarkana 9008
University of Houston 10705472
University of Houston ndash Clear Lake 10392
University of Houston ndash Downtown 10248
University of Houston ndash Victoria 2254
Midwestern State University 30066
University of North Texas 2495448
Stephen F Austin University 895696
Texas Southern University 338580
Texas Tech University 8327602
Texas Womanrsquos University 266152
Angelo State University 123176
Lamar University 820010
Sam Houston State University 362574
Texas State University ndash San Marcos 3121164
Sul Ross State University 304040
TOTAL $65296738
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 10
FUNDING GENERAL ACADEMIC INSTITUTIONS
million is appropriated to the Top Ten Percent Scholarship Program
HOLD HARMLESS FUNDING
The Eighty-second Legislature 2011 provided $444 million in General Revenue Funds hold harmless funding for aff ected institutions to minimize the effect of reduced formula and special item funding Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment that other institutions or a change in utility costs
CAPITAL FUNDS
In addition to the constitutional funds discussed in the next subsection there are three types of state appropriation for capital funds tuition revenue bonds Skiles Act revenue bonds and lease payments Almost all of the direct appropriations to institutions related to capital funds are for debt service on tuition revenue bonds
A $5931 million General Revenue Funds appropriation was made for tuition revenue bond debt service for the 2012ndash13 biennium
Tuition revenue bonds must be authorized in statute Once an authorization is made institutions issue bonds and make related debt payments with tuition revenue Th e Texas Public Finance Authority issues tuition revenue bonds for Midwestern State University Stephen F Austin University Texas Southern University and the Texas State Technical Colleges Legislative practice has been to use General Revenue Funds to reimburse institutions for the costs related to this debt service
The legislature first authorized tuition revenue bonds in 1971 In some instances the authorization was a lump sum for the benefit of specific institutions During the Seventy-eighth Legislature 2003 $2689 million in tuition revenue bonds was authorized for specific projects at various higher education institutions The Seventy-ninth Legislature Th ird Called Session 2005 adopted House Bill 153 which authorized the issuance of $1858 billion in tuition revenue bonds for forty-four different institutions Only one tuition revenue bond (House Bill 1775) was adopted by the Eightieth Legislature 2007 for a $13 million nursing building at Stephen F Austin University Th e Eighty-fi rst Legislature 2009 authorized one tuition revenue bond for Texas AampM University at Galveston The Eighty-second Legislature 2011 did not authorize any new tuition revenue bonds
The authority for Skiles Act Revenue Bonds was repealed in 1997 It had allowed institutions to pledge up to $5 from each enrolled student for each regular semester to the payment of bonds authorized under the governing boardrsquos general authority to sell revenue bonds Institutions use their Other Educational and General Income (General Revenuendash Dedicated Funds) to pay the debt service on these previously authorized bonds This is a $10 million appropriation for the 2012ndash13 biennium
Three general academic institutions receive a $3 million General Revenue Fund appropriation for lease payments to community colleges for facilities
CONSTITUTIONAL FUNDS
These funds are appropriated separately in the GAA and not directly appropriated to the institutions (see Appendix D)
The Available University Fund (AUF) established in Section 18 Article VII Texas Constitution consists of the surface income and investment proceeds from the Permanent University Fund (PUF) a state endowment with land grants totaling 21 million acres
Distributions to the AUF consist of investment returns from PUF assets surface income from PUF lands and interest earned on AUF balances For the 2012ndash13 biennium investment returns were $12200 million surface income was $398 million and interest income was $59 million Income from the sale of PUF lands and the lease of mineral interest is retained in the PUF and invested
The total 2012ndash13 estimated appropriation for the AUF is $12660 million The Constitution appropriates two-thirds of the AUF to The University of Texas System and one-third to the Texas AampM University System The two systems may use the AUF for capital purposes (debt service on PUF bonds) for most of their institutions and ldquofor the support and maintenancerdquo of other institutions listed Entities authorized to receive funding for ldquosupport and maintenancerdquo which is now commonly referred to as ldquoAUF Excellence Fundingrdquo are the two system offi ces The University of Texas at Austin Texas AampM University and Prairie View AampM University The systemsrsquo boards of regents determine allocations to individual institutions including health-related institutions and the amounts for ldquoExcellencerdquo Figure 11 lists the recipients and the type of support they received
The Higher Education Fund (HEF) as authorized in Section 17 Article VII Texas Constitution benefits institutions of higher education not eligible for the AUF (see Figure 12)
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 11
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 11 PARTICIPANTS IN THE AVAILABLE UNIVERSITY FUND
EXCELLENCE AND DEBT SERVICE FUNDS
The University of Texas System
The Texas AampM University System
The University of Texas at Austin
Texas AampM University
Prairie View AampM University
DEBT SERVICE ONLY
The University of Texas System Components
The University of Texas at Arlington
The University of Texas at Dallas
The University of Texas at El Paso
The University of Texas of Permian Basin
The University of Texas at San Antonio
The University of Texas at Tyler
The University of Texas Southwestern Medical Center
The University of Texas Medical Branch at Galveston
The University of Texas Health Science Center at Houston
The University of Texas Health Science Center at San Antonio
The University of Texas Health Science Center at Tyler
The University of Texas MD Anderson Cancer Center
Texas AampM University System Components
Texas AampM University at Galveston
Texas AampM University at Tarleton
Texas AampM University ndash San Antonio
Texas AampM University ndash Central Texas
Texas AampM University System Health Science Center
Texas AgriLife Research
Texas AgriLife Extension Service
Texas Engineering Experiment Station
Texas Engineering Extension Service
Texas Transportation Institute
Texas Forest Service
SOURCE Legislative Budget Board
FIGURE 12 PARTICIPANTS IN THE HIGHER EDUCATION FUND
The University of Texas System Components
The University of Texas ndash Pan American
Texas AampM University System Components
Texas AampM University ndash Corpus Christi
Texas AampM International University
Texas AampM University ndash Kingsville
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston System Components
University of Houston
University of Houston ndash Clearlake
University of Houston ndash Downtown
University of Houston ndash Victoria
Independent Institutions
Midwestern State University
Stephen F Austin State University
Texas Southern University
Texas Womanrsquos University
University of North Texas System Components
University of North Texas Health Science Center at Fort Worth
University of North Texas
Texas Tech University System Components
Texas Tech University Health Sciences Center
Angelo State University
Texas State University System Components
Lamar University
Sam Houston State University
Texas State University ndash San Marcos
Sul Ross State University
Sul Ross State Rio Grande College
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
Lamar Institute of Technology
Texas State Technical College System Components
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Marshall
Texas State Technical College ndash Waco
The University of North Texas at Dallas receives its allocation through the University of North Texas SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 12
FUNDING GENERAL ACADEMIC INSTITUTIONS
The HEF is supported by General Revenue Fund appropriations
The distribution of the $525 million HEF appropriation for 2012ndash13 is provided for in statute (Texas Education Code Section 62021) The Constitution calls for a re-allocation of HEF funds every ten years The Seventy-ninth Legislature Regular Session fulfilled this requirement with the enactment of House Bill 3001
The Constitution also allows the legislature to adjust the decennial allocations every five years Th e Eighty-fi rst Legislature Regular Session 2011 exercised this authority by enacting House Bill 51 which adjusted the formula allocation for the HEF funds for fiscal years 2009 through 2015
To maintain the equitable distribution of the HEF appropriation House Bill 51 also corrected the distribution of fiscal year 2009 and 2010 HEF allocations by using revised formula calculations Using these revised formula calculations House Bill 51 factored in updated data elements to generate the annual HEF allocations for the fi ve-year period starting in fiscal year 2011
HEF funds must be used for capital purposes Institutions may use HEF allocations for debt service on HEF bonds or as cash
In 1995 the Texas Constitution was amended to authorize the creation and funding of a dedicated HEF corpus known as the Permanent Higher Education Fund (PHEF) Th is corpus was separate from the annual HEF allocation of General Revenue Funds The PHEF was intended to become a permanent endowment to support non-PUF eligible institutions but never reached its targeted value of $2 billion
The PHEF corpus of $5159 million was rededicated with the enactment of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) The balance of the PHEF was transferred to the NRUF on January 1 2010 and the authorization for the PHEF expired Proposition 4 also allowed the legislature to appropriate some or all of the total returns from the NRUF to provide a source of funding to enable emerging research universities to achieve national prominence
The Eighty-second Legislature 2011 appropriated $124 million in estimated NRUF proceeds to eligible institutions in the 2012ndash13 biennium
House Bill 1000 Eighty-second Legislature Regular Session 2011 established the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution in designated as an emerging research university within the Higher Education Coordinating Boardrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fi scal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of the institutions research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs Texas Tech University and the University of Houston are the only two institutions that received funding through this program in 2012
HIGHER EDUCATION GROUP INSURANCE (HEGI)
The $4631 million General Revenue Fund appropriation for higher education group insurance (HEGI) is not a direct appropriation in the institutionsrsquo bill patterns It is appropriated in a separate section of the GAA entitled ldquoHigher Education Employees Group Insurance Contributionsrdquo This appropriation is intended to help institutions cover the cost of health insurance premiums for institution employees whose salaries are paid from the General Revenue Fund Because The University of Texas and Texas AampM University Systems operate their own health insurance programs they each receive separate appropriations The remaining institutions are included in the program operated by the Employees Retirement System (ERS)
The HEGI appropriation is sum-certain That is the Statersquos General Revenue Fund contributions are limited to each institutionrsquos number of employees enrolled in the health insurance program as of December 1 2012 However the GAA allows ERS The University of Texas and Texas AampM University Systems to transfer HEGI appropriations among institutions within their respective group insurance programs to address shortfalls in General Revenue Funds related to group insurance premiums
SOCIAL SECURITY BENEFITS
An appropriation for social security is included in the GAA at the end of Article III It is an estimated General Revenue
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 13
FUNDING GENERAL ACADEMIC INSTITUTIONS
Fund appropriation to provide the employer matching funds for employees of institutions of higher education (Th is appropriation amount is not included in Figure 3 on page 2)
STAFF GROUP INSURANCE
Staff group insurance is for staff whose salaries are not paid with General Revenue Funds (GR) The appropriation is based on an estimation of the number of non-GR funded employees at an institution as of December 1 2010 Th e total appropriation for all general academic institutions is $1766 million for the 2012ndash13 biennium The method of finance is Other Educational and General Income (which is classified as General RevenuendashDedicated Funds)
RETIREMENT CONTRIBUTIONS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and top administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees participate in TRS a defi ned benefit plan The state funds retirement contributions for TRS equal to 60 percent of an employeersquos salary in fiscal year 2012 and 64 percent in 2013 State contributions for ORP are equal to 60 percent of an employeersquos salary in fiscal years 2012 and 2013 (Th ese appropriation amounts are not included in Figure 3 on page 2)
OTHER NON-FORMULA FUNDING
WORKERSrsquo COMPENSATION
Changes in the structure of the statewide workersrsquo compensation system resulted in most institutions receiving General Revenue Fund appropriations for Workersrsquo Compensation starting in 2006ndash07 However Th e University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool
UNEMPLOYMENT COMPENSATION
Most components of The University of Texas and Texas AampM University Systems have this strategy because they operate their own risk pools Th ese institutions receive General Revenue Fund appropriations for unemployment compensation insurance The appropriation for the 2012ndash13 biennium is $05 million in General Revenue Funds Th e Texas Workforce Commission receives an appropriation to
cover unemployment benefi ts for former state employees for all other higher education institutions
TEXAS PUBLIC EDUCATION GRANTS
According to statute (Texas Education Code Chapter 56 Subchapter C and Texas Education Code Section 54051 [Statutory Tuition]) institutions must set aside a portion of tuition revenue for Texas Public Education Grants (TPEG) Fifteen percent of each resident studentrsquos tuition and 3 percent of each nonresident studentrsquos tuition are set aside for financial aid to students at the institution Texas Education Code Section 56033 provides guidelines on the allocation of TPEG revenue The GAA includes an estimate of the amount of TPEG revenue each institution will generate Th is $2111 million estimated appropriation is considered Other Educational and General Income which are classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
Indirect costs as defined by The Comptroller of Public Accounts are ldquoincurred for a common or joint purpose benefiting more than one cost objectiverdquo Institutions negotiate a percentage of a federal grant for indirect costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
The Seventy-eighth Legislature 2003 allowed universities to retain 100 percent of indirect costs income from research grants and contracts to encourage further research projects conducted by universities
ORGANIZED ACTIVITIES
Organized Activities are activities or enterprises connected with instructional departments whose primary function is training for students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training Revenue from Organized Activities is classified as General RevenuendashDedicated Funds Other EampG Income For the 2012ndash13 biennium $503 million is appropriated for Organized Activities
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 14
FUNDING HEALTH-RELATED INSTITUTIONS
OVERVIEW Appropriations for the nine health-related institutions are similar in structure to the appropriations for general academic institutions There are formula and non-formula funding appropriations made directly to the institutions as well as appropriations that benefit the institutions but are not included in the institutionsrsquo bill patterns such as the Available University Fund certain staff benefi ts and funds trusteed at the Texas Higher Education Coordinating Board (THECB) While health-related institutions do not receive appropriations from the Research Development Fund they share many other types of appropriations similar to general academic institution appropriations Th ose appropriations will be briefly restated in this section of the report Figure 13 lists the institutions and their enrollment
FIGURE 13 PUBLIC HEALTH-RELATED INSTITUTIONS CERTIFIED HEADCOUNT FALL 2011
INSTITUTION HEADCOUNT
UT Southwestern Medical Center 2467
UT Medical Branch at Galveston 2660
UT Health Science Center at Houston 4485
UT Health Science Center at San Antonio 3273
UT M D Anderson Cancer Center 248
UT Health Science Center at Tyler NA
Texas AampM University System Health Science 1958 Center
University of North Texas Health Science 1567 Center at Fort Worth
Texas Tech University Health Sciences Center 3590
Statewide Totals 20248
SOURCE Higher Education Coordinating Board
Like other higher education institutions the appropriations for health-related institutions are a lump sum and funding strategies are presented for informational purposes in the General Appropriations Act (GAA) The funding strategies in a health-related institutionrsquos bill pattern represent how state funds are allocated but not how they must be spent Also certain methods of finance in the appropriation are estimated This means that if for example patient income for an institution is above the amount included in the GAA
the institution can spend more than the amount listed in the GAA
Also health-related institutions have access to an estimated $109 billion outside the appropriations process in 2012ndash13 Examples of this include certain tuition revenue indirect lost recovery grants and gifts
Figure 14 illustrates the 2012ndash13 method of finance for $85 billion in appropriations for health-related institutions including a number of the indirect appropriations but it does not include appropriations for retirement benefi ts
FIGURE 14 METHOD OF FINANCE FOR HEALTH-RELATED INSTITUTIONS 2012ndash13 BIENNIUM
727$ 021
HQHUDO
2WKHU)XQGV3DWLHQWQFRPH
5HYHQXH)XQGV
HQHUDO5HYHQXHsup2HGLFDWHG)XQGV13
Including some tuition and fees SOURCE Legislative Budget Board
FORMULA FUNDING The three primary funding formulas for health-related institutions are Instruction and Operations support Infrastructure support and Research Enhancement Th e University of Texas MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler have additional formula allocations to accommodate their unique missions Each health-related institution also receives formula funding for graduate medical education
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 15
FUNDING HEALTH-RELATED INSTITUTIONS
General Revenue funding and some Other Educational and General Income (Other EampG is classified as General RevenuendashDedicated) fund the formulas Like general academic institutions certain tuition revenue is used in the calculation of the Instruction and Operation support and Infrastructure support formulas Of the $15 billion that is allocated by the health-related institutionsrsquo primary formulas 939 percent is from the General Revenue Fund and the remaining 61 percent is from General RevenuendashDedicated Funds (tuition and fee revenue)
Some tuition and fee income is set aside for specifi c purposes Some specific amounts are unavailable for formula purposes and consequently are not a formula method of fi nance For example health-related institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) and Medical Loans
INSTRUCTION AND OPERATIONS SUPPORT FORMULA
The Instruction and Operations (IampO) support formula represents nearly 755 percent of the primary formula funds for health-related institutions ($9282 million for the 2012ndash13 biennium) It is intended to fund items such as faculty salaries departmental operating expenses instructional administration and libraries It is allocated on a per full-time student equivalent (FTSE) basis with a funding weight predicated on the instructional program of the student This formula applies to all health-related
institutions except The University of Texas Health Science Center at Tyler which did not offer education instruction during the base period for the 2012ndash13 biennium
Figure 15 illustrates the Instruction and Operations support formula among the eight health-related institutions
The Instruction and Operations support formula is calculated as follows
(FTSE X Program Weight X $8874) + SmallMultiple Campus Supplement
FTSE is weighted by discipline For example medicine (4753) is weighted more than pharmacy (1670) Allied Health is assigned a weight of 1000
The Legislature sets the weights and the rate ($8874 adjusted for the 2012ndash13 biennium) in the Higher Education Special Provisions of the GAA (Sec 29 page III-239 and 240) The rate is calculated based on the available revenue for the formula and the number of FTSEs
Programs with enrollments less than 200 receive a Small Campus Supplement (see Figure 16)
FIGURE 15 DISTRIBUTION OF INSTRUCTION AND OPERATIONS SUPPORT FORMULA 2012ndash13 BIENNIUM
727$ 021870$QGHUVRQ 7H[DV$ amp 0+HDOWKampDQFHUampHQWHU 6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV 87+HDOWK6FLHQFHampHQWHUDW6DQ
DW)WRUWK
+HDOWK6FLHQFHampHQWHU$QWRQLR
87+HDOWK6FLHQFH 7H[DV7HFK8QLYHUVLW+HDOWKampHQWHUDW+RXVWRQ 6FLHQFHVampHQWHU
876RXWKZHVWHUQ0HGLFDOampHQWHU
870HGLFDOUDQFK DWDOYHVWRQ
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 16
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 16 SMALL CAMPUS SUPPLEMENT RECIPIENTS
The University of Texas Southwestern Medical Center
No
The University of Texas Medical Branch at Galveston
Yes
The University of Texas Health Science Center at Houston
Yes
The University of Texas Health Science Center at San Antonio
Yes
The University of Texas MD Anderson Cancer Center
No
The University of Texas Health Science Center at Tyler
NA
Texas AampM Health Science Center Yes
University of North Texas Health Science Center at Fort Worth
No
Texas Tech University Health Sciences Center Yes
SOURCE Legislative Budget Board
INFRASTRUCTURE SUPPORT FORMULA
The Infrastructure support formula is 194 percent of the primary formula funding and is intended for utilities and physical plant support ($2383 million for the 2012ndash13 biennium) This formula calculation is similar to that for general academic institutions but includes only one rate ($655) for all institutions except The University of Texas
FIGURE 17 DISTRIBUTION OF INFRASTRUCTURE SUPPORT FORMULA 2012ndash13 BIENNIUM
MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler which have another rate ($625)
THECBrsquos space model predicts square footage for each institution The space model projection is based on the following
bull number and level of FTE students
bull number of faculty
bull single or multiple programs and campuses
bull actual clinical space and
bull research and current EampG expenditures
Because the space projection model does not account for hospital space separate infrastructure funding for hospital space is included in the total funding for hospital and patient-care activities at The University of Texas Medical Branch at Galveston The University of Texas MD Anderson Cancer Center and The University of Texas Health Science Center at Tyler
Figure 17 illustrates the Infrastructure Support Formula allocation to institutions among the nine health-related institutions
727$ 021
87+HDOWK6FLHQFHampHQWHUDW6DQ 870$QGHUVRQampDQFHUampHQWHU$QWRQLR
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW
+RXVWRQ 7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK6FLHQFHVampHQWHU
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 17
FUNDING HEALTH-RELATED INSTITUTIONS
RESEARCH FORMULA
Health-related institutions generate state appropriations to support research through General Revenue Funds in the Research Enhancement formula ($629 million for the 2012ndash13 biennium) The Research Enhancement formula accounts for 51 percent of the primary formula funds and is funded entirely from the General Revenue Fund
The allocation is based on the amount of research generated by each institution
$1412500 + (110 X Research
Expenditures)
This provides a base Institutions report for all institutions current research
regardless of research expenditures to volume THECB
Figure 18 illustrates the Research Enhancement formula allocation to the institutions among the nine health-related institutions
GRADUATE MEDICAL EDUCATION
The Seventy-ninth Legislature 2005 established a new formula for funding graduate medical education in the 2006ndash07 GAA For 2012ndash13 the funding totals $46 million
FIGURE 18 DISTRIBUTION OF RESEARCH ENHANCEMENT FORMULA 2012ndash13 BIENNIUM
727$ 021
870$QGHUVRQampDQFHUampHQWHU
(an additional $109 million is appropriated to the Baylor College of Medicine through the THECB) and provides $4436 per medical resident each year
Figure 19 illustrates the Graduate Medical Education formula allocation to institutions among the nine health related institutions and Baylor College of Medicine
CHEST DISEASE CENTER FORMULA
The Chest Disease Center operations formula which was established during the 2010ndash11 biennium applies only to The University of Texas Health Science Center at Tyler Th e University of Texas Health Science Center at Tyler has a statutory mission to conduct research develop diagnostic and treatment techniques provide training and teaching programs and provide diagnosis and treatment of inpatients and outpatients with respiratory diseases The Chest Disease Center formula is based on the number of primary chest disease patients the institution served Approximately $472 million in General Revenue Funds are appropriated for the 2012ndash13 biennium
CANCER CENTER OPERATIONS FORMULA
The Eightieth Legislature 2007 established in the GAA an Operations formula for funding The University of Texas MD Anderson Cancer Center The University of Texas MD Anderson Cancer Center has a statutory mission to eliminate cancer through patient care research education
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR
7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ 8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
870HGLFDOUDQFKDWDOYHVWRQ 7H[DV7HFK8QLYHUVLW+HDOWK876RXWKZHVWHUQ0HGLFDOampHQWHU
6FLHQFHVampHQWHU
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 18
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 19 DISTRIBUTION OF GRADUATE MEDICAL EDUCATION FORMULA 2012ndash13 BIENNIUM
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
727$ 02187+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR 870$QGHUVRQampDQFHUampHQWHU
87+HDOWK6FLHQFHampHQWHUDW7OHU
7H[DV$ amp 08QLYHULVW6VWHP +HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK 6FLHQFHVampHQWHU
DORUampROOHJHRI0HGLFLQH
and prevention The Operations formula funding is based on the total number of Texas cancer patients the institution served The Operations formula growth in funding may not exceed the average growth in funding for health-related institutions in the Instruction and Operations support formula for the current biennium For the 2012ndash13 biennium this funding formula provided $2125 million in General Revenue Funds
NON-FORMULA FUNDING
PATIENT CARE ACTIVITIES
Some institutions conduct patient care activities generally medical or dental For the 2012ndash13 biennium the estimated appropriation for Patient Income was $56 billion Th e hospital and clinic revenues earned through patient care activities are considered Other Funds which are part of Educational and General Income (not to be confused with Other Educational and General Income which is another subset of Educational and General Income) General Revenue funding supplements patient-care income to varying degrees at each institution Patient Income is an estimated appropriation and is spread across an institutionrsquos funding strategies however it is not used in the calculation of the formulas
INSTITUTIONAL ENHANCEMENT
Institutional Enhancement is a General Revenue Fund appropriation that started in the 2000ndash01 biennium It is designed to allow each institution to address its unique needs and diseconomies of scale at institutions with smaller campuses The total institutional enhancement appropriation for the 2012ndash13 biennium was $42 million which includes $407 million in General Revenue Funds and $16 million in Patient Income
SPECIAL ITEMS
Special items are activities that are not generally funded through the formulas and typically represent an institutionrsquos special needs or areas of expertise The $3107 million in General Revenue Funds for the 2012ndash13 biennium funds items such as residency programs academic outreach programs public service items and research items other than general research support Institutions propose and justify special items and request an amount for each on an ad hoc basis Special items generally remain constant from biennium to biennium unless the item was a one-time expense (eg tornado damage repairs) or the institution has not used the funding for the intended purpose
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 19
FUNDING HEALTH-RELATED INSTITUTIONS
CONSTITUTIONAL FUNDS
These funds are not directly appropriated to institutions in the GAA In other words these funds are not found in a strategy within an institutionrsquos bill pattern
Health-related institutions are eligible for funding from the Available University Fund ($146 million in Other Funds allocated to these institutions by system offices for the 2012ndash 13 biennium) and the Higher Education Fund ($257 million in General Revenue Funds appropriated for the 2012ndash13 biennium) which are presented in detail in the ldquoFunding General Academic Institutionsrdquo section of this report
CAPITAL FUNDS
Just like general academic institutions tuition revenue bonds ($1665 million in General Revenue Funds for related debt service in the 2012ndash13 biennium) are also used to fund capital projects at health-related institutions A detailed presentation of tuition revenue bonds is in the ldquoFunding General Academic Institutionsrdquo section The University of Texas Medical Branch at Galveston and The University of Texas MD Anderson Cancer Center also have separate appropriations for capital projects that are funded primarily with Patient Income
EMPLOYEE BENEFITS
Like general academic institutions health-related institutions benefit from direct and indirect state appropriations related to employee benefi ts The indirect appropriations include Higher Education Group Insurance ($2339 million in General Revenue Funds for the 2012ndash13 biennium) Retirement Contributions and Social Security Benefi ts (all presented in the ldquoFunding General Academic Institutionsrdquo section) The direct appropriations include Staff Group Insurance
For the 2012ndash13 biennium the Workersrsquo Compensation and Unemployment Compensation strategies (all presented in the ldquoFunding General Academic Institutionsrdquo section) are funded directly with General Revenue Funds and General RevenuendashDedicated Funds However The University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool The University of Texas and Texas AampM Systems also manage their own unemployment compensation coverage while all other institutions receive coverage from
the Texas Workforce Commission which receives an appropriation to cover unemployment benefi ts
TEXAS PUBLIC EDUCATION GRANTS
Health-related institutions similar to general academic institutions are subject to the Texas Education Code (sect56031 et al) provision requiring a portion of tuition revenue be set aside to fund Texas Public Education Grants (TPEG) For the 2012ndash13 biennium the estimated TPEG appropriation is $188 million This revenue is considered Other Education and General Income which is classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
As mentioned earlier in this section Indirect Cost Recovery was removed from the GAA for the 2010ndash11 biennium however the individual institution still receives the funds
TOBACCO SETTLEMENT
House Bill 1945 Seventy-sixth Legislature 1999 established the Permanent Health Fund for health-related institutions of Higher Education the Permanent Fund for Minority Health Research and Education the Permanent Fund for Higher Education Nursing Allied Health and Other Health Related Programs and 13 permanent endowments for individual institutions of higher education The $769 million in estimated interest earnings from the endowments for 2012ndash13 (based on estimated interest earnings of 45 percent each year) were appropriated to the health-related institutions
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 20
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW Public two-year lower-level institutions include 50 community and junior college districts four Texas State Technical College (TSTC) campuses and three Lamar State Colleges These institutions were appropriated $22 billion in state funding for the 2012ndash13 biennium Preliminary fall FIGURE 20 TWO-YEAR INSTITUTION FUNDING MECHANISMS 2012ndash13 BIENNIUM
2011 enrollment at these institutions totaled 789713 Figure 20 illustrates the funding mechanisms for these institutions Community colleges accounted for 983 percent of this enrollment total while the Texas State Technical and Lamar State Colleges composed the remaining portion
COMMUNITY COLLEGES
Instruction and Administration General Revenue Funds from the state are based on contact hour driven formulas for two-year institutions Tuition and fee revenues and local tax revenues augment state General Revenue Funds for these costs
Academic Courses Approximately 82 percent of the total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 18 percent of the total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant The state provides no funding for physical plant operations and maintenance Local taxing districts are expected to provide support for physical plant needs Community colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011
Facilities Local communities must provide facilities Community colleges are not eligible to receive Higher Education Fund (HEF) allocations Available University Fund allocations or state tuition revenue bonds
Employee Benefits While community college employees are locally-employed community colleges participate in the Employee Retirement System (ERS) Group Benefits Program for health benefi ts and the Teacher Retirement System(TRS) and Optional Retirement Program (ORP) for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits
Tuition Fee Revenues Tuition and fee revenues are considered institutional funds and are not appropriated by the state Tuition rates vary by institution In 2012 the statewide tuition rates plus fees averaged $73 per semester credit hour but varied from $34 to $208 per semester credit hour
Local Tax Revenue Community Colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011 Local tax revenues are expected to provide support for physical plant needs and augment state General Revenue Funds for instruction and administration costs
SOURCE Legislative Budget Board
TSTCLAMAR COLLEGES
Instruction and Administration General Revenue Funds from the state are based on formulas for two-year institutions Tuition and fee revenues augment General Revenue Funds for these costs
Academic Courses Approximately 39 percent at the Lamar colleges and 28 percent at Texas State Technical College (TSTC) of total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 61 percent at the Lamar colleges and 72 percent at TSTC of total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant State funding based on the formula for general academic institutions The Lamar colleges will receive approximately $71 million and TSTC will receive $157 million in General Revenue Funds for physical plant and utilities in the 2012ndash13 biennium
Facilities The Lamar colleges receive approximately $42 million annually from HEF funds and TSTC receives almost $58 million annually The HEF monies are used to acquire land construct and equip buildings provide major building repair or rehabilitation and acquire capital equipment and library materials
Employee Benefits Both the Lamar colleges and TSTC institutions participate in ERSrsquo Group Benefits Program for health benefits and the TRS and ORP programs for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits of those employees having their salaries paid with General Revenue Funds
Tuition Fee Revenues Certain tuition revenue is appropriated by the state In 2012 for resident students average tuition plus fees was $139 per semester credit hour at the Lamar colleges and $150 per semester credit hour at TSTC
FINANCING HIGHER EDUCATION IN TEXAS ndash ID690 LEGISLATIVE BUDGET BOARD 21
FUNDING COMMUNITY AND TECHNICAL COLLEGES
These institutions are primarily funded based on student contact hours A contact hour is a standard unit of measure that represents an hour of scheduled academic and technical instruction given to students during a semester Community and junior college districts generate almost 958 percent of the state-funded contact hours at two-year institutions TSTC components generate approximately 29 percent of the contact hours and the three Lamar State Colleges account for the 13 percent
COMMUNITY COLLEGES Over 99 percent of the direct appropriations to community colleges are from the General Revenue Fund and are generated through a funding formula The remaining direct appropriations are for isolated ldquospecial itemsrdquo including appropriations for the Southwest Collegiate Institute for the Deaf which is part of the appropriation for Howard College The Texas Education Code Section 130003(a) calls for state appropriations to public community colleges to ldquosupplement local funds for the proper support maintenance operation and improvement of those public junior colleges of Texas that meet the standards prescribed by the chapterrdquo Further Education Code Section 130003(c) indicates that state funds must be used ldquoexclusively for the purpose of paying salaries of instructional and administrative forceshellip and the purchase of supplies and materials for instructional purposesrdquo
Consistent with statute community colleges have their own Instruction and Administration Formula which is funded by General Revenue Funds and based on ldquostudent contact hoursrdquo Unlike general academic institution formulas this formula does not include tuition and fee revenue as part of the method of fi nance
The Eighty-second Legislature 2011 also provided $45 million to certain districts through a new small institution supplemental formula A district is eligible for the supplement if it makes a significantly above-average effort to generate tax income while at the same time experiencing below-average tax revenue and does not have a number of contact hours that exceeds the statewide median Th e Eighty-second Legislature appropriated each eligible district $05 million for the 2012ndash13 biennium
No state funding is provided for physical plant operations and maintenance or for facilities that is supported by local tax eff ort
Three community colleges receive weighted semester credit hour formula funding for a Bachelor of Applied Technology degree program
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $153 million in General Revenue formula hold harmless funding for aff ected community colleges to minimize the effect of reduced formula funding as a result of overall contact hour declines The Eighty-second Legislature 2011 did not provide any hold harmless funding in the 2012ndash13 biennium
Property taxes tuition and fees are other major sources of revenue for community colleges Figure 21 illustrates the estimated sources of funding for community colleges Th e state appropriations in Figure 21 include all formula special item Higher Education Group Insurance appropriations and retirement benefi t appropriations
FIGURE 21 MAJOR SOURCES OF COMMUNITY COLLEGESrsquo OPERATING REVENUE IN BILLIONS FISCAL YEAR 2011
727$ 21
6WDWHampRQWULEXWLRQV
URVV7XLWLRQDQG)HHV
3URSHUW7D[HV
)HGHUDO)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING
The basis of the formula starts with the Texas Higher Education Coordinating Board (THECB) Report of Fundable Operating Expenses (RFOE) (formally called the All Funds Expenditure Report) The study includes all expenditures for instruction and administration (facilities costs are not included) in 26 program areas THECB uses the expenditure data to determine the median cost in the 26 program areasmdashthe ldquoratesrdquo for contact hours in those disciplines THECB then makes a recommendation for
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 22
FUNDING COMMUNITY AND TECHNICAL COLLEGES
funding based on the rates Over the years THECB has used various methodologies as the basis for its funding recommendations Because the RFOE takes into account all funds (state appropriations plus tuition and tax revenue which are not appropriated) THECBrsquos recommendation for state funding has generally not equaled 100 percent of the rates
The amount of the appropriation is a legislative decision based on funds available The appropriation is allocated to the colleges according to each districtrsquos pro-rata share of THECB recommendations
HIGHER EDUCATION GROUP INSURANCE (HEGI)
Like state institutions of higher education community colleges receive General Revenue Fund contributions for group insurance However since community college employees are local not state employees state contributions for health benefits are fully discretionary Other agencies and institutions of higher education report employee eligibility for General Revenue-funded group health insurance benefi ts only if the employeersquos salary is directly paid with General Revenue Funds However in the past community colleges tended to base eligibility for General Revenue-funded benefits if the employeersquos job function fell under an approved ldquoelement of costrdquo This practice caused community colleges to report eligibility for state funded health benefits in a manner that did not always match the source of the employeersquos salary
This practice led to the Governorrsquos veto of the Group Health Insurance appropriation for fiscal year 2009 ($154 million) at the end of the Eightieth Legislative session However an agreement to restore the vetoed funds was reached and returned directly to the districts in House Bill 4586 Eighty-first Legislature Regular Session 2009
The Eight-Second Legislature 2011 allowed community colleges to receive General Revenue Fund contributions for employees whose job function fell under an approved ldquoelement of costrdquo However the Legislature only funded 42 percent of the premium costs for these employees
OTHER STAFF BENEFITS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and certain administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees
participate in TRS a defi ned benefit plan In both instances the state funds retirement contributions equal 60 and 64 percent of an employeersquos salary in fiscal year 2012 and fi scal year 2013 respectively (These appropriation amounts are not included in Figure 2 on page 3)
DRAMATIC ENROLLMENT GROWTH
Since the 1996ndash97 biennium public community colleges have received ldquoDramatic Enrollment Growth Fundingrdquo For the 2000ndash01 biennium this was expanded to include Texas State Technical Colleges and Lamar State Colleges (Lamars) The appropriation was made to THECB Rider 13 page IIIshy53 General Appropriations Act (2010ndash11 Biennium) provided guidelines for distributing this funding
For the 2010ndash11 biennium THECB is authorized to allocate up to $175 million per year to schools experiencing a growth rate of five percent or greater in 2010 and eight percent or greater in 2011 The Eighty-second Legislature 2011 did not provide any dramatic enrollment growth funding in the 2012-13 biennium
OTHER TRUSTEED FUNDS
Students at community colleges also benefi t from Texas Educational Opportunity Grants the student fi nancial aid program appropriation that is allocated by THECB
TEXAS STATE TECHNICAL COLLEGE LAMAR STATE COLLEGES The Texas State Technical Colleges (TSTC) and Lamar State Colleges are allocated a majority of their appropriation via two formulas the Instruction and Administration Formula for two-year institutions and the Infrastructure Formula for general academic institutions Similar to general academic institutions the tuition revenue for these colleges is included in the appropriations bill
Contact hours for vocationaltechnical courses represent approximately 61 percent of total contact hours at the Lamar State Colleges and 72 percent at TSTC institutions Th e remaining contact hours are generated from academic and continuing education courses
Facilities funding is available from the Higher Education Fund for both TSTC and the Lamars State Colleges and both have received Tuition Revenue Bond authorizations
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 23
FUNDING COMMUNITY AND TECHNICAL COLLEGES
The Community Colleges section of this report includes subsections on Higher Education Group Insurance Other Staff Benefits and Dramatic Enrollment Growth Th ese three subsections apply to appropriations for Texas State Technical Colleges and the Lamar State Colleges as well
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 24
FUNDING TEXAS AampM SYSTEM AGENCIES
There are seven research and service agencies that are administered by the Texas AampM University System Th e system agenciesrsquo missions differ from other institutions of higher education in that each system agency focuses on one or two of the three traditional missions of higher education institutions research extension and service (Figure 22)
FIGURE 22 TEXAS AampM SYSTEM AGENCIES MISSIONS AND FUNCTIONS
STATUTORY AUTHORITY MISSIONFUNCTIONS
For the 2012ndash13 biennium the total direct appropriations for Texas AampM System (System) agencies are $8897 million In addition to state appropriations the System agencies receive some Federal Funds that are not included in the General Appropriations Act and have access to private funds While System agencies have significant portions of their Other Funds and Federal Funds appropriated the appropriations are estimated and actual income from these funding sources is subject to signifi cant variation
Texas AampM AgriLife Education Conducts research in the agricultural environmental and life sciences Goals include Research Code Title III enhancing the competitiveness of agricultural industries and natural resource conservation
Chapter 88 Research highlights bioenergy irrigation efficiency and the use of distillerrsquos grain in feedlots Administers the honey bee regulation and feed and fertilizer programs
Texas AampM AgriLife Education Provides training and educational programs including 4-H through extension agents Extension Service Code Title III serving every county in Texas and supported by federal state and county funds Provides
Chapter 88 wildlife and insect management services including feral hog abatement and boll weevil eradication
Texas AampM Education Conducts engineering and technology research with a focus on interdisciplinary research Engineering Code Title III based on statewide priorities Research highlights energy independence effi ciency and Experiment Station Chapter 88 conservation alternative energy and national security
Texas AampM Education Conducts transportation related research and develops technology Approximately 50 Transportation Code Title III percent of research expenditures from interagency contracts are contracted from the Texas Institute Chapter 88 Department of Transportation
Texas AampM Education Provides training technical assistance and emergency response to enhance public Engineering Code Title III safety security and economic growth Operates the Brayden Fire Training Field and the Extension Service Chapter 88 Emergency Operations Training Center Texas Task Force 1 is deployed for emergency
response and search and rescue operations
Texas AampM Forest Education Provides incident management teams and emergency response as well as wildfire Service Code Title III prevention detection and suppression services The Texas Wildfire Protection Plan is
Chapter 88 the agencyrsquos wildfire response model Administers the Rural Volunteer Fire Department Assistance Program which gives grants to local fire departments for equipment and training
Texas AampM Veterinary Education Provides fee-based veterinary medical diagnostic services which contribute to an animal Medical Diagnostic Code Title III and zoonotic disease surveillance system Responds to potential high consequence andor Laboratory Chapter 88 emerging disease events Develops new diagnostic testing technologies
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 25
FUNDING TEXAS AampM SYSTEM AGENCIES
FIGURE 23 TEXAS AampM SYSTEM AGENCIES COMPARED TO INSTITUTIONS OF HIGHER EDUCATION
SIMILARITIES
FUNDING
Both Texas AampM System (System) agencies and institutions of higher education have considerable flexibility in their budgeting and financial operations (ldquolump sumrdquo appropriations)
Both are eligible to receive proceeds from the Permanent University Fund
Both are considered to be institutions of higher education for purposes of employee group health insurance
Both System agencies and institutions of higher education generate and keep 100 percent of indirect cost recovery from research and other grants
PERFORMANCE MEASURES
OPERATIONS
Like other institutions of higher education System agencies are not required to submit operating budgets or strategic plans
Both are statutorily embedded within the Texas AampM Systemrsquos institutional framework
SOURCE Legislative Budget Board
DIFFERENCES
General academic health-related and two-year institutions receive formula funding while System agencies do not
Texas AampM System agencies do not generate revenue in the same manner or amount of other higher education institutions
Performance measures for the System agencies are agency-specific while performance measures for other higher education institutions are standardized
In several ways state funding for System agencies is similar to funding for higher education institutions System agencies have considerable flexibility in their budgeting and fi nancial operations because they receive lump-sum appropriations in the same manner as other institutions of higher education They are eligible to receive funds from the Permanent University Fund (PUF) (They were allocated $153 million from the PUF for debt service in the 2012ndash13 biennium) System agencies are also funded in the same manner as other institutions of higher education with regard to staff benefi ts including employee group health insurance contributions
However there are several funding diff erences between System agencies and other higher education institutions Most significantly System agencies do not receive formula-based funding Also while some System agencies may charge fees for their services they do not generate tuition and fees in the same manner or quantity as other institutions of higher education
As is the case with all institutions the System agencies keep 100 percent of their respective indirect cost recovery income
because this income is derived from earnings on federal grants and is held outside the treasury
For the 2012ndash13 biennium funding associated with infrastructure expenses and utilities for System agencies inside Brazos County is equal to the infrastructure rate (as determined by the General Academic formulas on page 6) for Texas AampM University
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 26
APPENDIX A FREQUENTLY ASKED QUESTIONS
Q What are the limitations on how institutions spend state appropriations
A Generally speaking institutions have great fl exibility in spending appropriated funds however some limitations do exist depending on the source of revenue Appropriated revenue includes General Revenue Funds General Revenuendash Dedicated Funds (mostly tuition and fee income) Other Funds (including Patient Income) and Federal Funds (for certain Texas AampM System Agencies) Th e Texas Constitution (Article VII Section 18(i) and 17(j)) prohibits with limited exceptions the use of General Revenue Funds for acquiring land or for construction projects An exception occurs when the legislature by two-thirds vote in each house expressly determines that there is a demonstrated need for the project
Various provisions in the 2012ndash13 General Appropriations Act (GAA) Higher Education Special Provisions restrict state appropriations These restrictions include the following
bull Section 6 (Rider 8b) which prohibits the use of appropriated funds for auxiliary enterprises
bull Section 6 (Rider 9) which limits the use of these funds to pay debt service for statutorily authorized tuition revenue bonds Any such appropriation not spent must be returned to the General Revenue Fund at the end of the year
bull Section 9 which prohibits the use of appropriated funds for intercollegiate athletics purposes and
bull Section 54 which limits the use of the Research Development Fund to those defined in Education Code Section 62091
Q Would an increase in tuition revenue replace a corresponding amount in General Revenue Funds or would the revenue remain within the institution
A The result depends on how the Legislature responds
For instance assume that the Eight-second Legislature 2011 changed the statute to require institutions to charge nonresident tuition in circumstances where they had previously waived the nonresident tuition rate For the 2012ndash13 biennium institutions would benefit fully from the
increase in tuition revenue (This assumes the formula calculation would not include a projected increase in tuition)
However institutional appropriations in the 2014ndash15 biennium now depend on that legislation passed in the Eighty-third Legislature 2013 Assuming the same number of students (semester credit hours) enroll regardless of changes in tuition policy and that the result of charging nonresident tuition generated $100 million in additional tuition revenue there are three options
1 Reduce General Revenue Funds (GR) in the formulas by $100 million In this scenario the formula rate stays the same and every dollar increase in tuition revenue results in a dollar decrease in GRmdashinstitutional funding does not increase
2 Keep GR the same and run the additional tuition revenue through the formulas Th e formula funding rate would increase and every institution would receive more funds including those institutions that generated no additional tuition revenue
3 Keep GR formula appropriations at the same level and let individual institutions keep the additional tuition revenue they generated outside the formula allocation
Q Are all tuition and fee revenues collected by institutions of higher education included in the appropriations bill
A No None of the tuition and fee revenues collected by community colleges are appropriated
For general academic institutions an estimate of the revenue from certain tuitions and fees such as statutory tuition (Education Code 54051 Tuition Rates) board authorized tuition (Education Code 54008 Tuition Rate Set by Governing Board) Laboratory Fees (Education Code 54501) and certain other fees are appropriated in the GAA as General Revenue FundsndashDedicated Estimated Other Educational and General Income There are a number of other tuitions and fees that are not included in the GAA and therefore not referred to as state funding Such tuitions and fees include but are not limited to designated tuition (Education Code 540513 Redesignation of Building Use Fee) and Incidental Fees (Education Code 54504) Federal
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 27
APPENDIX A FREQUENTLY ASKED QUESTIONS
Funds are also not appropriated to the general academic and health-related institutions
Q Is a decrease in enrollment the only reason an institution would be eligible for formula funding hold harmless
A No Each session the Legislature makes a determination of whether it will make an appropriation for formula hold harmless A decrease in total enrollment is one reason an institution could be eligible for the funding Because the semester credit hours (general academic institutions) full-time student equivalents (health-related institutions) used in the formulas are based on weights (discipline program and course level) a change in the type of student enrollment regardless of total enrollment could also make an institution eligible for hold harmless funding
Q What are Educational and General Funds
A ldquoOther Educational and General Incomerdquo is a subset of ldquoEducational and General Incomerdquo The following are included in the Education Code (51009(c)) defi nition for ldquoEducational and General Fundsrdquo net tuition special course fees charged under Education Code 54051(e) and (l) lab fees student teaching fees hospital and clinic fees organized activity fees and proceeds from the sale of educational and general equipment
Q What does it mean to be a Tier One institution
A The Tier One reference is often derived from the Carnegie Foundation for the Advancement of Teachingrsquos prior system for classifying institutions of higher education As part of the 1994 version of the Carnegie Classification there were four categories for doctorate granting institutions Research Universities I Research Universities II Doctoral Universities I and Doctoral Universities II ldquoTier Onerdquo was synonymous with Research Universities I Such institutions had to off er a full range of baccalaureate programs award 50 or more doctoral degrees each year and receive annually at least $40 million or more in federal research funds Two institutions in Texas (The University of Texas at Austin and Texas AampM University) met these criteria The 2000 version of the Carnegie Classification collapsed the categories for doctorate granting institutions from four to two Doctoral Research UniversitiesmdashExtensive and DoctoralResearch UniversitiesmdashIntensive Six public institutions in Texas (Texas AampM University Texas Tech University University of Houston University of North Texas The University of Texas at Arlington and The University of Texas at Austin) meet the criteria for DoctoralResearch Universitiesmdash
Extensive In 2005 however the classifi cation structure returned to a more restricted top tier of institutions classifi ed as ldquoResearch Universities (very high research activity)rdquo Both The University of Texas at Austin and Texas AampM University are now counted in this category but any reference to Tier One usually refers to the 1994 Carnegie Classifi cation
Q What is the space model What is the base number of square feet needed
A In 1992 the Texas Higher Education Coordinating Board approved the Space Projection Model for Higher Education Institutions in Texas for public universities to assess the net assignable square feet (NASF) of educational and general space an institution needs There are fi ve categories incorporated into the model teaching library research offi ce and support space Space needs for auxiliary purposes such as dormitories or athletics are not included in the model Square footage amounts are assigned based on a number of elements within each category including the number of students and their program levels and the amount of research expenditures The space model was fi rst incorporated into the funding formulas for general academic institutions in 1997
Q What are ldquoOrganized Activitiesrdquo
A General academic institutions have a funding strategy titled ldquoOrganized Activitiesrdquo These are activities or enterprises that are connected with instructional departments Th ey are intended primarily to give training to students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training
Q What are tuition revenue bonds
A Established in 1971 under Education Code 5513 tuition revenue bonds are bonds (not to exceed 50 years) issued by institutions of higher education for the purpose of ldquoproviding funds to acquire purchase construct improve enlarge andor equip any property buildings structures activities services operations or other facilities for and on behalf of its institution or institutions or any branch of branches thereofrdquo Each institutionsystem is authorized and required to pay debt service on its bonds Although the authorization and issuance of the bonds is not contingent on an appropriation by the state for related debt service the Legislature has provided General Revenue Funds to reimburse institutions for costs related to debt service However in the 2004ndash05 GAA the legislature changed this practice and only provided General Revenue Fund reimbursements for interest
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 28
APPENDIX A FREQUENTLY ASKED QUESTIONS
on bonds issued after March 31 2003 The 2006ndash07 GAA renewed the practice of reimbursing institutions for the costs related to debt service The 2008ndash09 GAA and 2010-11 GAA continues this practice
Q What Is Proportionality
A Pursuant to Section 608 of Article IX of the 2012ndash13 GAA the legislative intent of proportionality is to ldquomaximize balances in the General Revenue Fundrdquo by harmonizing salary funding source with benefits funding source Th is effectively means the Legislature limits its General Revenue Fund contributions for benefits only to those employees having salaries paid with General Revenue Funds As such proportionality requires employee health and retirement benefits be paid in ldquoproportionrdquo to the funding source of salaries To this end institutions are obligated to submit the Accounting Policy Statement 011 Benefits Proportional by Fund (APS 011) report to the Comptroller Th is document provides a structure by which state and local contributions are ldquosettled uprdquo in light of the fiscal years fund proportionality
Q What Is the National Research University Fund
A In 1995 the Texas Constitution was amended to authorize the creation and funding of the Permanent Higher Education Fund (PHEF) The PHEF was intended eventually to become a permanent endowment to support non-Permanent University Fund eligible institutions However the PHEF corpus was rededicated with the voter passage of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) In 2009 Proposition 4 transferred the balance of the PHEF to the credit of the NRUF as of January 1 2010 and repealed the constitutional authorization for the PHEF
The NRUF is intended to provide a source of funding to enable emerging research universities in Texas to achieve national prominence as major research universities Article VII of the Texas Constitution authorizes the Legislature to appropriate some or all of the total return on all investment assets of the NRUF for the purposes of the fund except for two caveats (1) the Legislature may not increase distributions from the fund if the purchasing power of investment assets for any rolling 10-year period is not preserved and (2) the amount appropriated from the proceeds of the NRUF corpus in any fiscal year must be capped at 7 percent of the investment assetsrsquo average net fair market value Until the NRUF has been invested long enough to determine its purchasing power over a 10-year period the Legislature is
authorized to use other means of preserving the purchasing power of the fund
House Bill 1000 Eighty-second Legislature Regular Session 2011 establishes the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution is designated as an emerging research university within the THECBrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fiscal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of institutionrsquos research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 29
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 30
APPENDIX B TUITION AND FEE PROVISIONS
VTCA Texas Education Code Section 54003 states No institution of higher education may collect from students attending the institution any tuition fee or charge of any kind except as permitted by lawhellip
The laws governing tuition and fees at institutions of higher education are found in Education Code Section 54 including a limited number of rules that relate to tuition and fees charged by junior and community colleges Education Code Section 54 includes statutes regarding statewide tuition and fee authority rules regarding residency for tuition and fee purposes and various exemptions for tuition and fees from nonresidency status Also it includes specific fee authority for individual institutions Figure B1 provides a listing of tuition and fee authorizations in Education Code Section 54 but does not include the items presented below or the various exemption and waiver provisions (Details about each provision can be found at httpwwwcapitolstate txus) Th ere are isolated instances outside Chapter 54 whereby the boards of regents are authorized to charge for specific services provided to students
This appendix highlights some of the more prominent tuition and fee provisions and indicates whether the related revenue is or is not included in the General Appropriations Act (GAA)
INCLUDED IN THE GENERAL APPROPRIATIONS ACT Tuition and fee revenue included in the GAA as General Revenue DedicatedndashFunds is referenced as ldquoOther Education and General Incomerdquo The amounts are ldquoEstimatedrdquo so whatever amount of revenue generated is the actual amount available to the institution to spend
54051 Tuition Rates (statutory tuition) In conjunction with Section 540512 Interim Tuition Rates resident tuition for undergraduate students reached $50 per semester credit hour in the 2005ndash06 academic year (the 2006 state fi scal year) Tuition for nonresident students at general academic medical and dental institutions is based on the average of nonresident tuition rates in the five most populous states other than Texas The Texas Higher Education Coordinating Board must make this computation each academic year
54008 Tuition Rate Set by Governing Board (also known as board authorized tuition) Applies to graduate programs Subsection (d) specifies that it is not to be used in the GAA as an offset to General Revenue Funds It is distributed across formula strategies after the formula calculation
54501 Laboratory Fees The fee amount must be sufficient to cover the general costs of laboratory materials and supplies used by a student It is not to be less than $2 or more than $30 per semester and it must not exceed the actual cost of materials and supplies
NOT INCLUDED IN THE GENERAL APPROPRIATIONS ACT 540513 Designated Tuition Statute defi nes designated tuition as an institutional fund which means the revenue is not considered part of ldquoeducational and general fundsrdquo Th e governing board can waive designated tuition for a student (see 54261) Statute specifies that this revenue not be used in the GAA as a way to offset General Revenue
54503 Student Services Fees This is intended for activities which are separate from the regularly scheduled academic functions of the institution and directly involve or benefi t students Except for The University of Texas at Austin (see 54513) and components of the University of Houston System (see 545061) the maximum of all compulsory student services cannot exceed $250 per semester It is kept separate from educational and general funds
54504 Incidental Fees The governing board sets the fee which must reasonably reflect the actual cost of the materials or services for which the fee is collected Examples of unearned fees include late registration library fi nes microfilming fees thesis or doctoral manuscript reproduction or filing fees and bad check charges
5516 Board Responsibility The governing board is authorized to ldquofix and collect rentals rates and chargesrdquo
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 31
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54006 Refund or Adjustment of Tuition and Mandatory Fees for Dropped Courses and Student Withdrawals
540065 Tuition Rebate for Certain Undergraduates
54007 Option to Pay Tuition by Installment
540071 Authority of Institution to Provide Payment Options for Student with Delayed Financial Aid
54009 Increase in Tuition Rate or Fees
54010 Reduction in Tuition
54011 Tuition Limit in Cases of Concurrent Enrollment
54012 Tuition Rates for Certain Doctoral Students
54014 Tuition for Repeated or Excessive Undergraduate Hours
54015 Billing and Notifi cation for Tuition
54016 Fixed Tuition Rate Program for Certain Transfer Students at General Academic Teaching Institutions
54052ndash54057 Residency Provisions
542031 Dependent Children of Residents Who are Members of Armed Forces Deployed on Combat Duty
54204 Children of Disabled Firefighters and Law Enforcement Officers
542041 Disabled Peace Officers
54205 Blind Deaf Students
54206 Foreign Service Officers
54208 Firefighters Enrolled in Fire Science Courses
542081 Peace Officers Enrolled in Certain Courses
54211 Faculty and Dependents
54212 Teaching and Research Assistant
54213 Scholarship Student
54214 Biomedical Research Program Scholarship Student
54221 The University of Texas System Science and Technology Development Management and Transfer
54222 Economic Development and Diversification
54223 Tuition Rates for Olympic Athletes
54231 Resident of Boarding State or Nation or Participant in Student Exchange Program Tuition
54232 NATO Agreement
54233 Academic Common Market
54241 Military Personnel and Dependents
54331 Students from other Nations of the American Hemisphere
54341 Veterans and Other Military Personnel Dependents
54342 Prisoners of War
54343 Children of Prisoners of War or Persons Missing in Action
54344 Participants in Military Funerals
54345 Assistance for Tuition and Fees for Members of State Military Forces
54351 Children of Disabled Firefighters and Law Enforcement Officers
54352 Disabled Peace Officers Optional Exemption
54353 Firefighters and Peace Officers Enrolled in Certain Courses
543531 Firefighters Enrolled in Fire Science Courses
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 32
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54354 Education Benefits for Certain Survivors
54355 Children of Professional Nursing Program Faculty
54356 Preceptors for Professional Nursing Education Programs
54363 Educational Aids
54364 Blind Deaf Students
54365 Senior Citizens Optional Benefit
545011 Charges and Fees for Certain Payments
54502 General Deposits
545021 Student Deposit Fund Composition and Uses
545025 Proration of Fees
545031 Student Fee Advisory Committee
545032 Student Fee Advisory Committee the Texas AampM University System
545041 Environmental Service Fee
54505 Vehicle Registration Fees and Other Fees Related to Parking and Traffic
54506 Fees and Charges for Services to the Public the University of Houston System
545061 Student Services Fees the University of Houston System
545062 Student Fees Advisory Committee the University of Houston System
54507 Group Hospital and Medical Services Fees Texas AampM University System
54508 Medical Services Fee Texas Tech University System Components
545081 Medical Services Fee University of North Texas System Institutions
545082 Medical Services Fee Midwestern State University
545085 Medical Services Fee Texas Womanrsquos University
545089 Medical Services Fee Texas State University System Components
5450891 Medical Services Fee The University of Texas System Components
54509 Student Recreation Fee Texas Tech University System Components
545091 Student Recreational Facility Fee University of North Texas
54510 Student Recreational Sports Fee The University of Texas at Austin
54511 Student Fees for Bus Service Texas State University
545111 Environmental Service Fee Southwest Texas State University
54512 Shuttle Bus Fee The University of Texas at Arlington
545121 Intercollegiate Athletic Fee The University of Texas at Arlington
545122 Recreational Facility Fee The University of Texas at Arlington
54513 Student Service Fees The University of Texas at Austin
545131 International Education Fee The University of Texas at Austin
545132 International Education Fee
545133 Martin Luther King Jr Statue Fee The University of Texas at Austin
545134 Washington DC Internship Education Fee
545135 Barbara Jordan and Cesar Chavez Statues Fee The University of Texas at Austin
54515 Student Union Fee
54518 University Center Fee Midwestern State University
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 33
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54519 Student Union Fee North Texas State University
545191 Intercollegiate Athletic Fee University of North Texas
54520 University Center Student Fee Stephen F Austin State University
545201 Recreational Sports Fee Stephen F Austin State University
54521 Student Center Facility Fees Texas AampM University System
54522 Student Center Fees Texas Southern University
545221 Recreational Facility Fee Texas Southern University
545222 Medical Services Fee Texas Southern University
545223 Intercollegiate Athletics Fee Texas Southern University
54523 Student Center Fees Texas State University System
545241 Student Union Fees Texas Tech University System
54525 Fees for Student Centers Texas Womanrsquos University
545251 Student Fitness and Recreational Fee Texas Womanrsquos University
54526 Student Fees for University Centers the University of Houston
54527 Student Fees for University Center Facilities the University of Houston-Downtown College
54528 Recreational Facility Fee the University of Houston
54529 Student Union Fee The University of Texas at Arlington
54530 Student Union Fees The University of Texas at Austin
54531 Student Union Building Fees The University of Texas at Dallas
545311 Transportation Fee The University of Texas at Dallas
545312 Student Services Building Fee The University of Texas at Dallas
545313 Intramural and Intercollegiate Athletics Fee The University of Texas at Dallas
54532 Student Union Building Fees The University of Texas at San Antonio
545321 Transportation Fee The University of Texas at San Antonio
545322 Intercollegiate Athletics Fee The University of Texas at San Antonio
54533 Student Union Fees The University of Texas of the Permian Basin
545331 Intercollegiate Athletic Fee The University of Texas of the Permian Basin
545332 Fees for Student Services Building The University of Texas of the Permian Basin
54534 Arts and Performance Center Fee The University of Texas at Tyler
545341 Student Recreational Facility Fee The University of Texas at Tyler
545342 Intercollegiate Athletics Fee The University of Texas at Tyler
545343 Student Union Fee The University of Texas at Tyler
54535 Student Union Fee The University of Texas at El Paso
54536 Fees for Student Health Services Building The University of Texas at Austin
54537 Fees for Student Services Building The University of Texas at Austin
545371 Gregory Gymnasium Renovation Fee The University of Texas at Austin
545372 Aquatics Center Fee The University of Texas at Austin
54538 Recreational Sports Fee Texas State University System
545381 Intercollegiate Athletics Fee Certain Institutions in Texas State University System
545382 Intercollegiate Athletics Fee Texas State University ndash San Marcos
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 34
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54539 Recreational Sports Fee the Texas AampM University System
545391 Intercollegiate Athletics Fee Texas AampM University ndash Corpus Christi
545392 Intercollegiate Athletics Fee Texas AampM University ndash Kingsville
545393 Intercollegiate Athletics Fee Prairie View AampM University
545394 Intercollegiate Athletics Fee Tarleton State University
545395 Intercollegiate Athletics Fee Texas AampM International University
545396 Intercollegiate Athletics Fees West Texas AampM University
545397 Intercollegiate Athletics Fees Texas AampM University ndash Commerce
545398 Student Endowment Fund Fee Texas AampM University ndash Corpus Christi
54540 Student Center Fee University of Houston ndash Clear Lake
54541 Recreational Facility Fee The University of Texas at El Paso
54542 Student Union Building Fee The University of Texas ndash Pan American
545421 Sports Recreation and Wellness Facility Fee The University of Texas ndash Pan American
54543 Recreational Facility Fee The University of Texas at San Antonio
54544 Recreational Facility Fee The University of Texas at Dallas
545441 Student Recreational and Health Facilities Fee Midwestern State University
545442 Intercollegiate Athletics Fee Midwestern State University
54545 Fees for Continuing Education Courses
54546 Student Union Fees The University of Texas at Brownsville
54550 Wellness Recreational and Fitness Complex Fee The University of Texas at Brownsville
54551 Intercollegiate Athletics Fee The University of Texas at Brownsville
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 35
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 36
APPENDIX C GLOSSARY
APPROPRIATION METHODOLOGIES Direct Appropriation The actual appropriation either estimated or sum certain listed in that institutionrsquos portion of the General Appropriations Act (GAA)
Indirect Appropriation An appropriation made on behalf of an institution but not listed in that institutionrsquos portion of the GAA Examples include appropriations to the Available University Fund the Higher Education Fund and the Higher Education Coordinating Board all of which are ultimately allocated to institutions
Estimated Appropriation An estimated appropriation is a figure in the GAA that best reflects the information available about the revenue source but the amount available for an institution to spend is contingent on the amount of revenue actually generated If the actual amount of revenue is less than the estimated amount the institution is limited to the lower amount If more revenue is generated than the estimated amount the institution can spend the higher amount
Sum Certain Appropriation A sum certain appropriation in the GAA means that an institution is limited to spend no more than the level of appropriation noted in the institutionrsquos bill pattern in the GAA
Lump Sum Appropriation Texas Education Code Section 61059(k) calls for flexibility in funds appropriated to higher education institutions A lump sum appropriation is a single amount that is unrestricted which means that it can be used for any variety of strategies The GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Higher education institutions are not required to spend their appropriation within specified strategies One exception to this is the Tuition Revenue Bond strategy which represents the appropriation related to debt service on related bonds and must be spent as appropriated or it is reverted to the treasury
METHODS OF FINANCE General Revenue (GR) The non-dedicated portion of the General Revenue Fund is the statersquos primary operating fund Most state tax revenue many state fees and various other sources of revenue are deposited as non-dedicated General Revenue Funds
General RevenuendashDedicated (GRndashD) This is the dedicated portion of General Revenue Funds For higher education institutions the bulk of General RevenuendashDedicated Fund appropriations consist of tuition and fee revenue generated by the institutions These include the tuition and fee revenue included as ldquoOther Educational and General Incomerdquo (defined below) ldquoboard authorized tuitionrdquo (Texas Education Code Section 54008)
Other Funds State funds not included in General Revenue Funds or General RevenuendashDedicated Funds For institutions of higher education these include the Available University Fund and Patient Income generated by health-related institutions
FUND TYPES Educational and General Income Th e Texas Education Code (51009(c)) definition for ldquoEducational and General Fundsrdquo includes (a) net tuition (b) special course fees charged under Education Code Section 54051(e) and (l) (c) lab fees (d) student teaching fees (e) hospital and clinic fees (f ) organized activity fees and (g) proceeds from the sale of educational and general equipment
Institutional Funds Texas Education Code Section 51009(b) defines institutional funds as those that are not ldquoeducational and general fundsrdquo An example of an institutional fund is ldquodesignated tuitionrdquo (Texas Education Code Section 540513) These funds are not included in the GAA
Local Funds Texas Education Code Section 51009(a) defines local funds as net tuition certain special course fees lab fees student teaching fees hospital and clinic fees organized activity fees proceeds from the sale of educational and general equipment and indirect cost recovery fees Th is revenue is accounted for as ldquoeducational and general fundsrdquo and is included in the GAA
Other Educational and General Income The GAA includes some tuition and fees collected by institutions of higher education (General RevenuendashDedicated Funds) Th e revenue from tuition and fees such as statutory tuition (see texas Education Code Section 54051 Tuition Rates) board authorized tuition (see Texas Education Code Section 54008 Tuition Rate Set by Governing Board) Laboratory
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 37
APPENDIX C GLOSSARY
Fees (Texas Education Code Section 54501) and certain other fees are considered Other Educational and General Income (Other EampG) and are appropriated in the GAA as General RevenuendashDedicated Funds Other Educational and General Income is a subset of Educational and General Income (EampG Income)
Patient Income Health-related institutions that operate hospitals or dental clinics generate patient income from services rendered It is allocated as a method of finance to the related institution across a range of strategies in the institutionrsquos bill pattern (Other Funds) For the 2010ndash11 biennium more than $48 billion in patient income was appropriated making it the largest method of fi nance for health-related institutions
OTHER ITEMS Indirect Cost Recovery Institutions negotiate a percentage of a grant with the federal government for Indirect Costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 38
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cap
ital e
quip
men
t use
djo
intly
for e
duca
tiona
l and
gene
ral a
ctiv
ities
Arti
cle
VII
Sec
tion
18(a
-j) o
f the
Tex
as
Con
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Arti
cle
VII
Sec
tion
17(a
-l) o
f the
Tex
as
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
620
02
Gen
eral
App
ropr
iatio
nsA
ct
Texa
s C
onst
itutio
n re
quire
s 1
3 of
the
annu
al
AU
F pr
ocee
ds b
e tra
nsfe
rred
to th
e Te
xas
Aamp
M U
nive
rsity
Sys
tem
E
ach
Sys
tem
offi
cede
term
ines
how
to a
ppor
tion
its s
hare
of t
heA
UF
betw
een
debt
ser
vice
and
sup
port
and
mai
nten
ance
w
ithin
gui
delin
es s
pecifi e
d by
the
Texa
s C
onst
itutio
n
Arti
cle
VII
Sec
tion
17(a
) req
uire
s th
e H
EF
beal
loca
ted
usin
g an
equ
itabl
e fo
rmul
a d
efi n
edin
the
Edu
catio
n C
ode
(Sec
tion
620
21) a
sT
he a
lloca
tion
of fu
nds
unde
r thi
s su
bsec
tion
ism
ade
in a
ccor
danc
e w
ith a
n eq
uita
ble
form
ula
cons
istin
g of
the
follo
win
g el
emen
ts
spac
e defi c
it fa
cilit
ies
cond
ition
ins
titut
iona
l com
plex
ity
and
a se
para
te a
lloca
tion
for
the
Texa
s S
tate
Te
chni
cal C
olle
ge S
yste
m
THE
CB
adm
inis
ters
the
HE
F fo
rmul
a re
allo
catio
nad
viso
ry p
roce
ss
Edu
catio
n C
ode
(Sec
tion
620
21) p
rovi
des
a by
-in
stitu
tion
brea
kout
of a
nnua
l HE
F ap
prop
riatio
ns
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 39
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Nat
iona
l $1
24
mill
ion
Res
earc
hU
nive
rsity
(E
stim
ated
)Fu
nd
Res
earc
h $6
53
mill
ion
Dev
elop
men
tFu
nd
Texa
s $9
35
mill
ion
Com
petit
ive
Kno
wle
dge
Fund
Arti
cle
VII
Sec
tion
20(a
)
for t
he p
urpo
se o
f pr
ovid
ing
a de
dica
ted
inde
pend
ent
and
equi
tabl
eso
urce
of f
undi
ng to
enab
le e
mer
ging
rese
arch
univ
ersi
ties
in th
is s
tate
to a
chie
ve n
atio
nal
prom
inen
ce a
s m
ajor
rese
arch
uni
vers
ities
Arti
cle
VII
Sec
tion
20 (h
)
onl
y fo
r the
sup
port
and
mai
nten
ance
of
educ
atio
nal a
nd g
ener
alac
tiviti
es th
at p
rom
ote
incr
ease
d re
sear
chca
paci
ty a
t the
uni
vers
ity
Edu
catio
n C
ode
Sec
tion
hellipto
pro
mot
e62
091
in
crea
sed
rese
arch
capa
city
at e
ligib
le g
ener
alac
adem
ic te
achi
ngin
stitu
tions
Sec
tion
56 o
f Hig
her
Edu
catio
n S
peci
alP
rovi
sion
s G
AA
201
2ndash13
bi
enni
um
hellipto
sup
port
facu
lty fo
r the
pur
pose
of
inst
ruct
iona
l exc
elle
nce
and
rese
arch
Des
igna
ted
an e
mer
ging
rese
arch
uni
vers
ity b
yTe
xas
Hig
her E
duca
tion
Coo
rdin
atin
g B
oard
R
epor
ts a
t lea
st $
45 m
illio
nin
rest
ricte
d re
sear
chex
pend
iture
s in
eac
h of
the
last
2 y
ears
P
lus
four
of t
he fo
llow
ing
addi
tiona
l crit
eria
1)
End
owm
ents
gt $
400
mill
ion
2) P
rodu
ces
gt 20
0 P
hDs
per y
ear
3) S
elec
tive
ente
ring
Fres
hmen
cla
ss
4) M
embe
r of P
hi B
eta
Kap
pa o
r equ
ival
ent
5) P
osse
sses
hig
h qu
ality
facu
lty a
nd6)
Dem
onst
rate
dco
mm
itmen
t to
high
-qua
lity
grad
uate
edu
catio
n
Edu
catio
n C
ode
Sec
tion
Elig
ible
inst
itutio
n62
092
m
eans
a g
ener
al a
cade
mic
teac
hing
inst
itutio
n a
sdefi n
ed b
y S
ectio
n 61
003
ot
her t
han
The
Uni
vers
ity o
f Te
xas
at A
ustin
Tex
as A
ampM
U
nive
rsity
or P
rairi
e Vi
ew
Aamp
M U
nive
rsity
Uni
vers
ity o
f Tex
as a
t A
ustin
Uni
vers
ity o
f Tex
as
at D
alla
s T
exas
Aamp
M
Uni
vers
ity T
exas
Tec
h U
nive
rsity
Uni
vers
ity o
f H
oust
on
Arti
cle
VII
Sec
tion
20 (a
-h)
of th
e Te
xas
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
621
41
Gen
eral
App
ropr
iatio
nA
ct
Edu
catio
n C
ode
Sec
tion
Not
e th
e62
091
RD
F as
a s
tand
-alo
neap
prop
riatio
n ite
m h
asno
t bee
n fu
nded
sin
ceth
e 20
06ndash0
7 bi
enni
um
How
ever
fun
ds c
alle
d th
e R
DF
have
bee
nap
prop
riate
d di
rect
lyin
to th
e bi
ll pa
ttern
s of
each
elig
ible
Gen
eral
Aca
dem
ic In
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Edu
catio
n C
ode
Sec
tion
621
46 (c
)
o
fth
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for
dist
ribut
ion
in a
sta
tefi s
cal y
ear
each
elig
ible
in
stitu
tion
is e
ntitl
ed to
a d
istri
butio
n in
an
amou
nteq
ual t
o th
e su
m o
fon
e-se
vent
h of
the
tota
l am
ount
app
ropr
iate
d(1
)an
dan
equ
al s
hare
of a
ny a
mou
nt re
mai
ning
afte
r(2
)di
strib
utio
ns a
re c
alcu
late
d un
der S
ubdi
visi
on (1
)no
t to
exce
ed a
n am
ount
equ
al to
one
-four
th o
fth
at re
mai
ning
am
ount
Edu
catio
n C
ode
Sec
tion
621
46 (e
)If
the
num
ber o
f ins
titut
ions
that
are
elig
ible
for
dist
ribut
ions
in a
sta
tefi s
cal y
ear i
s m
ore
than
four
eac
h el
igib
le in
stitu
tion
is e
ntitl
ed to
an
equa
l sh
are
of th
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for d
istri
butio
n in
thatfi s
cal y
ear
Edu
catio
n C
ode
Sec
tion
620
95
The
am
ount
shal
l be
appo
rtion
ed a
mon
g th
e el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of
rest
ricte
d re
sear
ch fu
nds
expe
nded
by
each
inst
itutio
n pe
r yea
r for
the
thre
e pr
eced
ing
stat
efi s
cal y
ears
The
2012
ndash13
appr
opria
tion
prov
ided
abo
ut $
07
mill
ion
to e
ach
elig
ible
inst
itutio
n fo
r eve
ry $
100
mill
ion
in u
nres
trict
ed re
sear
ch e
xpen
ditu
res
asav
erag
ed o
ver a
3-y
ear p
erio
d
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 40
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Res
earc
h N
one
U
nive
rsity
D
evel
opm
ent
Fund
Texa
s $3
56
mill
ion
Res
earc
hIn
cent
ive
Pro
gram
SO
UR
CE L
egis
lativ
e B
udge
t Boa
rd
Texa
s E
duca
tion
Cod
e S
ectio
n 62
051
to
pro
vide
fund
ing
tore
sear
ch u
nive
rsiti
esan
d em
ergi
ng re
sear
chun
iver
sitie
s fo
r the
recr
uitm
ent a
nd re
tent
ion
of h
ighl
y qu
alifi
ed fa
culty
an
d th
e en
hanc
emen
t of
rese
arch
pro
duct
ivity
at
thos
e un
iver
sitie
s
Edu
catio
n C
ode
Sec
tion
hellipto
pro
vide
621
22
mat
chin
g fu
nds
to a
ssis
tel
igib
le in
stitu
tions
inle
vera
ging
priv
ate
gifts
for t
he e
nhan
cem
ent o
fre
sear
ch p
rodu
ctiv
ity a
ndfa
culty
recr
uitm
ent
Edu
catio
n C
ode
Sec
tion
620
51
Elig
ible
inst
itutio
nm
eans
an
inst
itutio
nof
hig
her e
duca
tion
desi
gnat
ed a
s a
rese
arch
univ
ersi
ty o
r em
ergi
ngre
sear
ch u
nive
rsity
und
erth
e co
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
E
ligib
le62
121
in
stitu
tion
mea
ns a
nin
stitu
tion
of h
ighe
red
ucat
ion
desi
gnat
ed a
san
em
ergi
ng re
sear
chun
iver
sity
und
er th
eco
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
620
51
Edu
catio
n C
ode
Sec
tion
(Hou
se B
ill 5
162
121
Eig
hty-fi r
st R
egul
ar
Ses
sion
)
Edu
catio
n C
ode
Sec
tion
620
53
t
o el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of t
otal
rese
arch
fund
s ex
pend
ed b
y ea
ch in
stitu
tion
annu
ally
dur
ing
the
thre
e m
ost r
ecen
t sta
tefi s
cal
year
s a
ccor
ding
to th
e fo
llow
ing
rate
s
at le
ast $
1 m
illio
n fo
r eve
ry $
10 m
illio
n of
(1)
the
aver
age
annu
al a
mou
nt o
f tho
se re
sear
chfu
nds
expe
nded
by
the
inst
itutio
n if
that
ave
rage
amou
nt fo
r the
inst
itutio
n is
$50
mill
ion
or m
ore
and
at le
ast $
500
000
for e
very
$10
mill
ion
of(2
)th
e av
erag
e an
nual
am
ount
of t
hose
rese
arch
fund
s ex
pend
ed b
y th
e in
stitu
tion
if th
at a
vera
geam
ount
for t
he in
stitu
tion
is le
ss th
an $
50 m
illio
n
Edu
catio
n C
ode
Sec
tion
621
23
hellipis
ent
itled
to re
ceiv
e o
ut o
f fun
ds a
ppro
pria
ted
for t
hepu
rpos
es o
f the
pro
gram
for t
hatfi
sca
l yea
r a
mat
chin
g gr
ant i
n an
am
ount
det
erm
ined
acco
rdin
g to
the
follo
win
g ra
tes
50 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(1)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$10
000
0 or
mor
e bu
t not
mor
eth
an $
999
999
75 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(2)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$1
mill
ion
or m
ore
but n
ot m
ore
than
$1
999
999
or
100
perc
ent o
f the
am
ount
of t
he g
ifts
and
(3)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$2
mill
ion
or m
ore
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 41
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 42
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $50119391873 $47339213388 ($2780178485) (55)
School for the Blind and Visually Impaired 93388870 41245345 (52143525) (558)
School for the Deaf 53083657 52695245 (388412) (07)
SUBTOTAL PUBLIC EDUCATION $50265864400 $47433153978 ($2832710422) (56)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1745695460 $1749380723 $3685263 02
Lamar Institute of Technology 27568721 28708990 1140269 41
Lamar University ndash Orange 18484576 19164769 680193 37
Lamar University ndash Port Arthur 23780405 22119709 (1660696) (70)
SUBTOTAL LAMAR STATE COLLEGES $69833702 $69993468 $159766 02
Texas State Technical College System $16493826 $5351461 ($11142365) (676) Administration
Texas State Technical College ndash Harlingen 50980986 49093510 (1887476) (37)
Texas State Technical College ndash West Texas 27965791 24970291 (2995500) (107)
Texas State Technical College ndash Marshall 11434368 10995468 (438900) (38)
Texas State Technical College ndash Waco 68111562 73596786 5485224 81
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$174986533 $164007516 ($10979017) (63)
SUBTOTAL TWO-YEAR INSTITUTIONS $1990515695 $1983381707 ($7133988) (04)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $19099360 $18147200 ($952160) (50)
The University of Texas at Arlington 275081581 288654156 13572575 49
The University of Texas at Austin 749518863 702739665 (46779198) (62)
The University of Texas at Dallas 230535884 223513862 (7022022) (30)
The University of Texas at El Paso 202195230 195511098 (6684132) (33)
The University of Texas ndash Pan American 169039177 162830092 (6209085) (37)
The University of Texas at Brownsville 61910963 57628718 (4282245) (69)
The University of Texas of the Permian Basin 58194080 59145561 951481 16
The University of Texas at San Antonio 273182023 260495772 (12686251) (46)
The University of Texas at Tyler 71137295 66147545 (4989750) (70)
Texas AampM University System Administrative and 20701573 4501868 (16199705) (783) General Offices
Texas AampM University 700537434 651599219 (48938215) (70)
Texas AampM University at Galveston 43799673 37773622 (6026051) (138)
Prairie View AampM University 134247361 122639379 (11607982) (86)
Tarleton State University 87292499 83950084 (3342415) (38)
Texas AampM University ndash Central Texas 29460313 30599703 1139390 39
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 43
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Corpus Christi $121534331 $110283074 ($11251257) (93)
Texas AampM University ndash Kingsville 82466491 75368253 (7098238) (86)
Texas AampM University ndash San Antonio 27154411 37125363 9970952 367
Texas AampM International University 83231209 73816324 (9414885) (113)
West Texas AampM University 79410486 72847023 (6563463) (83)
Texas AampM University ndash Commerce 99558312 89920628 (9637684) (97)
Texas AampM University ndash Texarkana 41409091 34754968 (6654123) (161)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 450003385 394815403 (55187982) (123)
University of Houston ndash Clear Lake 83394543 71849633 (11544910) (138)
University of Houston ndash Downtown 88104670 67926822 (20177848) (229)
University of Houston ndash Victoria 42631672 39786959 (2844713) (67)
Midwestern State University 54249721 48828454 (5421267) (100)
University of North Texas System Administration 9789067 6732226 (3056841) (312)
University of North Texas 302350602 296355351 (5995251) (20)
University of North Texas at Dallas 35156605 30478388 (4678217) (133)
Stephen F Austin State University 121843336 108728674 (13114662) (108)
Texas Southern University 174127907 150903873 (23224034) (133)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 368026094 357056343 (10969751) (30)
Angelo State University 68450875 64053866 (4397009) (64)
Texas Womans University 146639127 135140923 (11498204) (78)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 121909453 111926905 (9982548) (82)
Sam Houston State University 162684291 145338873 (17345418) (107)
Texas State University ndash San Marcos 261940220 254492644 (7447576) (28)
Sul Ross State University 34008142 37804020 3795878 112
Sul Ross State University Rio Grande College 13112804 12127383 (985421) (75)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$6217659551 $5853308379 ($364351172) (59)
HEALTH-RELATED INSTITUTIONS -
The University of Texas Southwestern Medical $339025963 $278284511 ($60741452) (179) Center
The University of Texas Medical Branch at 1252556677 1214546039 (38010638) (30) Galveston
The University of Texas Health Science Center at 356632008 347880533 (8751475) (25) Houston
The University of Texas Health Science Center at 357022348 319153560 (37868788) (106) San Antonio
The University of Texas MD Anderson Cancer 4614023153 5043439860 429416707 93 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 44
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center at $170568794 $176002869 $5434075 32 Tyler
Texas AampM University System Health Science 252705800 241434175 (11271625) (45) Center
University of North Texas Health Science Center 141974215 140131956 (1842259) (13) at Fort Worth
Texas Tech University Health Sciences Center 361096839 333314809 (27782030) (77)
SUBTOTAL HEALTH-RELATED INSTITUTIONS $7845605797 $8094188312 $248582515 32
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $137560226 $130327148 ($7233078) (53)
Texas AgriLife Extension Service 137837443 128253897 (9583546) (70)
Texas Engineering Experiment Station 249008314 268154320 19146006 77
Texas Transportation Institute 96056916 99288013 3231097 34
Texas Engineering Extension Service 164895453 161748713 (3146740) (19)
Texas Forest Service 108765979 196355520 87589541 805
Texas Veterinary Medical Diagnostic Laboratory 32693561 29601103 (3092458) (95)
SUBTOTAL TEXAS AampM UNIVERSITY $926817892 $1013728714 $86910822 94 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 1755022519 1301687813 (453334706) (258)
SUBTOTAL OTHER HIGHER EDUCATION $3339042471 $2900537481 ($438504990) (131)
SUBTOTAL HIGHER EDUCATION $20319641406 $19845144593 ($474496813) (23)
EMPLOYEE BENEFITS
Teacher Retirement System $4038146148 $3797393090 ($240753058) (60)
Optional Retirement Program 294169521 247905975 (46263546) (157)
Higher Education Employees Group Insurance 1068235618 968961950 (99273668) (93) Contributions
Retirement and Group Insurance 61823656 63645693 1822037 29
Social Security and Benefits Replacement Pay 560373470 577908771 17535301 31
SUBTOTAL EMPLOYEE BENEFITS $6022748413 $5655815479 ($366932934) (61)
DEBT SERVICE
Bond Debt Service Payments $7579835 $14567314 $6987479 922
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13483869 $19862644 $6378775 473
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION $76416008567 $72871348360 ($3544660207) (46) 1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 45
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $30322901124 $30476707526 $153806402 05
School for the Blind and Visually Impaired 28830574 29152947 322373 11
School for the Deaf 36111132 36216478 105346 03
SUBTOTAL PUBLIC EDUCATION $30387842830 $30542076951 $154234121 05
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1728790460 $1749380723 $20590263 12
Lamar Institute of Technology 20141881 21363652 1221771 61
Lamar University ndash Orange 13379584 13438359 58775 04
Lamar University ndash Port Arthur 18247526 16676606 (1570920) (86)
SUBTOTAL LAMAR STATE COLLEGES $51768991 $51478617 ($290374) (06)
Texas State Technical College System $16122329 $4603444 ($11518885) (714) Administration
Texas State Technical College ndash Harlingen 35862333 35177742 (684591) (19)
Texas State Technical College ndash West Texas 22972902 20195085 (2777817) (121)
Texas State Technical College ndash Marshall 8795246 8519429 (275817) (31)
Texas State Technical College ndash Waco 48458059 55190076 6732017 139
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$132210869 $123685776 ($8525093) (64)
SUBTOTAL TWO-YEAR INSTITUTIONS $1912770320 $1924545116 $11774796 06
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $16827250 $15931200 ($896050) (53)
The University of Texas at Arlington 171697428 183867794 12170366 71
The University of Texas at Austin 536034384 492544731 (43489653) (81)
The University of Texas at Dallas 142108554 148778381 6669827 47
The University of Texas at El Paso 142521273 137781712 (4739561) (33)
The University of Texas ndash Pan American 115707790 110889522 (4818268) (42)
The University of Texas at Brownsville 51100517 47424781 (3675736) (72)
The University of Texas of the Permian Basin 47639722 48816240 1176518 25
The University of Texas at San Antonio 186961792 178547264 (8414528) (45)
The University of Texas at Tyler 56673893 51804728 (4869165) (86)
Texas AampM University System Administrative 11478504 4473868 (7004636) (610) and General Offices
Texas AampM University 487991523 458011060 (29980463) (61)
Texas AampM University at Galveston 36736318 30964674 (5771644) (157)
Prairie View AampM University 102383638 90923868 (11459770) (112)
Tarleton State University 62999263 59464473 (3534790) (56)
Texas AampM University ndash Central Texas 24007601 25352928 1345327 56
Texas AampM University ndash Corpus Christi 93966271 81624416 (12341855) (131)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 46
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $60610859 $54030202 ($6580657) (109)
Texas AampM University ndash San Antonio 21438200 29287597 7849397 366
Texas AampM International University 67735925 58009521 (9726404) (144)
West Texas AampM University 57622391 53282160 (4340231) (75)
Texas AampM University ndash Commerce 67888967 66581226 (1307741) (19)
Texas AampM University ndash Texarkana 31084147 30370655 (713492) (23)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 311616152 257331674 (54284478) (174)
University of Houston ndash Clear Lake 58807555 46454050 (12353505) (210)
University of Houston ndash Downtown 56441987 39973395 (16468592) (292)
University of Houston ndash Victoria 32315073 27651821 (4663252) (144)
Midwestern State University 37434162 33382015 (4052147) (108)
University of North Texas System Administration 4789067 6732226 1943159 406
University of North Texas 194672599 191274119 (3398480) (17)
University of North Texas at Dallas 30330149 28165402 (2164747) (71)
Stephen F Austin State University 84817662 75640135 (9177527) (108)
Texas Southern University 125878414 104685201 (21193213) (168)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 261015662 253976808 (7038854) (27)
Angelo State University 48095474 45861337 (2234137) (46)
Texas Womans University 104666337 92467100 (12199237) (117)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 77990428 70849905 (7140523) (92)
Sam Houston State University 85061409 79609576 (5451833) (64)
Texas State University ndash San Marcos 168720167 164894925 (3825242) (23)
Sul Ross State University 28832045 32758471 3926426 136
Sul Ross State University Rio Grande College 10662338 9364932 (1297406) (122)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$4333902287 $4078804555 ($255097732) (59)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $286599806 $249279177 ($37320629) (130) Center
The University of Texas Medical Branch at 586704245 472189151 (114515094) (195) Galveston
The University of Texas Health Science Center 278466261 294281302 15815041 57 at Houston
The University of Texas Health Science Center 285919332 260615042 (25304290) (89) at San Antonio
The University of Texas MD Anderson Cancer 316274242 298435072 (17839170) (56) Center
The University of Texas Health Science Center 68656721 71856579 3199858 47 at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 47
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $205234148 $194402799 ($10831349) (53) Center
University of North Texas Health Science Center 120369543 113121832 (7247711) (60) at Fort Worth
Texas Tech University Health Sciences Center 308265168 291713120 (16552048) (54)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$2456489466 $2245894074 ($210595392) (86)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $108442641 $101233060 ($7209581) (66)
Texas AgriLife Extension Service 93421095 84437039 (8984056) (96)
Texas Engineering Experiment Station 27420670 27791758 371088 14
Texas Transportation Institute 1786250 1282500 (503750) (282)
Texas Engineering Extension Service 13423471 12388837 (1034634) (77)
Texas Forest Service 38994278 158979948 119985670 3077
Texas Veterinary Medical Diagnostic Laboratory 12326913 11519113 (807800) (66)
SUBTOTAL TEXAS AampM UNIVERSITY $295815318 $397632255 $101816937 344 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 1324025818 1053522035 (270503783) (204)
SUBTOTAL OTHER HIGHER EDUCATION $1849025818 $1578522035 ($270503783) (146)
SUBTOTAL HIGHER EDUCATION $10848003209 $10225398035 ($622605174) (57)
EMPLOYEE BENEFITS
Teacher Retirement System $3721648969 $3431139479 ($290509490) (78)
Optional Retirement Program 249841016 205341297 (44499719) (178)
Higher Education Employees Group Insurance 1066913010 967556924 (99356086) (93) Contributions
Retirement and Group Insurance 51589368 54070178 2480810 48
Social Security and Benefits Replacement Pay 456936472 471706602 14770130 32
SUBTOTAL EMPLOYEE BENEFITS $5546928835 $5129814480 ($417114355) (75)
DEBT SERVICE
Bond Debt Service Payments $7325020 $14248830 $6923810 945
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13229054 $19544160 $6315106 477
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$46796003928 $45916833626 ($879170302) (19)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 48
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $418569 $649000 $230431 551
School for the Blind and Visually Impaired 0 0 0 NA
School for the Deaf 0 0 0 NA
SUBTOTAL PUBLIC EDUCATION $418569 $649000 $230431 551
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 7026644 7345338 318694 45
Lamar University ndash Orange 4875929 5726410 850481 174
Lamar University ndash Port Arthur 4747409 5443103 695694 147
SUBTOTAL LAMAR STATE COLLEGES $16649982 $18514851 $1864869 112
Texas State Technical College System $371497 $748017 $376520 1014 Administration
Texas State Technical College ndash Harlingen 14268123 13915768 (352355) (25)
Texas State Technical College ndash West Texas 4573311 4775206 201895 44
Texas State Technical College ndash Marshall 2486999 2476039 (10960) (04)
Texas State Technical College ndash Waco 18496312 18406710 (89602) (05)
SUBTOTAL TEXAS STATE TECHNICAL $40196242 $40321740 $125498 03 COLLEGES
SUBTOTAL TWO-YEAR INSTITUTIONS $56846224 $58836591 $1990367 35
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 99544565 104786362 5241797 53
The University of Texas at Austin 203175074 210194934 7019860 35
The University of Texas at Dallas 73902392 74735481 833089 11
The University of Texas at El Paso 54257081 54959386 702305 13
The University of Texas ndash Pan American 50448111 51483144 1035033 21
The University of Texas at Brownsville 10270338 10203937 (66401) (06)
The University of Texas of the Permian Basin 10153771 10329321 175550 17
The University of Texas at San Antonio 78194498 81948508 3754010 48
The University of Texas at Tyler 13686400 14342817 656417 48
Texas AampM University System Administrative 9223069 28000 (9195069) (997) and General Offices
Texas AampM University 194931245 184789626 (10141619) (52)
Texas AampM University at Galveston 6714220 6808948 94728 14
Prairie View AampM University 31863723 31715511 (148212) (05)
Tarleton State University 23018364 24485611 1467247 64
Texas AampM University ndash Central Texas 5452712 5246775 (205937) (38)
Texas AampM University ndash Corpus Christi 26308558 28658658 2350100 89
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 49
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $20743629 $21338051 $594422 29
Texas AampM University ndash San Antonio 5716211 7837766 2121555 371
Texas AampM International University 14449349 15531029 1081680 75
West Texas AampM University 20857129 19564863 (1292266) (62)
Texas AampM University ndash Commerce 29344128 23339402 (6004726) (205)
Texas AampM University ndash Texarkana 4114223 4384313 270090 66
University of Houston System Administration 0 0 0 NA
University of Houston 129680228 137483729 7803501 60
University of Houston ndash Clear Lake 23417549 25395583 1978034 84
University of Houston ndash Downtown 30264387 27953427 (2310960) (76)
University of Houston ndash Victoria 9883366 12135138 2251772 228
Midwestern State University 15912994 15446439 (466555) (29)
University of North Texas System 0 0 0 NA Administration
University of North Texas 100805298 105081232 4275934 42
University of North Texas at Dallas 4826456 2312986 (2513470) (521)
Stephen F Austin State University 35525799 33088539 (2437260) (69)
Texas Southern University 47027769 46218672 (809097) (17)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 98116061 103079535 4963474 51
Angelo State University 17654127 18192529 538402 30
Texas Womans University 40098242 42673823 2575581 64
Texas State University System 0 0 0 NA
Lamar University 37445892 41077000 3631108 97
Sam Houston State University 71500172 65729297 (5770875) (81)
Texas State University ndash San Marcos 88567369 89597719 1030350 12
Sul Ross State University 4941096 5045549 104453 21
Sul Ross State University Rio Grande College 2342952 2762451 419499 179
SUBTOTAL GENERAL ACADEMIC $1744378547 $1759986091 $15607544 09 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $22514152 $18054614 ($4459538) (198) Center
The University of Texas Medical Branch at 23120930 24797153 1676223 72 Galveston
The University of Texas Health Science Center 35777999 35483172 (294827) (08) at Houston
The University of Texas Health Science Center 16488403 17234857 746454 45 at San Antonio
The University of Texas MD Anderson Cancer 48597071 55476185 6879114 142 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 50
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center $512055 $569200 $57145 112 at Tyler
Texas AampM University System Health Science 13306322 24908409 11602087 872 Center
University of North Texas Health Science 12596783 16295862 3699079 294 Center at Fort Worth
Texas Tech University Health Sciences Center 23553492 27695220 4141728 176
SUBTOTAL HEALTH-RELATED $196467207 $220514672 $24047465 122 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $950000 $950000 $0 NA
Texas AgriLife Extension Service 46992 18000 (28992) (617)
Texas Engineering Experiment Station 1785036 904418 (880618) (493)
Texas Transportation Institute 0 0 0 NA
Texas Engineering Extension Service 0 0 0 NA
Texas Forest Service 61388596 28912000 (32476596) (529)
Texas Veterinary Medical Diagnostic Laboratory 0 0 0 NA
SUBTOTAL TEXAS AampM UNIVERSITY SERVICES
$64170624 $30784418 ($33386206) (520)
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 111572621 87256791 (24315830) (218)
SUBTOTAL OTHER HIGHER EDUCATION $111572621 $87256791 ($24315830) (218)
SUBTOTAL HIGHER EDUCATION $2173435223 $2157378563 ($16056660) (07)
EMPLOYEE BENEFITS
Teacher Retirement System $188794770 $209600575 $20805805 110
Optional Retirement Program 44328505 42564678 (1763827) (40)
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 0 0 0 NA
Social Security and Benefits Replacement Pay 82274010 85153600 2879590 35
SUBTOTAL EMPLOYEE BENEFITS $315397285 $337318853 $21921568 70
DEBT SERVICE
Bond Debt Service Payments $0 $0 $0 NA
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $0 $0 $0 NA
TOTAL ARTICLE III ndash AGENCIES OF $2489251077 $2495346416 $6095339 02 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 51
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $13298491946 $10520619770 ($2777872176) (209)
School for the Blind and Visually Impaired 5430126 5855880 425754 78
School for the Deaf 4233990 2921862 (1312128) (310)
SUBTOTAL PUBLIC EDUCATION $13308156062 $10529397512 ($2778758550) (209)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $16905000 $0 ($16905000) (1000)
Lamar Institute of Technology 400196 0 (400196) (1000)
Lamar University ndash Orange 229063 0 (229063) (1000)
Lamar University ndash Port Arthur 785470 0 (785470) (1000)
SUBTOTAL LAMAR STATE COLLEGES $1414729 $0 ($1414729) (1000)
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 850530 0 (850530) (1000)
Texas State Technical College ndash West Texas 419578 0 (419578) (1000)
Texas State Technical College ndash Marshall 152123 0 (152123) (1000)
Texas State Technical College ndash Waco 1157191 0 (1157191) (1000)
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$2579422 $0 ($2579422) (1000)
SUBTOTAL TWO-YEAR INSTITUTIONS $20899151 $0 ($20899151) (1000)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 3839588 0 (3839588) (1000)
The University of Texas at Austin 10309405 0 (10309405) (1000)
The University of Texas at Dallas 14524938 0 (14524938) (1000)
The University of Texas at El Paso 2681876 0 (2681876) (1000)
The University of Texas ndash Pan American 2241274 0 (2241274) (1000)
The University of Texas at Brownsville 540108 0 (540108) (1000)
The University of Texas of the Permian Basin 400587 0 (400587) (1000)
The University of Texas at San Antonio 8025733 0 (8025733) (1000)
The University of Texas at Tyler 777002 0 (777002) (1000)
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 10292036 0 (10292036) (1000)
Texas AampM University at Galveston 349135 0 (349135) (1000)
Prairie View AampM University 0 0 0 NA
Tarleton State University 1274872 0 (1274872) (1000)
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 1259502 0 (1259502) (1000)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 52
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville 1112003 0 (1112003) (1000)
Texas AampM University ndash San Antonio $0 $0 $0 NA
Texas AampM International University 658885 0 (658885) (1000)
West Texas AampM University 930966 0 (930966) (1000)
Texas AampM University ndash Commerce 2325217 0 (2325217) (1000)
Texas AampM University ndash Texarkana 6210721 0 (6210721) (1000)
University of Houston System Administration 0 0 0 NA
University of Houston 8707005 0 (8707005) (1000)
University of Houston ndash Clear Lake 1169439 0 (1169439) (1000)
University of Houston ndash Downtown 1398296 0 (1398296) (1000)
University of Houston ndash Victoria 433233 0 (433233) (1000)
Midwestern State University 902565 0 (902565) (1000)
University of North Texas System Administration 5000000 0 (5000000) (1000)
University of North Texas 6872705 0 (6872705) (1000)
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 1499875 0 (1499875) (1000)
Texas Southern University 1221724 0 (1221724) (1000)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 8894371 0 (8894371) (1000)
Angelo State University 2701274 0 (2701274) (1000)
Texas Womans University 1874548 0 (1874548) (1000)
Texas State University System 0 0 0 NA
Lamar University 6473133 0 (6473133) (1000)
Sam Houston State University 6122710 0 (6122710) (1000)
Texas State University ndash San Marcos 4652684 0 (4652684) (1000)
Sul Ross State University 235001 0 (235001) (1000)
Sul Ross State University Rio Grande College 107514 0 (107514) (1000)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$126019925 $0 ($126019925) (1000)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $16614303 $0 ($16614303) (1000) Center
The University of Texas Medical Branch at 6745161 0 (6745161) (1000) Galveston
The University of Texas Health Science Center at 24173646 0 (24173646) (1000) Houston
The University of Texas Health Science Center at 19224332 0 (19224332) (1000) San Antonio
The University of Texas MD Anderson Cancer 634206 0 (634206) (1000) Center
The University of Texas Health Science Center 80210 0 (80210) (1000) at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 53
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $15014608 $0 ($15014608) (1000) Center
University of North Texas Health Science Center 3438054 0 (3438054) (1000) at Fort Worth
Texas Tech University Health Sciences Center 11075479 0 (11075479) (1000)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$96999999 $0 ($96999999) (1000)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $15933582 $15933582 $0 NA
Texas AgriLife Extension Service 25302708 25302708 0 NA
Texas Engineering Experiment Station 137281801 153857672 16575871 121
Texas Transportation Institute 17405197 18757193 1351996 78
Texas Engineering Extension Service 48387893 48387894 1 00
Texas Forest Service 7349101 7429568 80467 11
Texas Veterinary Medical Diagnostic Laboratory 594001 594000 (1) (00)
SUBTOTAL TEXAS AampM UNIVERSITY $252254283 $270262617 $18008334 71 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 197332508 123636426 (73696082) (373)
SUBTOTAL OTHER HIGHER EDUCATION $197332508 $123636426 ($73696082) (373)
SUBTOTAL HIGHER EDUCATION $693505866 $393899043 ($299606823) (432)
EMPLOYEE BENEFITS
Teacher Retirement System $0 $0 $0 NA
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 8832085 8286741 (545344) (62)
Social Security and Benefits Replacement Pay 3888441 3428099 (460342) (118)
SUBTOTAL EMPLOYEE BENEFITS $12720526 $11714840 ($1005686) (79)
DEBT SERVICE
Bond Debt Service Payments $253903 $318484 $64581 254
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $253903 $318484 $64581 254
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$14014636357 $10935329879 ($3079306478) (220)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 54
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $6497580234 $6341237092 ($156343142) (24)
School for the Blind and Visually Impaired 59128170 6236518 (52891652) (895)
School for the Deaf 12738535 13556905 818370 64
SUBTOTAL PUBLIC EDUCATION $6569446939 $6361030515 ($208416424) (32)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 0 0 0 NA
Lamar University ndash Orange 0 0 0 NA
Lamar University ndash Port Arthur 0 0 0 NA
SUBTOTAL LAMAR STATE COLLEGES $0 $0 $0 NA
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 0 0 0 NA
Texas State Technical College ndash West Texas 0 0 0 NA
Texas State Technical College ndash Marshall 0 0 0 NA
Texas State Technical College ndash Waco 0 0 0 NA
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$0 $0 $0 NA
SUBTOTAL TWO-YEAR INSTITUTIONS $0 $0 $0 NA
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $2272110 $2216000 ($56110) (25)
The University of Texas at Arlington 0 0 0 NA
The University of Texas at Austin 0 0 0 NA
The University of Texas at Dallas 0 0 0 NA
The University of Texas at El Paso 2735000 2770000 35000 13
The University of Texas ndash Pan American 642002 457426 (184576) (288)
The University of Texas at Brownsville 0 0 0 NA
The University of Texas of the Permian Basin 0 0 0 NA
The University of Texas at San Antonio 0 0 0 NA
The University of Texas at Tyler 0 0 0 NA
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 7322630 8798533 1475903 202
Texas AampM University at Galveston 0 0 0 NA
Prairie View AampM University 0 0 0 NA
Tarleton State University 0 0 0 NA
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 0 0 0 NA
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 55
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $0 $0 $0 NA
Texas AampM University ndash San Antonio 0 0 0 NA
Texas AampM International University 387050 275774 (111276) (287)
West Texas AampM University 0 0 0 NA
Texas AampM University ndash Commerce 0 0 0 NA
Texas AampM University ndash Texarkana 0 0 0 NA
University of Houston System Administration 0 0 0 NA
University of Houston 0 0 0 NA
University of Houston ndash Clear Lake 0 0 0 NA
University of Houston ndash Downtown 0 0 0 NA
University of Houston ndash Victoria 0 0 0 NA
Midwestern State University 0 0 0 NA
University of North Texas System Administration 0 0 0 NA
University of North Texas 0 0 0 NA
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 0 0 0 NA
Texas Southern University 0 0 0 NA
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 0 0 0 NA
Angelo State University 0 0 0 NA
Texas Womans University 0 0 0 NA
Texas State University System 0 0 0 NA
Lamar University 0 0 0 NA
Sam Houston State University 0 0 0 NA
Texas State University ndash San Marcos 0 0 0 NA
Sul Ross State University 0 0 0 NA
Sul Ross State University Rio Grande College 0 0 0 NA
SUBTOTAL GENERAL ACADEMIC $13358792 $14517733 $1158941 87 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $13297702 $10950720 ($2346982) (176) Center
The University of Texas Medical Branch at 635986341 717559735 81573394 128 Galveston
The University of Texas Health Science Center at 18214102 18116059 (98043) (05) Houston
The University of Texas Health Science Center at 35390281 41303661 5913380 167 San Antonio
The University of Texas MD Anderson Cancer 4248517634 4689528603 441010969 104 Center
The University of Texas Health Science Center 101319808 103577090 2257282 22 at Tyler
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 56
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $19150722 $22122967 $2972245 155 Center
University of North Texas Health Science Center 5569835 10714262 5144427 924 at Fort Worth
Texas Tech University Health Sciences Center 18202700 13906469 (4296231) (236)
SUBTOTAL HEALTH-RELATED $5095649125 $5627779566 $532130441 104 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $12234003 $12210506 ($23497) (02)
Texas AgriLife Extension Service 19066648 18496150 (570498) (30)
Texas Engineering Experiment Station 82520807 85600472 3079665 37
Texas Transportation Institute 76865469 79248320 2382851 31
Texas Engineering Extension Service 103084089 100971982 (2112107) (20)
Texas Forest Service 1034004 1034004 0 NA
Texas Veterinary Medical Diagnostic Laboratory 19772647 17487990 (2284657) (116)
SUBTOTAL TEXAS AampM UNIVERSITY $314577667 $315049424 $471757 01 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 122091572 37272561 (84819011) (695)
SUBTOTAL OTHER HIGHER EDUCATION $1181111524 $1111122229 ($69989295) (59)
SUBTOTAL HIGHER EDUCATION $6604697108 $7068468952 $463771844 70
EMPLOYEE BENEFITS
Teacher Retirement System $127702409 $156653036 $28950627 227
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 1322608 1405026 82418 62 Contributions
Retirement and Group Insurance 1402203 1288774 (113429) (81)
Social Security and Benefits Replacement Pay 17274547 17620470 345923 20
SUBTOTAL EMPLOYEE BENEFITS $147701767 $176967306 $29265539 198
DEBT SERVICE
Bond Debt Service Payments $912 $0 ($912) (1000)
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $912 $0 ($912) (1000)
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF $13116117205 $13523838439 $407721234 31 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 57
- INTRODUCTION
- FUNDING GENERAL ACADEMICS INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
- OTHER NON-FORMULA FUNDING
-
- FUNDING HEALTH-RELATED INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
-
- FUNDING COMMUNITY AND TECHNICAL COLLEGES
-
- OVERVIEW
- COMMUNITY COLLEGES
- TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES
-
- FUNDING TEXAS AampM SYSTEM AGENCIES
- APPENDIX A FREQUENTLY ASKED QUESTIONS
- APPENDIX B TUITION AND FEE PROVISIONS
- APPENDIX C GLOSSARY
- APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
- APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
-
CONTENTS
INTRODUCTION 1
FUNDING GENERAL ACADEMICS INSTITUTIONS
FUNDING HEALTH-RELATED INSTITUTIONS
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW 5
FORMULA FUNDING 6
NON-FORMULA FUNDING 9
OTHER NON-FORMULA FUNDING 13
OVERVIEW 15
FORMULA FUNDING 15
NON-FORMULA FUNDING 19
OVERVIEW 21
COMMUNITY COLLEGES 22
TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES 23
FUNDING TEXAS AampM SYSTEM AGENCIES 25
APPENDIX A FREQUENTLY ASKED QUESTIONS 27
APPENDIX B TUITION AND FEE PROVISIONS31
APPENDIX C GLOSSARY37
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 39
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET43
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 i
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD ii
INTRODUCTION
The Texas public higher education system encompasses 38 general academic teaching institutions (including law schools) 50 community and junior college districts one technical college system with four main campuses three lower-division state colleges and nine health-related institutions which operate a total of eight state medical schools three dental schools two pharmacy schools and other allied health and nursing units In addition there are seven agencies that are components of the Texas AampM University System
Private institutions in Texas include 38 four year colleges and universities two junior colleges one medical school and one accredited independent law school
Public institutions serve about 91 percent of the approximately 14 million students enrolled in higher education in Texas
The Texas Higher Education Coordinating Board (THECB) was established in 1965 and is composed of nine members appointed by the Governor for staggered six-year terms THECB provides leadership and coordination for the Texas higher education system to promote excellence in higher education
THECBrsquos responsibilities include assessing Texasrsquo system of higher education and developing recommendations for
FIGURE 1 HISTORICAL SPENDING FOR HIGHER EDUCATION 2002ndash03 TO 2012ndash13 BIENNIA
improvements to the Governor the Legislature and institutions THECB reviews and recommends changes in formulas regarding the allocation of state funds to public institutions to limit duplication of academic programs and unnecessary construction projects THECB also promotes access to high quality programs at diff erent institutional levels and oversees the statersquos student financial aid programs
The Eighty-second Legislature 2011 appropriated $221 billion in the General Appropriations Act (GAA) for the 2012ndash13 biennium to support Texas higher education a 25 percent decrease from the 2010ndash11 biennium (Figure 1) Figure 2 illustrates the sources of revenue also referred to as methods of finance for the $221 billion in state appropriations Generally only small portions of the Federal Funds received by institutions of higher education are reflected in the General Appropriations Act (GAA)
State funds are allocated to public institutions and agencies of higher education in a number of ways
bull direct appropriations through funding formulas and other direct appropriations based on identifi ed needs
bull indirect appropriations not made directly to an institution in its portion of the appropriations bill but used to cover costs related to the institutionrsquos staff
ESTIMATED ESTIMATED ESTIMATED ESTIMATED ESTIMATED BUDGETED BUDGETED BUDGETED BUDGETED BUDGETED APPROPRIATED
IN MILLIONS 2002ndash03 2004ndash05 2006ndash07 2008ndash09 2010ndash11 2012ndash13
General Revenue Funds $102337 $101944 $111762 $127216 $129966 $121723
General RevenuendashDedicated $20675 $23962 $21467 $22578 $24889 $24947 Funds
Other Funds $32494 $40530 $50023 $61974 $64674 $70298
Federal Funds $2674 $3397 $3331 $3090 $6941 $3944
TOTAL HIGHER $158180 $169833 $186583 $214858 $226470 $220912 EDUCATION
Percentage of Statewide Total
137 134 129 125 120 127
STATEWIDE TOTAL $1156786 $1267102 $1450594 $1721315 $1875165 $1734842 ALL ARTICLES
Includes $3269 in ARRA funds SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 1
INTRODUCTION
FIGURE 2 METHODS OF FINANCE FOR HIGHER EDUCATION INSTITUTIONS ndash INCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV )HGHUDO)XQGV
HQHUDO5HYHQXH)XQGV
2WKHU)XQGV
)
SOURCE Legislative Budget Board
for health insurance retirement benefits and social security and
bull other indirect appropriations which are subsequently allocated to an institution such as the Available University Fund
The $221 billion appropriation includes funds trusteed to THECB for distribution to institutions For the 2012ndash13 biennium THECB received more than $10013 million in trusteed funds The majority of these funds are allocated for student financial assistance Those remaining provide funding for the Baylor College of Medicine incentives for the general academic institutions and the Texas Research Incentive Program
Figure 3 shows the percentage of state funding appropriated to the various types of institutions excluding the allocation for employee insurance and retirement benefi ts
State appropriations to THECB that benefi t private institutions include financial assistance programs (eg Tuition Equalizations Grants B-On-Time and related programs) for Texas residents attending approved private institutions per student funding at the Baylor College of Medicine and grant funds from the Advanced Research Program a competitive grant program
Within a group such as general academic institutions state appropriations are allocated in a consistent manner Diff erent
FIGURE 3 APPROPRIATION BY TYPE OF INSTITUTION ndash EXCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
ampRPPXQLWDQG7HFKQLFDOampROOHJHV
HQHUDO$FDGHPLFV
+HDOWKUHODWHG
2WKHU+LJKHU(GXFDWLRQ
$06HUYLFHV
SOURCE Legislative Budget Board
groups of institutions such as general academic institutions and community colleges differ in how the Legislature allocates state appropriations For example all general academic institutions receive funding generated from Instruction and Operations and Infrastructure formulas while community colleges have one formula for Instruction and Administration
While the General Revenue Fundrsquos portion of direct appropriations to institutions is ldquosum certainrdquo the appropriation of Patient Income and Other Educational and General Income (primarily tuition) is ldquoestimatedrdquo Th is means that if patient income or tuition revenue generated by an institution is greater than the amount included in the GAA the institution can spend at a level beyond the amounts in the GAA If an institution generates less tuition revenue it must spend less
The GAA establishes a key distinction for higher education entities differentiating them from other state agencies Statute (Texas Education Code Section 61059(k)) calls for each higher education institution to receive a lump sum appropriation for base funding The GAA expands this concept and provides each higher education institution with one lump sum appropriation For each institution the GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Th is information reflects how the state funds are ldquoallocatedrdquo not how they must be spent Higher education institutions are not bound to spend their appropriation within the specifi ed
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 2
INTRODUCTION
strategy as are regular state agencies An exception to this is debt service on tuition revenue bonds Section 6 Rider 9 in the Higher Education Special Provisions GAA page III-233 limits the use of debt service to pay debt service for tuition revenue bonds Any amount of an appropriation not spent must be returned to the General Revenue Fund at the end of the fi scal year
There are some limitations on how institutions can spend appropriated funds The Texas Constitution (Article VII Section 18(i) and 17 (j)) prohibits with limited exceptions the use of General Revenue Funds for construction projects However the Texas Legislature by two-thirds vote in each house may opt to use General Revenue Funds for construction projects if there is a natural disaster or demonstrated need for the project
Also GAA (Section 6 Rider 8b) Special Provisions Relating Only to State Agencies of Higher Education (page III-233) prohibits the use of appropriated funds for auxiliary purposes such as athletics and parking Section 54 of the Special Provisions (page III-246) also restricts the use of funds in the Research Development Strategy to purposes defi ned in Texas Education Code Section 62091 Communityjunior colleges can spend General Revenue Funds only for instruction and administrative costs (Texas Education Code Section 130003(c))
This report presents the different ways that public institutions and agencies allocate state appropriations and highlights the flexibility with which these appropriations may be expended References to appropriated funds are based on the Eighty-second Legislature Regular Session 2011 2012ndash13 biennium GAA as adjusted for certain appropriations made in Article IX (General Provisions) of the GAA contingency appropriations other bills making appropriations in fi scal years 2012 and 2013 and Governor vetoes Amounts for fiscal year 2011 have been adjusted for the Supplemental Appropriations Bill House Bill 4 Eighty-second Legislature Regular Session 2011 and Senate Bill 2 First Called Session 2011 Each category of institutionmdashgeneral academic health-related community and technical colleges and Texas AampM System agenciesmdashis presented separately Th e only THECB funds detailed in this report are funds that have been distributed to public institutions
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 3
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 4
FUNDING GENERAL ACADEMIC INSTITUTIONS
OVERVIEW General academic institutions are listed in the Texas Education Code (61003) Figure 4 lists the institutions and their enrollments All of the institutions have common goals of instruction research and public service however each has a unique set of academic offerings and a unique regional or statewide mission
General academic institutions receive direct appropriations via funding formulas and non-formula appropriations Direct appropriations are identified in the informational strategies of each institutionrsquos bill pattern in the General Appropriations Act (GAA) As mentioned earlier appropriations are made to institutions as a lump sum Th e informational strategies reflect how state funds are ldquoallocatedrdquo not how they must be spent This means that with a few exceptions higher education entities unlike other state agencies are not required to spend appropriations within a specified funding strategy
The appropriation levels in each strategy refl ect diff erent revenue sources such as General Revenue Funds General RevenuendashDedicated Funds (mostly tuition and fee revenue) and Other Funds These revenue sources are referred to as the ldquomethod of fi nancerdquo Figure 5 illustrates the method of finance for $74 billion in appropriations for general academic institutions including a number of the indirect appropriations referenced in the next paragraph but does not include appropriations for employee retirement benefi ts
There are also appropriations that benefit institutions that are not reflected in the bill pattern of individual institutions including the Higher Education Fund the Available National Research University Fund Available University Fund certain employee benefits and funds trusteed to the Texas Higher Education Coordinating Board (THECB)
Figure 6 presents the percentage of funding related to each of these direct and indirect appropriations All of these appropriations are further described in the following pages
In addition general academic institutions have access to funds not reflected in the state appropriations process Examples of this include indirect cost recovery certain tuition and fees such as ldquodesignated tuitionrdquo and ldquoincidental feesrdquo (both are described in Appendix B) auxiliary operations (ie revenue from athletics student services fees bookstore and parking) and grants and gifts
FIGURE 4 PUBLIC GENERAL ACADEMIC INSTITUTIONS CERTIFIED FALL 2011 HEADCOUNT
INSTITUTION HEADCOUNT
Angelo State University 7077
Lamar University 14021
Midwestern State University 5811
Prairie View AampM University 8425
Sam Houston State University 17527
Stephen F Austin State University 12702
Sul Ross State University 1985
Sul Ross State University Rio Grande College 971
Tarleton State University 9893
Texas AampM International University 7037
Texas AampM University 49861
Texas AampM University ndash Central Texas 2096
Texas AampM University at Galveston 2035
Texas AampM University ndash Commerce 10726
Texas AampM University ndash Corpus Christi 10162
Texas AampM University ndash Kingsville 6731
Texas AampM University ndash San Antonio 3554
Texas AampM University ndash Texarkana 1907
Texas Southern University 9730
Texas State University ndash San Marcos 34087
Texas Tech University 32149
Texas Womanrsquos University 14503
The University of Texas at Arlington 33439
The University of Texas at Austin 51112
The University of Texas at Brownsville 8625
The University of Texas at Dallas 18864
The University of Texas at El Paso 22582
The University of Texas at San Antonio 30968
The University of Texas at Tyler 6628
The University of Texas of the Permian Basin 3831
The University of Texas ndash Pan American 19034
University of Houston 39820
University of Houston ndash Clear Lake 8185
University of Houston ndash Downtown 12918
University of Houston ndash Victoria 4330
University of North Texas 35694
University of North Texas at Dallas 2032
West Texas AampM University 7886
STATEWIDE TOTALS 568938 SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 5
FUNDING GENERAL ACADEMIC INSTITUTIONS
HQHUDO5HYHQXH)XQGV
FIGURE 5 METHOD OF FINANCE FOR GENERAL ACADEMICS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV
2WKHU)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING Nearly 573 percent of state appropriations for general academic institutions are allocated via two funding formulas and two supplements Instruction and Operations Formula Teaching Experience Supplement Infrastructure Formula
and Small Institution Supplement The formulas and supplements are direct appropriations and are primarily based on enrollment
The formula appropriations consist of General Revenue Funds and some Other Educational and General Income (Other EampG) Other EampG includes specific tuition and fee revenue (see Appendix B for a listing of tuition and fee provisions) The inclusion of certain tuition and fee revenue in the formula funding calculation is referred to as an ldquoAll Funds methodologyrdquo to formula funding Th e most significant tuition revenue included in the formula calculation is tuition charged in accordance with Texas Education Code Section 54051 Interim Tuition Rates (referred to as statutory tuition) The statutory tuition rate for the 2012ndash13 academic year is $50 per semester credit hour for Texas residents Th e corresponding tuition rate for a nonresident student is the average nonresident tuition charged to a Texas resident at a public university in each of the five most populous states
Of the $40 billion allocated by the general academic formulas and supplements nearly 728 percent consists of General Revenue Funds with the remainder consisting of General RevenuendashDedicated Funds (Other EampG)
A portion of Other EampG income is set aside for specifi c purposes or allocated to non-formula based strategies in the
FIGURE 6 APPROPRIATIONS FOR GENERAL ACADEMIC INSTITUTIONS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
QIUDVWUXFWXUH)RUPXOD +ROG+DUPOHVV 727$ 021 )RUPXODDQG
1RQ)RUPXOD7HDFKLQJ([SHULHQFH
QVWUXFWLRQamp 2SHUDWLRQV)RUPXOD
ampDSLWDO)XQGV
QVWLWXWLRQDO
(QKDQFHPHQW
6SHFLDOWHPV
ampRQVWLWXWLRQDO)XQGV
5HVHDUFKHYHORSPHQW)XQG
+LJKHU(GXFDWLRQURXSQVXUDQFH2WKHU1RQIRUPXODWHPV
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 6
FUNDING GENERAL ACADEMIC INSTITUTIONS
institutionrsquos bill pattern For example institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) TPEG are grants designed to help students cover their tuition fees and textbook costs when these expenses exceed a certain portion of their familiesrsquo contributions to their educations This set-aside revenue is not part of the tuition and fee revenue used to calculate the funding formulas
INSTRUCTION AND OPERATIONS FORMULA
About 815 percent of formula funds flow through the Instruction and Operations Formula ($32716 million for the 2012ndash13 biennium) and Teaching Experience Supplement ($957 million for the 2012ndash13 biennium) Th e Instruction and Operations formula is calculated as follows
Semester Credit Hours X ProgramLevel Weight X Rate (5371)
Semester credit hours (SCH) are a measurement of how many classes (and the number of students enrolled in those classes) an institution delivers The formula calculation for a biennium uses a ldquobase periodrdquo of SCH The ldquobase periodrdquo used for the 2012ndash13 biennium was the combination of summer 2010 fall 2010 and spring 2011
SCH is weighted by discipline (eg nursing is weighted more than liberal arts) and by level (ie lower and upper division masters doctoral and professional) For instance a lower division liberal arts course receives a weight of 10 A doctoral level liberal arts course receives a weight of 923 A nursing lower division course receives a weight of 203 A doctoral nursing course receives a weight of 925 Beginning with the 2006ndash07 GAA the basis for the weights per discipline was shifted to an aggregation of actual costs based on institutions Annual Financial Reports Currently THECB uses a rolling three year average to adjust the weights each biennium
THECB recommends a rate based on its recommended weights and program enhancements The legislature sets the weights and the rate in the Higher Education Special Provisions of the GAA (page III-238) In practice the legislature has set the rate based on available funding including consideration of enrollment changes and other factors Figure 7 illustrates the Instruction and Operations Formula allocation to institutions
FIGURE 7 DISTRIBUTION OF INSTRUCTION AND OPERATIONS FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
7H[DV$ amp 08QLYHUVLW
2WKHUHQHUDO$FDGHPLFV
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
TEACHING EXPERIENCE SUPPLEMENT
For the 2012ndash13 biennium an additional weight of ten percent is added to lower-division and upper-division semester credit hours taught by tenured and tenure-track faculty The 2012ndash13 GAA includes the following language ldquoFurthermore it is the intent of the Legislature that the weight shall increase by 10 percent per biennium up to 50 percentrdquo (Special Provisions Relating Only to State Agencies of Higher Education Sec 28 page III-238 2012ndash13 GAA)
The Teaching Experience Supplement is calculated as follows
Semester Credit Hours X ProgramLevel Weight Supplement (10) X Rate (5371)
The Teaching Experience Supplement was 5 percent during the 1998ndash99 and 2000ndash01 biennia Th e Seventy-seventh Legislature 2001 increased the supplement to the current 10 percent in 2002ndash03 biennium
INFRASTRUCTURE FORMULA
Almost 16 percent of formula funds flow through the Infrastructure Formula and Small Institution Supplement ($6768 million for the 2012ndash13 biennium) In addition to
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 7
FUNDING GENERAL ACADEMIC INSTITUTIONS
the universities the State Colleges and components of Texas State Technical College also receive infrastructure formula appropriations This formula uses a statewide infrastructure rate which is set in the GAA The statewide infrastructure rate is divided into two rates an Adjusted Utility Rate and an All Other Rate As with the SCH rate the legislature has set the rate based on available funding including consideration of changes in institutional space and other factors
The Infrastructure Formula is calculated as follows
(Adjusted Utility Rate + All Other Rates) X Predicted Square Feet
The Adjusted Utility Rate is 52 percent of the statewide infrastructure rate The 52 percent reflects the percentage of infrastructure formula funds that institutions historically spent on utilities A statewide utility rate is determined and then adjusted for each institution to reflect utility costs relative to other institutions
The All Other Rate is 48 percent of the statewide infrastructure rate and remains constant among institutions It accounts for physical plant grounds maintenance and custodial services
THECBrsquos Space Projection Model for Higher Education Institutions in Texas (space model) estimates square footage for each institution The objective of the space model projection is to calculate the amount of space an institution needs based on the following
bull number program and level of semester credit hours
bull number of faculty non-faculty students programs and library holdings and
bull research and current EampG expenditures
Figure 8 illustrates the Infrastructure Formula allocation to institutions The similarity of the allocation to the Instruction and Operations Formula allocation demonstrates the influence of enrollment on both formula allocations
SMALL INSTITUTION SUPPLEMENT
Prior to the Eighty-fi rst Legislature (2009) general academic institutions with enrollments of less than 5000 received a $750000 annual Small Institution Supplement However the Eighty-first Legislature increased the enrollment threshold to 10000 students and implemented a phase-out
FIGURE 8 DISTRIBUTION OF INFRASTRUCTURE FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
2WKHUHQHUDO$FDGHPLFV
7H[DV$ amp M 8QLYHUVLW
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
(based on the number of students) of the supplement between 5000 and 10000 students for the 2012ndash13 biennium (see Figure 9) This supplement recognizes that institutions have a minimum cost of operation that may not be covered by funds generated through the formulas
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $414 million in General Revenue hold harmless funding for aff ected institutions to minimize the effect of reduced formula funding as a result of overall enrollment declines or declines in upper-division or graduate enrollment Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment than other institutions or a change in utility costs Th e Eighty-second Legislature 2011 provided $444 million in a hold harmless based on total General Revenue Funds (formula and non-formula) for the 2012ndash13 biennium
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 8
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 9 SMALL INSTITUTION SUPPLEMENT RECIPIENTS
The University of Texas at Brownsville
The University of Texas of the Permian Basin
The University of Texas at Tyler
Texas AampM University at Galveston
Prairie View AampM University
Tarleton State University
Texas AampM University ndash Central Texas
Texas AampM University ndash Kingsville
Texas AampM University ndash San Antonio
Texas AampM International University
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston ndash Clear Lake
University of Houston ndash Victoria
Midwestern State University
University of North Texas at Dallas
Texas Southern University
Angelo State University
Sul Ross State University
Sul Ross State University ndash Rio Grande College
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Waco
Texas State Technical College ndash Marshall
Lamar Institute of Technology
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
SOURCE Legislative Budget Board
NON-FORMULA FUNDING
SPECIAL ITEMS
Special Item appropriations to the institutions total $4836 million for the 2012ndash13 biennium In 2012ndash13 $69 million was appropriated to system offices for special items These are direct appropriations to institutions for projects that are not funded by formula but are specifi cally identifi ed by the legislature as needing support An institution is not required to spend the amount identified in a Special Item strategy for that particular project but expenditure reports indicate that institutions often use an entire appropriation along with additional funding for the related project
The majority of special item funding is through the Institutional Enhancement strategy Institutional Enhancement is a $2204 million appropriation for the 2012ndash13 biennium This is a direct appropriation to institutions and was established by the Seventy-sixth Legislature 1999 for the 2000ndash01 biennium Th e fi rst Institutional Enhancement appropriation was based on a consolidation of certain Special Item appropriations in 1999 and an additional $1 million per year was appropriated for each institution Examples of consolidated special items are items that could be funded through the formulas such as general institutional academic and research support
For the 2002ndash03 biennium there was an additional $1 million increase in appropriations for most institutions and a $15 million increase for selected institutions in South Texas and the border region Institutions that benefi ted signifi cantly from the Seventy-seventh Legislaturersquos new University Research and Texas Excellence Funds (House Bill 1839 Seventy-seventh Legislature 2001) or from the Permanent University Fund (PUF) ldquoexcellence fundingrdquo did not receive an increase in Institutional Enhancement funds for the 2002ndash03 biennium
Other Special Items total $2632 million in appropriations for the 2012ndash13 biennium and include the following institutional and instructional support public service items research items other than general research support funding for separate campuses and accreditation program items
TEXAS COMPETITIVE KNOWLEDGE FUND
The Texas Competitive Knowledge Fund (TCKF) is authorized by the General Appropriations Act (GAA) (2012ndash13 Biennium) Article III Higher Education Special Provisions Section 56 The GAA prescribes that this funding will be used to support faculty for the purpose of instructional excellence and research Funding was first allocated in these strategies by the Legislature for the 2008ndash09 biennium
Current institutions receiving TCKF appropriations include The University of Texas at Austin Texas AampM University University of Houston Texas Tech University and Th e University of Texas at Dallas Institutions are allocated funding appropriated to the TCKF based on average research expenditures for the previous three-year period Th e Eighty-second Legislature Regular Session 2011 appropriated $935 million in Texas Competitive Knowledge Fund strategies directly to the institutions This funding level provides approximately $07 million to each institution for every $100 million in research expenditures In practice
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 9
FUNDING GENERAL ACADEMIC INSTITUTIONS
when institutions have first received distributions from the fund appropriations have been reduced from the institutionrsquos special item strategies In subsequent biennia the institution continues to receive appropriations from the TCKF and the reduction in special items is not specifi cally restored
RESEARCH DEVELOPMENT FUND
The Research Development Fund was created by House Bill 3526 Seventy-eighth Legislature Regular Session 2003 and replaced the Texas Excellence and University Research Funds effective September 1 2005 The intent was to combine the Texas Excellence Fund and University Research Fund into a new fund applying a uniform allocation methodology based on a three-year average of each institutionrsquos restricted research expenditures Th e Eighty-fi rst Legislature allocated $653 million (Figure 10) in the 2012ndash13 biennium to individual institutions to fund objectives identical to the Research Development Fund (Section 62091)
TEXAS RESEARCH INCENTIVE PROGRAM
Th e Eighty-first Legislature Regular Session 2009 established the Texas Research Incentive Program (TRIP) at THECB to match state appropriations with certain gifts and endowments received by emerging research universities Th e goal of this $178 million a year program is to create more Tier One universities in Texas
PERFORMANCE INCENTIVE INITIATIVE
The Eightieth Legislature 2007 appropriated $100 million in fiscal year 2009 to THECB to establish a Higher Education Performance Incentive Initiative The funding was for ldquoimprovement in teaching and educational excellence at Texas public general academic institutionsrdquo THECB distributed $80 million for increases in degrees awarded with special weights given to critical fields and at-risk students The remaining $20 million was used to fund scholarships for students graduating in the top 10 percent of their high school class
Th e Eighty-first Legislature Regular Session 2009 maintained the $80 million for the higher education performance incentive initiative (funded by the American Recovery and Reinvestment Act) and increased funding for the Top Ten Percent scholarship program by $34 million bringing total appropriations for the program to $54 million
There were no performance funding incentives for the 2012ndash13 biennium For the 2012ndash13 biennium $396
FIGURE 10 RESEARCH DEVELOPMENT FUND ALLOCATIONS
2012ndash13 BIENNIAL RDF
INSTITUTION ALLOCATION
The University of Texas at Arlington $6032754
The University of Texas at Dallas 8425486
The University of Texas at El Paso 6925040
The University of Texas at Pan American 1147838
The University of Texas at Brownsville 902512
The University of Texas of the Permian Basin 306408
The University of Texas at San Antonio 5491296
The University of Texas at Tyler 434072
Texas AampM University at Galveston 600342
Tarleton State University 1586396
Texas AampM University ndash Corpus Christi 2212356
Texas AampM University ndash Kingsville 1846206
Texas AampM International University 253246
West Texas AampM University 681752
Texas AampM Commerce 436752
Texas AampM Texarkana 9008
University of Houston 10705472
University of Houston ndash Clear Lake 10392
University of Houston ndash Downtown 10248
University of Houston ndash Victoria 2254
Midwestern State University 30066
University of North Texas 2495448
Stephen F Austin University 895696
Texas Southern University 338580
Texas Tech University 8327602
Texas Womanrsquos University 266152
Angelo State University 123176
Lamar University 820010
Sam Houston State University 362574
Texas State University ndash San Marcos 3121164
Sul Ross State University 304040
TOTAL $65296738
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 10
FUNDING GENERAL ACADEMIC INSTITUTIONS
million is appropriated to the Top Ten Percent Scholarship Program
HOLD HARMLESS FUNDING
The Eighty-second Legislature 2011 provided $444 million in General Revenue Funds hold harmless funding for aff ected institutions to minimize the effect of reduced formula and special item funding Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment that other institutions or a change in utility costs
CAPITAL FUNDS
In addition to the constitutional funds discussed in the next subsection there are three types of state appropriation for capital funds tuition revenue bonds Skiles Act revenue bonds and lease payments Almost all of the direct appropriations to institutions related to capital funds are for debt service on tuition revenue bonds
A $5931 million General Revenue Funds appropriation was made for tuition revenue bond debt service for the 2012ndash13 biennium
Tuition revenue bonds must be authorized in statute Once an authorization is made institutions issue bonds and make related debt payments with tuition revenue Th e Texas Public Finance Authority issues tuition revenue bonds for Midwestern State University Stephen F Austin University Texas Southern University and the Texas State Technical Colleges Legislative practice has been to use General Revenue Funds to reimburse institutions for the costs related to this debt service
The legislature first authorized tuition revenue bonds in 1971 In some instances the authorization was a lump sum for the benefit of specific institutions During the Seventy-eighth Legislature 2003 $2689 million in tuition revenue bonds was authorized for specific projects at various higher education institutions The Seventy-ninth Legislature Th ird Called Session 2005 adopted House Bill 153 which authorized the issuance of $1858 billion in tuition revenue bonds for forty-four different institutions Only one tuition revenue bond (House Bill 1775) was adopted by the Eightieth Legislature 2007 for a $13 million nursing building at Stephen F Austin University Th e Eighty-fi rst Legislature 2009 authorized one tuition revenue bond for Texas AampM University at Galveston The Eighty-second Legislature 2011 did not authorize any new tuition revenue bonds
The authority for Skiles Act Revenue Bonds was repealed in 1997 It had allowed institutions to pledge up to $5 from each enrolled student for each regular semester to the payment of bonds authorized under the governing boardrsquos general authority to sell revenue bonds Institutions use their Other Educational and General Income (General Revenuendash Dedicated Funds) to pay the debt service on these previously authorized bonds This is a $10 million appropriation for the 2012ndash13 biennium
Three general academic institutions receive a $3 million General Revenue Fund appropriation for lease payments to community colleges for facilities
CONSTITUTIONAL FUNDS
These funds are appropriated separately in the GAA and not directly appropriated to the institutions (see Appendix D)
The Available University Fund (AUF) established in Section 18 Article VII Texas Constitution consists of the surface income and investment proceeds from the Permanent University Fund (PUF) a state endowment with land grants totaling 21 million acres
Distributions to the AUF consist of investment returns from PUF assets surface income from PUF lands and interest earned on AUF balances For the 2012ndash13 biennium investment returns were $12200 million surface income was $398 million and interest income was $59 million Income from the sale of PUF lands and the lease of mineral interest is retained in the PUF and invested
The total 2012ndash13 estimated appropriation for the AUF is $12660 million The Constitution appropriates two-thirds of the AUF to The University of Texas System and one-third to the Texas AampM University System The two systems may use the AUF for capital purposes (debt service on PUF bonds) for most of their institutions and ldquofor the support and maintenancerdquo of other institutions listed Entities authorized to receive funding for ldquosupport and maintenancerdquo which is now commonly referred to as ldquoAUF Excellence Fundingrdquo are the two system offi ces The University of Texas at Austin Texas AampM University and Prairie View AampM University The systemsrsquo boards of regents determine allocations to individual institutions including health-related institutions and the amounts for ldquoExcellencerdquo Figure 11 lists the recipients and the type of support they received
The Higher Education Fund (HEF) as authorized in Section 17 Article VII Texas Constitution benefits institutions of higher education not eligible for the AUF (see Figure 12)
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 11
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 11 PARTICIPANTS IN THE AVAILABLE UNIVERSITY FUND
EXCELLENCE AND DEBT SERVICE FUNDS
The University of Texas System
The Texas AampM University System
The University of Texas at Austin
Texas AampM University
Prairie View AampM University
DEBT SERVICE ONLY
The University of Texas System Components
The University of Texas at Arlington
The University of Texas at Dallas
The University of Texas at El Paso
The University of Texas of Permian Basin
The University of Texas at San Antonio
The University of Texas at Tyler
The University of Texas Southwestern Medical Center
The University of Texas Medical Branch at Galveston
The University of Texas Health Science Center at Houston
The University of Texas Health Science Center at San Antonio
The University of Texas Health Science Center at Tyler
The University of Texas MD Anderson Cancer Center
Texas AampM University System Components
Texas AampM University at Galveston
Texas AampM University at Tarleton
Texas AampM University ndash San Antonio
Texas AampM University ndash Central Texas
Texas AampM University System Health Science Center
Texas AgriLife Research
Texas AgriLife Extension Service
Texas Engineering Experiment Station
Texas Engineering Extension Service
Texas Transportation Institute
Texas Forest Service
SOURCE Legislative Budget Board
FIGURE 12 PARTICIPANTS IN THE HIGHER EDUCATION FUND
The University of Texas System Components
The University of Texas ndash Pan American
Texas AampM University System Components
Texas AampM University ndash Corpus Christi
Texas AampM International University
Texas AampM University ndash Kingsville
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston System Components
University of Houston
University of Houston ndash Clearlake
University of Houston ndash Downtown
University of Houston ndash Victoria
Independent Institutions
Midwestern State University
Stephen F Austin State University
Texas Southern University
Texas Womanrsquos University
University of North Texas System Components
University of North Texas Health Science Center at Fort Worth
University of North Texas
Texas Tech University System Components
Texas Tech University Health Sciences Center
Angelo State University
Texas State University System Components
Lamar University
Sam Houston State University
Texas State University ndash San Marcos
Sul Ross State University
Sul Ross State Rio Grande College
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
Lamar Institute of Technology
Texas State Technical College System Components
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Marshall
Texas State Technical College ndash Waco
The University of North Texas at Dallas receives its allocation through the University of North Texas SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 12
FUNDING GENERAL ACADEMIC INSTITUTIONS
The HEF is supported by General Revenue Fund appropriations
The distribution of the $525 million HEF appropriation for 2012ndash13 is provided for in statute (Texas Education Code Section 62021) The Constitution calls for a re-allocation of HEF funds every ten years The Seventy-ninth Legislature Regular Session fulfilled this requirement with the enactment of House Bill 3001
The Constitution also allows the legislature to adjust the decennial allocations every five years Th e Eighty-fi rst Legislature Regular Session 2011 exercised this authority by enacting House Bill 51 which adjusted the formula allocation for the HEF funds for fiscal years 2009 through 2015
To maintain the equitable distribution of the HEF appropriation House Bill 51 also corrected the distribution of fiscal year 2009 and 2010 HEF allocations by using revised formula calculations Using these revised formula calculations House Bill 51 factored in updated data elements to generate the annual HEF allocations for the fi ve-year period starting in fiscal year 2011
HEF funds must be used for capital purposes Institutions may use HEF allocations for debt service on HEF bonds or as cash
In 1995 the Texas Constitution was amended to authorize the creation and funding of a dedicated HEF corpus known as the Permanent Higher Education Fund (PHEF) Th is corpus was separate from the annual HEF allocation of General Revenue Funds The PHEF was intended to become a permanent endowment to support non-PUF eligible institutions but never reached its targeted value of $2 billion
The PHEF corpus of $5159 million was rededicated with the enactment of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) The balance of the PHEF was transferred to the NRUF on January 1 2010 and the authorization for the PHEF expired Proposition 4 also allowed the legislature to appropriate some or all of the total returns from the NRUF to provide a source of funding to enable emerging research universities to achieve national prominence
The Eighty-second Legislature 2011 appropriated $124 million in estimated NRUF proceeds to eligible institutions in the 2012ndash13 biennium
House Bill 1000 Eighty-second Legislature Regular Session 2011 established the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution in designated as an emerging research university within the Higher Education Coordinating Boardrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fi scal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of the institutions research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs Texas Tech University and the University of Houston are the only two institutions that received funding through this program in 2012
HIGHER EDUCATION GROUP INSURANCE (HEGI)
The $4631 million General Revenue Fund appropriation for higher education group insurance (HEGI) is not a direct appropriation in the institutionsrsquo bill patterns It is appropriated in a separate section of the GAA entitled ldquoHigher Education Employees Group Insurance Contributionsrdquo This appropriation is intended to help institutions cover the cost of health insurance premiums for institution employees whose salaries are paid from the General Revenue Fund Because The University of Texas and Texas AampM University Systems operate their own health insurance programs they each receive separate appropriations The remaining institutions are included in the program operated by the Employees Retirement System (ERS)
The HEGI appropriation is sum-certain That is the Statersquos General Revenue Fund contributions are limited to each institutionrsquos number of employees enrolled in the health insurance program as of December 1 2012 However the GAA allows ERS The University of Texas and Texas AampM University Systems to transfer HEGI appropriations among institutions within their respective group insurance programs to address shortfalls in General Revenue Funds related to group insurance premiums
SOCIAL SECURITY BENEFITS
An appropriation for social security is included in the GAA at the end of Article III It is an estimated General Revenue
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 13
FUNDING GENERAL ACADEMIC INSTITUTIONS
Fund appropriation to provide the employer matching funds for employees of institutions of higher education (Th is appropriation amount is not included in Figure 3 on page 2)
STAFF GROUP INSURANCE
Staff group insurance is for staff whose salaries are not paid with General Revenue Funds (GR) The appropriation is based on an estimation of the number of non-GR funded employees at an institution as of December 1 2010 Th e total appropriation for all general academic institutions is $1766 million for the 2012ndash13 biennium The method of finance is Other Educational and General Income (which is classified as General RevenuendashDedicated Funds)
RETIREMENT CONTRIBUTIONS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and top administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees participate in TRS a defi ned benefit plan The state funds retirement contributions for TRS equal to 60 percent of an employeersquos salary in fiscal year 2012 and 64 percent in 2013 State contributions for ORP are equal to 60 percent of an employeersquos salary in fiscal years 2012 and 2013 (Th ese appropriation amounts are not included in Figure 3 on page 2)
OTHER NON-FORMULA FUNDING
WORKERSrsquo COMPENSATION
Changes in the structure of the statewide workersrsquo compensation system resulted in most institutions receiving General Revenue Fund appropriations for Workersrsquo Compensation starting in 2006ndash07 However Th e University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool
UNEMPLOYMENT COMPENSATION
Most components of The University of Texas and Texas AampM University Systems have this strategy because they operate their own risk pools Th ese institutions receive General Revenue Fund appropriations for unemployment compensation insurance The appropriation for the 2012ndash13 biennium is $05 million in General Revenue Funds Th e Texas Workforce Commission receives an appropriation to
cover unemployment benefi ts for former state employees for all other higher education institutions
TEXAS PUBLIC EDUCATION GRANTS
According to statute (Texas Education Code Chapter 56 Subchapter C and Texas Education Code Section 54051 [Statutory Tuition]) institutions must set aside a portion of tuition revenue for Texas Public Education Grants (TPEG) Fifteen percent of each resident studentrsquos tuition and 3 percent of each nonresident studentrsquos tuition are set aside for financial aid to students at the institution Texas Education Code Section 56033 provides guidelines on the allocation of TPEG revenue The GAA includes an estimate of the amount of TPEG revenue each institution will generate Th is $2111 million estimated appropriation is considered Other Educational and General Income which are classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
Indirect costs as defined by The Comptroller of Public Accounts are ldquoincurred for a common or joint purpose benefiting more than one cost objectiverdquo Institutions negotiate a percentage of a federal grant for indirect costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
The Seventy-eighth Legislature 2003 allowed universities to retain 100 percent of indirect costs income from research grants and contracts to encourage further research projects conducted by universities
ORGANIZED ACTIVITIES
Organized Activities are activities or enterprises connected with instructional departments whose primary function is training for students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training Revenue from Organized Activities is classified as General RevenuendashDedicated Funds Other EampG Income For the 2012ndash13 biennium $503 million is appropriated for Organized Activities
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 14
FUNDING HEALTH-RELATED INSTITUTIONS
OVERVIEW Appropriations for the nine health-related institutions are similar in structure to the appropriations for general academic institutions There are formula and non-formula funding appropriations made directly to the institutions as well as appropriations that benefit the institutions but are not included in the institutionsrsquo bill patterns such as the Available University Fund certain staff benefi ts and funds trusteed at the Texas Higher Education Coordinating Board (THECB) While health-related institutions do not receive appropriations from the Research Development Fund they share many other types of appropriations similar to general academic institution appropriations Th ose appropriations will be briefly restated in this section of the report Figure 13 lists the institutions and their enrollment
FIGURE 13 PUBLIC HEALTH-RELATED INSTITUTIONS CERTIFIED HEADCOUNT FALL 2011
INSTITUTION HEADCOUNT
UT Southwestern Medical Center 2467
UT Medical Branch at Galveston 2660
UT Health Science Center at Houston 4485
UT Health Science Center at San Antonio 3273
UT M D Anderson Cancer Center 248
UT Health Science Center at Tyler NA
Texas AampM University System Health Science 1958 Center
University of North Texas Health Science 1567 Center at Fort Worth
Texas Tech University Health Sciences Center 3590
Statewide Totals 20248
SOURCE Higher Education Coordinating Board
Like other higher education institutions the appropriations for health-related institutions are a lump sum and funding strategies are presented for informational purposes in the General Appropriations Act (GAA) The funding strategies in a health-related institutionrsquos bill pattern represent how state funds are allocated but not how they must be spent Also certain methods of finance in the appropriation are estimated This means that if for example patient income for an institution is above the amount included in the GAA
the institution can spend more than the amount listed in the GAA
Also health-related institutions have access to an estimated $109 billion outside the appropriations process in 2012ndash13 Examples of this include certain tuition revenue indirect lost recovery grants and gifts
Figure 14 illustrates the 2012ndash13 method of finance for $85 billion in appropriations for health-related institutions including a number of the indirect appropriations but it does not include appropriations for retirement benefi ts
FIGURE 14 METHOD OF FINANCE FOR HEALTH-RELATED INSTITUTIONS 2012ndash13 BIENNIUM
727$ 021
HQHUDO
2WKHU)XQGV3DWLHQWQFRPH
5HYHQXH)XQGV
HQHUDO5HYHQXHsup2HGLFDWHG)XQGV13
Including some tuition and fees SOURCE Legislative Budget Board
FORMULA FUNDING The three primary funding formulas for health-related institutions are Instruction and Operations support Infrastructure support and Research Enhancement Th e University of Texas MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler have additional formula allocations to accommodate their unique missions Each health-related institution also receives formula funding for graduate medical education
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 15
FUNDING HEALTH-RELATED INSTITUTIONS
General Revenue funding and some Other Educational and General Income (Other EampG is classified as General RevenuendashDedicated) fund the formulas Like general academic institutions certain tuition revenue is used in the calculation of the Instruction and Operation support and Infrastructure support formulas Of the $15 billion that is allocated by the health-related institutionsrsquo primary formulas 939 percent is from the General Revenue Fund and the remaining 61 percent is from General RevenuendashDedicated Funds (tuition and fee revenue)
Some tuition and fee income is set aside for specifi c purposes Some specific amounts are unavailable for formula purposes and consequently are not a formula method of fi nance For example health-related institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) and Medical Loans
INSTRUCTION AND OPERATIONS SUPPORT FORMULA
The Instruction and Operations (IampO) support formula represents nearly 755 percent of the primary formula funds for health-related institutions ($9282 million for the 2012ndash13 biennium) It is intended to fund items such as faculty salaries departmental operating expenses instructional administration and libraries It is allocated on a per full-time student equivalent (FTSE) basis with a funding weight predicated on the instructional program of the student This formula applies to all health-related
institutions except The University of Texas Health Science Center at Tyler which did not offer education instruction during the base period for the 2012ndash13 biennium
Figure 15 illustrates the Instruction and Operations support formula among the eight health-related institutions
The Instruction and Operations support formula is calculated as follows
(FTSE X Program Weight X $8874) + SmallMultiple Campus Supplement
FTSE is weighted by discipline For example medicine (4753) is weighted more than pharmacy (1670) Allied Health is assigned a weight of 1000
The Legislature sets the weights and the rate ($8874 adjusted for the 2012ndash13 biennium) in the Higher Education Special Provisions of the GAA (Sec 29 page III-239 and 240) The rate is calculated based on the available revenue for the formula and the number of FTSEs
Programs with enrollments less than 200 receive a Small Campus Supplement (see Figure 16)
FIGURE 15 DISTRIBUTION OF INSTRUCTION AND OPERATIONS SUPPORT FORMULA 2012ndash13 BIENNIUM
727$ 021870$QGHUVRQ 7H[DV$ amp 0+HDOWKampDQFHUampHQWHU 6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV 87+HDOWK6FLHQFHampHQWHUDW6DQ
DW)WRUWK
+HDOWK6FLHQFHampHQWHU$QWRQLR
87+HDOWK6FLHQFH 7H[DV7HFK8QLYHUVLW+HDOWKampHQWHUDW+RXVWRQ 6FLHQFHVampHQWHU
876RXWKZHVWHUQ0HGLFDOampHQWHU
870HGLFDOUDQFK DWDOYHVWRQ
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 16
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 16 SMALL CAMPUS SUPPLEMENT RECIPIENTS
The University of Texas Southwestern Medical Center
No
The University of Texas Medical Branch at Galveston
Yes
The University of Texas Health Science Center at Houston
Yes
The University of Texas Health Science Center at San Antonio
Yes
The University of Texas MD Anderson Cancer Center
No
The University of Texas Health Science Center at Tyler
NA
Texas AampM Health Science Center Yes
University of North Texas Health Science Center at Fort Worth
No
Texas Tech University Health Sciences Center Yes
SOURCE Legislative Budget Board
INFRASTRUCTURE SUPPORT FORMULA
The Infrastructure support formula is 194 percent of the primary formula funding and is intended for utilities and physical plant support ($2383 million for the 2012ndash13 biennium) This formula calculation is similar to that for general academic institutions but includes only one rate ($655) for all institutions except The University of Texas
FIGURE 17 DISTRIBUTION OF INFRASTRUCTURE SUPPORT FORMULA 2012ndash13 BIENNIUM
MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler which have another rate ($625)
THECBrsquos space model predicts square footage for each institution The space model projection is based on the following
bull number and level of FTE students
bull number of faculty
bull single or multiple programs and campuses
bull actual clinical space and
bull research and current EampG expenditures
Because the space projection model does not account for hospital space separate infrastructure funding for hospital space is included in the total funding for hospital and patient-care activities at The University of Texas Medical Branch at Galveston The University of Texas MD Anderson Cancer Center and The University of Texas Health Science Center at Tyler
Figure 17 illustrates the Infrastructure Support Formula allocation to institutions among the nine health-related institutions
727$ 021
87+HDOWK6FLHQFHampHQWHUDW6DQ 870$QGHUVRQampDQFHUampHQWHU$QWRQLR
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW
+RXVWRQ 7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK6FLHQFHVampHQWHU
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 17
FUNDING HEALTH-RELATED INSTITUTIONS
RESEARCH FORMULA
Health-related institutions generate state appropriations to support research through General Revenue Funds in the Research Enhancement formula ($629 million for the 2012ndash13 biennium) The Research Enhancement formula accounts for 51 percent of the primary formula funds and is funded entirely from the General Revenue Fund
The allocation is based on the amount of research generated by each institution
$1412500 + (110 X Research
Expenditures)
This provides a base Institutions report for all institutions current research
regardless of research expenditures to volume THECB
Figure 18 illustrates the Research Enhancement formula allocation to the institutions among the nine health-related institutions
GRADUATE MEDICAL EDUCATION
The Seventy-ninth Legislature 2005 established a new formula for funding graduate medical education in the 2006ndash07 GAA For 2012ndash13 the funding totals $46 million
FIGURE 18 DISTRIBUTION OF RESEARCH ENHANCEMENT FORMULA 2012ndash13 BIENNIUM
727$ 021
870$QGHUVRQampDQFHUampHQWHU
(an additional $109 million is appropriated to the Baylor College of Medicine through the THECB) and provides $4436 per medical resident each year
Figure 19 illustrates the Graduate Medical Education formula allocation to institutions among the nine health related institutions and Baylor College of Medicine
CHEST DISEASE CENTER FORMULA
The Chest Disease Center operations formula which was established during the 2010ndash11 biennium applies only to The University of Texas Health Science Center at Tyler Th e University of Texas Health Science Center at Tyler has a statutory mission to conduct research develop diagnostic and treatment techniques provide training and teaching programs and provide diagnosis and treatment of inpatients and outpatients with respiratory diseases The Chest Disease Center formula is based on the number of primary chest disease patients the institution served Approximately $472 million in General Revenue Funds are appropriated for the 2012ndash13 biennium
CANCER CENTER OPERATIONS FORMULA
The Eightieth Legislature 2007 established in the GAA an Operations formula for funding The University of Texas MD Anderson Cancer Center The University of Texas MD Anderson Cancer Center has a statutory mission to eliminate cancer through patient care research education
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR
7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ 8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
870HGLFDOUDQFKDWDOYHVWRQ 7H[DV7HFK8QLYHUVLW+HDOWK876RXWKZHVWHUQ0HGLFDOampHQWHU
6FLHQFHVampHQWHU
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 18
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 19 DISTRIBUTION OF GRADUATE MEDICAL EDUCATION FORMULA 2012ndash13 BIENNIUM
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
727$ 02187+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR 870$QGHUVRQampDQFHUampHQWHU
87+HDOWK6FLHQFHampHQWHUDW7OHU
7H[DV$ amp 08QLYHULVW6VWHP +HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK 6FLHQFHVampHQWHU
DORUampROOHJHRI0HGLFLQH
and prevention The Operations formula funding is based on the total number of Texas cancer patients the institution served The Operations formula growth in funding may not exceed the average growth in funding for health-related institutions in the Instruction and Operations support formula for the current biennium For the 2012ndash13 biennium this funding formula provided $2125 million in General Revenue Funds
NON-FORMULA FUNDING
PATIENT CARE ACTIVITIES
Some institutions conduct patient care activities generally medical or dental For the 2012ndash13 biennium the estimated appropriation for Patient Income was $56 billion Th e hospital and clinic revenues earned through patient care activities are considered Other Funds which are part of Educational and General Income (not to be confused with Other Educational and General Income which is another subset of Educational and General Income) General Revenue funding supplements patient-care income to varying degrees at each institution Patient Income is an estimated appropriation and is spread across an institutionrsquos funding strategies however it is not used in the calculation of the formulas
INSTITUTIONAL ENHANCEMENT
Institutional Enhancement is a General Revenue Fund appropriation that started in the 2000ndash01 biennium It is designed to allow each institution to address its unique needs and diseconomies of scale at institutions with smaller campuses The total institutional enhancement appropriation for the 2012ndash13 biennium was $42 million which includes $407 million in General Revenue Funds and $16 million in Patient Income
SPECIAL ITEMS
Special items are activities that are not generally funded through the formulas and typically represent an institutionrsquos special needs or areas of expertise The $3107 million in General Revenue Funds for the 2012ndash13 biennium funds items such as residency programs academic outreach programs public service items and research items other than general research support Institutions propose and justify special items and request an amount for each on an ad hoc basis Special items generally remain constant from biennium to biennium unless the item was a one-time expense (eg tornado damage repairs) or the institution has not used the funding for the intended purpose
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 19
FUNDING HEALTH-RELATED INSTITUTIONS
CONSTITUTIONAL FUNDS
These funds are not directly appropriated to institutions in the GAA In other words these funds are not found in a strategy within an institutionrsquos bill pattern
Health-related institutions are eligible for funding from the Available University Fund ($146 million in Other Funds allocated to these institutions by system offices for the 2012ndash 13 biennium) and the Higher Education Fund ($257 million in General Revenue Funds appropriated for the 2012ndash13 biennium) which are presented in detail in the ldquoFunding General Academic Institutionsrdquo section of this report
CAPITAL FUNDS
Just like general academic institutions tuition revenue bonds ($1665 million in General Revenue Funds for related debt service in the 2012ndash13 biennium) are also used to fund capital projects at health-related institutions A detailed presentation of tuition revenue bonds is in the ldquoFunding General Academic Institutionsrdquo section The University of Texas Medical Branch at Galveston and The University of Texas MD Anderson Cancer Center also have separate appropriations for capital projects that are funded primarily with Patient Income
EMPLOYEE BENEFITS
Like general academic institutions health-related institutions benefit from direct and indirect state appropriations related to employee benefi ts The indirect appropriations include Higher Education Group Insurance ($2339 million in General Revenue Funds for the 2012ndash13 biennium) Retirement Contributions and Social Security Benefi ts (all presented in the ldquoFunding General Academic Institutionsrdquo section) The direct appropriations include Staff Group Insurance
For the 2012ndash13 biennium the Workersrsquo Compensation and Unemployment Compensation strategies (all presented in the ldquoFunding General Academic Institutionsrdquo section) are funded directly with General Revenue Funds and General RevenuendashDedicated Funds However The University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool The University of Texas and Texas AampM Systems also manage their own unemployment compensation coverage while all other institutions receive coverage from
the Texas Workforce Commission which receives an appropriation to cover unemployment benefi ts
TEXAS PUBLIC EDUCATION GRANTS
Health-related institutions similar to general academic institutions are subject to the Texas Education Code (sect56031 et al) provision requiring a portion of tuition revenue be set aside to fund Texas Public Education Grants (TPEG) For the 2012ndash13 biennium the estimated TPEG appropriation is $188 million This revenue is considered Other Education and General Income which is classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
As mentioned earlier in this section Indirect Cost Recovery was removed from the GAA for the 2010ndash11 biennium however the individual institution still receives the funds
TOBACCO SETTLEMENT
House Bill 1945 Seventy-sixth Legislature 1999 established the Permanent Health Fund for health-related institutions of Higher Education the Permanent Fund for Minority Health Research and Education the Permanent Fund for Higher Education Nursing Allied Health and Other Health Related Programs and 13 permanent endowments for individual institutions of higher education The $769 million in estimated interest earnings from the endowments for 2012ndash13 (based on estimated interest earnings of 45 percent each year) were appropriated to the health-related institutions
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 20
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW Public two-year lower-level institutions include 50 community and junior college districts four Texas State Technical College (TSTC) campuses and three Lamar State Colleges These institutions were appropriated $22 billion in state funding for the 2012ndash13 biennium Preliminary fall FIGURE 20 TWO-YEAR INSTITUTION FUNDING MECHANISMS 2012ndash13 BIENNIUM
2011 enrollment at these institutions totaled 789713 Figure 20 illustrates the funding mechanisms for these institutions Community colleges accounted for 983 percent of this enrollment total while the Texas State Technical and Lamar State Colleges composed the remaining portion
COMMUNITY COLLEGES
Instruction and Administration General Revenue Funds from the state are based on contact hour driven formulas for two-year institutions Tuition and fee revenues and local tax revenues augment state General Revenue Funds for these costs
Academic Courses Approximately 82 percent of the total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 18 percent of the total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant The state provides no funding for physical plant operations and maintenance Local taxing districts are expected to provide support for physical plant needs Community colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011
Facilities Local communities must provide facilities Community colleges are not eligible to receive Higher Education Fund (HEF) allocations Available University Fund allocations or state tuition revenue bonds
Employee Benefits While community college employees are locally-employed community colleges participate in the Employee Retirement System (ERS) Group Benefits Program for health benefi ts and the Teacher Retirement System(TRS) and Optional Retirement Program (ORP) for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits
Tuition Fee Revenues Tuition and fee revenues are considered institutional funds and are not appropriated by the state Tuition rates vary by institution In 2012 the statewide tuition rates plus fees averaged $73 per semester credit hour but varied from $34 to $208 per semester credit hour
Local Tax Revenue Community Colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011 Local tax revenues are expected to provide support for physical plant needs and augment state General Revenue Funds for instruction and administration costs
SOURCE Legislative Budget Board
TSTCLAMAR COLLEGES
Instruction and Administration General Revenue Funds from the state are based on formulas for two-year institutions Tuition and fee revenues augment General Revenue Funds for these costs
Academic Courses Approximately 39 percent at the Lamar colleges and 28 percent at Texas State Technical College (TSTC) of total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 61 percent at the Lamar colleges and 72 percent at TSTC of total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant State funding based on the formula for general academic institutions The Lamar colleges will receive approximately $71 million and TSTC will receive $157 million in General Revenue Funds for physical plant and utilities in the 2012ndash13 biennium
Facilities The Lamar colleges receive approximately $42 million annually from HEF funds and TSTC receives almost $58 million annually The HEF monies are used to acquire land construct and equip buildings provide major building repair or rehabilitation and acquire capital equipment and library materials
Employee Benefits Both the Lamar colleges and TSTC institutions participate in ERSrsquo Group Benefits Program for health benefits and the TRS and ORP programs for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits of those employees having their salaries paid with General Revenue Funds
Tuition Fee Revenues Certain tuition revenue is appropriated by the state In 2012 for resident students average tuition plus fees was $139 per semester credit hour at the Lamar colleges and $150 per semester credit hour at TSTC
FINANCING HIGHER EDUCATION IN TEXAS ndash ID690 LEGISLATIVE BUDGET BOARD 21
FUNDING COMMUNITY AND TECHNICAL COLLEGES
These institutions are primarily funded based on student contact hours A contact hour is a standard unit of measure that represents an hour of scheduled academic and technical instruction given to students during a semester Community and junior college districts generate almost 958 percent of the state-funded contact hours at two-year institutions TSTC components generate approximately 29 percent of the contact hours and the three Lamar State Colleges account for the 13 percent
COMMUNITY COLLEGES Over 99 percent of the direct appropriations to community colleges are from the General Revenue Fund and are generated through a funding formula The remaining direct appropriations are for isolated ldquospecial itemsrdquo including appropriations for the Southwest Collegiate Institute for the Deaf which is part of the appropriation for Howard College The Texas Education Code Section 130003(a) calls for state appropriations to public community colleges to ldquosupplement local funds for the proper support maintenance operation and improvement of those public junior colleges of Texas that meet the standards prescribed by the chapterrdquo Further Education Code Section 130003(c) indicates that state funds must be used ldquoexclusively for the purpose of paying salaries of instructional and administrative forceshellip and the purchase of supplies and materials for instructional purposesrdquo
Consistent with statute community colleges have their own Instruction and Administration Formula which is funded by General Revenue Funds and based on ldquostudent contact hoursrdquo Unlike general academic institution formulas this formula does not include tuition and fee revenue as part of the method of fi nance
The Eighty-second Legislature 2011 also provided $45 million to certain districts through a new small institution supplemental formula A district is eligible for the supplement if it makes a significantly above-average effort to generate tax income while at the same time experiencing below-average tax revenue and does not have a number of contact hours that exceeds the statewide median Th e Eighty-second Legislature appropriated each eligible district $05 million for the 2012ndash13 biennium
No state funding is provided for physical plant operations and maintenance or for facilities that is supported by local tax eff ort
Three community colleges receive weighted semester credit hour formula funding for a Bachelor of Applied Technology degree program
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $153 million in General Revenue formula hold harmless funding for aff ected community colleges to minimize the effect of reduced formula funding as a result of overall contact hour declines The Eighty-second Legislature 2011 did not provide any hold harmless funding in the 2012ndash13 biennium
Property taxes tuition and fees are other major sources of revenue for community colleges Figure 21 illustrates the estimated sources of funding for community colleges Th e state appropriations in Figure 21 include all formula special item Higher Education Group Insurance appropriations and retirement benefi t appropriations
FIGURE 21 MAJOR SOURCES OF COMMUNITY COLLEGESrsquo OPERATING REVENUE IN BILLIONS FISCAL YEAR 2011
727$ 21
6WDWHampRQWULEXWLRQV
URVV7XLWLRQDQG)HHV
3URSHUW7D[HV
)HGHUDO)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING
The basis of the formula starts with the Texas Higher Education Coordinating Board (THECB) Report of Fundable Operating Expenses (RFOE) (formally called the All Funds Expenditure Report) The study includes all expenditures for instruction and administration (facilities costs are not included) in 26 program areas THECB uses the expenditure data to determine the median cost in the 26 program areasmdashthe ldquoratesrdquo for contact hours in those disciplines THECB then makes a recommendation for
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 22
FUNDING COMMUNITY AND TECHNICAL COLLEGES
funding based on the rates Over the years THECB has used various methodologies as the basis for its funding recommendations Because the RFOE takes into account all funds (state appropriations plus tuition and tax revenue which are not appropriated) THECBrsquos recommendation for state funding has generally not equaled 100 percent of the rates
The amount of the appropriation is a legislative decision based on funds available The appropriation is allocated to the colleges according to each districtrsquos pro-rata share of THECB recommendations
HIGHER EDUCATION GROUP INSURANCE (HEGI)
Like state institutions of higher education community colleges receive General Revenue Fund contributions for group insurance However since community college employees are local not state employees state contributions for health benefits are fully discretionary Other agencies and institutions of higher education report employee eligibility for General Revenue-funded group health insurance benefi ts only if the employeersquos salary is directly paid with General Revenue Funds However in the past community colleges tended to base eligibility for General Revenue-funded benefits if the employeersquos job function fell under an approved ldquoelement of costrdquo This practice caused community colleges to report eligibility for state funded health benefits in a manner that did not always match the source of the employeersquos salary
This practice led to the Governorrsquos veto of the Group Health Insurance appropriation for fiscal year 2009 ($154 million) at the end of the Eightieth Legislative session However an agreement to restore the vetoed funds was reached and returned directly to the districts in House Bill 4586 Eighty-first Legislature Regular Session 2009
The Eight-Second Legislature 2011 allowed community colleges to receive General Revenue Fund contributions for employees whose job function fell under an approved ldquoelement of costrdquo However the Legislature only funded 42 percent of the premium costs for these employees
OTHER STAFF BENEFITS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and certain administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees
participate in TRS a defi ned benefit plan In both instances the state funds retirement contributions equal 60 and 64 percent of an employeersquos salary in fiscal year 2012 and fi scal year 2013 respectively (These appropriation amounts are not included in Figure 2 on page 3)
DRAMATIC ENROLLMENT GROWTH
Since the 1996ndash97 biennium public community colleges have received ldquoDramatic Enrollment Growth Fundingrdquo For the 2000ndash01 biennium this was expanded to include Texas State Technical Colleges and Lamar State Colleges (Lamars) The appropriation was made to THECB Rider 13 page IIIshy53 General Appropriations Act (2010ndash11 Biennium) provided guidelines for distributing this funding
For the 2010ndash11 biennium THECB is authorized to allocate up to $175 million per year to schools experiencing a growth rate of five percent or greater in 2010 and eight percent or greater in 2011 The Eighty-second Legislature 2011 did not provide any dramatic enrollment growth funding in the 2012-13 biennium
OTHER TRUSTEED FUNDS
Students at community colleges also benefi t from Texas Educational Opportunity Grants the student fi nancial aid program appropriation that is allocated by THECB
TEXAS STATE TECHNICAL COLLEGE LAMAR STATE COLLEGES The Texas State Technical Colleges (TSTC) and Lamar State Colleges are allocated a majority of their appropriation via two formulas the Instruction and Administration Formula for two-year institutions and the Infrastructure Formula for general academic institutions Similar to general academic institutions the tuition revenue for these colleges is included in the appropriations bill
Contact hours for vocationaltechnical courses represent approximately 61 percent of total contact hours at the Lamar State Colleges and 72 percent at TSTC institutions Th e remaining contact hours are generated from academic and continuing education courses
Facilities funding is available from the Higher Education Fund for both TSTC and the Lamars State Colleges and both have received Tuition Revenue Bond authorizations
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 23
FUNDING COMMUNITY AND TECHNICAL COLLEGES
The Community Colleges section of this report includes subsections on Higher Education Group Insurance Other Staff Benefits and Dramatic Enrollment Growth Th ese three subsections apply to appropriations for Texas State Technical Colleges and the Lamar State Colleges as well
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 24
FUNDING TEXAS AampM SYSTEM AGENCIES
There are seven research and service agencies that are administered by the Texas AampM University System Th e system agenciesrsquo missions differ from other institutions of higher education in that each system agency focuses on one or two of the three traditional missions of higher education institutions research extension and service (Figure 22)
FIGURE 22 TEXAS AampM SYSTEM AGENCIES MISSIONS AND FUNCTIONS
STATUTORY AUTHORITY MISSIONFUNCTIONS
For the 2012ndash13 biennium the total direct appropriations for Texas AampM System (System) agencies are $8897 million In addition to state appropriations the System agencies receive some Federal Funds that are not included in the General Appropriations Act and have access to private funds While System agencies have significant portions of their Other Funds and Federal Funds appropriated the appropriations are estimated and actual income from these funding sources is subject to signifi cant variation
Texas AampM AgriLife Education Conducts research in the agricultural environmental and life sciences Goals include Research Code Title III enhancing the competitiveness of agricultural industries and natural resource conservation
Chapter 88 Research highlights bioenergy irrigation efficiency and the use of distillerrsquos grain in feedlots Administers the honey bee regulation and feed and fertilizer programs
Texas AampM AgriLife Education Provides training and educational programs including 4-H through extension agents Extension Service Code Title III serving every county in Texas and supported by federal state and county funds Provides
Chapter 88 wildlife and insect management services including feral hog abatement and boll weevil eradication
Texas AampM Education Conducts engineering and technology research with a focus on interdisciplinary research Engineering Code Title III based on statewide priorities Research highlights energy independence effi ciency and Experiment Station Chapter 88 conservation alternative energy and national security
Texas AampM Education Conducts transportation related research and develops technology Approximately 50 Transportation Code Title III percent of research expenditures from interagency contracts are contracted from the Texas Institute Chapter 88 Department of Transportation
Texas AampM Education Provides training technical assistance and emergency response to enhance public Engineering Code Title III safety security and economic growth Operates the Brayden Fire Training Field and the Extension Service Chapter 88 Emergency Operations Training Center Texas Task Force 1 is deployed for emergency
response and search and rescue operations
Texas AampM Forest Education Provides incident management teams and emergency response as well as wildfire Service Code Title III prevention detection and suppression services The Texas Wildfire Protection Plan is
Chapter 88 the agencyrsquos wildfire response model Administers the Rural Volunteer Fire Department Assistance Program which gives grants to local fire departments for equipment and training
Texas AampM Veterinary Education Provides fee-based veterinary medical diagnostic services which contribute to an animal Medical Diagnostic Code Title III and zoonotic disease surveillance system Responds to potential high consequence andor Laboratory Chapter 88 emerging disease events Develops new diagnostic testing technologies
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 25
FUNDING TEXAS AampM SYSTEM AGENCIES
FIGURE 23 TEXAS AampM SYSTEM AGENCIES COMPARED TO INSTITUTIONS OF HIGHER EDUCATION
SIMILARITIES
FUNDING
Both Texas AampM System (System) agencies and institutions of higher education have considerable flexibility in their budgeting and financial operations (ldquolump sumrdquo appropriations)
Both are eligible to receive proceeds from the Permanent University Fund
Both are considered to be institutions of higher education for purposes of employee group health insurance
Both System agencies and institutions of higher education generate and keep 100 percent of indirect cost recovery from research and other grants
PERFORMANCE MEASURES
OPERATIONS
Like other institutions of higher education System agencies are not required to submit operating budgets or strategic plans
Both are statutorily embedded within the Texas AampM Systemrsquos institutional framework
SOURCE Legislative Budget Board
DIFFERENCES
General academic health-related and two-year institutions receive formula funding while System agencies do not
Texas AampM System agencies do not generate revenue in the same manner or amount of other higher education institutions
Performance measures for the System agencies are agency-specific while performance measures for other higher education institutions are standardized
In several ways state funding for System agencies is similar to funding for higher education institutions System agencies have considerable flexibility in their budgeting and fi nancial operations because they receive lump-sum appropriations in the same manner as other institutions of higher education They are eligible to receive funds from the Permanent University Fund (PUF) (They were allocated $153 million from the PUF for debt service in the 2012ndash13 biennium) System agencies are also funded in the same manner as other institutions of higher education with regard to staff benefi ts including employee group health insurance contributions
However there are several funding diff erences between System agencies and other higher education institutions Most significantly System agencies do not receive formula-based funding Also while some System agencies may charge fees for their services they do not generate tuition and fees in the same manner or quantity as other institutions of higher education
As is the case with all institutions the System agencies keep 100 percent of their respective indirect cost recovery income
because this income is derived from earnings on federal grants and is held outside the treasury
For the 2012ndash13 biennium funding associated with infrastructure expenses and utilities for System agencies inside Brazos County is equal to the infrastructure rate (as determined by the General Academic formulas on page 6) for Texas AampM University
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 26
APPENDIX A FREQUENTLY ASKED QUESTIONS
Q What are the limitations on how institutions spend state appropriations
A Generally speaking institutions have great fl exibility in spending appropriated funds however some limitations do exist depending on the source of revenue Appropriated revenue includes General Revenue Funds General Revenuendash Dedicated Funds (mostly tuition and fee income) Other Funds (including Patient Income) and Federal Funds (for certain Texas AampM System Agencies) Th e Texas Constitution (Article VII Section 18(i) and 17(j)) prohibits with limited exceptions the use of General Revenue Funds for acquiring land or for construction projects An exception occurs when the legislature by two-thirds vote in each house expressly determines that there is a demonstrated need for the project
Various provisions in the 2012ndash13 General Appropriations Act (GAA) Higher Education Special Provisions restrict state appropriations These restrictions include the following
bull Section 6 (Rider 8b) which prohibits the use of appropriated funds for auxiliary enterprises
bull Section 6 (Rider 9) which limits the use of these funds to pay debt service for statutorily authorized tuition revenue bonds Any such appropriation not spent must be returned to the General Revenue Fund at the end of the year
bull Section 9 which prohibits the use of appropriated funds for intercollegiate athletics purposes and
bull Section 54 which limits the use of the Research Development Fund to those defined in Education Code Section 62091
Q Would an increase in tuition revenue replace a corresponding amount in General Revenue Funds or would the revenue remain within the institution
A The result depends on how the Legislature responds
For instance assume that the Eight-second Legislature 2011 changed the statute to require institutions to charge nonresident tuition in circumstances where they had previously waived the nonresident tuition rate For the 2012ndash13 biennium institutions would benefit fully from the
increase in tuition revenue (This assumes the formula calculation would not include a projected increase in tuition)
However institutional appropriations in the 2014ndash15 biennium now depend on that legislation passed in the Eighty-third Legislature 2013 Assuming the same number of students (semester credit hours) enroll regardless of changes in tuition policy and that the result of charging nonresident tuition generated $100 million in additional tuition revenue there are three options
1 Reduce General Revenue Funds (GR) in the formulas by $100 million In this scenario the formula rate stays the same and every dollar increase in tuition revenue results in a dollar decrease in GRmdashinstitutional funding does not increase
2 Keep GR the same and run the additional tuition revenue through the formulas Th e formula funding rate would increase and every institution would receive more funds including those institutions that generated no additional tuition revenue
3 Keep GR formula appropriations at the same level and let individual institutions keep the additional tuition revenue they generated outside the formula allocation
Q Are all tuition and fee revenues collected by institutions of higher education included in the appropriations bill
A No None of the tuition and fee revenues collected by community colleges are appropriated
For general academic institutions an estimate of the revenue from certain tuitions and fees such as statutory tuition (Education Code 54051 Tuition Rates) board authorized tuition (Education Code 54008 Tuition Rate Set by Governing Board) Laboratory Fees (Education Code 54501) and certain other fees are appropriated in the GAA as General Revenue FundsndashDedicated Estimated Other Educational and General Income There are a number of other tuitions and fees that are not included in the GAA and therefore not referred to as state funding Such tuitions and fees include but are not limited to designated tuition (Education Code 540513 Redesignation of Building Use Fee) and Incidental Fees (Education Code 54504) Federal
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 27
APPENDIX A FREQUENTLY ASKED QUESTIONS
Funds are also not appropriated to the general academic and health-related institutions
Q Is a decrease in enrollment the only reason an institution would be eligible for formula funding hold harmless
A No Each session the Legislature makes a determination of whether it will make an appropriation for formula hold harmless A decrease in total enrollment is one reason an institution could be eligible for the funding Because the semester credit hours (general academic institutions) full-time student equivalents (health-related institutions) used in the formulas are based on weights (discipline program and course level) a change in the type of student enrollment regardless of total enrollment could also make an institution eligible for hold harmless funding
Q What are Educational and General Funds
A ldquoOther Educational and General Incomerdquo is a subset of ldquoEducational and General Incomerdquo The following are included in the Education Code (51009(c)) defi nition for ldquoEducational and General Fundsrdquo net tuition special course fees charged under Education Code 54051(e) and (l) lab fees student teaching fees hospital and clinic fees organized activity fees and proceeds from the sale of educational and general equipment
Q What does it mean to be a Tier One institution
A The Tier One reference is often derived from the Carnegie Foundation for the Advancement of Teachingrsquos prior system for classifying institutions of higher education As part of the 1994 version of the Carnegie Classification there were four categories for doctorate granting institutions Research Universities I Research Universities II Doctoral Universities I and Doctoral Universities II ldquoTier Onerdquo was synonymous with Research Universities I Such institutions had to off er a full range of baccalaureate programs award 50 or more doctoral degrees each year and receive annually at least $40 million or more in federal research funds Two institutions in Texas (The University of Texas at Austin and Texas AampM University) met these criteria The 2000 version of the Carnegie Classification collapsed the categories for doctorate granting institutions from four to two Doctoral Research UniversitiesmdashExtensive and DoctoralResearch UniversitiesmdashIntensive Six public institutions in Texas (Texas AampM University Texas Tech University University of Houston University of North Texas The University of Texas at Arlington and The University of Texas at Austin) meet the criteria for DoctoralResearch Universitiesmdash
Extensive In 2005 however the classifi cation structure returned to a more restricted top tier of institutions classifi ed as ldquoResearch Universities (very high research activity)rdquo Both The University of Texas at Austin and Texas AampM University are now counted in this category but any reference to Tier One usually refers to the 1994 Carnegie Classifi cation
Q What is the space model What is the base number of square feet needed
A In 1992 the Texas Higher Education Coordinating Board approved the Space Projection Model for Higher Education Institutions in Texas for public universities to assess the net assignable square feet (NASF) of educational and general space an institution needs There are fi ve categories incorporated into the model teaching library research offi ce and support space Space needs for auxiliary purposes such as dormitories or athletics are not included in the model Square footage amounts are assigned based on a number of elements within each category including the number of students and their program levels and the amount of research expenditures The space model was fi rst incorporated into the funding formulas for general academic institutions in 1997
Q What are ldquoOrganized Activitiesrdquo
A General academic institutions have a funding strategy titled ldquoOrganized Activitiesrdquo These are activities or enterprises that are connected with instructional departments Th ey are intended primarily to give training to students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training
Q What are tuition revenue bonds
A Established in 1971 under Education Code 5513 tuition revenue bonds are bonds (not to exceed 50 years) issued by institutions of higher education for the purpose of ldquoproviding funds to acquire purchase construct improve enlarge andor equip any property buildings structures activities services operations or other facilities for and on behalf of its institution or institutions or any branch of branches thereofrdquo Each institutionsystem is authorized and required to pay debt service on its bonds Although the authorization and issuance of the bonds is not contingent on an appropriation by the state for related debt service the Legislature has provided General Revenue Funds to reimburse institutions for costs related to debt service However in the 2004ndash05 GAA the legislature changed this practice and only provided General Revenue Fund reimbursements for interest
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 28
APPENDIX A FREQUENTLY ASKED QUESTIONS
on bonds issued after March 31 2003 The 2006ndash07 GAA renewed the practice of reimbursing institutions for the costs related to debt service The 2008ndash09 GAA and 2010-11 GAA continues this practice
Q What Is Proportionality
A Pursuant to Section 608 of Article IX of the 2012ndash13 GAA the legislative intent of proportionality is to ldquomaximize balances in the General Revenue Fundrdquo by harmonizing salary funding source with benefits funding source Th is effectively means the Legislature limits its General Revenue Fund contributions for benefits only to those employees having salaries paid with General Revenue Funds As such proportionality requires employee health and retirement benefits be paid in ldquoproportionrdquo to the funding source of salaries To this end institutions are obligated to submit the Accounting Policy Statement 011 Benefits Proportional by Fund (APS 011) report to the Comptroller Th is document provides a structure by which state and local contributions are ldquosettled uprdquo in light of the fiscal years fund proportionality
Q What Is the National Research University Fund
A In 1995 the Texas Constitution was amended to authorize the creation and funding of the Permanent Higher Education Fund (PHEF) The PHEF was intended eventually to become a permanent endowment to support non-Permanent University Fund eligible institutions However the PHEF corpus was rededicated with the voter passage of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) In 2009 Proposition 4 transferred the balance of the PHEF to the credit of the NRUF as of January 1 2010 and repealed the constitutional authorization for the PHEF
The NRUF is intended to provide a source of funding to enable emerging research universities in Texas to achieve national prominence as major research universities Article VII of the Texas Constitution authorizes the Legislature to appropriate some or all of the total return on all investment assets of the NRUF for the purposes of the fund except for two caveats (1) the Legislature may not increase distributions from the fund if the purchasing power of investment assets for any rolling 10-year period is not preserved and (2) the amount appropriated from the proceeds of the NRUF corpus in any fiscal year must be capped at 7 percent of the investment assetsrsquo average net fair market value Until the NRUF has been invested long enough to determine its purchasing power over a 10-year period the Legislature is
authorized to use other means of preserving the purchasing power of the fund
House Bill 1000 Eighty-second Legislature Regular Session 2011 establishes the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution is designated as an emerging research university within the THECBrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fiscal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of institutionrsquos research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 29
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 30
APPENDIX B TUITION AND FEE PROVISIONS
VTCA Texas Education Code Section 54003 states No institution of higher education may collect from students attending the institution any tuition fee or charge of any kind except as permitted by lawhellip
The laws governing tuition and fees at institutions of higher education are found in Education Code Section 54 including a limited number of rules that relate to tuition and fees charged by junior and community colleges Education Code Section 54 includes statutes regarding statewide tuition and fee authority rules regarding residency for tuition and fee purposes and various exemptions for tuition and fees from nonresidency status Also it includes specific fee authority for individual institutions Figure B1 provides a listing of tuition and fee authorizations in Education Code Section 54 but does not include the items presented below or the various exemption and waiver provisions (Details about each provision can be found at httpwwwcapitolstate txus) Th ere are isolated instances outside Chapter 54 whereby the boards of regents are authorized to charge for specific services provided to students
This appendix highlights some of the more prominent tuition and fee provisions and indicates whether the related revenue is or is not included in the General Appropriations Act (GAA)
INCLUDED IN THE GENERAL APPROPRIATIONS ACT Tuition and fee revenue included in the GAA as General Revenue DedicatedndashFunds is referenced as ldquoOther Education and General Incomerdquo The amounts are ldquoEstimatedrdquo so whatever amount of revenue generated is the actual amount available to the institution to spend
54051 Tuition Rates (statutory tuition) In conjunction with Section 540512 Interim Tuition Rates resident tuition for undergraduate students reached $50 per semester credit hour in the 2005ndash06 academic year (the 2006 state fi scal year) Tuition for nonresident students at general academic medical and dental institutions is based on the average of nonresident tuition rates in the five most populous states other than Texas The Texas Higher Education Coordinating Board must make this computation each academic year
54008 Tuition Rate Set by Governing Board (also known as board authorized tuition) Applies to graduate programs Subsection (d) specifies that it is not to be used in the GAA as an offset to General Revenue Funds It is distributed across formula strategies after the formula calculation
54501 Laboratory Fees The fee amount must be sufficient to cover the general costs of laboratory materials and supplies used by a student It is not to be less than $2 or more than $30 per semester and it must not exceed the actual cost of materials and supplies
NOT INCLUDED IN THE GENERAL APPROPRIATIONS ACT 540513 Designated Tuition Statute defi nes designated tuition as an institutional fund which means the revenue is not considered part of ldquoeducational and general fundsrdquo Th e governing board can waive designated tuition for a student (see 54261) Statute specifies that this revenue not be used in the GAA as a way to offset General Revenue
54503 Student Services Fees This is intended for activities which are separate from the regularly scheduled academic functions of the institution and directly involve or benefi t students Except for The University of Texas at Austin (see 54513) and components of the University of Houston System (see 545061) the maximum of all compulsory student services cannot exceed $250 per semester It is kept separate from educational and general funds
54504 Incidental Fees The governing board sets the fee which must reasonably reflect the actual cost of the materials or services for which the fee is collected Examples of unearned fees include late registration library fi nes microfilming fees thesis or doctoral manuscript reproduction or filing fees and bad check charges
5516 Board Responsibility The governing board is authorized to ldquofix and collect rentals rates and chargesrdquo
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 31
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54006 Refund or Adjustment of Tuition and Mandatory Fees for Dropped Courses and Student Withdrawals
540065 Tuition Rebate for Certain Undergraduates
54007 Option to Pay Tuition by Installment
540071 Authority of Institution to Provide Payment Options for Student with Delayed Financial Aid
54009 Increase in Tuition Rate or Fees
54010 Reduction in Tuition
54011 Tuition Limit in Cases of Concurrent Enrollment
54012 Tuition Rates for Certain Doctoral Students
54014 Tuition for Repeated or Excessive Undergraduate Hours
54015 Billing and Notifi cation for Tuition
54016 Fixed Tuition Rate Program for Certain Transfer Students at General Academic Teaching Institutions
54052ndash54057 Residency Provisions
542031 Dependent Children of Residents Who are Members of Armed Forces Deployed on Combat Duty
54204 Children of Disabled Firefighters and Law Enforcement Officers
542041 Disabled Peace Officers
54205 Blind Deaf Students
54206 Foreign Service Officers
54208 Firefighters Enrolled in Fire Science Courses
542081 Peace Officers Enrolled in Certain Courses
54211 Faculty and Dependents
54212 Teaching and Research Assistant
54213 Scholarship Student
54214 Biomedical Research Program Scholarship Student
54221 The University of Texas System Science and Technology Development Management and Transfer
54222 Economic Development and Diversification
54223 Tuition Rates for Olympic Athletes
54231 Resident of Boarding State or Nation or Participant in Student Exchange Program Tuition
54232 NATO Agreement
54233 Academic Common Market
54241 Military Personnel and Dependents
54331 Students from other Nations of the American Hemisphere
54341 Veterans and Other Military Personnel Dependents
54342 Prisoners of War
54343 Children of Prisoners of War or Persons Missing in Action
54344 Participants in Military Funerals
54345 Assistance for Tuition and Fees for Members of State Military Forces
54351 Children of Disabled Firefighters and Law Enforcement Officers
54352 Disabled Peace Officers Optional Exemption
54353 Firefighters and Peace Officers Enrolled in Certain Courses
543531 Firefighters Enrolled in Fire Science Courses
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 32
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54354 Education Benefits for Certain Survivors
54355 Children of Professional Nursing Program Faculty
54356 Preceptors for Professional Nursing Education Programs
54363 Educational Aids
54364 Blind Deaf Students
54365 Senior Citizens Optional Benefit
545011 Charges and Fees for Certain Payments
54502 General Deposits
545021 Student Deposit Fund Composition and Uses
545025 Proration of Fees
545031 Student Fee Advisory Committee
545032 Student Fee Advisory Committee the Texas AampM University System
545041 Environmental Service Fee
54505 Vehicle Registration Fees and Other Fees Related to Parking and Traffic
54506 Fees and Charges for Services to the Public the University of Houston System
545061 Student Services Fees the University of Houston System
545062 Student Fees Advisory Committee the University of Houston System
54507 Group Hospital and Medical Services Fees Texas AampM University System
54508 Medical Services Fee Texas Tech University System Components
545081 Medical Services Fee University of North Texas System Institutions
545082 Medical Services Fee Midwestern State University
545085 Medical Services Fee Texas Womanrsquos University
545089 Medical Services Fee Texas State University System Components
5450891 Medical Services Fee The University of Texas System Components
54509 Student Recreation Fee Texas Tech University System Components
545091 Student Recreational Facility Fee University of North Texas
54510 Student Recreational Sports Fee The University of Texas at Austin
54511 Student Fees for Bus Service Texas State University
545111 Environmental Service Fee Southwest Texas State University
54512 Shuttle Bus Fee The University of Texas at Arlington
545121 Intercollegiate Athletic Fee The University of Texas at Arlington
545122 Recreational Facility Fee The University of Texas at Arlington
54513 Student Service Fees The University of Texas at Austin
545131 International Education Fee The University of Texas at Austin
545132 International Education Fee
545133 Martin Luther King Jr Statue Fee The University of Texas at Austin
545134 Washington DC Internship Education Fee
545135 Barbara Jordan and Cesar Chavez Statues Fee The University of Texas at Austin
54515 Student Union Fee
54518 University Center Fee Midwestern State University
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 33
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54519 Student Union Fee North Texas State University
545191 Intercollegiate Athletic Fee University of North Texas
54520 University Center Student Fee Stephen F Austin State University
545201 Recreational Sports Fee Stephen F Austin State University
54521 Student Center Facility Fees Texas AampM University System
54522 Student Center Fees Texas Southern University
545221 Recreational Facility Fee Texas Southern University
545222 Medical Services Fee Texas Southern University
545223 Intercollegiate Athletics Fee Texas Southern University
54523 Student Center Fees Texas State University System
545241 Student Union Fees Texas Tech University System
54525 Fees for Student Centers Texas Womanrsquos University
545251 Student Fitness and Recreational Fee Texas Womanrsquos University
54526 Student Fees for University Centers the University of Houston
54527 Student Fees for University Center Facilities the University of Houston-Downtown College
54528 Recreational Facility Fee the University of Houston
54529 Student Union Fee The University of Texas at Arlington
54530 Student Union Fees The University of Texas at Austin
54531 Student Union Building Fees The University of Texas at Dallas
545311 Transportation Fee The University of Texas at Dallas
545312 Student Services Building Fee The University of Texas at Dallas
545313 Intramural and Intercollegiate Athletics Fee The University of Texas at Dallas
54532 Student Union Building Fees The University of Texas at San Antonio
545321 Transportation Fee The University of Texas at San Antonio
545322 Intercollegiate Athletics Fee The University of Texas at San Antonio
54533 Student Union Fees The University of Texas of the Permian Basin
545331 Intercollegiate Athletic Fee The University of Texas of the Permian Basin
545332 Fees for Student Services Building The University of Texas of the Permian Basin
54534 Arts and Performance Center Fee The University of Texas at Tyler
545341 Student Recreational Facility Fee The University of Texas at Tyler
545342 Intercollegiate Athletics Fee The University of Texas at Tyler
545343 Student Union Fee The University of Texas at Tyler
54535 Student Union Fee The University of Texas at El Paso
54536 Fees for Student Health Services Building The University of Texas at Austin
54537 Fees for Student Services Building The University of Texas at Austin
545371 Gregory Gymnasium Renovation Fee The University of Texas at Austin
545372 Aquatics Center Fee The University of Texas at Austin
54538 Recreational Sports Fee Texas State University System
545381 Intercollegiate Athletics Fee Certain Institutions in Texas State University System
545382 Intercollegiate Athletics Fee Texas State University ndash San Marcos
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 34
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54539 Recreational Sports Fee the Texas AampM University System
545391 Intercollegiate Athletics Fee Texas AampM University ndash Corpus Christi
545392 Intercollegiate Athletics Fee Texas AampM University ndash Kingsville
545393 Intercollegiate Athletics Fee Prairie View AampM University
545394 Intercollegiate Athletics Fee Tarleton State University
545395 Intercollegiate Athletics Fee Texas AampM International University
545396 Intercollegiate Athletics Fees West Texas AampM University
545397 Intercollegiate Athletics Fees Texas AampM University ndash Commerce
545398 Student Endowment Fund Fee Texas AampM University ndash Corpus Christi
54540 Student Center Fee University of Houston ndash Clear Lake
54541 Recreational Facility Fee The University of Texas at El Paso
54542 Student Union Building Fee The University of Texas ndash Pan American
545421 Sports Recreation and Wellness Facility Fee The University of Texas ndash Pan American
54543 Recreational Facility Fee The University of Texas at San Antonio
54544 Recreational Facility Fee The University of Texas at Dallas
545441 Student Recreational and Health Facilities Fee Midwestern State University
545442 Intercollegiate Athletics Fee Midwestern State University
54545 Fees for Continuing Education Courses
54546 Student Union Fees The University of Texas at Brownsville
54550 Wellness Recreational and Fitness Complex Fee The University of Texas at Brownsville
54551 Intercollegiate Athletics Fee The University of Texas at Brownsville
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 35
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 36
APPENDIX C GLOSSARY
APPROPRIATION METHODOLOGIES Direct Appropriation The actual appropriation either estimated or sum certain listed in that institutionrsquos portion of the General Appropriations Act (GAA)
Indirect Appropriation An appropriation made on behalf of an institution but not listed in that institutionrsquos portion of the GAA Examples include appropriations to the Available University Fund the Higher Education Fund and the Higher Education Coordinating Board all of which are ultimately allocated to institutions
Estimated Appropriation An estimated appropriation is a figure in the GAA that best reflects the information available about the revenue source but the amount available for an institution to spend is contingent on the amount of revenue actually generated If the actual amount of revenue is less than the estimated amount the institution is limited to the lower amount If more revenue is generated than the estimated amount the institution can spend the higher amount
Sum Certain Appropriation A sum certain appropriation in the GAA means that an institution is limited to spend no more than the level of appropriation noted in the institutionrsquos bill pattern in the GAA
Lump Sum Appropriation Texas Education Code Section 61059(k) calls for flexibility in funds appropriated to higher education institutions A lump sum appropriation is a single amount that is unrestricted which means that it can be used for any variety of strategies The GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Higher education institutions are not required to spend their appropriation within specified strategies One exception to this is the Tuition Revenue Bond strategy which represents the appropriation related to debt service on related bonds and must be spent as appropriated or it is reverted to the treasury
METHODS OF FINANCE General Revenue (GR) The non-dedicated portion of the General Revenue Fund is the statersquos primary operating fund Most state tax revenue many state fees and various other sources of revenue are deposited as non-dedicated General Revenue Funds
General RevenuendashDedicated (GRndashD) This is the dedicated portion of General Revenue Funds For higher education institutions the bulk of General RevenuendashDedicated Fund appropriations consist of tuition and fee revenue generated by the institutions These include the tuition and fee revenue included as ldquoOther Educational and General Incomerdquo (defined below) ldquoboard authorized tuitionrdquo (Texas Education Code Section 54008)
Other Funds State funds not included in General Revenue Funds or General RevenuendashDedicated Funds For institutions of higher education these include the Available University Fund and Patient Income generated by health-related institutions
FUND TYPES Educational and General Income Th e Texas Education Code (51009(c)) definition for ldquoEducational and General Fundsrdquo includes (a) net tuition (b) special course fees charged under Education Code Section 54051(e) and (l) (c) lab fees (d) student teaching fees (e) hospital and clinic fees (f ) organized activity fees and (g) proceeds from the sale of educational and general equipment
Institutional Funds Texas Education Code Section 51009(b) defines institutional funds as those that are not ldquoeducational and general fundsrdquo An example of an institutional fund is ldquodesignated tuitionrdquo (Texas Education Code Section 540513) These funds are not included in the GAA
Local Funds Texas Education Code Section 51009(a) defines local funds as net tuition certain special course fees lab fees student teaching fees hospital and clinic fees organized activity fees proceeds from the sale of educational and general equipment and indirect cost recovery fees Th is revenue is accounted for as ldquoeducational and general fundsrdquo and is included in the GAA
Other Educational and General Income The GAA includes some tuition and fees collected by institutions of higher education (General RevenuendashDedicated Funds) Th e revenue from tuition and fees such as statutory tuition (see texas Education Code Section 54051 Tuition Rates) board authorized tuition (see Texas Education Code Section 54008 Tuition Rate Set by Governing Board) Laboratory
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 37
APPENDIX C GLOSSARY
Fees (Texas Education Code Section 54501) and certain other fees are considered Other Educational and General Income (Other EampG) and are appropriated in the GAA as General RevenuendashDedicated Funds Other Educational and General Income is a subset of Educational and General Income (EampG Income)
Patient Income Health-related institutions that operate hospitals or dental clinics generate patient income from services rendered It is allocated as a method of finance to the related institution across a range of strategies in the institutionrsquos bill pattern (Other Funds) For the 2010ndash11 biennium more than $48 billion in patient income was appropriated making it the largest method of fi nance for health-related institutions
OTHER ITEMS Indirect Cost Recovery Institutions negotiate a percentage of a grant with the federal government for Indirect Costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 38
FI
GU
RE
D1
CO
MPA
RIS
ON
OF
CO
NST
ITU
TIO
NA
L A
ND
RES
EARC
H F
UN
DS
201
2ndash13
BIE
NN
IUM
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Avai
labl
e $1
061
4 m
illio
nTe
xas
Con
stitu
tion
hellip
for
Texa
s C
onst
itutio
nU
nive
rsity
the
purp
ose
of a
cqui
ring
Fund
(E
stim
ated
) la
nd
con
stru
ctin
g an
dFo
r su
ppor
t and
equi
ppin
g bu
ildin
gsm
aint
enan
ce
UT
Aus
tin
or o
ther
per
man
ent
Texa
s A
ampM
Uni
vers
ity
impr
ovem
ents
maj
orP
rairi
e Vi
ew U
nive
rsity
UT
repa
ir an
d re
habi
litat
ion
Sys
tem
Aamp
M S
yste
mof
bui
ldin
gs a
nd o
ther
perm
anen
t im
prov
emen
ts
For d
ebt s
ervi
ce
All
acqu
iring
cap
ital
com
pone
nts
incl
udin
g th
eeq
uipm
ent a
nd li
brar
yTA
MU
Sys
tem
Age
ncie
s bo
oks
and
libra
ryex
cept
Tex
as V
eter
inar
y m
ater
ials
and
refu
ndin
gM
edic
al D
iagn
ostic
bond
s or
not
es is
sued
Labo
rato
ry (w
hich
per
unde
r thi
s S
ectio
n
Edu
catio
n C
ode
Sec
tion
887
01 i
s a
stat
e ag
ency
Als
o
for
the
purp
ose
unde
r the
juris
dict
ion
of th
e su
ppor
t and
and
supe
rvis
ion
of th
em
aint
enan
ce o
f The
Tex
as
boar
d)
and
excl
udin
gA
ampM
Uni
vers
ity S
yste
mU
T P
an A
mer
ican
and
UT
adm
inis
tratio
n T
exas
Aamp
M
Bro
wns
ville
(bec
ause
they
Uni
vers
ity a
nd P
rairi
e re
ceiv
e H
EF
allo
catio
ns -
View
Aamp
M U
nive
rsity
and
an
inst
itutio
n ca
nnot
rece
ive
The
Uni
vers
ity o
f Tex
as a
t bo
th A
UF
and
HE
F do
llars
) A
ustin
and
The
Uni
vers
ity
of T
exas
Sys
tem
Hig
her
$525
0 m
illio
nTo
sup
port
inst
itutio
ns
Arti
cle
VII
Sec
tion
17(c
)E
duca
tion
inel
igib
le fo
r AU
F su
ppor
t pr
ovid
es a
n al
low
ance
toFu
nd
add
a ne
w in
stitu
tion
by a
Arti
cle
VII
Sec
tion
23
vote
of b
oth
hous
es o
f17
(a)
fo
r the
pur
pose
the
Legi
slat
ure
if th
e ne
wof
acq
uirin
g la
nd
inst
itutio
n is
out
side
the
UT
cons
truct
ing
and
equi
ppin
gan
d A
ampM
Sys
tem
s
build
ings
m
ajor
repa
ir
acq
uisi
tion
of c
apita
leq
uipm
ent
oth
erpe
rman
ent i
mpr
ovem
ents
or
cap
ital e
quip
men
t use
djo
intly
for e
duca
tiona
l and
gene
ral a
ctiv
ities
Arti
cle
VII
Sec
tion
18(a
-j) o
f the
Tex
as
Con
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Arti
cle
VII
Sec
tion
17(a
-l) o
f the
Tex
as
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
620
02
Gen
eral
App
ropr
iatio
nsA
ct
Texa
s C
onst
itutio
n re
quire
s 1
3 of
the
annu
al
AU
F pr
ocee
ds b
e tra
nsfe
rred
to th
e Te
xas
Aamp
M U
nive
rsity
Sys
tem
E
ach
Sys
tem
offi
cede
term
ines
how
to a
ppor
tion
its s
hare
of t
heA
UF
betw
een
debt
ser
vice
and
sup
port
and
mai
nten
ance
w
ithin
gui
delin
es s
pecifi e
d by
the
Texa
s C
onst
itutio
n
Arti
cle
VII
Sec
tion
17(a
) req
uire
s th
e H
EF
beal
loca
ted
usin
g an
equ
itabl
e fo
rmul
a d
efi n
edin
the
Edu
catio
n C
ode
(Sec
tion
620
21) a
sT
he a
lloca
tion
of fu
nds
unde
r thi
s su
bsec
tion
ism
ade
in a
ccor
danc
e w
ith a
n eq
uita
ble
form
ula
cons
istin
g of
the
follo
win
g el
emen
ts
spac
e defi c
it fa
cilit
ies
cond
ition
ins
titut
iona
l com
plex
ity
and
a se
para
te a
lloca
tion
for
the
Texa
s S
tate
Te
chni
cal C
olle
ge S
yste
m
THE
CB
adm
inis
ters
the
HE
F fo
rmul
a re
allo
catio
nad
viso
ry p
roce
ss
Edu
catio
n C
ode
(Sec
tion
620
21) p
rovi
des
a by
-in
stitu
tion
brea
kout
of a
nnua
l HE
F ap
prop
riatio
ns
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 39
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Nat
iona
l $1
24
mill
ion
Res
earc
hU
nive
rsity
(E
stim
ated
)Fu
nd
Res
earc
h $6
53
mill
ion
Dev
elop
men
tFu
nd
Texa
s $9
35
mill
ion
Com
petit
ive
Kno
wle
dge
Fund
Arti
cle
VII
Sec
tion
20(a
)
for t
he p
urpo
se o
f pr
ovid
ing
a de
dica
ted
inde
pend
ent
and
equi
tabl
eso
urce
of f
undi
ng to
enab
le e
mer
ging
rese
arch
univ
ersi
ties
in th
is s
tate
to a
chie
ve n
atio
nal
prom
inen
ce a
s m
ajor
rese
arch
uni
vers
ities
Arti
cle
VII
Sec
tion
20 (h
)
onl
y fo
r the
sup
port
and
mai
nten
ance
of
educ
atio
nal a
nd g
ener
alac
tiviti
es th
at p
rom
ote
incr
ease
d re
sear
chca
paci
ty a
t the
uni
vers
ity
Edu
catio
n C
ode
Sec
tion
hellipto
pro
mot
e62
091
in
crea
sed
rese
arch
capa
city
at e
ligib
le g
ener
alac
adem
ic te
achi
ngin
stitu
tions
Sec
tion
56 o
f Hig
her
Edu
catio
n S
peci
alP
rovi
sion
s G
AA
201
2ndash13
bi
enni
um
hellipto
sup
port
facu
lty fo
r the
pur
pose
of
inst
ruct
iona
l exc
elle
nce
and
rese
arch
Des
igna
ted
an e
mer
ging
rese
arch
uni
vers
ity b
yTe
xas
Hig
her E
duca
tion
Coo
rdin
atin
g B
oard
R
epor
ts a
t lea
st $
45 m
illio
nin
rest
ricte
d re
sear
chex
pend
iture
s in
eac
h of
the
last
2 y
ears
P
lus
four
of t
he fo
llow
ing
addi
tiona
l crit
eria
1)
End
owm
ents
gt $
400
mill
ion
2) P
rodu
ces
gt 20
0 P
hDs
per y
ear
3) S
elec
tive
ente
ring
Fres
hmen
cla
ss
4) M
embe
r of P
hi B
eta
Kap
pa o
r equ
ival
ent
5) P
osse
sses
hig
h qu
ality
facu
lty a
nd6)
Dem
onst
rate
dco
mm
itmen
t to
high
-qua
lity
grad
uate
edu
catio
n
Edu
catio
n C
ode
Sec
tion
Elig
ible
inst
itutio
n62
092
m
eans
a g
ener
al a
cade
mic
teac
hing
inst
itutio
n a
sdefi n
ed b
y S
ectio
n 61
003
ot
her t
han
The
Uni
vers
ity o
f Te
xas
at A
ustin
Tex
as A
ampM
U
nive
rsity
or P
rairi
e Vi
ew
Aamp
M U
nive
rsity
Uni
vers
ity o
f Tex
as a
t A
ustin
Uni
vers
ity o
f Tex
as
at D
alla
s T
exas
Aamp
M
Uni
vers
ity T
exas
Tec
h U
nive
rsity
Uni
vers
ity o
f H
oust
on
Arti
cle
VII
Sec
tion
20 (a
-h)
of th
e Te
xas
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
621
41
Gen
eral
App
ropr
iatio
nA
ct
Edu
catio
n C
ode
Sec
tion
Not
e th
e62
091
RD
F as
a s
tand
-alo
neap
prop
riatio
n ite
m h
asno
t bee
n fu
nded
sin
ceth
e 20
06ndash0
7 bi
enni
um
How
ever
fun
ds c
alle
d th
e R
DF
have
bee
nap
prop
riate
d di
rect
lyin
to th
e bi
ll pa
ttern
s of
each
elig
ible
Gen
eral
Aca
dem
ic In
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Edu
catio
n C
ode
Sec
tion
621
46 (c
)
o
fth
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for
dist
ribut
ion
in a
sta
tefi s
cal y
ear
each
elig
ible
in
stitu
tion
is e
ntitl
ed to
a d
istri
butio
n in
an
amou
nteq
ual t
o th
e su
m o
fon
e-se
vent
h of
the
tota
l am
ount
app
ropr
iate
d(1
)an
dan
equ
al s
hare
of a
ny a
mou
nt re
mai
ning
afte
r(2
)di
strib
utio
ns a
re c
alcu
late
d un
der S
ubdi
visi
on (1
)no
t to
exce
ed a
n am
ount
equ
al to
one
-four
th o
fth
at re
mai
ning
am
ount
Edu
catio
n C
ode
Sec
tion
621
46 (e
)If
the
num
ber o
f ins
titut
ions
that
are
elig
ible
for
dist
ribut
ions
in a
sta
tefi s
cal y
ear i
s m
ore
than
four
eac
h el
igib
le in
stitu
tion
is e
ntitl
ed to
an
equa
l sh
are
of th
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for d
istri
butio
n in
thatfi s
cal y
ear
Edu
catio
n C
ode
Sec
tion
620
95
The
am
ount
shal
l be
appo
rtion
ed a
mon
g th
e el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of
rest
ricte
d re
sear
ch fu
nds
expe
nded
by
each
inst
itutio
n pe
r yea
r for
the
thre
e pr
eced
ing
stat
efi s
cal y
ears
The
2012
ndash13
appr
opria
tion
prov
ided
abo
ut $
07
mill
ion
to e
ach
elig
ible
inst
itutio
n fo
r eve
ry $
100
mill
ion
in u
nres
trict
ed re
sear
ch e
xpen
ditu
res
asav
erag
ed o
ver a
3-y
ear p
erio
d
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 40
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Res
earc
h N
one
U
nive
rsity
D
evel
opm
ent
Fund
Texa
s $3
56
mill
ion
Res
earc
hIn
cent
ive
Pro
gram
SO
UR
CE L
egis
lativ
e B
udge
t Boa
rd
Texa
s E
duca
tion
Cod
e S
ectio
n 62
051
to
pro
vide
fund
ing
tore
sear
ch u
nive
rsiti
esan
d em
ergi
ng re
sear
chun
iver
sitie
s fo
r the
recr
uitm
ent a
nd re
tent
ion
of h
ighl
y qu
alifi
ed fa
culty
an
d th
e en
hanc
emen
t of
rese
arch
pro
duct
ivity
at
thos
e un
iver
sitie
s
Edu
catio
n C
ode
Sec
tion
hellipto
pro
vide
621
22
mat
chin
g fu
nds
to a
ssis
tel
igib
le in
stitu
tions
inle
vera
ging
priv
ate
gifts
for t
he e
nhan
cem
ent o
fre
sear
ch p
rodu
ctiv
ity a
ndfa
culty
recr
uitm
ent
Edu
catio
n C
ode
Sec
tion
620
51
Elig
ible
inst
itutio
nm
eans
an
inst
itutio
nof
hig
her e
duca
tion
desi
gnat
ed a
s a
rese
arch
univ
ersi
ty o
r em
ergi
ngre
sear
ch u
nive
rsity
und
erth
e co
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
E
ligib
le62
121
in
stitu
tion
mea
ns a
nin
stitu
tion
of h
ighe
red
ucat
ion
desi
gnat
ed a
san
em
ergi
ng re
sear
chun
iver
sity
und
er th
eco
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
620
51
Edu
catio
n C
ode
Sec
tion
(Hou
se B
ill 5
162
121
Eig
hty-fi r
st R
egul
ar
Ses
sion
)
Edu
catio
n C
ode
Sec
tion
620
53
t
o el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of t
otal
rese
arch
fund
s ex
pend
ed b
y ea
ch in
stitu
tion
annu
ally
dur
ing
the
thre
e m
ost r
ecen
t sta
tefi s
cal
year
s a
ccor
ding
to th
e fo
llow
ing
rate
s
at le
ast $
1 m
illio
n fo
r eve
ry $
10 m
illio
n of
(1)
the
aver
age
annu
al a
mou
nt o
f tho
se re
sear
chfu
nds
expe
nded
by
the
inst
itutio
n if
that
ave
rage
amou
nt fo
r the
inst
itutio
n is
$50
mill
ion
or m
ore
and
at le
ast $
500
000
for e
very
$10
mill
ion
of(2
)th
e av
erag
e an
nual
am
ount
of t
hose
rese
arch
fund
s ex
pend
ed b
y th
e in
stitu
tion
if th
at a
vera
geam
ount
for t
he in
stitu
tion
is le
ss th
an $
50 m
illio
n
Edu
catio
n C
ode
Sec
tion
621
23
hellipis
ent
itled
to re
ceiv
e o
ut o
f fun
ds a
ppro
pria
ted
for t
hepu
rpos
es o
f the
pro
gram
for t
hatfi
sca
l yea
r a
mat
chin
g gr
ant i
n an
am
ount
det
erm
ined
acco
rdin
g to
the
follo
win
g ra
tes
50 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(1)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$10
000
0 or
mor
e bu
t not
mor
eth
an $
999
999
75 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(2)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$1
mill
ion
or m
ore
but n
ot m
ore
than
$1
999
999
or
100
perc
ent o
f the
am
ount
of t
he g
ifts
and
(3)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$2
mill
ion
or m
ore
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 41
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 42
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $50119391873 $47339213388 ($2780178485) (55)
School for the Blind and Visually Impaired 93388870 41245345 (52143525) (558)
School for the Deaf 53083657 52695245 (388412) (07)
SUBTOTAL PUBLIC EDUCATION $50265864400 $47433153978 ($2832710422) (56)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1745695460 $1749380723 $3685263 02
Lamar Institute of Technology 27568721 28708990 1140269 41
Lamar University ndash Orange 18484576 19164769 680193 37
Lamar University ndash Port Arthur 23780405 22119709 (1660696) (70)
SUBTOTAL LAMAR STATE COLLEGES $69833702 $69993468 $159766 02
Texas State Technical College System $16493826 $5351461 ($11142365) (676) Administration
Texas State Technical College ndash Harlingen 50980986 49093510 (1887476) (37)
Texas State Technical College ndash West Texas 27965791 24970291 (2995500) (107)
Texas State Technical College ndash Marshall 11434368 10995468 (438900) (38)
Texas State Technical College ndash Waco 68111562 73596786 5485224 81
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$174986533 $164007516 ($10979017) (63)
SUBTOTAL TWO-YEAR INSTITUTIONS $1990515695 $1983381707 ($7133988) (04)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $19099360 $18147200 ($952160) (50)
The University of Texas at Arlington 275081581 288654156 13572575 49
The University of Texas at Austin 749518863 702739665 (46779198) (62)
The University of Texas at Dallas 230535884 223513862 (7022022) (30)
The University of Texas at El Paso 202195230 195511098 (6684132) (33)
The University of Texas ndash Pan American 169039177 162830092 (6209085) (37)
The University of Texas at Brownsville 61910963 57628718 (4282245) (69)
The University of Texas of the Permian Basin 58194080 59145561 951481 16
The University of Texas at San Antonio 273182023 260495772 (12686251) (46)
The University of Texas at Tyler 71137295 66147545 (4989750) (70)
Texas AampM University System Administrative and 20701573 4501868 (16199705) (783) General Offices
Texas AampM University 700537434 651599219 (48938215) (70)
Texas AampM University at Galveston 43799673 37773622 (6026051) (138)
Prairie View AampM University 134247361 122639379 (11607982) (86)
Tarleton State University 87292499 83950084 (3342415) (38)
Texas AampM University ndash Central Texas 29460313 30599703 1139390 39
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 43
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Corpus Christi $121534331 $110283074 ($11251257) (93)
Texas AampM University ndash Kingsville 82466491 75368253 (7098238) (86)
Texas AampM University ndash San Antonio 27154411 37125363 9970952 367
Texas AampM International University 83231209 73816324 (9414885) (113)
West Texas AampM University 79410486 72847023 (6563463) (83)
Texas AampM University ndash Commerce 99558312 89920628 (9637684) (97)
Texas AampM University ndash Texarkana 41409091 34754968 (6654123) (161)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 450003385 394815403 (55187982) (123)
University of Houston ndash Clear Lake 83394543 71849633 (11544910) (138)
University of Houston ndash Downtown 88104670 67926822 (20177848) (229)
University of Houston ndash Victoria 42631672 39786959 (2844713) (67)
Midwestern State University 54249721 48828454 (5421267) (100)
University of North Texas System Administration 9789067 6732226 (3056841) (312)
University of North Texas 302350602 296355351 (5995251) (20)
University of North Texas at Dallas 35156605 30478388 (4678217) (133)
Stephen F Austin State University 121843336 108728674 (13114662) (108)
Texas Southern University 174127907 150903873 (23224034) (133)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 368026094 357056343 (10969751) (30)
Angelo State University 68450875 64053866 (4397009) (64)
Texas Womans University 146639127 135140923 (11498204) (78)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 121909453 111926905 (9982548) (82)
Sam Houston State University 162684291 145338873 (17345418) (107)
Texas State University ndash San Marcos 261940220 254492644 (7447576) (28)
Sul Ross State University 34008142 37804020 3795878 112
Sul Ross State University Rio Grande College 13112804 12127383 (985421) (75)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$6217659551 $5853308379 ($364351172) (59)
HEALTH-RELATED INSTITUTIONS -
The University of Texas Southwestern Medical $339025963 $278284511 ($60741452) (179) Center
The University of Texas Medical Branch at 1252556677 1214546039 (38010638) (30) Galveston
The University of Texas Health Science Center at 356632008 347880533 (8751475) (25) Houston
The University of Texas Health Science Center at 357022348 319153560 (37868788) (106) San Antonio
The University of Texas MD Anderson Cancer 4614023153 5043439860 429416707 93 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 44
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center at $170568794 $176002869 $5434075 32 Tyler
Texas AampM University System Health Science 252705800 241434175 (11271625) (45) Center
University of North Texas Health Science Center 141974215 140131956 (1842259) (13) at Fort Worth
Texas Tech University Health Sciences Center 361096839 333314809 (27782030) (77)
SUBTOTAL HEALTH-RELATED INSTITUTIONS $7845605797 $8094188312 $248582515 32
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $137560226 $130327148 ($7233078) (53)
Texas AgriLife Extension Service 137837443 128253897 (9583546) (70)
Texas Engineering Experiment Station 249008314 268154320 19146006 77
Texas Transportation Institute 96056916 99288013 3231097 34
Texas Engineering Extension Service 164895453 161748713 (3146740) (19)
Texas Forest Service 108765979 196355520 87589541 805
Texas Veterinary Medical Diagnostic Laboratory 32693561 29601103 (3092458) (95)
SUBTOTAL TEXAS AampM UNIVERSITY $926817892 $1013728714 $86910822 94 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 1755022519 1301687813 (453334706) (258)
SUBTOTAL OTHER HIGHER EDUCATION $3339042471 $2900537481 ($438504990) (131)
SUBTOTAL HIGHER EDUCATION $20319641406 $19845144593 ($474496813) (23)
EMPLOYEE BENEFITS
Teacher Retirement System $4038146148 $3797393090 ($240753058) (60)
Optional Retirement Program 294169521 247905975 (46263546) (157)
Higher Education Employees Group Insurance 1068235618 968961950 (99273668) (93) Contributions
Retirement and Group Insurance 61823656 63645693 1822037 29
Social Security and Benefits Replacement Pay 560373470 577908771 17535301 31
SUBTOTAL EMPLOYEE BENEFITS $6022748413 $5655815479 ($366932934) (61)
DEBT SERVICE
Bond Debt Service Payments $7579835 $14567314 $6987479 922
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13483869 $19862644 $6378775 473
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION $76416008567 $72871348360 ($3544660207) (46) 1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 45
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $30322901124 $30476707526 $153806402 05
School for the Blind and Visually Impaired 28830574 29152947 322373 11
School for the Deaf 36111132 36216478 105346 03
SUBTOTAL PUBLIC EDUCATION $30387842830 $30542076951 $154234121 05
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1728790460 $1749380723 $20590263 12
Lamar Institute of Technology 20141881 21363652 1221771 61
Lamar University ndash Orange 13379584 13438359 58775 04
Lamar University ndash Port Arthur 18247526 16676606 (1570920) (86)
SUBTOTAL LAMAR STATE COLLEGES $51768991 $51478617 ($290374) (06)
Texas State Technical College System $16122329 $4603444 ($11518885) (714) Administration
Texas State Technical College ndash Harlingen 35862333 35177742 (684591) (19)
Texas State Technical College ndash West Texas 22972902 20195085 (2777817) (121)
Texas State Technical College ndash Marshall 8795246 8519429 (275817) (31)
Texas State Technical College ndash Waco 48458059 55190076 6732017 139
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$132210869 $123685776 ($8525093) (64)
SUBTOTAL TWO-YEAR INSTITUTIONS $1912770320 $1924545116 $11774796 06
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $16827250 $15931200 ($896050) (53)
The University of Texas at Arlington 171697428 183867794 12170366 71
The University of Texas at Austin 536034384 492544731 (43489653) (81)
The University of Texas at Dallas 142108554 148778381 6669827 47
The University of Texas at El Paso 142521273 137781712 (4739561) (33)
The University of Texas ndash Pan American 115707790 110889522 (4818268) (42)
The University of Texas at Brownsville 51100517 47424781 (3675736) (72)
The University of Texas of the Permian Basin 47639722 48816240 1176518 25
The University of Texas at San Antonio 186961792 178547264 (8414528) (45)
The University of Texas at Tyler 56673893 51804728 (4869165) (86)
Texas AampM University System Administrative 11478504 4473868 (7004636) (610) and General Offices
Texas AampM University 487991523 458011060 (29980463) (61)
Texas AampM University at Galveston 36736318 30964674 (5771644) (157)
Prairie View AampM University 102383638 90923868 (11459770) (112)
Tarleton State University 62999263 59464473 (3534790) (56)
Texas AampM University ndash Central Texas 24007601 25352928 1345327 56
Texas AampM University ndash Corpus Christi 93966271 81624416 (12341855) (131)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 46
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $60610859 $54030202 ($6580657) (109)
Texas AampM University ndash San Antonio 21438200 29287597 7849397 366
Texas AampM International University 67735925 58009521 (9726404) (144)
West Texas AampM University 57622391 53282160 (4340231) (75)
Texas AampM University ndash Commerce 67888967 66581226 (1307741) (19)
Texas AampM University ndash Texarkana 31084147 30370655 (713492) (23)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 311616152 257331674 (54284478) (174)
University of Houston ndash Clear Lake 58807555 46454050 (12353505) (210)
University of Houston ndash Downtown 56441987 39973395 (16468592) (292)
University of Houston ndash Victoria 32315073 27651821 (4663252) (144)
Midwestern State University 37434162 33382015 (4052147) (108)
University of North Texas System Administration 4789067 6732226 1943159 406
University of North Texas 194672599 191274119 (3398480) (17)
University of North Texas at Dallas 30330149 28165402 (2164747) (71)
Stephen F Austin State University 84817662 75640135 (9177527) (108)
Texas Southern University 125878414 104685201 (21193213) (168)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 261015662 253976808 (7038854) (27)
Angelo State University 48095474 45861337 (2234137) (46)
Texas Womans University 104666337 92467100 (12199237) (117)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 77990428 70849905 (7140523) (92)
Sam Houston State University 85061409 79609576 (5451833) (64)
Texas State University ndash San Marcos 168720167 164894925 (3825242) (23)
Sul Ross State University 28832045 32758471 3926426 136
Sul Ross State University Rio Grande College 10662338 9364932 (1297406) (122)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$4333902287 $4078804555 ($255097732) (59)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $286599806 $249279177 ($37320629) (130) Center
The University of Texas Medical Branch at 586704245 472189151 (114515094) (195) Galveston
The University of Texas Health Science Center 278466261 294281302 15815041 57 at Houston
The University of Texas Health Science Center 285919332 260615042 (25304290) (89) at San Antonio
The University of Texas MD Anderson Cancer 316274242 298435072 (17839170) (56) Center
The University of Texas Health Science Center 68656721 71856579 3199858 47 at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 47
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $205234148 $194402799 ($10831349) (53) Center
University of North Texas Health Science Center 120369543 113121832 (7247711) (60) at Fort Worth
Texas Tech University Health Sciences Center 308265168 291713120 (16552048) (54)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$2456489466 $2245894074 ($210595392) (86)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $108442641 $101233060 ($7209581) (66)
Texas AgriLife Extension Service 93421095 84437039 (8984056) (96)
Texas Engineering Experiment Station 27420670 27791758 371088 14
Texas Transportation Institute 1786250 1282500 (503750) (282)
Texas Engineering Extension Service 13423471 12388837 (1034634) (77)
Texas Forest Service 38994278 158979948 119985670 3077
Texas Veterinary Medical Diagnostic Laboratory 12326913 11519113 (807800) (66)
SUBTOTAL TEXAS AampM UNIVERSITY $295815318 $397632255 $101816937 344 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 1324025818 1053522035 (270503783) (204)
SUBTOTAL OTHER HIGHER EDUCATION $1849025818 $1578522035 ($270503783) (146)
SUBTOTAL HIGHER EDUCATION $10848003209 $10225398035 ($622605174) (57)
EMPLOYEE BENEFITS
Teacher Retirement System $3721648969 $3431139479 ($290509490) (78)
Optional Retirement Program 249841016 205341297 (44499719) (178)
Higher Education Employees Group Insurance 1066913010 967556924 (99356086) (93) Contributions
Retirement and Group Insurance 51589368 54070178 2480810 48
Social Security and Benefits Replacement Pay 456936472 471706602 14770130 32
SUBTOTAL EMPLOYEE BENEFITS $5546928835 $5129814480 ($417114355) (75)
DEBT SERVICE
Bond Debt Service Payments $7325020 $14248830 $6923810 945
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13229054 $19544160 $6315106 477
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$46796003928 $45916833626 ($879170302) (19)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 48
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $418569 $649000 $230431 551
School for the Blind and Visually Impaired 0 0 0 NA
School for the Deaf 0 0 0 NA
SUBTOTAL PUBLIC EDUCATION $418569 $649000 $230431 551
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 7026644 7345338 318694 45
Lamar University ndash Orange 4875929 5726410 850481 174
Lamar University ndash Port Arthur 4747409 5443103 695694 147
SUBTOTAL LAMAR STATE COLLEGES $16649982 $18514851 $1864869 112
Texas State Technical College System $371497 $748017 $376520 1014 Administration
Texas State Technical College ndash Harlingen 14268123 13915768 (352355) (25)
Texas State Technical College ndash West Texas 4573311 4775206 201895 44
Texas State Technical College ndash Marshall 2486999 2476039 (10960) (04)
Texas State Technical College ndash Waco 18496312 18406710 (89602) (05)
SUBTOTAL TEXAS STATE TECHNICAL $40196242 $40321740 $125498 03 COLLEGES
SUBTOTAL TWO-YEAR INSTITUTIONS $56846224 $58836591 $1990367 35
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 99544565 104786362 5241797 53
The University of Texas at Austin 203175074 210194934 7019860 35
The University of Texas at Dallas 73902392 74735481 833089 11
The University of Texas at El Paso 54257081 54959386 702305 13
The University of Texas ndash Pan American 50448111 51483144 1035033 21
The University of Texas at Brownsville 10270338 10203937 (66401) (06)
The University of Texas of the Permian Basin 10153771 10329321 175550 17
The University of Texas at San Antonio 78194498 81948508 3754010 48
The University of Texas at Tyler 13686400 14342817 656417 48
Texas AampM University System Administrative 9223069 28000 (9195069) (997) and General Offices
Texas AampM University 194931245 184789626 (10141619) (52)
Texas AampM University at Galveston 6714220 6808948 94728 14
Prairie View AampM University 31863723 31715511 (148212) (05)
Tarleton State University 23018364 24485611 1467247 64
Texas AampM University ndash Central Texas 5452712 5246775 (205937) (38)
Texas AampM University ndash Corpus Christi 26308558 28658658 2350100 89
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 49
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $20743629 $21338051 $594422 29
Texas AampM University ndash San Antonio 5716211 7837766 2121555 371
Texas AampM International University 14449349 15531029 1081680 75
West Texas AampM University 20857129 19564863 (1292266) (62)
Texas AampM University ndash Commerce 29344128 23339402 (6004726) (205)
Texas AampM University ndash Texarkana 4114223 4384313 270090 66
University of Houston System Administration 0 0 0 NA
University of Houston 129680228 137483729 7803501 60
University of Houston ndash Clear Lake 23417549 25395583 1978034 84
University of Houston ndash Downtown 30264387 27953427 (2310960) (76)
University of Houston ndash Victoria 9883366 12135138 2251772 228
Midwestern State University 15912994 15446439 (466555) (29)
University of North Texas System 0 0 0 NA Administration
University of North Texas 100805298 105081232 4275934 42
University of North Texas at Dallas 4826456 2312986 (2513470) (521)
Stephen F Austin State University 35525799 33088539 (2437260) (69)
Texas Southern University 47027769 46218672 (809097) (17)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 98116061 103079535 4963474 51
Angelo State University 17654127 18192529 538402 30
Texas Womans University 40098242 42673823 2575581 64
Texas State University System 0 0 0 NA
Lamar University 37445892 41077000 3631108 97
Sam Houston State University 71500172 65729297 (5770875) (81)
Texas State University ndash San Marcos 88567369 89597719 1030350 12
Sul Ross State University 4941096 5045549 104453 21
Sul Ross State University Rio Grande College 2342952 2762451 419499 179
SUBTOTAL GENERAL ACADEMIC $1744378547 $1759986091 $15607544 09 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $22514152 $18054614 ($4459538) (198) Center
The University of Texas Medical Branch at 23120930 24797153 1676223 72 Galveston
The University of Texas Health Science Center 35777999 35483172 (294827) (08) at Houston
The University of Texas Health Science Center 16488403 17234857 746454 45 at San Antonio
The University of Texas MD Anderson Cancer 48597071 55476185 6879114 142 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 50
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center $512055 $569200 $57145 112 at Tyler
Texas AampM University System Health Science 13306322 24908409 11602087 872 Center
University of North Texas Health Science 12596783 16295862 3699079 294 Center at Fort Worth
Texas Tech University Health Sciences Center 23553492 27695220 4141728 176
SUBTOTAL HEALTH-RELATED $196467207 $220514672 $24047465 122 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $950000 $950000 $0 NA
Texas AgriLife Extension Service 46992 18000 (28992) (617)
Texas Engineering Experiment Station 1785036 904418 (880618) (493)
Texas Transportation Institute 0 0 0 NA
Texas Engineering Extension Service 0 0 0 NA
Texas Forest Service 61388596 28912000 (32476596) (529)
Texas Veterinary Medical Diagnostic Laboratory 0 0 0 NA
SUBTOTAL TEXAS AampM UNIVERSITY SERVICES
$64170624 $30784418 ($33386206) (520)
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 111572621 87256791 (24315830) (218)
SUBTOTAL OTHER HIGHER EDUCATION $111572621 $87256791 ($24315830) (218)
SUBTOTAL HIGHER EDUCATION $2173435223 $2157378563 ($16056660) (07)
EMPLOYEE BENEFITS
Teacher Retirement System $188794770 $209600575 $20805805 110
Optional Retirement Program 44328505 42564678 (1763827) (40)
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 0 0 0 NA
Social Security and Benefits Replacement Pay 82274010 85153600 2879590 35
SUBTOTAL EMPLOYEE BENEFITS $315397285 $337318853 $21921568 70
DEBT SERVICE
Bond Debt Service Payments $0 $0 $0 NA
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $0 $0 $0 NA
TOTAL ARTICLE III ndash AGENCIES OF $2489251077 $2495346416 $6095339 02 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 51
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $13298491946 $10520619770 ($2777872176) (209)
School for the Blind and Visually Impaired 5430126 5855880 425754 78
School for the Deaf 4233990 2921862 (1312128) (310)
SUBTOTAL PUBLIC EDUCATION $13308156062 $10529397512 ($2778758550) (209)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $16905000 $0 ($16905000) (1000)
Lamar Institute of Technology 400196 0 (400196) (1000)
Lamar University ndash Orange 229063 0 (229063) (1000)
Lamar University ndash Port Arthur 785470 0 (785470) (1000)
SUBTOTAL LAMAR STATE COLLEGES $1414729 $0 ($1414729) (1000)
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 850530 0 (850530) (1000)
Texas State Technical College ndash West Texas 419578 0 (419578) (1000)
Texas State Technical College ndash Marshall 152123 0 (152123) (1000)
Texas State Technical College ndash Waco 1157191 0 (1157191) (1000)
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$2579422 $0 ($2579422) (1000)
SUBTOTAL TWO-YEAR INSTITUTIONS $20899151 $0 ($20899151) (1000)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 3839588 0 (3839588) (1000)
The University of Texas at Austin 10309405 0 (10309405) (1000)
The University of Texas at Dallas 14524938 0 (14524938) (1000)
The University of Texas at El Paso 2681876 0 (2681876) (1000)
The University of Texas ndash Pan American 2241274 0 (2241274) (1000)
The University of Texas at Brownsville 540108 0 (540108) (1000)
The University of Texas of the Permian Basin 400587 0 (400587) (1000)
The University of Texas at San Antonio 8025733 0 (8025733) (1000)
The University of Texas at Tyler 777002 0 (777002) (1000)
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 10292036 0 (10292036) (1000)
Texas AampM University at Galveston 349135 0 (349135) (1000)
Prairie View AampM University 0 0 0 NA
Tarleton State University 1274872 0 (1274872) (1000)
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 1259502 0 (1259502) (1000)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 52
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville 1112003 0 (1112003) (1000)
Texas AampM University ndash San Antonio $0 $0 $0 NA
Texas AampM International University 658885 0 (658885) (1000)
West Texas AampM University 930966 0 (930966) (1000)
Texas AampM University ndash Commerce 2325217 0 (2325217) (1000)
Texas AampM University ndash Texarkana 6210721 0 (6210721) (1000)
University of Houston System Administration 0 0 0 NA
University of Houston 8707005 0 (8707005) (1000)
University of Houston ndash Clear Lake 1169439 0 (1169439) (1000)
University of Houston ndash Downtown 1398296 0 (1398296) (1000)
University of Houston ndash Victoria 433233 0 (433233) (1000)
Midwestern State University 902565 0 (902565) (1000)
University of North Texas System Administration 5000000 0 (5000000) (1000)
University of North Texas 6872705 0 (6872705) (1000)
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 1499875 0 (1499875) (1000)
Texas Southern University 1221724 0 (1221724) (1000)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 8894371 0 (8894371) (1000)
Angelo State University 2701274 0 (2701274) (1000)
Texas Womans University 1874548 0 (1874548) (1000)
Texas State University System 0 0 0 NA
Lamar University 6473133 0 (6473133) (1000)
Sam Houston State University 6122710 0 (6122710) (1000)
Texas State University ndash San Marcos 4652684 0 (4652684) (1000)
Sul Ross State University 235001 0 (235001) (1000)
Sul Ross State University Rio Grande College 107514 0 (107514) (1000)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$126019925 $0 ($126019925) (1000)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $16614303 $0 ($16614303) (1000) Center
The University of Texas Medical Branch at 6745161 0 (6745161) (1000) Galveston
The University of Texas Health Science Center at 24173646 0 (24173646) (1000) Houston
The University of Texas Health Science Center at 19224332 0 (19224332) (1000) San Antonio
The University of Texas MD Anderson Cancer 634206 0 (634206) (1000) Center
The University of Texas Health Science Center 80210 0 (80210) (1000) at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 53
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $15014608 $0 ($15014608) (1000) Center
University of North Texas Health Science Center 3438054 0 (3438054) (1000) at Fort Worth
Texas Tech University Health Sciences Center 11075479 0 (11075479) (1000)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$96999999 $0 ($96999999) (1000)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $15933582 $15933582 $0 NA
Texas AgriLife Extension Service 25302708 25302708 0 NA
Texas Engineering Experiment Station 137281801 153857672 16575871 121
Texas Transportation Institute 17405197 18757193 1351996 78
Texas Engineering Extension Service 48387893 48387894 1 00
Texas Forest Service 7349101 7429568 80467 11
Texas Veterinary Medical Diagnostic Laboratory 594001 594000 (1) (00)
SUBTOTAL TEXAS AampM UNIVERSITY $252254283 $270262617 $18008334 71 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 197332508 123636426 (73696082) (373)
SUBTOTAL OTHER HIGHER EDUCATION $197332508 $123636426 ($73696082) (373)
SUBTOTAL HIGHER EDUCATION $693505866 $393899043 ($299606823) (432)
EMPLOYEE BENEFITS
Teacher Retirement System $0 $0 $0 NA
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 8832085 8286741 (545344) (62)
Social Security and Benefits Replacement Pay 3888441 3428099 (460342) (118)
SUBTOTAL EMPLOYEE BENEFITS $12720526 $11714840 ($1005686) (79)
DEBT SERVICE
Bond Debt Service Payments $253903 $318484 $64581 254
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $253903 $318484 $64581 254
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$14014636357 $10935329879 ($3079306478) (220)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 54
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $6497580234 $6341237092 ($156343142) (24)
School for the Blind and Visually Impaired 59128170 6236518 (52891652) (895)
School for the Deaf 12738535 13556905 818370 64
SUBTOTAL PUBLIC EDUCATION $6569446939 $6361030515 ($208416424) (32)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 0 0 0 NA
Lamar University ndash Orange 0 0 0 NA
Lamar University ndash Port Arthur 0 0 0 NA
SUBTOTAL LAMAR STATE COLLEGES $0 $0 $0 NA
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 0 0 0 NA
Texas State Technical College ndash West Texas 0 0 0 NA
Texas State Technical College ndash Marshall 0 0 0 NA
Texas State Technical College ndash Waco 0 0 0 NA
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$0 $0 $0 NA
SUBTOTAL TWO-YEAR INSTITUTIONS $0 $0 $0 NA
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $2272110 $2216000 ($56110) (25)
The University of Texas at Arlington 0 0 0 NA
The University of Texas at Austin 0 0 0 NA
The University of Texas at Dallas 0 0 0 NA
The University of Texas at El Paso 2735000 2770000 35000 13
The University of Texas ndash Pan American 642002 457426 (184576) (288)
The University of Texas at Brownsville 0 0 0 NA
The University of Texas of the Permian Basin 0 0 0 NA
The University of Texas at San Antonio 0 0 0 NA
The University of Texas at Tyler 0 0 0 NA
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 7322630 8798533 1475903 202
Texas AampM University at Galveston 0 0 0 NA
Prairie View AampM University 0 0 0 NA
Tarleton State University 0 0 0 NA
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 0 0 0 NA
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 55
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $0 $0 $0 NA
Texas AampM University ndash San Antonio 0 0 0 NA
Texas AampM International University 387050 275774 (111276) (287)
West Texas AampM University 0 0 0 NA
Texas AampM University ndash Commerce 0 0 0 NA
Texas AampM University ndash Texarkana 0 0 0 NA
University of Houston System Administration 0 0 0 NA
University of Houston 0 0 0 NA
University of Houston ndash Clear Lake 0 0 0 NA
University of Houston ndash Downtown 0 0 0 NA
University of Houston ndash Victoria 0 0 0 NA
Midwestern State University 0 0 0 NA
University of North Texas System Administration 0 0 0 NA
University of North Texas 0 0 0 NA
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 0 0 0 NA
Texas Southern University 0 0 0 NA
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 0 0 0 NA
Angelo State University 0 0 0 NA
Texas Womans University 0 0 0 NA
Texas State University System 0 0 0 NA
Lamar University 0 0 0 NA
Sam Houston State University 0 0 0 NA
Texas State University ndash San Marcos 0 0 0 NA
Sul Ross State University 0 0 0 NA
Sul Ross State University Rio Grande College 0 0 0 NA
SUBTOTAL GENERAL ACADEMIC $13358792 $14517733 $1158941 87 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $13297702 $10950720 ($2346982) (176) Center
The University of Texas Medical Branch at 635986341 717559735 81573394 128 Galveston
The University of Texas Health Science Center at 18214102 18116059 (98043) (05) Houston
The University of Texas Health Science Center at 35390281 41303661 5913380 167 San Antonio
The University of Texas MD Anderson Cancer 4248517634 4689528603 441010969 104 Center
The University of Texas Health Science Center 101319808 103577090 2257282 22 at Tyler
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 56
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $19150722 $22122967 $2972245 155 Center
University of North Texas Health Science Center 5569835 10714262 5144427 924 at Fort Worth
Texas Tech University Health Sciences Center 18202700 13906469 (4296231) (236)
SUBTOTAL HEALTH-RELATED $5095649125 $5627779566 $532130441 104 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $12234003 $12210506 ($23497) (02)
Texas AgriLife Extension Service 19066648 18496150 (570498) (30)
Texas Engineering Experiment Station 82520807 85600472 3079665 37
Texas Transportation Institute 76865469 79248320 2382851 31
Texas Engineering Extension Service 103084089 100971982 (2112107) (20)
Texas Forest Service 1034004 1034004 0 NA
Texas Veterinary Medical Diagnostic Laboratory 19772647 17487990 (2284657) (116)
SUBTOTAL TEXAS AampM UNIVERSITY $314577667 $315049424 $471757 01 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 122091572 37272561 (84819011) (695)
SUBTOTAL OTHER HIGHER EDUCATION $1181111524 $1111122229 ($69989295) (59)
SUBTOTAL HIGHER EDUCATION $6604697108 $7068468952 $463771844 70
EMPLOYEE BENEFITS
Teacher Retirement System $127702409 $156653036 $28950627 227
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 1322608 1405026 82418 62 Contributions
Retirement and Group Insurance 1402203 1288774 (113429) (81)
Social Security and Benefits Replacement Pay 17274547 17620470 345923 20
SUBTOTAL EMPLOYEE BENEFITS $147701767 $176967306 $29265539 198
DEBT SERVICE
Bond Debt Service Payments $912 $0 ($912) (1000)
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $912 $0 ($912) (1000)
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF $13116117205 $13523838439 $407721234 31 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 57
- INTRODUCTION
- FUNDING GENERAL ACADEMICS INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
- OTHER NON-FORMULA FUNDING
-
- FUNDING HEALTH-RELATED INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
-
- FUNDING COMMUNITY AND TECHNICAL COLLEGES
-
- OVERVIEW
- COMMUNITY COLLEGES
- TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES
-
- FUNDING TEXAS AampM SYSTEM AGENCIES
- APPENDIX A FREQUENTLY ASKED QUESTIONS
- APPENDIX B TUITION AND FEE PROVISIONS
- APPENDIX C GLOSSARY
- APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
- APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
-
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD ii
INTRODUCTION
The Texas public higher education system encompasses 38 general academic teaching institutions (including law schools) 50 community and junior college districts one technical college system with four main campuses three lower-division state colleges and nine health-related institutions which operate a total of eight state medical schools three dental schools two pharmacy schools and other allied health and nursing units In addition there are seven agencies that are components of the Texas AampM University System
Private institutions in Texas include 38 four year colleges and universities two junior colleges one medical school and one accredited independent law school
Public institutions serve about 91 percent of the approximately 14 million students enrolled in higher education in Texas
The Texas Higher Education Coordinating Board (THECB) was established in 1965 and is composed of nine members appointed by the Governor for staggered six-year terms THECB provides leadership and coordination for the Texas higher education system to promote excellence in higher education
THECBrsquos responsibilities include assessing Texasrsquo system of higher education and developing recommendations for
FIGURE 1 HISTORICAL SPENDING FOR HIGHER EDUCATION 2002ndash03 TO 2012ndash13 BIENNIA
improvements to the Governor the Legislature and institutions THECB reviews and recommends changes in formulas regarding the allocation of state funds to public institutions to limit duplication of academic programs and unnecessary construction projects THECB also promotes access to high quality programs at diff erent institutional levels and oversees the statersquos student financial aid programs
The Eighty-second Legislature 2011 appropriated $221 billion in the General Appropriations Act (GAA) for the 2012ndash13 biennium to support Texas higher education a 25 percent decrease from the 2010ndash11 biennium (Figure 1) Figure 2 illustrates the sources of revenue also referred to as methods of finance for the $221 billion in state appropriations Generally only small portions of the Federal Funds received by institutions of higher education are reflected in the General Appropriations Act (GAA)
State funds are allocated to public institutions and agencies of higher education in a number of ways
bull direct appropriations through funding formulas and other direct appropriations based on identifi ed needs
bull indirect appropriations not made directly to an institution in its portion of the appropriations bill but used to cover costs related to the institutionrsquos staff
ESTIMATED ESTIMATED ESTIMATED ESTIMATED ESTIMATED BUDGETED BUDGETED BUDGETED BUDGETED BUDGETED APPROPRIATED
IN MILLIONS 2002ndash03 2004ndash05 2006ndash07 2008ndash09 2010ndash11 2012ndash13
General Revenue Funds $102337 $101944 $111762 $127216 $129966 $121723
General RevenuendashDedicated $20675 $23962 $21467 $22578 $24889 $24947 Funds
Other Funds $32494 $40530 $50023 $61974 $64674 $70298
Federal Funds $2674 $3397 $3331 $3090 $6941 $3944
TOTAL HIGHER $158180 $169833 $186583 $214858 $226470 $220912 EDUCATION
Percentage of Statewide Total
137 134 129 125 120 127
STATEWIDE TOTAL $1156786 $1267102 $1450594 $1721315 $1875165 $1734842 ALL ARTICLES
Includes $3269 in ARRA funds SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 1
INTRODUCTION
FIGURE 2 METHODS OF FINANCE FOR HIGHER EDUCATION INSTITUTIONS ndash INCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV )HGHUDO)XQGV
HQHUDO5HYHQXH)XQGV
2WKHU)XQGV
)
SOURCE Legislative Budget Board
for health insurance retirement benefits and social security and
bull other indirect appropriations which are subsequently allocated to an institution such as the Available University Fund
The $221 billion appropriation includes funds trusteed to THECB for distribution to institutions For the 2012ndash13 biennium THECB received more than $10013 million in trusteed funds The majority of these funds are allocated for student financial assistance Those remaining provide funding for the Baylor College of Medicine incentives for the general academic institutions and the Texas Research Incentive Program
Figure 3 shows the percentage of state funding appropriated to the various types of institutions excluding the allocation for employee insurance and retirement benefi ts
State appropriations to THECB that benefi t private institutions include financial assistance programs (eg Tuition Equalizations Grants B-On-Time and related programs) for Texas residents attending approved private institutions per student funding at the Baylor College of Medicine and grant funds from the Advanced Research Program a competitive grant program
Within a group such as general academic institutions state appropriations are allocated in a consistent manner Diff erent
FIGURE 3 APPROPRIATION BY TYPE OF INSTITUTION ndash EXCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
ampRPPXQLWDQG7HFKQLFDOampROOHJHV
HQHUDO$FDGHPLFV
+HDOWKUHODWHG
2WKHU+LJKHU(GXFDWLRQ
$06HUYLFHV
SOURCE Legislative Budget Board
groups of institutions such as general academic institutions and community colleges differ in how the Legislature allocates state appropriations For example all general academic institutions receive funding generated from Instruction and Operations and Infrastructure formulas while community colleges have one formula for Instruction and Administration
While the General Revenue Fundrsquos portion of direct appropriations to institutions is ldquosum certainrdquo the appropriation of Patient Income and Other Educational and General Income (primarily tuition) is ldquoestimatedrdquo Th is means that if patient income or tuition revenue generated by an institution is greater than the amount included in the GAA the institution can spend at a level beyond the amounts in the GAA If an institution generates less tuition revenue it must spend less
The GAA establishes a key distinction for higher education entities differentiating them from other state agencies Statute (Texas Education Code Section 61059(k)) calls for each higher education institution to receive a lump sum appropriation for base funding The GAA expands this concept and provides each higher education institution with one lump sum appropriation For each institution the GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Th is information reflects how the state funds are ldquoallocatedrdquo not how they must be spent Higher education institutions are not bound to spend their appropriation within the specifi ed
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 2
INTRODUCTION
strategy as are regular state agencies An exception to this is debt service on tuition revenue bonds Section 6 Rider 9 in the Higher Education Special Provisions GAA page III-233 limits the use of debt service to pay debt service for tuition revenue bonds Any amount of an appropriation not spent must be returned to the General Revenue Fund at the end of the fi scal year
There are some limitations on how institutions can spend appropriated funds The Texas Constitution (Article VII Section 18(i) and 17 (j)) prohibits with limited exceptions the use of General Revenue Funds for construction projects However the Texas Legislature by two-thirds vote in each house may opt to use General Revenue Funds for construction projects if there is a natural disaster or demonstrated need for the project
Also GAA (Section 6 Rider 8b) Special Provisions Relating Only to State Agencies of Higher Education (page III-233) prohibits the use of appropriated funds for auxiliary purposes such as athletics and parking Section 54 of the Special Provisions (page III-246) also restricts the use of funds in the Research Development Strategy to purposes defi ned in Texas Education Code Section 62091 Communityjunior colleges can spend General Revenue Funds only for instruction and administrative costs (Texas Education Code Section 130003(c))
This report presents the different ways that public institutions and agencies allocate state appropriations and highlights the flexibility with which these appropriations may be expended References to appropriated funds are based on the Eighty-second Legislature Regular Session 2011 2012ndash13 biennium GAA as adjusted for certain appropriations made in Article IX (General Provisions) of the GAA contingency appropriations other bills making appropriations in fi scal years 2012 and 2013 and Governor vetoes Amounts for fiscal year 2011 have been adjusted for the Supplemental Appropriations Bill House Bill 4 Eighty-second Legislature Regular Session 2011 and Senate Bill 2 First Called Session 2011 Each category of institutionmdashgeneral academic health-related community and technical colleges and Texas AampM System agenciesmdashis presented separately Th e only THECB funds detailed in this report are funds that have been distributed to public institutions
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 3
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 4
FUNDING GENERAL ACADEMIC INSTITUTIONS
OVERVIEW General academic institutions are listed in the Texas Education Code (61003) Figure 4 lists the institutions and their enrollments All of the institutions have common goals of instruction research and public service however each has a unique set of academic offerings and a unique regional or statewide mission
General academic institutions receive direct appropriations via funding formulas and non-formula appropriations Direct appropriations are identified in the informational strategies of each institutionrsquos bill pattern in the General Appropriations Act (GAA) As mentioned earlier appropriations are made to institutions as a lump sum Th e informational strategies reflect how state funds are ldquoallocatedrdquo not how they must be spent This means that with a few exceptions higher education entities unlike other state agencies are not required to spend appropriations within a specified funding strategy
The appropriation levels in each strategy refl ect diff erent revenue sources such as General Revenue Funds General RevenuendashDedicated Funds (mostly tuition and fee revenue) and Other Funds These revenue sources are referred to as the ldquomethod of fi nancerdquo Figure 5 illustrates the method of finance for $74 billion in appropriations for general academic institutions including a number of the indirect appropriations referenced in the next paragraph but does not include appropriations for employee retirement benefi ts
There are also appropriations that benefit institutions that are not reflected in the bill pattern of individual institutions including the Higher Education Fund the Available National Research University Fund Available University Fund certain employee benefits and funds trusteed to the Texas Higher Education Coordinating Board (THECB)
Figure 6 presents the percentage of funding related to each of these direct and indirect appropriations All of these appropriations are further described in the following pages
In addition general academic institutions have access to funds not reflected in the state appropriations process Examples of this include indirect cost recovery certain tuition and fees such as ldquodesignated tuitionrdquo and ldquoincidental feesrdquo (both are described in Appendix B) auxiliary operations (ie revenue from athletics student services fees bookstore and parking) and grants and gifts
FIGURE 4 PUBLIC GENERAL ACADEMIC INSTITUTIONS CERTIFIED FALL 2011 HEADCOUNT
INSTITUTION HEADCOUNT
Angelo State University 7077
Lamar University 14021
Midwestern State University 5811
Prairie View AampM University 8425
Sam Houston State University 17527
Stephen F Austin State University 12702
Sul Ross State University 1985
Sul Ross State University Rio Grande College 971
Tarleton State University 9893
Texas AampM International University 7037
Texas AampM University 49861
Texas AampM University ndash Central Texas 2096
Texas AampM University at Galveston 2035
Texas AampM University ndash Commerce 10726
Texas AampM University ndash Corpus Christi 10162
Texas AampM University ndash Kingsville 6731
Texas AampM University ndash San Antonio 3554
Texas AampM University ndash Texarkana 1907
Texas Southern University 9730
Texas State University ndash San Marcos 34087
Texas Tech University 32149
Texas Womanrsquos University 14503
The University of Texas at Arlington 33439
The University of Texas at Austin 51112
The University of Texas at Brownsville 8625
The University of Texas at Dallas 18864
The University of Texas at El Paso 22582
The University of Texas at San Antonio 30968
The University of Texas at Tyler 6628
The University of Texas of the Permian Basin 3831
The University of Texas ndash Pan American 19034
University of Houston 39820
University of Houston ndash Clear Lake 8185
University of Houston ndash Downtown 12918
University of Houston ndash Victoria 4330
University of North Texas 35694
University of North Texas at Dallas 2032
West Texas AampM University 7886
STATEWIDE TOTALS 568938 SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 5
FUNDING GENERAL ACADEMIC INSTITUTIONS
HQHUDO5HYHQXH)XQGV
FIGURE 5 METHOD OF FINANCE FOR GENERAL ACADEMICS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV
2WKHU)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING Nearly 573 percent of state appropriations for general academic institutions are allocated via two funding formulas and two supplements Instruction and Operations Formula Teaching Experience Supplement Infrastructure Formula
and Small Institution Supplement The formulas and supplements are direct appropriations and are primarily based on enrollment
The formula appropriations consist of General Revenue Funds and some Other Educational and General Income (Other EampG) Other EampG includes specific tuition and fee revenue (see Appendix B for a listing of tuition and fee provisions) The inclusion of certain tuition and fee revenue in the formula funding calculation is referred to as an ldquoAll Funds methodologyrdquo to formula funding Th e most significant tuition revenue included in the formula calculation is tuition charged in accordance with Texas Education Code Section 54051 Interim Tuition Rates (referred to as statutory tuition) The statutory tuition rate for the 2012ndash13 academic year is $50 per semester credit hour for Texas residents Th e corresponding tuition rate for a nonresident student is the average nonresident tuition charged to a Texas resident at a public university in each of the five most populous states
Of the $40 billion allocated by the general academic formulas and supplements nearly 728 percent consists of General Revenue Funds with the remainder consisting of General RevenuendashDedicated Funds (Other EampG)
A portion of Other EampG income is set aside for specifi c purposes or allocated to non-formula based strategies in the
FIGURE 6 APPROPRIATIONS FOR GENERAL ACADEMIC INSTITUTIONS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
QIUDVWUXFWXUH)RUPXOD +ROG+DUPOHVV 727$ 021 )RUPXODDQG
1RQ)RUPXOD7HDFKLQJ([SHULHQFH
QVWUXFWLRQamp 2SHUDWLRQV)RUPXOD
ampDSLWDO)XQGV
QVWLWXWLRQDO
(QKDQFHPHQW
6SHFLDOWHPV
ampRQVWLWXWLRQDO)XQGV
5HVHDUFKHYHORSPHQW)XQG
+LJKHU(GXFDWLRQURXSQVXUDQFH2WKHU1RQIRUPXODWHPV
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 6
FUNDING GENERAL ACADEMIC INSTITUTIONS
institutionrsquos bill pattern For example institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) TPEG are grants designed to help students cover their tuition fees and textbook costs when these expenses exceed a certain portion of their familiesrsquo contributions to their educations This set-aside revenue is not part of the tuition and fee revenue used to calculate the funding formulas
INSTRUCTION AND OPERATIONS FORMULA
About 815 percent of formula funds flow through the Instruction and Operations Formula ($32716 million for the 2012ndash13 biennium) and Teaching Experience Supplement ($957 million for the 2012ndash13 biennium) Th e Instruction and Operations formula is calculated as follows
Semester Credit Hours X ProgramLevel Weight X Rate (5371)
Semester credit hours (SCH) are a measurement of how many classes (and the number of students enrolled in those classes) an institution delivers The formula calculation for a biennium uses a ldquobase periodrdquo of SCH The ldquobase periodrdquo used for the 2012ndash13 biennium was the combination of summer 2010 fall 2010 and spring 2011
SCH is weighted by discipline (eg nursing is weighted more than liberal arts) and by level (ie lower and upper division masters doctoral and professional) For instance a lower division liberal arts course receives a weight of 10 A doctoral level liberal arts course receives a weight of 923 A nursing lower division course receives a weight of 203 A doctoral nursing course receives a weight of 925 Beginning with the 2006ndash07 GAA the basis for the weights per discipline was shifted to an aggregation of actual costs based on institutions Annual Financial Reports Currently THECB uses a rolling three year average to adjust the weights each biennium
THECB recommends a rate based on its recommended weights and program enhancements The legislature sets the weights and the rate in the Higher Education Special Provisions of the GAA (page III-238) In practice the legislature has set the rate based on available funding including consideration of enrollment changes and other factors Figure 7 illustrates the Instruction and Operations Formula allocation to institutions
FIGURE 7 DISTRIBUTION OF INSTRUCTION AND OPERATIONS FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
7H[DV$ amp 08QLYHUVLW
2WKHUHQHUDO$FDGHPLFV
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
TEACHING EXPERIENCE SUPPLEMENT
For the 2012ndash13 biennium an additional weight of ten percent is added to lower-division and upper-division semester credit hours taught by tenured and tenure-track faculty The 2012ndash13 GAA includes the following language ldquoFurthermore it is the intent of the Legislature that the weight shall increase by 10 percent per biennium up to 50 percentrdquo (Special Provisions Relating Only to State Agencies of Higher Education Sec 28 page III-238 2012ndash13 GAA)
The Teaching Experience Supplement is calculated as follows
Semester Credit Hours X ProgramLevel Weight Supplement (10) X Rate (5371)
The Teaching Experience Supplement was 5 percent during the 1998ndash99 and 2000ndash01 biennia Th e Seventy-seventh Legislature 2001 increased the supplement to the current 10 percent in 2002ndash03 biennium
INFRASTRUCTURE FORMULA
Almost 16 percent of formula funds flow through the Infrastructure Formula and Small Institution Supplement ($6768 million for the 2012ndash13 biennium) In addition to
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 7
FUNDING GENERAL ACADEMIC INSTITUTIONS
the universities the State Colleges and components of Texas State Technical College also receive infrastructure formula appropriations This formula uses a statewide infrastructure rate which is set in the GAA The statewide infrastructure rate is divided into two rates an Adjusted Utility Rate and an All Other Rate As with the SCH rate the legislature has set the rate based on available funding including consideration of changes in institutional space and other factors
The Infrastructure Formula is calculated as follows
(Adjusted Utility Rate + All Other Rates) X Predicted Square Feet
The Adjusted Utility Rate is 52 percent of the statewide infrastructure rate The 52 percent reflects the percentage of infrastructure formula funds that institutions historically spent on utilities A statewide utility rate is determined and then adjusted for each institution to reflect utility costs relative to other institutions
The All Other Rate is 48 percent of the statewide infrastructure rate and remains constant among institutions It accounts for physical plant grounds maintenance and custodial services
THECBrsquos Space Projection Model for Higher Education Institutions in Texas (space model) estimates square footage for each institution The objective of the space model projection is to calculate the amount of space an institution needs based on the following
bull number program and level of semester credit hours
bull number of faculty non-faculty students programs and library holdings and
bull research and current EampG expenditures
Figure 8 illustrates the Infrastructure Formula allocation to institutions The similarity of the allocation to the Instruction and Operations Formula allocation demonstrates the influence of enrollment on both formula allocations
SMALL INSTITUTION SUPPLEMENT
Prior to the Eighty-fi rst Legislature (2009) general academic institutions with enrollments of less than 5000 received a $750000 annual Small Institution Supplement However the Eighty-first Legislature increased the enrollment threshold to 10000 students and implemented a phase-out
FIGURE 8 DISTRIBUTION OF INFRASTRUCTURE FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
2WKHUHQHUDO$FDGHPLFV
7H[DV$ amp M 8QLYHUVLW
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
(based on the number of students) of the supplement between 5000 and 10000 students for the 2012ndash13 biennium (see Figure 9) This supplement recognizes that institutions have a minimum cost of operation that may not be covered by funds generated through the formulas
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $414 million in General Revenue hold harmless funding for aff ected institutions to minimize the effect of reduced formula funding as a result of overall enrollment declines or declines in upper-division or graduate enrollment Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment than other institutions or a change in utility costs Th e Eighty-second Legislature 2011 provided $444 million in a hold harmless based on total General Revenue Funds (formula and non-formula) for the 2012ndash13 biennium
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 8
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 9 SMALL INSTITUTION SUPPLEMENT RECIPIENTS
The University of Texas at Brownsville
The University of Texas of the Permian Basin
The University of Texas at Tyler
Texas AampM University at Galveston
Prairie View AampM University
Tarleton State University
Texas AampM University ndash Central Texas
Texas AampM University ndash Kingsville
Texas AampM University ndash San Antonio
Texas AampM International University
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston ndash Clear Lake
University of Houston ndash Victoria
Midwestern State University
University of North Texas at Dallas
Texas Southern University
Angelo State University
Sul Ross State University
Sul Ross State University ndash Rio Grande College
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Waco
Texas State Technical College ndash Marshall
Lamar Institute of Technology
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
SOURCE Legislative Budget Board
NON-FORMULA FUNDING
SPECIAL ITEMS
Special Item appropriations to the institutions total $4836 million for the 2012ndash13 biennium In 2012ndash13 $69 million was appropriated to system offices for special items These are direct appropriations to institutions for projects that are not funded by formula but are specifi cally identifi ed by the legislature as needing support An institution is not required to spend the amount identified in a Special Item strategy for that particular project but expenditure reports indicate that institutions often use an entire appropriation along with additional funding for the related project
The majority of special item funding is through the Institutional Enhancement strategy Institutional Enhancement is a $2204 million appropriation for the 2012ndash13 biennium This is a direct appropriation to institutions and was established by the Seventy-sixth Legislature 1999 for the 2000ndash01 biennium Th e fi rst Institutional Enhancement appropriation was based on a consolidation of certain Special Item appropriations in 1999 and an additional $1 million per year was appropriated for each institution Examples of consolidated special items are items that could be funded through the formulas such as general institutional academic and research support
For the 2002ndash03 biennium there was an additional $1 million increase in appropriations for most institutions and a $15 million increase for selected institutions in South Texas and the border region Institutions that benefi ted signifi cantly from the Seventy-seventh Legislaturersquos new University Research and Texas Excellence Funds (House Bill 1839 Seventy-seventh Legislature 2001) or from the Permanent University Fund (PUF) ldquoexcellence fundingrdquo did not receive an increase in Institutional Enhancement funds for the 2002ndash03 biennium
Other Special Items total $2632 million in appropriations for the 2012ndash13 biennium and include the following institutional and instructional support public service items research items other than general research support funding for separate campuses and accreditation program items
TEXAS COMPETITIVE KNOWLEDGE FUND
The Texas Competitive Knowledge Fund (TCKF) is authorized by the General Appropriations Act (GAA) (2012ndash13 Biennium) Article III Higher Education Special Provisions Section 56 The GAA prescribes that this funding will be used to support faculty for the purpose of instructional excellence and research Funding was first allocated in these strategies by the Legislature for the 2008ndash09 biennium
Current institutions receiving TCKF appropriations include The University of Texas at Austin Texas AampM University University of Houston Texas Tech University and Th e University of Texas at Dallas Institutions are allocated funding appropriated to the TCKF based on average research expenditures for the previous three-year period Th e Eighty-second Legislature Regular Session 2011 appropriated $935 million in Texas Competitive Knowledge Fund strategies directly to the institutions This funding level provides approximately $07 million to each institution for every $100 million in research expenditures In practice
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 9
FUNDING GENERAL ACADEMIC INSTITUTIONS
when institutions have first received distributions from the fund appropriations have been reduced from the institutionrsquos special item strategies In subsequent biennia the institution continues to receive appropriations from the TCKF and the reduction in special items is not specifi cally restored
RESEARCH DEVELOPMENT FUND
The Research Development Fund was created by House Bill 3526 Seventy-eighth Legislature Regular Session 2003 and replaced the Texas Excellence and University Research Funds effective September 1 2005 The intent was to combine the Texas Excellence Fund and University Research Fund into a new fund applying a uniform allocation methodology based on a three-year average of each institutionrsquos restricted research expenditures Th e Eighty-fi rst Legislature allocated $653 million (Figure 10) in the 2012ndash13 biennium to individual institutions to fund objectives identical to the Research Development Fund (Section 62091)
TEXAS RESEARCH INCENTIVE PROGRAM
Th e Eighty-first Legislature Regular Session 2009 established the Texas Research Incentive Program (TRIP) at THECB to match state appropriations with certain gifts and endowments received by emerging research universities Th e goal of this $178 million a year program is to create more Tier One universities in Texas
PERFORMANCE INCENTIVE INITIATIVE
The Eightieth Legislature 2007 appropriated $100 million in fiscal year 2009 to THECB to establish a Higher Education Performance Incentive Initiative The funding was for ldquoimprovement in teaching and educational excellence at Texas public general academic institutionsrdquo THECB distributed $80 million for increases in degrees awarded with special weights given to critical fields and at-risk students The remaining $20 million was used to fund scholarships for students graduating in the top 10 percent of their high school class
Th e Eighty-first Legislature Regular Session 2009 maintained the $80 million for the higher education performance incentive initiative (funded by the American Recovery and Reinvestment Act) and increased funding for the Top Ten Percent scholarship program by $34 million bringing total appropriations for the program to $54 million
There were no performance funding incentives for the 2012ndash13 biennium For the 2012ndash13 biennium $396
FIGURE 10 RESEARCH DEVELOPMENT FUND ALLOCATIONS
2012ndash13 BIENNIAL RDF
INSTITUTION ALLOCATION
The University of Texas at Arlington $6032754
The University of Texas at Dallas 8425486
The University of Texas at El Paso 6925040
The University of Texas at Pan American 1147838
The University of Texas at Brownsville 902512
The University of Texas of the Permian Basin 306408
The University of Texas at San Antonio 5491296
The University of Texas at Tyler 434072
Texas AampM University at Galveston 600342
Tarleton State University 1586396
Texas AampM University ndash Corpus Christi 2212356
Texas AampM University ndash Kingsville 1846206
Texas AampM International University 253246
West Texas AampM University 681752
Texas AampM Commerce 436752
Texas AampM Texarkana 9008
University of Houston 10705472
University of Houston ndash Clear Lake 10392
University of Houston ndash Downtown 10248
University of Houston ndash Victoria 2254
Midwestern State University 30066
University of North Texas 2495448
Stephen F Austin University 895696
Texas Southern University 338580
Texas Tech University 8327602
Texas Womanrsquos University 266152
Angelo State University 123176
Lamar University 820010
Sam Houston State University 362574
Texas State University ndash San Marcos 3121164
Sul Ross State University 304040
TOTAL $65296738
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 10
FUNDING GENERAL ACADEMIC INSTITUTIONS
million is appropriated to the Top Ten Percent Scholarship Program
HOLD HARMLESS FUNDING
The Eighty-second Legislature 2011 provided $444 million in General Revenue Funds hold harmless funding for aff ected institutions to minimize the effect of reduced formula and special item funding Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment that other institutions or a change in utility costs
CAPITAL FUNDS
In addition to the constitutional funds discussed in the next subsection there are three types of state appropriation for capital funds tuition revenue bonds Skiles Act revenue bonds and lease payments Almost all of the direct appropriations to institutions related to capital funds are for debt service on tuition revenue bonds
A $5931 million General Revenue Funds appropriation was made for tuition revenue bond debt service for the 2012ndash13 biennium
Tuition revenue bonds must be authorized in statute Once an authorization is made institutions issue bonds and make related debt payments with tuition revenue Th e Texas Public Finance Authority issues tuition revenue bonds for Midwestern State University Stephen F Austin University Texas Southern University and the Texas State Technical Colleges Legislative practice has been to use General Revenue Funds to reimburse institutions for the costs related to this debt service
The legislature first authorized tuition revenue bonds in 1971 In some instances the authorization was a lump sum for the benefit of specific institutions During the Seventy-eighth Legislature 2003 $2689 million in tuition revenue bonds was authorized for specific projects at various higher education institutions The Seventy-ninth Legislature Th ird Called Session 2005 adopted House Bill 153 which authorized the issuance of $1858 billion in tuition revenue bonds for forty-four different institutions Only one tuition revenue bond (House Bill 1775) was adopted by the Eightieth Legislature 2007 for a $13 million nursing building at Stephen F Austin University Th e Eighty-fi rst Legislature 2009 authorized one tuition revenue bond for Texas AampM University at Galveston The Eighty-second Legislature 2011 did not authorize any new tuition revenue bonds
The authority for Skiles Act Revenue Bonds was repealed in 1997 It had allowed institutions to pledge up to $5 from each enrolled student for each regular semester to the payment of bonds authorized under the governing boardrsquos general authority to sell revenue bonds Institutions use their Other Educational and General Income (General Revenuendash Dedicated Funds) to pay the debt service on these previously authorized bonds This is a $10 million appropriation for the 2012ndash13 biennium
Three general academic institutions receive a $3 million General Revenue Fund appropriation for lease payments to community colleges for facilities
CONSTITUTIONAL FUNDS
These funds are appropriated separately in the GAA and not directly appropriated to the institutions (see Appendix D)
The Available University Fund (AUF) established in Section 18 Article VII Texas Constitution consists of the surface income and investment proceeds from the Permanent University Fund (PUF) a state endowment with land grants totaling 21 million acres
Distributions to the AUF consist of investment returns from PUF assets surface income from PUF lands and interest earned on AUF balances For the 2012ndash13 biennium investment returns were $12200 million surface income was $398 million and interest income was $59 million Income from the sale of PUF lands and the lease of mineral interest is retained in the PUF and invested
The total 2012ndash13 estimated appropriation for the AUF is $12660 million The Constitution appropriates two-thirds of the AUF to The University of Texas System and one-third to the Texas AampM University System The two systems may use the AUF for capital purposes (debt service on PUF bonds) for most of their institutions and ldquofor the support and maintenancerdquo of other institutions listed Entities authorized to receive funding for ldquosupport and maintenancerdquo which is now commonly referred to as ldquoAUF Excellence Fundingrdquo are the two system offi ces The University of Texas at Austin Texas AampM University and Prairie View AampM University The systemsrsquo boards of regents determine allocations to individual institutions including health-related institutions and the amounts for ldquoExcellencerdquo Figure 11 lists the recipients and the type of support they received
The Higher Education Fund (HEF) as authorized in Section 17 Article VII Texas Constitution benefits institutions of higher education not eligible for the AUF (see Figure 12)
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 11
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 11 PARTICIPANTS IN THE AVAILABLE UNIVERSITY FUND
EXCELLENCE AND DEBT SERVICE FUNDS
The University of Texas System
The Texas AampM University System
The University of Texas at Austin
Texas AampM University
Prairie View AampM University
DEBT SERVICE ONLY
The University of Texas System Components
The University of Texas at Arlington
The University of Texas at Dallas
The University of Texas at El Paso
The University of Texas of Permian Basin
The University of Texas at San Antonio
The University of Texas at Tyler
The University of Texas Southwestern Medical Center
The University of Texas Medical Branch at Galveston
The University of Texas Health Science Center at Houston
The University of Texas Health Science Center at San Antonio
The University of Texas Health Science Center at Tyler
The University of Texas MD Anderson Cancer Center
Texas AampM University System Components
Texas AampM University at Galveston
Texas AampM University at Tarleton
Texas AampM University ndash San Antonio
Texas AampM University ndash Central Texas
Texas AampM University System Health Science Center
Texas AgriLife Research
Texas AgriLife Extension Service
Texas Engineering Experiment Station
Texas Engineering Extension Service
Texas Transportation Institute
Texas Forest Service
SOURCE Legislative Budget Board
FIGURE 12 PARTICIPANTS IN THE HIGHER EDUCATION FUND
The University of Texas System Components
The University of Texas ndash Pan American
Texas AampM University System Components
Texas AampM University ndash Corpus Christi
Texas AampM International University
Texas AampM University ndash Kingsville
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston System Components
University of Houston
University of Houston ndash Clearlake
University of Houston ndash Downtown
University of Houston ndash Victoria
Independent Institutions
Midwestern State University
Stephen F Austin State University
Texas Southern University
Texas Womanrsquos University
University of North Texas System Components
University of North Texas Health Science Center at Fort Worth
University of North Texas
Texas Tech University System Components
Texas Tech University Health Sciences Center
Angelo State University
Texas State University System Components
Lamar University
Sam Houston State University
Texas State University ndash San Marcos
Sul Ross State University
Sul Ross State Rio Grande College
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
Lamar Institute of Technology
Texas State Technical College System Components
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Marshall
Texas State Technical College ndash Waco
The University of North Texas at Dallas receives its allocation through the University of North Texas SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 12
FUNDING GENERAL ACADEMIC INSTITUTIONS
The HEF is supported by General Revenue Fund appropriations
The distribution of the $525 million HEF appropriation for 2012ndash13 is provided for in statute (Texas Education Code Section 62021) The Constitution calls for a re-allocation of HEF funds every ten years The Seventy-ninth Legislature Regular Session fulfilled this requirement with the enactment of House Bill 3001
The Constitution also allows the legislature to adjust the decennial allocations every five years Th e Eighty-fi rst Legislature Regular Session 2011 exercised this authority by enacting House Bill 51 which adjusted the formula allocation for the HEF funds for fiscal years 2009 through 2015
To maintain the equitable distribution of the HEF appropriation House Bill 51 also corrected the distribution of fiscal year 2009 and 2010 HEF allocations by using revised formula calculations Using these revised formula calculations House Bill 51 factored in updated data elements to generate the annual HEF allocations for the fi ve-year period starting in fiscal year 2011
HEF funds must be used for capital purposes Institutions may use HEF allocations for debt service on HEF bonds or as cash
In 1995 the Texas Constitution was amended to authorize the creation and funding of a dedicated HEF corpus known as the Permanent Higher Education Fund (PHEF) Th is corpus was separate from the annual HEF allocation of General Revenue Funds The PHEF was intended to become a permanent endowment to support non-PUF eligible institutions but never reached its targeted value of $2 billion
The PHEF corpus of $5159 million was rededicated with the enactment of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) The balance of the PHEF was transferred to the NRUF on January 1 2010 and the authorization for the PHEF expired Proposition 4 also allowed the legislature to appropriate some or all of the total returns from the NRUF to provide a source of funding to enable emerging research universities to achieve national prominence
The Eighty-second Legislature 2011 appropriated $124 million in estimated NRUF proceeds to eligible institutions in the 2012ndash13 biennium
House Bill 1000 Eighty-second Legislature Regular Session 2011 established the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution in designated as an emerging research university within the Higher Education Coordinating Boardrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fi scal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of the institutions research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs Texas Tech University and the University of Houston are the only two institutions that received funding through this program in 2012
HIGHER EDUCATION GROUP INSURANCE (HEGI)
The $4631 million General Revenue Fund appropriation for higher education group insurance (HEGI) is not a direct appropriation in the institutionsrsquo bill patterns It is appropriated in a separate section of the GAA entitled ldquoHigher Education Employees Group Insurance Contributionsrdquo This appropriation is intended to help institutions cover the cost of health insurance premiums for institution employees whose salaries are paid from the General Revenue Fund Because The University of Texas and Texas AampM University Systems operate their own health insurance programs they each receive separate appropriations The remaining institutions are included in the program operated by the Employees Retirement System (ERS)
The HEGI appropriation is sum-certain That is the Statersquos General Revenue Fund contributions are limited to each institutionrsquos number of employees enrolled in the health insurance program as of December 1 2012 However the GAA allows ERS The University of Texas and Texas AampM University Systems to transfer HEGI appropriations among institutions within their respective group insurance programs to address shortfalls in General Revenue Funds related to group insurance premiums
SOCIAL SECURITY BENEFITS
An appropriation for social security is included in the GAA at the end of Article III It is an estimated General Revenue
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 13
FUNDING GENERAL ACADEMIC INSTITUTIONS
Fund appropriation to provide the employer matching funds for employees of institutions of higher education (Th is appropriation amount is not included in Figure 3 on page 2)
STAFF GROUP INSURANCE
Staff group insurance is for staff whose salaries are not paid with General Revenue Funds (GR) The appropriation is based on an estimation of the number of non-GR funded employees at an institution as of December 1 2010 Th e total appropriation for all general academic institutions is $1766 million for the 2012ndash13 biennium The method of finance is Other Educational and General Income (which is classified as General RevenuendashDedicated Funds)
RETIREMENT CONTRIBUTIONS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and top administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees participate in TRS a defi ned benefit plan The state funds retirement contributions for TRS equal to 60 percent of an employeersquos salary in fiscal year 2012 and 64 percent in 2013 State contributions for ORP are equal to 60 percent of an employeersquos salary in fiscal years 2012 and 2013 (Th ese appropriation amounts are not included in Figure 3 on page 2)
OTHER NON-FORMULA FUNDING
WORKERSrsquo COMPENSATION
Changes in the structure of the statewide workersrsquo compensation system resulted in most institutions receiving General Revenue Fund appropriations for Workersrsquo Compensation starting in 2006ndash07 However Th e University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool
UNEMPLOYMENT COMPENSATION
Most components of The University of Texas and Texas AampM University Systems have this strategy because they operate their own risk pools Th ese institutions receive General Revenue Fund appropriations for unemployment compensation insurance The appropriation for the 2012ndash13 biennium is $05 million in General Revenue Funds Th e Texas Workforce Commission receives an appropriation to
cover unemployment benefi ts for former state employees for all other higher education institutions
TEXAS PUBLIC EDUCATION GRANTS
According to statute (Texas Education Code Chapter 56 Subchapter C and Texas Education Code Section 54051 [Statutory Tuition]) institutions must set aside a portion of tuition revenue for Texas Public Education Grants (TPEG) Fifteen percent of each resident studentrsquos tuition and 3 percent of each nonresident studentrsquos tuition are set aside for financial aid to students at the institution Texas Education Code Section 56033 provides guidelines on the allocation of TPEG revenue The GAA includes an estimate of the amount of TPEG revenue each institution will generate Th is $2111 million estimated appropriation is considered Other Educational and General Income which are classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
Indirect costs as defined by The Comptroller of Public Accounts are ldquoincurred for a common or joint purpose benefiting more than one cost objectiverdquo Institutions negotiate a percentage of a federal grant for indirect costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
The Seventy-eighth Legislature 2003 allowed universities to retain 100 percent of indirect costs income from research grants and contracts to encourage further research projects conducted by universities
ORGANIZED ACTIVITIES
Organized Activities are activities or enterprises connected with instructional departments whose primary function is training for students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training Revenue from Organized Activities is classified as General RevenuendashDedicated Funds Other EampG Income For the 2012ndash13 biennium $503 million is appropriated for Organized Activities
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 14
FUNDING HEALTH-RELATED INSTITUTIONS
OVERVIEW Appropriations for the nine health-related institutions are similar in structure to the appropriations for general academic institutions There are formula and non-formula funding appropriations made directly to the institutions as well as appropriations that benefit the institutions but are not included in the institutionsrsquo bill patterns such as the Available University Fund certain staff benefi ts and funds trusteed at the Texas Higher Education Coordinating Board (THECB) While health-related institutions do not receive appropriations from the Research Development Fund they share many other types of appropriations similar to general academic institution appropriations Th ose appropriations will be briefly restated in this section of the report Figure 13 lists the institutions and their enrollment
FIGURE 13 PUBLIC HEALTH-RELATED INSTITUTIONS CERTIFIED HEADCOUNT FALL 2011
INSTITUTION HEADCOUNT
UT Southwestern Medical Center 2467
UT Medical Branch at Galveston 2660
UT Health Science Center at Houston 4485
UT Health Science Center at San Antonio 3273
UT M D Anderson Cancer Center 248
UT Health Science Center at Tyler NA
Texas AampM University System Health Science 1958 Center
University of North Texas Health Science 1567 Center at Fort Worth
Texas Tech University Health Sciences Center 3590
Statewide Totals 20248
SOURCE Higher Education Coordinating Board
Like other higher education institutions the appropriations for health-related institutions are a lump sum and funding strategies are presented for informational purposes in the General Appropriations Act (GAA) The funding strategies in a health-related institutionrsquos bill pattern represent how state funds are allocated but not how they must be spent Also certain methods of finance in the appropriation are estimated This means that if for example patient income for an institution is above the amount included in the GAA
the institution can spend more than the amount listed in the GAA
Also health-related institutions have access to an estimated $109 billion outside the appropriations process in 2012ndash13 Examples of this include certain tuition revenue indirect lost recovery grants and gifts
Figure 14 illustrates the 2012ndash13 method of finance for $85 billion in appropriations for health-related institutions including a number of the indirect appropriations but it does not include appropriations for retirement benefi ts
FIGURE 14 METHOD OF FINANCE FOR HEALTH-RELATED INSTITUTIONS 2012ndash13 BIENNIUM
727$ 021
HQHUDO
2WKHU)XQGV3DWLHQWQFRPH
5HYHQXH)XQGV
HQHUDO5HYHQXHsup2HGLFDWHG)XQGV13
Including some tuition and fees SOURCE Legislative Budget Board
FORMULA FUNDING The three primary funding formulas for health-related institutions are Instruction and Operations support Infrastructure support and Research Enhancement Th e University of Texas MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler have additional formula allocations to accommodate their unique missions Each health-related institution also receives formula funding for graduate medical education
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 15
FUNDING HEALTH-RELATED INSTITUTIONS
General Revenue funding and some Other Educational and General Income (Other EampG is classified as General RevenuendashDedicated) fund the formulas Like general academic institutions certain tuition revenue is used in the calculation of the Instruction and Operation support and Infrastructure support formulas Of the $15 billion that is allocated by the health-related institutionsrsquo primary formulas 939 percent is from the General Revenue Fund and the remaining 61 percent is from General RevenuendashDedicated Funds (tuition and fee revenue)
Some tuition and fee income is set aside for specifi c purposes Some specific amounts are unavailable for formula purposes and consequently are not a formula method of fi nance For example health-related institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) and Medical Loans
INSTRUCTION AND OPERATIONS SUPPORT FORMULA
The Instruction and Operations (IampO) support formula represents nearly 755 percent of the primary formula funds for health-related institutions ($9282 million for the 2012ndash13 biennium) It is intended to fund items such as faculty salaries departmental operating expenses instructional administration and libraries It is allocated on a per full-time student equivalent (FTSE) basis with a funding weight predicated on the instructional program of the student This formula applies to all health-related
institutions except The University of Texas Health Science Center at Tyler which did not offer education instruction during the base period for the 2012ndash13 biennium
Figure 15 illustrates the Instruction and Operations support formula among the eight health-related institutions
The Instruction and Operations support formula is calculated as follows
(FTSE X Program Weight X $8874) + SmallMultiple Campus Supplement
FTSE is weighted by discipline For example medicine (4753) is weighted more than pharmacy (1670) Allied Health is assigned a weight of 1000
The Legislature sets the weights and the rate ($8874 adjusted for the 2012ndash13 biennium) in the Higher Education Special Provisions of the GAA (Sec 29 page III-239 and 240) The rate is calculated based on the available revenue for the formula and the number of FTSEs
Programs with enrollments less than 200 receive a Small Campus Supplement (see Figure 16)
FIGURE 15 DISTRIBUTION OF INSTRUCTION AND OPERATIONS SUPPORT FORMULA 2012ndash13 BIENNIUM
727$ 021870$QGHUVRQ 7H[DV$ amp 0+HDOWKampDQFHUampHQWHU 6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV 87+HDOWK6FLHQFHampHQWHUDW6DQ
DW)WRUWK
+HDOWK6FLHQFHampHQWHU$QWRQLR
87+HDOWK6FLHQFH 7H[DV7HFK8QLYHUVLW+HDOWKampHQWHUDW+RXVWRQ 6FLHQFHVampHQWHU
876RXWKZHVWHUQ0HGLFDOampHQWHU
870HGLFDOUDQFK DWDOYHVWRQ
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 16
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 16 SMALL CAMPUS SUPPLEMENT RECIPIENTS
The University of Texas Southwestern Medical Center
No
The University of Texas Medical Branch at Galveston
Yes
The University of Texas Health Science Center at Houston
Yes
The University of Texas Health Science Center at San Antonio
Yes
The University of Texas MD Anderson Cancer Center
No
The University of Texas Health Science Center at Tyler
NA
Texas AampM Health Science Center Yes
University of North Texas Health Science Center at Fort Worth
No
Texas Tech University Health Sciences Center Yes
SOURCE Legislative Budget Board
INFRASTRUCTURE SUPPORT FORMULA
The Infrastructure support formula is 194 percent of the primary formula funding and is intended for utilities and physical plant support ($2383 million for the 2012ndash13 biennium) This formula calculation is similar to that for general academic institutions but includes only one rate ($655) for all institutions except The University of Texas
FIGURE 17 DISTRIBUTION OF INFRASTRUCTURE SUPPORT FORMULA 2012ndash13 BIENNIUM
MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler which have another rate ($625)
THECBrsquos space model predicts square footage for each institution The space model projection is based on the following
bull number and level of FTE students
bull number of faculty
bull single or multiple programs and campuses
bull actual clinical space and
bull research and current EampG expenditures
Because the space projection model does not account for hospital space separate infrastructure funding for hospital space is included in the total funding for hospital and patient-care activities at The University of Texas Medical Branch at Galveston The University of Texas MD Anderson Cancer Center and The University of Texas Health Science Center at Tyler
Figure 17 illustrates the Infrastructure Support Formula allocation to institutions among the nine health-related institutions
727$ 021
87+HDOWK6FLHQFHampHQWHUDW6DQ 870$QGHUVRQampDQFHUampHQWHU$QWRQLR
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW
+RXVWRQ 7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK6FLHQFHVampHQWHU
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 17
FUNDING HEALTH-RELATED INSTITUTIONS
RESEARCH FORMULA
Health-related institutions generate state appropriations to support research through General Revenue Funds in the Research Enhancement formula ($629 million for the 2012ndash13 biennium) The Research Enhancement formula accounts for 51 percent of the primary formula funds and is funded entirely from the General Revenue Fund
The allocation is based on the amount of research generated by each institution
$1412500 + (110 X Research
Expenditures)
This provides a base Institutions report for all institutions current research
regardless of research expenditures to volume THECB
Figure 18 illustrates the Research Enhancement formula allocation to the institutions among the nine health-related institutions
GRADUATE MEDICAL EDUCATION
The Seventy-ninth Legislature 2005 established a new formula for funding graduate medical education in the 2006ndash07 GAA For 2012ndash13 the funding totals $46 million
FIGURE 18 DISTRIBUTION OF RESEARCH ENHANCEMENT FORMULA 2012ndash13 BIENNIUM
727$ 021
870$QGHUVRQampDQFHUampHQWHU
(an additional $109 million is appropriated to the Baylor College of Medicine through the THECB) and provides $4436 per medical resident each year
Figure 19 illustrates the Graduate Medical Education formula allocation to institutions among the nine health related institutions and Baylor College of Medicine
CHEST DISEASE CENTER FORMULA
The Chest Disease Center operations formula which was established during the 2010ndash11 biennium applies only to The University of Texas Health Science Center at Tyler Th e University of Texas Health Science Center at Tyler has a statutory mission to conduct research develop diagnostic and treatment techniques provide training and teaching programs and provide diagnosis and treatment of inpatients and outpatients with respiratory diseases The Chest Disease Center formula is based on the number of primary chest disease patients the institution served Approximately $472 million in General Revenue Funds are appropriated for the 2012ndash13 biennium
CANCER CENTER OPERATIONS FORMULA
The Eightieth Legislature 2007 established in the GAA an Operations formula for funding The University of Texas MD Anderson Cancer Center The University of Texas MD Anderson Cancer Center has a statutory mission to eliminate cancer through patient care research education
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR
7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ 8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
870HGLFDOUDQFKDWDOYHVWRQ 7H[DV7HFK8QLYHUVLW+HDOWK876RXWKZHVWHUQ0HGLFDOampHQWHU
6FLHQFHVampHQWHU
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 18
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 19 DISTRIBUTION OF GRADUATE MEDICAL EDUCATION FORMULA 2012ndash13 BIENNIUM
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
727$ 02187+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR 870$QGHUVRQampDQFHUampHQWHU
87+HDOWK6FLHQFHampHQWHUDW7OHU
7H[DV$ amp 08QLYHULVW6VWHP +HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK 6FLHQFHVampHQWHU
DORUampROOHJHRI0HGLFLQH
and prevention The Operations formula funding is based on the total number of Texas cancer patients the institution served The Operations formula growth in funding may not exceed the average growth in funding for health-related institutions in the Instruction and Operations support formula for the current biennium For the 2012ndash13 biennium this funding formula provided $2125 million in General Revenue Funds
NON-FORMULA FUNDING
PATIENT CARE ACTIVITIES
Some institutions conduct patient care activities generally medical or dental For the 2012ndash13 biennium the estimated appropriation for Patient Income was $56 billion Th e hospital and clinic revenues earned through patient care activities are considered Other Funds which are part of Educational and General Income (not to be confused with Other Educational and General Income which is another subset of Educational and General Income) General Revenue funding supplements patient-care income to varying degrees at each institution Patient Income is an estimated appropriation and is spread across an institutionrsquos funding strategies however it is not used in the calculation of the formulas
INSTITUTIONAL ENHANCEMENT
Institutional Enhancement is a General Revenue Fund appropriation that started in the 2000ndash01 biennium It is designed to allow each institution to address its unique needs and diseconomies of scale at institutions with smaller campuses The total institutional enhancement appropriation for the 2012ndash13 biennium was $42 million which includes $407 million in General Revenue Funds and $16 million in Patient Income
SPECIAL ITEMS
Special items are activities that are not generally funded through the formulas and typically represent an institutionrsquos special needs or areas of expertise The $3107 million in General Revenue Funds for the 2012ndash13 biennium funds items such as residency programs academic outreach programs public service items and research items other than general research support Institutions propose and justify special items and request an amount for each on an ad hoc basis Special items generally remain constant from biennium to biennium unless the item was a one-time expense (eg tornado damage repairs) or the institution has not used the funding for the intended purpose
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 19
FUNDING HEALTH-RELATED INSTITUTIONS
CONSTITUTIONAL FUNDS
These funds are not directly appropriated to institutions in the GAA In other words these funds are not found in a strategy within an institutionrsquos bill pattern
Health-related institutions are eligible for funding from the Available University Fund ($146 million in Other Funds allocated to these institutions by system offices for the 2012ndash 13 biennium) and the Higher Education Fund ($257 million in General Revenue Funds appropriated for the 2012ndash13 biennium) which are presented in detail in the ldquoFunding General Academic Institutionsrdquo section of this report
CAPITAL FUNDS
Just like general academic institutions tuition revenue bonds ($1665 million in General Revenue Funds for related debt service in the 2012ndash13 biennium) are also used to fund capital projects at health-related institutions A detailed presentation of tuition revenue bonds is in the ldquoFunding General Academic Institutionsrdquo section The University of Texas Medical Branch at Galveston and The University of Texas MD Anderson Cancer Center also have separate appropriations for capital projects that are funded primarily with Patient Income
EMPLOYEE BENEFITS
Like general academic institutions health-related institutions benefit from direct and indirect state appropriations related to employee benefi ts The indirect appropriations include Higher Education Group Insurance ($2339 million in General Revenue Funds for the 2012ndash13 biennium) Retirement Contributions and Social Security Benefi ts (all presented in the ldquoFunding General Academic Institutionsrdquo section) The direct appropriations include Staff Group Insurance
For the 2012ndash13 biennium the Workersrsquo Compensation and Unemployment Compensation strategies (all presented in the ldquoFunding General Academic Institutionsrdquo section) are funded directly with General Revenue Funds and General RevenuendashDedicated Funds However The University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool The University of Texas and Texas AampM Systems also manage their own unemployment compensation coverage while all other institutions receive coverage from
the Texas Workforce Commission which receives an appropriation to cover unemployment benefi ts
TEXAS PUBLIC EDUCATION GRANTS
Health-related institutions similar to general academic institutions are subject to the Texas Education Code (sect56031 et al) provision requiring a portion of tuition revenue be set aside to fund Texas Public Education Grants (TPEG) For the 2012ndash13 biennium the estimated TPEG appropriation is $188 million This revenue is considered Other Education and General Income which is classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
As mentioned earlier in this section Indirect Cost Recovery was removed from the GAA for the 2010ndash11 biennium however the individual institution still receives the funds
TOBACCO SETTLEMENT
House Bill 1945 Seventy-sixth Legislature 1999 established the Permanent Health Fund for health-related institutions of Higher Education the Permanent Fund for Minority Health Research and Education the Permanent Fund for Higher Education Nursing Allied Health and Other Health Related Programs and 13 permanent endowments for individual institutions of higher education The $769 million in estimated interest earnings from the endowments for 2012ndash13 (based on estimated interest earnings of 45 percent each year) were appropriated to the health-related institutions
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 20
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW Public two-year lower-level institutions include 50 community and junior college districts four Texas State Technical College (TSTC) campuses and three Lamar State Colleges These institutions were appropriated $22 billion in state funding for the 2012ndash13 biennium Preliminary fall FIGURE 20 TWO-YEAR INSTITUTION FUNDING MECHANISMS 2012ndash13 BIENNIUM
2011 enrollment at these institutions totaled 789713 Figure 20 illustrates the funding mechanisms for these institutions Community colleges accounted for 983 percent of this enrollment total while the Texas State Technical and Lamar State Colleges composed the remaining portion
COMMUNITY COLLEGES
Instruction and Administration General Revenue Funds from the state are based on contact hour driven formulas for two-year institutions Tuition and fee revenues and local tax revenues augment state General Revenue Funds for these costs
Academic Courses Approximately 82 percent of the total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 18 percent of the total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant The state provides no funding for physical plant operations and maintenance Local taxing districts are expected to provide support for physical plant needs Community colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011
Facilities Local communities must provide facilities Community colleges are not eligible to receive Higher Education Fund (HEF) allocations Available University Fund allocations or state tuition revenue bonds
Employee Benefits While community college employees are locally-employed community colleges participate in the Employee Retirement System (ERS) Group Benefits Program for health benefi ts and the Teacher Retirement System(TRS) and Optional Retirement Program (ORP) for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits
Tuition Fee Revenues Tuition and fee revenues are considered institutional funds and are not appropriated by the state Tuition rates vary by institution In 2012 the statewide tuition rates plus fees averaged $73 per semester credit hour but varied from $34 to $208 per semester credit hour
Local Tax Revenue Community Colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011 Local tax revenues are expected to provide support for physical plant needs and augment state General Revenue Funds for instruction and administration costs
SOURCE Legislative Budget Board
TSTCLAMAR COLLEGES
Instruction and Administration General Revenue Funds from the state are based on formulas for two-year institutions Tuition and fee revenues augment General Revenue Funds for these costs
Academic Courses Approximately 39 percent at the Lamar colleges and 28 percent at Texas State Technical College (TSTC) of total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 61 percent at the Lamar colleges and 72 percent at TSTC of total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant State funding based on the formula for general academic institutions The Lamar colleges will receive approximately $71 million and TSTC will receive $157 million in General Revenue Funds for physical plant and utilities in the 2012ndash13 biennium
Facilities The Lamar colleges receive approximately $42 million annually from HEF funds and TSTC receives almost $58 million annually The HEF monies are used to acquire land construct and equip buildings provide major building repair or rehabilitation and acquire capital equipment and library materials
Employee Benefits Both the Lamar colleges and TSTC institutions participate in ERSrsquo Group Benefits Program for health benefits and the TRS and ORP programs for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits of those employees having their salaries paid with General Revenue Funds
Tuition Fee Revenues Certain tuition revenue is appropriated by the state In 2012 for resident students average tuition plus fees was $139 per semester credit hour at the Lamar colleges and $150 per semester credit hour at TSTC
FINANCING HIGHER EDUCATION IN TEXAS ndash ID690 LEGISLATIVE BUDGET BOARD 21
FUNDING COMMUNITY AND TECHNICAL COLLEGES
These institutions are primarily funded based on student contact hours A contact hour is a standard unit of measure that represents an hour of scheduled academic and technical instruction given to students during a semester Community and junior college districts generate almost 958 percent of the state-funded contact hours at two-year institutions TSTC components generate approximately 29 percent of the contact hours and the three Lamar State Colleges account for the 13 percent
COMMUNITY COLLEGES Over 99 percent of the direct appropriations to community colleges are from the General Revenue Fund and are generated through a funding formula The remaining direct appropriations are for isolated ldquospecial itemsrdquo including appropriations for the Southwest Collegiate Institute for the Deaf which is part of the appropriation for Howard College The Texas Education Code Section 130003(a) calls for state appropriations to public community colleges to ldquosupplement local funds for the proper support maintenance operation and improvement of those public junior colleges of Texas that meet the standards prescribed by the chapterrdquo Further Education Code Section 130003(c) indicates that state funds must be used ldquoexclusively for the purpose of paying salaries of instructional and administrative forceshellip and the purchase of supplies and materials for instructional purposesrdquo
Consistent with statute community colleges have their own Instruction and Administration Formula which is funded by General Revenue Funds and based on ldquostudent contact hoursrdquo Unlike general academic institution formulas this formula does not include tuition and fee revenue as part of the method of fi nance
The Eighty-second Legislature 2011 also provided $45 million to certain districts through a new small institution supplemental formula A district is eligible for the supplement if it makes a significantly above-average effort to generate tax income while at the same time experiencing below-average tax revenue and does not have a number of contact hours that exceeds the statewide median Th e Eighty-second Legislature appropriated each eligible district $05 million for the 2012ndash13 biennium
No state funding is provided for physical plant operations and maintenance or for facilities that is supported by local tax eff ort
Three community colleges receive weighted semester credit hour formula funding for a Bachelor of Applied Technology degree program
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $153 million in General Revenue formula hold harmless funding for aff ected community colleges to minimize the effect of reduced formula funding as a result of overall contact hour declines The Eighty-second Legislature 2011 did not provide any hold harmless funding in the 2012ndash13 biennium
Property taxes tuition and fees are other major sources of revenue for community colleges Figure 21 illustrates the estimated sources of funding for community colleges Th e state appropriations in Figure 21 include all formula special item Higher Education Group Insurance appropriations and retirement benefi t appropriations
FIGURE 21 MAJOR SOURCES OF COMMUNITY COLLEGESrsquo OPERATING REVENUE IN BILLIONS FISCAL YEAR 2011
727$ 21
6WDWHampRQWULEXWLRQV
URVV7XLWLRQDQG)HHV
3URSHUW7D[HV
)HGHUDO)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING
The basis of the formula starts with the Texas Higher Education Coordinating Board (THECB) Report of Fundable Operating Expenses (RFOE) (formally called the All Funds Expenditure Report) The study includes all expenditures for instruction and administration (facilities costs are not included) in 26 program areas THECB uses the expenditure data to determine the median cost in the 26 program areasmdashthe ldquoratesrdquo for contact hours in those disciplines THECB then makes a recommendation for
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 22
FUNDING COMMUNITY AND TECHNICAL COLLEGES
funding based on the rates Over the years THECB has used various methodologies as the basis for its funding recommendations Because the RFOE takes into account all funds (state appropriations plus tuition and tax revenue which are not appropriated) THECBrsquos recommendation for state funding has generally not equaled 100 percent of the rates
The amount of the appropriation is a legislative decision based on funds available The appropriation is allocated to the colleges according to each districtrsquos pro-rata share of THECB recommendations
HIGHER EDUCATION GROUP INSURANCE (HEGI)
Like state institutions of higher education community colleges receive General Revenue Fund contributions for group insurance However since community college employees are local not state employees state contributions for health benefits are fully discretionary Other agencies and institutions of higher education report employee eligibility for General Revenue-funded group health insurance benefi ts only if the employeersquos salary is directly paid with General Revenue Funds However in the past community colleges tended to base eligibility for General Revenue-funded benefits if the employeersquos job function fell under an approved ldquoelement of costrdquo This practice caused community colleges to report eligibility for state funded health benefits in a manner that did not always match the source of the employeersquos salary
This practice led to the Governorrsquos veto of the Group Health Insurance appropriation for fiscal year 2009 ($154 million) at the end of the Eightieth Legislative session However an agreement to restore the vetoed funds was reached and returned directly to the districts in House Bill 4586 Eighty-first Legislature Regular Session 2009
The Eight-Second Legislature 2011 allowed community colleges to receive General Revenue Fund contributions for employees whose job function fell under an approved ldquoelement of costrdquo However the Legislature only funded 42 percent of the premium costs for these employees
OTHER STAFF BENEFITS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and certain administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees
participate in TRS a defi ned benefit plan In both instances the state funds retirement contributions equal 60 and 64 percent of an employeersquos salary in fiscal year 2012 and fi scal year 2013 respectively (These appropriation amounts are not included in Figure 2 on page 3)
DRAMATIC ENROLLMENT GROWTH
Since the 1996ndash97 biennium public community colleges have received ldquoDramatic Enrollment Growth Fundingrdquo For the 2000ndash01 biennium this was expanded to include Texas State Technical Colleges and Lamar State Colleges (Lamars) The appropriation was made to THECB Rider 13 page IIIshy53 General Appropriations Act (2010ndash11 Biennium) provided guidelines for distributing this funding
For the 2010ndash11 biennium THECB is authorized to allocate up to $175 million per year to schools experiencing a growth rate of five percent or greater in 2010 and eight percent or greater in 2011 The Eighty-second Legislature 2011 did not provide any dramatic enrollment growth funding in the 2012-13 biennium
OTHER TRUSTEED FUNDS
Students at community colleges also benefi t from Texas Educational Opportunity Grants the student fi nancial aid program appropriation that is allocated by THECB
TEXAS STATE TECHNICAL COLLEGE LAMAR STATE COLLEGES The Texas State Technical Colleges (TSTC) and Lamar State Colleges are allocated a majority of their appropriation via two formulas the Instruction and Administration Formula for two-year institutions and the Infrastructure Formula for general academic institutions Similar to general academic institutions the tuition revenue for these colleges is included in the appropriations bill
Contact hours for vocationaltechnical courses represent approximately 61 percent of total contact hours at the Lamar State Colleges and 72 percent at TSTC institutions Th e remaining contact hours are generated from academic and continuing education courses
Facilities funding is available from the Higher Education Fund for both TSTC and the Lamars State Colleges and both have received Tuition Revenue Bond authorizations
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 23
FUNDING COMMUNITY AND TECHNICAL COLLEGES
The Community Colleges section of this report includes subsections on Higher Education Group Insurance Other Staff Benefits and Dramatic Enrollment Growth Th ese three subsections apply to appropriations for Texas State Technical Colleges and the Lamar State Colleges as well
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 24
FUNDING TEXAS AampM SYSTEM AGENCIES
There are seven research and service agencies that are administered by the Texas AampM University System Th e system agenciesrsquo missions differ from other institutions of higher education in that each system agency focuses on one or two of the three traditional missions of higher education institutions research extension and service (Figure 22)
FIGURE 22 TEXAS AampM SYSTEM AGENCIES MISSIONS AND FUNCTIONS
STATUTORY AUTHORITY MISSIONFUNCTIONS
For the 2012ndash13 biennium the total direct appropriations for Texas AampM System (System) agencies are $8897 million In addition to state appropriations the System agencies receive some Federal Funds that are not included in the General Appropriations Act and have access to private funds While System agencies have significant portions of their Other Funds and Federal Funds appropriated the appropriations are estimated and actual income from these funding sources is subject to signifi cant variation
Texas AampM AgriLife Education Conducts research in the agricultural environmental and life sciences Goals include Research Code Title III enhancing the competitiveness of agricultural industries and natural resource conservation
Chapter 88 Research highlights bioenergy irrigation efficiency and the use of distillerrsquos grain in feedlots Administers the honey bee regulation and feed and fertilizer programs
Texas AampM AgriLife Education Provides training and educational programs including 4-H through extension agents Extension Service Code Title III serving every county in Texas and supported by federal state and county funds Provides
Chapter 88 wildlife and insect management services including feral hog abatement and boll weevil eradication
Texas AampM Education Conducts engineering and technology research with a focus on interdisciplinary research Engineering Code Title III based on statewide priorities Research highlights energy independence effi ciency and Experiment Station Chapter 88 conservation alternative energy and national security
Texas AampM Education Conducts transportation related research and develops technology Approximately 50 Transportation Code Title III percent of research expenditures from interagency contracts are contracted from the Texas Institute Chapter 88 Department of Transportation
Texas AampM Education Provides training technical assistance and emergency response to enhance public Engineering Code Title III safety security and economic growth Operates the Brayden Fire Training Field and the Extension Service Chapter 88 Emergency Operations Training Center Texas Task Force 1 is deployed for emergency
response and search and rescue operations
Texas AampM Forest Education Provides incident management teams and emergency response as well as wildfire Service Code Title III prevention detection and suppression services The Texas Wildfire Protection Plan is
Chapter 88 the agencyrsquos wildfire response model Administers the Rural Volunteer Fire Department Assistance Program which gives grants to local fire departments for equipment and training
Texas AampM Veterinary Education Provides fee-based veterinary medical diagnostic services which contribute to an animal Medical Diagnostic Code Title III and zoonotic disease surveillance system Responds to potential high consequence andor Laboratory Chapter 88 emerging disease events Develops new diagnostic testing technologies
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 25
FUNDING TEXAS AampM SYSTEM AGENCIES
FIGURE 23 TEXAS AampM SYSTEM AGENCIES COMPARED TO INSTITUTIONS OF HIGHER EDUCATION
SIMILARITIES
FUNDING
Both Texas AampM System (System) agencies and institutions of higher education have considerable flexibility in their budgeting and financial operations (ldquolump sumrdquo appropriations)
Both are eligible to receive proceeds from the Permanent University Fund
Both are considered to be institutions of higher education for purposes of employee group health insurance
Both System agencies and institutions of higher education generate and keep 100 percent of indirect cost recovery from research and other grants
PERFORMANCE MEASURES
OPERATIONS
Like other institutions of higher education System agencies are not required to submit operating budgets or strategic plans
Both are statutorily embedded within the Texas AampM Systemrsquos institutional framework
SOURCE Legislative Budget Board
DIFFERENCES
General academic health-related and two-year institutions receive formula funding while System agencies do not
Texas AampM System agencies do not generate revenue in the same manner or amount of other higher education institutions
Performance measures for the System agencies are agency-specific while performance measures for other higher education institutions are standardized
In several ways state funding for System agencies is similar to funding for higher education institutions System agencies have considerable flexibility in their budgeting and fi nancial operations because they receive lump-sum appropriations in the same manner as other institutions of higher education They are eligible to receive funds from the Permanent University Fund (PUF) (They were allocated $153 million from the PUF for debt service in the 2012ndash13 biennium) System agencies are also funded in the same manner as other institutions of higher education with regard to staff benefi ts including employee group health insurance contributions
However there are several funding diff erences between System agencies and other higher education institutions Most significantly System agencies do not receive formula-based funding Also while some System agencies may charge fees for their services they do not generate tuition and fees in the same manner or quantity as other institutions of higher education
As is the case with all institutions the System agencies keep 100 percent of their respective indirect cost recovery income
because this income is derived from earnings on federal grants and is held outside the treasury
For the 2012ndash13 biennium funding associated with infrastructure expenses and utilities for System agencies inside Brazos County is equal to the infrastructure rate (as determined by the General Academic formulas on page 6) for Texas AampM University
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 26
APPENDIX A FREQUENTLY ASKED QUESTIONS
Q What are the limitations on how institutions spend state appropriations
A Generally speaking institutions have great fl exibility in spending appropriated funds however some limitations do exist depending on the source of revenue Appropriated revenue includes General Revenue Funds General Revenuendash Dedicated Funds (mostly tuition and fee income) Other Funds (including Patient Income) and Federal Funds (for certain Texas AampM System Agencies) Th e Texas Constitution (Article VII Section 18(i) and 17(j)) prohibits with limited exceptions the use of General Revenue Funds for acquiring land or for construction projects An exception occurs when the legislature by two-thirds vote in each house expressly determines that there is a demonstrated need for the project
Various provisions in the 2012ndash13 General Appropriations Act (GAA) Higher Education Special Provisions restrict state appropriations These restrictions include the following
bull Section 6 (Rider 8b) which prohibits the use of appropriated funds for auxiliary enterprises
bull Section 6 (Rider 9) which limits the use of these funds to pay debt service for statutorily authorized tuition revenue bonds Any such appropriation not spent must be returned to the General Revenue Fund at the end of the year
bull Section 9 which prohibits the use of appropriated funds for intercollegiate athletics purposes and
bull Section 54 which limits the use of the Research Development Fund to those defined in Education Code Section 62091
Q Would an increase in tuition revenue replace a corresponding amount in General Revenue Funds or would the revenue remain within the institution
A The result depends on how the Legislature responds
For instance assume that the Eight-second Legislature 2011 changed the statute to require institutions to charge nonresident tuition in circumstances where they had previously waived the nonresident tuition rate For the 2012ndash13 biennium institutions would benefit fully from the
increase in tuition revenue (This assumes the formula calculation would not include a projected increase in tuition)
However institutional appropriations in the 2014ndash15 biennium now depend on that legislation passed in the Eighty-third Legislature 2013 Assuming the same number of students (semester credit hours) enroll regardless of changes in tuition policy and that the result of charging nonresident tuition generated $100 million in additional tuition revenue there are three options
1 Reduce General Revenue Funds (GR) in the formulas by $100 million In this scenario the formula rate stays the same and every dollar increase in tuition revenue results in a dollar decrease in GRmdashinstitutional funding does not increase
2 Keep GR the same and run the additional tuition revenue through the formulas Th e formula funding rate would increase and every institution would receive more funds including those institutions that generated no additional tuition revenue
3 Keep GR formula appropriations at the same level and let individual institutions keep the additional tuition revenue they generated outside the formula allocation
Q Are all tuition and fee revenues collected by institutions of higher education included in the appropriations bill
A No None of the tuition and fee revenues collected by community colleges are appropriated
For general academic institutions an estimate of the revenue from certain tuitions and fees such as statutory tuition (Education Code 54051 Tuition Rates) board authorized tuition (Education Code 54008 Tuition Rate Set by Governing Board) Laboratory Fees (Education Code 54501) and certain other fees are appropriated in the GAA as General Revenue FundsndashDedicated Estimated Other Educational and General Income There are a number of other tuitions and fees that are not included in the GAA and therefore not referred to as state funding Such tuitions and fees include but are not limited to designated tuition (Education Code 540513 Redesignation of Building Use Fee) and Incidental Fees (Education Code 54504) Federal
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 27
APPENDIX A FREQUENTLY ASKED QUESTIONS
Funds are also not appropriated to the general academic and health-related institutions
Q Is a decrease in enrollment the only reason an institution would be eligible for formula funding hold harmless
A No Each session the Legislature makes a determination of whether it will make an appropriation for formula hold harmless A decrease in total enrollment is one reason an institution could be eligible for the funding Because the semester credit hours (general academic institutions) full-time student equivalents (health-related institutions) used in the formulas are based on weights (discipline program and course level) a change in the type of student enrollment regardless of total enrollment could also make an institution eligible for hold harmless funding
Q What are Educational and General Funds
A ldquoOther Educational and General Incomerdquo is a subset of ldquoEducational and General Incomerdquo The following are included in the Education Code (51009(c)) defi nition for ldquoEducational and General Fundsrdquo net tuition special course fees charged under Education Code 54051(e) and (l) lab fees student teaching fees hospital and clinic fees organized activity fees and proceeds from the sale of educational and general equipment
Q What does it mean to be a Tier One institution
A The Tier One reference is often derived from the Carnegie Foundation for the Advancement of Teachingrsquos prior system for classifying institutions of higher education As part of the 1994 version of the Carnegie Classification there were four categories for doctorate granting institutions Research Universities I Research Universities II Doctoral Universities I and Doctoral Universities II ldquoTier Onerdquo was synonymous with Research Universities I Such institutions had to off er a full range of baccalaureate programs award 50 or more doctoral degrees each year and receive annually at least $40 million or more in federal research funds Two institutions in Texas (The University of Texas at Austin and Texas AampM University) met these criteria The 2000 version of the Carnegie Classification collapsed the categories for doctorate granting institutions from four to two Doctoral Research UniversitiesmdashExtensive and DoctoralResearch UniversitiesmdashIntensive Six public institutions in Texas (Texas AampM University Texas Tech University University of Houston University of North Texas The University of Texas at Arlington and The University of Texas at Austin) meet the criteria for DoctoralResearch Universitiesmdash
Extensive In 2005 however the classifi cation structure returned to a more restricted top tier of institutions classifi ed as ldquoResearch Universities (very high research activity)rdquo Both The University of Texas at Austin and Texas AampM University are now counted in this category but any reference to Tier One usually refers to the 1994 Carnegie Classifi cation
Q What is the space model What is the base number of square feet needed
A In 1992 the Texas Higher Education Coordinating Board approved the Space Projection Model for Higher Education Institutions in Texas for public universities to assess the net assignable square feet (NASF) of educational and general space an institution needs There are fi ve categories incorporated into the model teaching library research offi ce and support space Space needs for auxiliary purposes such as dormitories or athletics are not included in the model Square footage amounts are assigned based on a number of elements within each category including the number of students and their program levels and the amount of research expenditures The space model was fi rst incorporated into the funding formulas for general academic institutions in 1997
Q What are ldquoOrganized Activitiesrdquo
A General academic institutions have a funding strategy titled ldquoOrganized Activitiesrdquo These are activities or enterprises that are connected with instructional departments Th ey are intended primarily to give training to students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training
Q What are tuition revenue bonds
A Established in 1971 under Education Code 5513 tuition revenue bonds are bonds (not to exceed 50 years) issued by institutions of higher education for the purpose of ldquoproviding funds to acquire purchase construct improve enlarge andor equip any property buildings structures activities services operations or other facilities for and on behalf of its institution or institutions or any branch of branches thereofrdquo Each institutionsystem is authorized and required to pay debt service on its bonds Although the authorization and issuance of the bonds is not contingent on an appropriation by the state for related debt service the Legislature has provided General Revenue Funds to reimburse institutions for costs related to debt service However in the 2004ndash05 GAA the legislature changed this practice and only provided General Revenue Fund reimbursements for interest
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 28
APPENDIX A FREQUENTLY ASKED QUESTIONS
on bonds issued after March 31 2003 The 2006ndash07 GAA renewed the practice of reimbursing institutions for the costs related to debt service The 2008ndash09 GAA and 2010-11 GAA continues this practice
Q What Is Proportionality
A Pursuant to Section 608 of Article IX of the 2012ndash13 GAA the legislative intent of proportionality is to ldquomaximize balances in the General Revenue Fundrdquo by harmonizing salary funding source with benefits funding source Th is effectively means the Legislature limits its General Revenue Fund contributions for benefits only to those employees having salaries paid with General Revenue Funds As such proportionality requires employee health and retirement benefits be paid in ldquoproportionrdquo to the funding source of salaries To this end institutions are obligated to submit the Accounting Policy Statement 011 Benefits Proportional by Fund (APS 011) report to the Comptroller Th is document provides a structure by which state and local contributions are ldquosettled uprdquo in light of the fiscal years fund proportionality
Q What Is the National Research University Fund
A In 1995 the Texas Constitution was amended to authorize the creation and funding of the Permanent Higher Education Fund (PHEF) The PHEF was intended eventually to become a permanent endowment to support non-Permanent University Fund eligible institutions However the PHEF corpus was rededicated with the voter passage of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) In 2009 Proposition 4 transferred the balance of the PHEF to the credit of the NRUF as of January 1 2010 and repealed the constitutional authorization for the PHEF
The NRUF is intended to provide a source of funding to enable emerging research universities in Texas to achieve national prominence as major research universities Article VII of the Texas Constitution authorizes the Legislature to appropriate some or all of the total return on all investment assets of the NRUF for the purposes of the fund except for two caveats (1) the Legislature may not increase distributions from the fund if the purchasing power of investment assets for any rolling 10-year period is not preserved and (2) the amount appropriated from the proceeds of the NRUF corpus in any fiscal year must be capped at 7 percent of the investment assetsrsquo average net fair market value Until the NRUF has been invested long enough to determine its purchasing power over a 10-year period the Legislature is
authorized to use other means of preserving the purchasing power of the fund
House Bill 1000 Eighty-second Legislature Regular Session 2011 establishes the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution is designated as an emerging research university within the THECBrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fiscal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of institutionrsquos research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 29
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 30
APPENDIX B TUITION AND FEE PROVISIONS
VTCA Texas Education Code Section 54003 states No institution of higher education may collect from students attending the institution any tuition fee or charge of any kind except as permitted by lawhellip
The laws governing tuition and fees at institutions of higher education are found in Education Code Section 54 including a limited number of rules that relate to tuition and fees charged by junior and community colleges Education Code Section 54 includes statutes regarding statewide tuition and fee authority rules regarding residency for tuition and fee purposes and various exemptions for tuition and fees from nonresidency status Also it includes specific fee authority for individual institutions Figure B1 provides a listing of tuition and fee authorizations in Education Code Section 54 but does not include the items presented below or the various exemption and waiver provisions (Details about each provision can be found at httpwwwcapitolstate txus) Th ere are isolated instances outside Chapter 54 whereby the boards of regents are authorized to charge for specific services provided to students
This appendix highlights some of the more prominent tuition and fee provisions and indicates whether the related revenue is or is not included in the General Appropriations Act (GAA)
INCLUDED IN THE GENERAL APPROPRIATIONS ACT Tuition and fee revenue included in the GAA as General Revenue DedicatedndashFunds is referenced as ldquoOther Education and General Incomerdquo The amounts are ldquoEstimatedrdquo so whatever amount of revenue generated is the actual amount available to the institution to spend
54051 Tuition Rates (statutory tuition) In conjunction with Section 540512 Interim Tuition Rates resident tuition for undergraduate students reached $50 per semester credit hour in the 2005ndash06 academic year (the 2006 state fi scal year) Tuition for nonresident students at general academic medical and dental institutions is based on the average of nonresident tuition rates in the five most populous states other than Texas The Texas Higher Education Coordinating Board must make this computation each academic year
54008 Tuition Rate Set by Governing Board (also known as board authorized tuition) Applies to graduate programs Subsection (d) specifies that it is not to be used in the GAA as an offset to General Revenue Funds It is distributed across formula strategies after the formula calculation
54501 Laboratory Fees The fee amount must be sufficient to cover the general costs of laboratory materials and supplies used by a student It is not to be less than $2 or more than $30 per semester and it must not exceed the actual cost of materials and supplies
NOT INCLUDED IN THE GENERAL APPROPRIATIONS ACT 540513 Designated Tuition Statute defi nes designated tuition as an institutional fund which means the revenue is not considered part of ldquoeducational and general fundsrdquo Th e governing board can waive designated tuition for a student (see 54261) Statute specifies that this revenue not be used in the GAA as a way to offset General Revenue
54503 Student Services Fees This is intended for activities which are separate from the regularly scheduled academic functions of the institution and directly involve or benefi t students Except for The University of Texas at Austin (see 54513) and components of the University of Houston System (see 545061) the maximum of all compulsory student services cannot exceed $250 per semester It is kept separate from educational and general funds
54504 Incidental Fees The governing board sets the fee which must reasonably reflect the actual cost of the materials or services for which the fee is collected Examples of unearned fees include late registration library fi nes microfilming fees thesis or doctoral manuscript reproduction or filing fees and bad check charges
5516 Board Responsibility The governing board is authorized to ldquofix and collect rentals rates and chargesrdquo
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 31
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54006 Refund or Adjustment of Tuition and Mandatory Fees for Dropped Courses and Student Withdrawals
540065 Tuition Rebate for Certain Undergraduates
54007 Option to Pay Tuition by Installment
540071 Authority of Institution to Provide Payment Options for Student with Delayed Financial Aid
54009 Increase in Tuition Rate or Fees
54010 Reduction in Tuition
54011 Tuition Limit in Cases of Concurrent Enrollment
54012 Tuition Rates for Certain Doctoral Students
54014 Tuition for Repeated or Excessive Undergraduate Hours
54015 Billing and Notifi cation for Tuition
54016 Fixed Tuition Rate Program for Certain Transfer Students at General Academic Teaching Institutions
54052ndash54057 Residency Provisions
542031 Dependent Children of Residents Who are Members of Armed Forces Deployed on Combat Duty
54204 Children of Disabled Firefighters and Law Enforcement Officers
542041 Disabled Peace Officers
54205 Blind Deaf Students
54206 Foreign Service Officers
54208 Firefighters Enrolled in Fire Science Courses
542081 Peace Officers Enrolled in Certain Courses
54211 Faculty and Dependents
54212 Teaching and Research Assistant
54213 Scholarship Student
54214 Biomedical Research Program Scholarship Student
54221 The University of Texas System Science and Technology Development Management and Transfer
54222 Economic Development and Diversification
54223 Tuition Rates for Olympic Athletes
54231 Resident of Boarding State or Nation or Participant in Student Exchange Program Tuition
54232 NATO Agreement
54233 Academic Common Market
54241 Military Personnel and Dependents
54331 Students from other Nations of the American Hemisphere
54341 Veterans and Other Military Personnel Dependents
54342 Prisoners of War
54343 Children of Prisoners of War or Persons Missing in Action
54344 Participants in Military Funerals
54345 Assistance for Tuition and Fees for Members of State Military Forces
54351 Children of Disabled Firefighters and Law Enforcement Officers
54352 Disabled Peace Officers Optional Exemption
54353 Firefighters and Peace Officers Enrolled in Certain Courses
543531 Firefighters Enrolled in Fire Science Courses
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 32
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54354 Education Benefits for Certain Survivors
54355 Children of Professional Nursing Program Faculty
54356 Preceptors for Professional Nursing Education Programs
54363 Educational Aids
54364 Blind Deaf Students
54365 Senior Citizens Optional Benefit
545011 Charges and Fees for Certain Payments
54502 General Deposits
545021 Student Deposit Fund Composition and Uses
545025 Proration of Fees
545031 Student Fee Advisory Committee
545032 Student Fee Advisory Committee the Texas AampM University System
545041 Environmental Service Fee
54505 Vehicle Registration Fees and Other Fees Related to Parking and Traffic
54506 Fees and Charges for Services to the Public the University of Houston System
545061 Student Services Fees the University of Houston System
545062 Student Fees Advisory Committee the University of Houston System
54507 Group Hospital and Medical Services Fees Texas AampM University System
54508 Medical Services Fee Texas Tech University System Components
545081 Medical Services Fee University of North Texas System Institutions
545082 Medical Services Fee Midwestern State University
545085 Medical Services Fee Texas Womanrsquos University
545089 Medical Services Fee Texas State University System Components
5450891 Medical Services Fee The University of Texas System Components
54509 Student Recreation Fee Texas Tech University System Components
545091 Student Recreational Facility Fee University of North Texas
54510 Student Recreational Sports Fee The University of Texas at Austin
54511 Student Fees for Bus Service Texas State University
545111 Environmental Service Fee Southwest Texas State University
54512 Shuttle Bus Fee The University of Texas at Arlington
545121 Intercollegiate Athletic Fee The University of Texas at Arlington
545122 Recreational Facility Fee The University of Texas at Arlington
54513 Student Service Fees The University of Texas at Austin
545131 International Education Fee The University of Texas at Austin
545132 International Education Fee
545133 Martin Luther King Jr Statue Fee The University of Texas at Austin
545134 Washington DC Internship Education Fee
545135 Barbara Jordan and Cesar Chavez Statues Fee The University of Texas at Austin
54515 Student Union Fee
54518 University Center Fee Midwestern State University
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 33
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54519 Student Union Fee North Texas State University
545191 Intercollegiate Athletic Fee University of North Texas
54520 University Center Student Fee Stephen F Austin State University
545201 Recreational Sports Fee Stephen F Austin State University
54521 Student Center Facility Fees Texas AampM University System
54522 Student Center Fees Texas Southern University
545221 Recreational Facility Fee Texas Southern University
545222 Medical Services Fee Texas Southern University
545223 Intercollegiate Athletics Fee Texas Southern University
54523 Student Center Fees Texas State University System
545241 Student Union Fees Texas Tech University System
54525 Fees for Student Centers Texas Womanrsquos University
545251 Student Fitness and Recreational Fee Texas Womanrsquos University
54526 Student Fees for University Centers the University of Houston
54527 Student Fees for University Center Facilities the University of Houston-Downtown College
54528 Recreational Facility Fee the University of Houston
54529 Student Union Fee The University of Texas at Arlington
54530 Student Union Fees The University of Texas at Austin
54531 Student Union Building Fees The University of Texas at Dallas
545311 Transportation Fee The University of Texas at Dallas
545312 Student Services Building Fee The University of Texas at Dallas
545313 Intramural and Intercollegiate Athletics Fee The University of Texas at Dallas
54532 Student Union Building Fees The University of Texas at San Antonio
545321 Transportation Fee The University of Texas at San Antonio
545322 Intercollegiate Athletics Fee The University of Texas at San Antonio
54533 Student Union Fees The University of Texas of the Permian Basin
545331 Intercollegiate Athletic Fee The University of Texas of the Permian Basin
545332 Fees for Student Services Building The University of Texas of the Permian Basin
54534 Arts and Performance Center Fee The University of Texas at Tyler
545341 Student Recreational Facility Fee The University of Texas at Tyler
545342 Intercollegiate Athletics Fee The University of Texas at Tyler
545343 Student Union Fee The University of Texas at Tyler
54535 Student Union Fee The University of Texas at El Paso
54536 Fees for Student Health Services Building The University of Texas at Austin
54537 Fees for Student Services Building The University of Texas at Austin
545371 Gregory Gymnasium Renovation Fee The University of Texas at Austin
545372 Aquatics Center Fee The University of Texas at Austin
54538 Recreational Sports Fee Texas State University System
545381 Intercollegiate Athletics Fee Certain Institutions in Texas State University System
545382 Intercollegiate Athletics Fee Texas State University ndash San Marcos
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 34
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54539 Recreational Sports Fee the Texas AampM University System
545391 Intercollegiate Athletics Fee Texas AampM University ndash Corpus Christi
545392 Intercollegiate Athletics Fee Texas AampM University ndash Kingsville
545393 Intercollegiate Athletics Fee Prairie View AampM University
545394 Intercollegiate Athletics Fee Tarleton State University
545395 Intercollegiate Athletics Fee Texas AampM International University
545396 Intercollegiate Athletics Fees West Texas AampM University
545397 Intercollegiate Athletics Fees Texas AampM University ndash Commerce
545398 Student Endowment Fund Fee Texas AampM University ndash Corpus Christi
54540 Student Center Fee University of Houston ndash Clear Lake
54541 Recreational Facility Fee The University of Texas at El Paso
54542 Student Union Building Fee The University of Texas ndash Pan American
545421 Sports Recreation and Wellness Facility Fee The University of Texas ndash Pan American
54543 Recreational Facility Fee The University of Texas at San Antonio
54544 Recreational Facility Fee The University of Texas at Dallas
545441 Student Recreational and Health Facilities Fee Midwestern State University
545442 Intercollegiate Athletics Fee Midwestern State University
54545 Fees for Continuing Education Courses
54546 Student Union Fees The University of Texas at Brownsville
54550 Wellness Recreational and Fitness Complex Fee The University of Texas at Brownsville
54551 Intercollegiate Athletics Fee The University of Texas at Brownsville
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 35
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 36
APPENDIX C GLOSSARY
APPROPRIATION METHODOLOGIES Direct Appropriation The actual appropriation either estimated or sum certain listed in that institutionrsquos portion of the General Appropriations Act (GAA)
Indirect Appropriation An appropriation made on behalf of an institution but not listed in that institutionrsquos portion of the GAA Examples include appropriations to the Available University Fund the Higher Education Fund and the Higher Education Coordinating Board all of which are ultimately allocated to institutions
Estimated Appropriation An estimated appropriation is a figure in the GAA that best reflects the information available about the revenue source but the amount available for an institution to spend is contingent on the amount of revenue actually generated If the actual amount of revenue is less than the estimated amount the institution is limited to the lower amount If more revenue is generated than the estimated amount the institution can spend the higher amount
Sum Certain Appropriation A sum certain appropriation in the GAA means that an institution is limited to spend no more than the level of appropriation noted in the institutionrsquos bill pattern in the GAA
Lump Sum Appropriation Texas Education Code Section 61059(k) calls for flexibility in funds appropriated to higher education institutions A lump sum appropriation is a single amount that is unrestricted which means that it can be used for any variety of strategies The GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Higher education institutions are not required to spend their appropriation within specified strategies One exception to this is the Tuition Revenue Bond strategy which represents the appropriation related to debt service on related bonds and must be spent as appropriated or it is reverted to the treasury
METHODS OF FINANCE General Revenue (GR) The non-dedicated portion of the General Revenue Fund is the statersquos primary operating fund Most state tax revenue many state fees and various other sources of revenue are deposited as non-dedicated General Revenue Funds
General RevenuendashDedicated (GRndashD) This is the dedicated portion of General Revenue Funds For higher education institutions the bulk of General RevenuendashDedicated Fund appropriations consist of tuition and fee revenue generated by the institutions These include the tuition and fee revenue included as ldquoOther Educational and General Incomerdquo (defined below) ldquoboard authorized tuitionrdquo (Texas Education Code Section 54008)
Other Funds State funds not included in General Revenue Funds or General RevenuendashDedicated Funds For institutions of higher education these include the Available University Fund and Patient Income generated by health-related institutions
FUND TYPES Educational and General Income Th e Texas Education Code (51009(c)) definition for ldquoEducational and General Fundsrdquo includes (a) net tuition (b) special course fees charged under Education Code Section 54051(e) and (l) (c) lab fees (d) student teaching fees (e) hospital and clinic fees (f ) organized activity fees and (g) proceeds from the sale of educational and general equipment
Institutional Funds Texas Education Code Section 51009(b) defines institutional funds as those that are not ldquoeducational and general fundsrdquo An example of an institutional fund is ldquodesignated tuitionrdquo (Texas Education Code Section 540513) These funds are not included in the GAA
Local Funds Texas Education Code Section 51009(a) defines local funds as net tuition certain special course fees lab fees student teaching fees hospital and clinic fees organized activity fees proceeds from the sale of educational and general equipment and indirect cost recovery fees Th is revenue is accounted for as ldquoeducational and general fundsrdquo and is included in the GAA
Other Educational and General Income The GAA includes some tuition and fees collected by institutions of higher education (General RevenuendashDedicated Funds) Th e revenue from tuition and fees such as statutory tuition (see texas Education Code Section 54051 Tuition Rates) board authorized tuition (see Texas Education Code Section 54008 Tuition Rate Set by Governing Board) Laboratory
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 37
APPENDIX C GLOSSARY
Fees (Texas Education Code Section 54501) and certain other fees are considered Other Educational and General Income (Other EampG) and are appropriated in the GAA as General RevenuendashDedicated Funds Other Educational and General Income is a subset of Educational and General Income (EampG Income)
Patient Income Health-related institutions that operate hospitals or dental clinics generate patient income from services rendered It is allocated as a method of finance to the related institution across a range of strategies in the institutionrsquos bill pattern (Other Funds) For the 2010ndash11 biennium more than $48 billion in patient income was appropriated making it the largest method of fi nance for health-related institutions
OTHER ITEMS Indirect Cost Recovery Institutions negotiate a percentage of a grant with the federal government for Indirect Costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 38
FI
GU
RE
D1
CO
MPA
RIS
ON
OF
CO
NST
ITU
TIO
NA
L A
ND
RES
EARC
H F
UN
DS
201
2ndash13
BIE
NN
IUM
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Avai
labl
e $1
061
4 m
illio
nTe
xas
Con
stitu
tion
hellip
for
Texa
s C
onst
itutio
nU
nive
rsity
the
purp
ose
of a
cqui
ring
Fund
(E
stim
ated
) la
nd
con
stru
ctin
g an
dFo
r su
ppor
t and
equi
ppin
g bu
ildin
gsm
aint
enan
ce
UT
Aus
tin
or o
ther
per
man
ent
Texa
s A
ampM
Uni
vers
ity
impr
ovem
ents
maj
orP
rairi
e Vi
ew U
nive
rsity
UT
repa
ir an
d re
habi
litat
ion
Sys
tem
Aamp
M S
yste
mof
bui
ldin
gs a
nd o
ther
perm
anen
t im
prov
emen
ts
For d
ebt s
ervi
ce
All
acqu
iring
cap
ital
com
pone
nts
incl
udin
g th
eeq
uipm
ent a
nd li
brar
yTA
MU
Sys
tem
Age
ncie
s bo
oks
and
libra
ryex
cept
Tex
as V
eter
inar
y m
ater
ials
and
refu
ndin
gM
edic
al D
iagn
ostic
bond
s or
not
es is
sued
Labo
rato
ry (w
hich
per
unde
r thi
s S
ectio
n
Edu
catio
n C
ode
Sec
tion
887
01 i
s a
stat
e ag
ency
Als
o
for
the
purp
ose
unde
r the
juris
dict
ion
of th
e su
ppor
t and
and
supe
rvis
ion
of th
em
aint
enan
ce o
f The
Tex
as
boar
d)
and
excl
udin
gA
ampM
Uni
vers
ity S
yste
mU
T P
an A
mer
ican
and
UT
adm
inis
tratio
n T
exas
Aamp
M
Bro
wns
ville
(bec
ause
they
Uni
vers
ity a
nd P
rairi
e re
ceiv
e H
EF
allo
catio
ns -
View
Aamp
M U
nive
rsity
and
an
inst
itutio
n ca
nnot
rece
ive
The
Uni
vers
ity o
f Tex
as a
t bo
th A
UF
and
HE
F do
llars
) A
ustin
and
The
Uni
vers
ity
of T
exas
Sys
tem
Hig
her
$525
0 m
illio
nTo
sup
port
inst
itutio
ns
Arti
cle
VII
Sec
tion
17(c
)E
duca
tion
inel
igib
le fo
r AU
F su
ppor
t pr
ovid
es a
n al
low
ance
toFu
nd
add
a ne
w in
stitu
tion
by a
Arti
cle
VII
Sec
tion
23
vote
of b
oth
hous
es o
f17
(a)
fo
r the
pur
pose
the
Legi
slat
ure
if th
e ne
wof
acq
uirin
g la
nd
inst
itutio
n is
out
side
the
UT
cons
truct
ing
and
equi
ppin
gan
d A
ampM
Sys
tem
s
build
ings
m
ajor
repa
ir
acq
uisi
tion
of c
apita
leq
uipm
ent
oth
erpe
rman
ent i
mpr
ovem
ents
or
cap
ital e
quip
men
t use
djo
intly
for e
duca
tiona
l and
gene
ral a
ctiv
ities
Arti
cle
VII
Sec
tion
18(a
-j) o
f the
Tex
as
Con
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Arti
cle
VII
Sec
tion
17(a
-l) o
f the
Tex
as
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
620
02
Gen
eral
App
ropr
iatio
nsA
ct
Texa
s C
onst
itutio
n re
quire
s 1
3 of
the
annu
al
AU
F pr
ocee
ds b
e tra
nsfe
rred
to th
e Te
xas
Aamp
M U
nive
rsity
Sys
tem
E
ach
Sys
tem
offi
cede
term
ines
how
to a
ppor
tion
its s
hare
of t
heA
UF
betw
een
debt
ser
vice
and
sup
port
and
mai
nten
ance
w
ithin
gui
delin
es s
pecifi e
d by
the
Texa
s C
onst
itutio
n
Arti
cle
VII
Sec
tion
17(a
) req
uire
s th
e H
EF
beal
loca
ted
usin
g an
equ
itabl
e fo
rmul
a d
efi n
edin
the
Edu
catio
n C
ode
(Sec
tion
620
21) a
sT
he a
lloca
tion
of fu
nds
unde
r thi
s su
bsec
tion
ism
ade
in a
ccor
danc
e w
ith a
n eq
uita
ble
form
ula
cons
istin
g of
the
follo
win
g el
emen
ts
spac
e defi c
it fa
cilit
ies
cond
ition
ins
titut
iona
l com
plex
ity
and
a se
para
te a
lloca
tion
for
the
Texa
s S
tate
Te
chni
cal C
olle
ge S
yste
m
THE
CB
adm
inis
ters
the
HE
F fo
rmul
a re
allo
catio
nad
viso
ry p
roce
ss
Edu
catio
n C
ode
(Sec
tion
620
21) p
rovi
des
a by
-in
stitu
tion
brea
kout
of a
nnua
l HE
F ap
prop
riatio
ns
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 39
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Nat
iona
l $1
24
mill
ion
Res
earc
hU
nive
rsity
(E
stim
ated
)Fu
nd
Res
earc
h $6
53
mill
ion
Dev
elop
men
tFu
nd
Texa
s $9
35
mill
ion
Com
petit
ive
Kno
wle
dge
Fund
Arti
cle
VII
Sec
tion
20(a
)
for t
he p
urpo
se o
f pr
ovid
ing
a de
dica
ted
inde
pend
ent
and
equi
tabl
eso
urce
of f
undi
ng to
enab
le e
mer
ging
rese
arch
univ
ersi
ties
in th
is s
tate
to a
chie
ve n
atio
nal
prom
inen
ce a
s m
ajor
rese
arch
uni
vers
ities
Arti
cle
VII
Sec
tion
20 (h
)
onl
y fo
r the
sup
port
and
mai
nten
ance
of
educ
atio
nal a
nd g
ener
alac
tiviti
es th
at p
rom
ote
incr
ease
d re
sear
chca
paci
ty a
t the
uni
vers
ity
Edu
catio
n C
ode
Sec
tion
hellipto
pro
mot
e62
091
in
crea
sed
rese
arch
capa
city
at e
ligib
le g
ener
alac
adem
ic te
achi
ngin
stitu
tions
Sec
tion
56 o
f Hig
her
Edu
catio
n S
peci
alP
rovi
sion
s G
AA
201
2ndash13
bi
enni
um
hellipto
sup
port
facu
lty fo
r the
pur
pose
of
inst
ruct
iona
l exc
elle
nce
and
rese
arch
Des
igna
ted
an e
mer
ging
rese
arch
uni
vers
ity b
yTe
xas
Hig
her E
duca
tion
Coo
rdin
atin
g B
oard
R
epor
ts a
t lea
st $
45 m
illio
nin
rest
ricte
d re
sear
chex
pend
iture
s in
eac
h of
the
last
2 y
ears
P
lus
four
of t
he fo
llow
ing
addi
tiona
l crit
eria
1)
End
owm
ents
gt $
400
mill
ion
2) P
rodu
ces
gt 20
0 P
hDs
per y
ear
3) S
elec
tive
ente
ring
Fres
hmen
cla
ss
4) M
embe
r of P
hi B
eta
Kap
pa o
r equ
ival
ent
5) P
osse
sses
hig
h qu
ality
facu
lty a
nd6)
Dem
onst
rate
dco
mm
itmen
t to
high
-qua
lity
grad
uate
edu
catio
n
Edu
catio
n C
ode
Sec
tion
Elig
ible
inst
itutio
n62
092
m
eans
a g
ener
al a
cade
mic
teac
hing
inst
itutio
n a
sdefi n
ed b
y S
ectio
n 61
003
ot
her t
han
The
Uni
vers
ity o
f Te
xas
at A
ustin
Tex
as A
ampM
U
nive
rsity
or P
rairi
e Vi
ew
Aamp
M U
nive
rsity
Uni
vers
ity o
f Tex
as a
t A
ustin
Uni
vers
ity o
f Tex
as
at D
alla
s T
exas
Aamp
M
Uni
vers
ity T
exas
Tec
h U
nive
rsity
Uni
vers
ity o
f H
oust
on
Arti
cle
VII
Sec
tion
20 (a
-h)
of th
e Te
xas
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
621
41
Gen
eral
App
ropr
iatio
nA
ct
Edu
catio
n C
ode
Sec
tion
Not
e th
e62
091
RD
F as
a s
tand
-alo
neap
prop
riatio
n ite
m h
asno
t bee
n fu
nded
sin
ceth
e 20
06ndash0
7 bi
enni
um
How
ever
fun
ds c
alle
d th
e R
DF
have
bee
nap
prop
riate
d di
rect
lyin
to th
e bi
ll pa
ttern
s of
each
elig
ible
Gen
eral
Aca
dem
ic In
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Edu
catio
n C
ode
Sec
tion
621
46 (c
)
o
fth
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for
dist
ribut
ion
in a
sta
tefi s
cal y
ear
each
elig
ible
in
stitu
tion
is e
ntitl
ed to
a d
istri
butio
n in
an
amou
nteq
ual t
o th
e su
m o
fon
e-se
vent
h of
the
tota
l am
ount
app
ropr
iate
d(1
)an
dan
equ
al s
hare
of a
ny a
mou
nt re
mai
ning
afte
r(2
)di
strib
utio
ns a
re c
alcu
late
d un
der S
ubdi
visi
on (1
)no
t to
exce
ed a
n am
ount
equ
al to
one
-four
th o
fth
at re
mai
ning
am
ount
Edu
catio
n C
ode
Sec
tion
621
46 (e
)If
the
num
ber o
f ins
titut
ions
that
are
elig
ible
for
dist
ribut
ions
in a
sta
tefi s
cal y
ear i
s m
ore
than
four
eac
h el
igib
le in
stitu
tion
is e
ntitl
ed to
an
equa
l sh
are
of th
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for d
istri
butio
n in
thatfi s
cal y
ear
Edu
catio
n C
ode
Sec
tion
620
95
The
am
ount
shal
l be
appo
rtion
ed a
mon
g th
e el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of
rest
ricte
d re
sear
ch fu
nds
expe
nded
by
each
inst
itutio
n pe
r yea
r for
the
thre
e pr
eced
ing
stat
efi s
cal y
ears
The
2012
ndash13
appr
opria
tion
prov
ided
abo
ut $
07
mill
ion
to e
ach
elig
ible
inst
itutio
n fo
r eve
ry $
100
mill
ion
in u
nres
trict
ed re
sear
ch e
xpen
ditu
res
asav
erag
ed o
ver a
3-y
ear p
erio
d
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 40
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Res
earc
h N
one
U
nive
rsity
D
evel
opm
ent
Fund
Texa
s $3
56
mill
ion
Res
earc
hIn
cent
ive
Pro
gram
SO
UR
CE L
egis
lativ
e B
udge
t Boa
rd
Texa
s E
duca
tion
Cod
e S
ectio
n 62
051
to
pro
vide
fund
ing
tore
sear
ch u
nive
rsiti
esan
d em
ergi
ng re
sear
chun
iver
sitie
s fo
r the
recr
uitm
ent a
nd re
tent
ion
of h
ighl
y qu
alifi
ed fa
culty
an
d th
e en
hanc
emen
t of
rese
arch
pro
duct
ivity
at
thos
e un
iver
sitie
s
Edu
catio
n C
ode
Sec
tion
hellipto
pro
vide
621
22
mat
chin
g fu
nds
to a
ssis
tel
igib
le in
stitu
tions
inle
vera
ging
priv
ate
gifts
for t
he e
nhan
cem
ent o
fre
sear
ch p
rodu
ctiv
ity a
ndfa
culty
recr
uitm
ent
Edu
catio
n C
ode
Sec
tion
620
51
Elig
ible
inst
itutio
nm
eans
an
inst
itutio
nof
hig
her e
duca
tion
desi
gnat
ed a
s a
rese
arch
univ
ersi
ty o
r em
ergi
ngre
sear
ch u
nive
rsity
und
erth
e co
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
E
ligib
le62
121
in
stitu
tion
mea
ns a
nin
stitu
tion
of h
ighe
red
ucat
ion
desi
gnat
ed a
san
em
ergi
ng re
sear
chun
iver
sity
und
er th
eco
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
620
51
Edu
catio
n C
ode
Sec
tion
(Hou
se B
ill 5
162
121
Eig
hty-fi r
st R
egul
ar
Ses
sion
)
Edu
catio
n C
ode
Sec
tion
620
53
t
o el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of t
otal
rese
arch
fund
s ex
pend
ed b
y ea
ch in
stitu
tion
annu
ally
dur
ing
the
thre
e m
ost r
ecen
t sta
tefi s
cal
year
s a
ccor
ding
to th
e fo
llow
ing
rate
s
at le
ast $
1 m
illio
n fo
r eve
ry $
10 m
illio
n of
(1)
the
aver
age
annu
al a
mou
nt o
f tho
se re
sear
chfu
nds
expe
nded
by
the
inst
itutio
n if
that
ave
rage
amou
nt fo
r the
inst
itutio
n is
$50
mill
ion
or m
ore
and
at le
ast $
500
000
for e
very
$10
mill
ion
of(2
)th
e av
erag
e an
nual
am
ount
of t
hose
rese
arch
fund
s ex
pend
ed b
y th
e in
stitu
tion
if th
at a
vera
geam
ount
for t
he in
stitu
tion
is le
ss th
an $
50 m
illio
n
Edu
catio
n C
ode
Sec
tion
621
23
hellipis
ent
itled
to re
ceiv
e o
ut o
f fun
ds a
ppro
pria
ted
for t
hepu
rpos
es o
f the
pro
gram
for t
hatfi
sca
l yea
r a
mat
chin
g gr
ant i
n an
am
ount
det
erm
ined
acco
rdin
g to
the
follo
win
g ra
tes
50 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(1)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$10
000
0 or
mor
e bu
t not
mor
eth
an $
999
999
75 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(2)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$1
mill
ion
or m
ore
but n
ot m
ore
than
$1
999
999
or
100
perc
ent o
f the
am
ount
of t
he g
ifts
and
(3)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$2
mill
ion
or m
ore
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 41
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 42
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $50119391873 $47339213388 ($2780178485) (55)
School for the Blind and Visually Impaired 93388870 41245345 (52143525) (558)
School for the Deaf 53083657 52695245 (388412) (07)
SUBTOTAL PUBLIC EDUCATION $50265864400 $47433153978 ($2832710422) (56)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1745695460 $1749380723 $3685263 02
Lamar Institute of Technology 27568721 28708990 1140269 41
Lamar University ndash Orange 18484576 19164769 680193 37
Lamar University ndash Port Arthur 23780405 22119709 (1660696) (70)
SUBTOTAL LAMAR STATE COLLEGES $69833702 $69993468 $159766 02
Texas State Technical College System $16493826 $5351461 ($11142365) (676) Administration
Texas State Technical College ndash Harlingen 50980986 49093510 (1887476) (37)
Texas State Technical College ndash West Texas 27965791 24970291 (2995500) (107)
Texas State Technical College ndash Marshall 11434368 10995468 (438900) (38)
Texas State Technical College ndash Waco 68111562 73596786 5485224 81
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$174986533 $164007516 ($10979017) (63)
SUBTOTAL TWO-YEAR INSTITUTIONS $1990515695 $1983381707 ($7133988) (04)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $19099360 $18147200 ($952160) (50)
The University of Texas at Arlington 275081581 288654156 13572575 49
The University of Texas at Austin 749518863 702739665 (46779198) (62)
The University of Texas at Dallas 230535884 223513862 (7022022) (30)
The University of Texas at El Paso 202195230 195511098 (6684132) (33)
The University of Texas ndash Pan American 169039177 162830092 (6209085) (37)
The University of Texas at Brownsville 61910963 57628718 (4282245) (69)
The University of Texas of the Permian Basin 58194080 59145561 951481 16
The University of Texas at San Antonio 273182023 260495772 (12686251) (46)
The University of Texas at Tyler 71137295 66147545 (4989750) (70)
Texas AampM University System Administrative and 20701573 4501868 (16199705) (783) General Offices
Texas AampM University 700537434 651599219 (48938215) (70)
Texas AampM University at Galveston 43799673 37773622 (6026051) (138)
Prairie View AampM University 134247361 122639379 (11607982) (86)
Tarleton State University 87292499 83950084 (3342415) (38)
Texas AampM University ndash Central Texas 29460313 30599703 1139390 39
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 43
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Corpus Christi $121534331 $110283074 ($11251257) (93)
Texas AampM University ndash Kingsville 82466491 75368253 (7098238) (86)
Texas AampM University ndash San Antonio 27154411 37125363 9970952 367
Texas AampM International University 83231209 73816324 (9414885) (113)
West Texas AampM University 79410486 72847023 (6563463) (83)
Texas AampM University ndash Commerce 99558312 89920628 (9637684) (97)
Texas AampM University ndash Texarkana 41409091 34754968 (6654123) (161)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 450003385 394815403 (55187982) (123)
University of Houston ndash Clear Lake 83394543 71849633 (11544910) (138)
University of Houston ndash Downtown 88104670 67926822 (20177848) (229)
University of Houston ndash Victoria 42631672 39786959 (2844713) (67)
Midwestern State University 54249721 48828454 (5421267) (100)
University of North Texas System Administration 9789067 6732226 (3056841) (312)
University of North Texas 302350602 296355351 (5995251) (20)
University of North Texas at Dallas 35156605 30478388 (4678217) (133)
Stephen F Austin State University 121843336 108728674 (13114662) (108)
Texas Southern University 174127907 150903873 (23224034) (133)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 368026094 357056343 (10969751) (30)
Angelo State University 68450875 64053866 (4397009) (64)
Texas Womans University 146639127 135140923 (11498204) (78)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 121909453 111926905 (9982548) (82)
Sam Houston State University 162684291 145338873 (17345418) (107)
Texas State University ndash San Marcos 261940220 254492644 (7447576) (28)
Sul Ross State University 34008142 37804020 3795878 112
Sul Ross State University Rio Grande College 13112804 12127383 (985421) (75)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$6217659551 $5853308379 ($364351172) (59)
HEALTH-RELATED INSTITUTIONS -
The University of Texas Southwestern Medical $339025963 $278284511 ($60741452) (179) Center
The University of Texas Medical Branch at 1252556677 1214546039 (38010638) (30) Galveston
The University of Texas Health Science Center at 356632008 347880533 (8751475) (25) Houston
The University of Texas Health Science Center at 357022348 319153560 (37868788) (106) San Antonio
The University of Texas MD Anderson Cancer 4614023153 5043439860 429416707 93 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 44
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center at $170568794 $176002869 $5434075 32 Tyler
Texas AampM University System Health Science 252705800 241434175 (11271625) (45) Center
University of North Texas Health Science Center 141974215 140131956 (1842259) (13) at Fort Worth
Texas Tech University Health Sciences Center 361096839 333314809 (27782030) (77)
SUBTOTAL HEALTH-RELATED INSTITUTIONS $7845605797 $8094188312 $248582515 32
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $137560226 $130327148 ($7233078) (53)
Texas AgriLife Extension Service 137837443 128253897 (9583546) (70)
Texas Engineering Experiment Station 249008314 268154320 19146006 77
Texas Transportation Institute 96056916 99288013 3231097 34
Texas Engineering Extension Service 164895453 161748713 (3146740) (19)
Texas Forest Service 108765979 196355520 87589541 805
Texas Veterinary Medical Diagnostic Laboratory 32693561 29601103 (3092458) (95)
SUBTOTAL TEXAS AampM UNIVERSITY $926817892 $1013728714 $86910822 94 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 1755022519 1301687813 (453334706) (258)
SUBTOTAL OTHER HIGHER EDUCATION $3339042471 $2900537481 ($438504990) (131)
SUBTOTAL HIGHER EDUCATION $20319641406 $19845144593 ($474496813) (23)
EMPLOYEE BENEFITS
Teacher Retirement System $4038146148 $3797393090 ($240753058) (60)
Optional Retirement Program 294169521 247905975 (46263546) (157)
Higher Education Employees Group Insurance 1068235618 968961950 (99273668) (93) Contributions
Retirement and Group Insurance 61823656 63645693 1822037 29
Social Security and Benefits Replacement Pay 560373470 577908771 17535301 31
SUBTOTAL EMPLOYEE BENEFITS $6022748413 $5655815479 ($366932934) (61)
DEBT SERVICE
Bond Debt Service Payments $7579835 $14567314 $6987479 922
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13483869 $19862644 $6378775 473
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION $76416008567 $72871348360 ($3544660207) (46) 1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 45
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $30322901124 $30476707526 $153806402 05
School for the Blind and Visually Impaired 28830574 29152947 322373 11
School for the Deaf 36111132 36216478 105346 03
SUBTOTAL PUBLIC EDUCATION $30387842830 $30542076951 $154234121 05
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1728790460 $1749380723 $20590263 12
Lamar Institute of Technology 20141881 21363652 1221771 61
Lamar University ndash Orange 13379584 13438359 58775 04
Lamar University ndash Port Arthur 18247526 16676606 (1570920) (86)
SUBTOTAL LAMAR STATE COLLEGES $51768991 $51478617 ($290374) (06)
Texas State Technical College System $16122329 $4603444 ($11518885) (714) Administration
Texas State Technical College ndash Harlingen 35862333 35177742 (684591) (19)
Texas State Technical College ndash West Texas 22972902 20195085 (2777817) (121)
Texas State Technical College ndash Marshall 8795246 8519429 (275817) (31)
Texas State Technical College ndash Waco 48458059 55190076 6732017 139
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$132210869 $123685776 ($8525093) (64)
SUBTOTAL TWO-YEAR INSTITUTIONS $1912770320 $1924545116 $11774796 06
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $16827250 $15931200 ($896050) (53)
The University of Texas at Arlington 171697428 183867794 12170366 71
The University of Texas at Austin 536034384 492544731 (43489653) (81)
The University of Texas at Dallas 142108554 148778381 6669827 47
The University of Texas at El Paso 142521273 137781712 (4739561) (33)
The University of Texas ndash Pan American 115707790 110889522 (4818268) (42)
The University of Texas at Brownsville 51100517 47424781 (3675736) (72)
The University of Texas of the Permian Basin 47639722 48816240 1176518 25
The University of Texas at San Antonio 186961792 178547264 (8414528) (45)
The University of Texas at Tyler 56673893 51804728 (4869165) (86)
Texas AampM University System Administrative 11478504 4473868 (7004636) (610) and General Offices
Texas AampM University 487991523 458011060 (29980463) (61)
Texas AampM University at Galveston 36736318 30964674 (5771644) (157)
Prairie View AampM University 102383638 90923868 (11459770) (112)
Tarleton State University 62999263 59464473 (3534790) (56)
Texas AampM University ndash Central Texas 24007601 25352928 1345327 56
Texas AampM University ndash Corpus Christi 93966271 81624416 (12341855) (131)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 46
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $60610859 $54030202 ($6580657) (109)
Texas AampM University ndash San Antonio 21438200 29287597 7849397 366
Texas AampM International University 67735925 58009521 (9726404) (144)
West Texas AampM University 57622391 53282160 (4340231) (75)
Texas AampM University ndash Commerce 67888967 66581226 (1307741) (19)
Texas AampM University ndash Texarkana 31084147 30370655 (713492) (23)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 311616152 257331674 (54284478) (174)
University of Houston ndash Clear Lake 58807555 46454050 (12353505) (210)
University of Houston ndash Downtown 56441987 39973395 (16468592) (292)
University of Houston ndash Victoria 32315073 27651821 (4663252) (144)
Midwestern State University 37434162 33382015 (4052147) (108)
University of North Texas System Administration 4789067 6732226 1943159 406
University of North Texas 194672599 191274119 (3398480) (17)
University of North Texas at Dallas 30330149 28165402 (2164747) (71)
Stephen F Austin State University 84817662 75640135 (9177527) (108)
Texas Southern University 125878414 104685201 (21193213) (168)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 261015662 253976808 (7038854) (27)
Angelo State University 48095474 45861337 (2234137) (46)
Texas Womans University 104666337 92467100 (12199237) (117)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 77990428 70849905 (7140523) (92)
Sam Houston State University 85061409 79609576 (5451833) (64)
Texas State University ndash San Marcos 168720167 164894925 (3825242) (23)
Sul Ross State University 28832045 32758471 3926426 136
Sul Ross State University Rio Grande College 10662338 9364932 (1297406) (122)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$4333902287 $4078804555 ($255097732) (59)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $286599806 $249279177 ($37320629) (130) Center
The University of Texas Medical Branch at 586704245 472189151 (114515094) (195) Galveston
The University of Texas Health Science Center 278466261 294281302 15815041 57 at Houston
The University of Texas Health Science Center 285919332 260615042 (25304290) (89) at San Antonio
The University of Texas MD Anderson Cancer 316274242 298435072 (17839170) (56) Center
The University of Texas Health Science Center 68656721 71856579 3199858 47 at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 47
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $205234148 $194402799 ($10831349) (53) Center
University of North Texas Health Science Center 120369543 113121832 (7247711) (60) at Fort Worth
Texas Tech University Health Sciences Center 308265168 291713120 (16552048) (54)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$2456489466 $2245894074 ($210595392) (86)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $108442641 $101233060 ($7209581) (66)
Texas AgriLife Extension Service 93421095 84437039 (8984056) (96)
Texas Engineering Experiment Station 27420670 27791758 371088 14
Texas Transportation Institute 1786250 1282500 (503750) (282)
Texas Engineering Extension Service 13423471 12388837 (1034634) (77)
Texas Forest Service 38994278 158979948 119985670 3077
Texas Veterinary Medical Diagnostic Laboratory 12326913 11519113 (807800) (66)
SUBTOTAL TEXAS AampM UNIVERSITY $295815318 $397632255 $101816937 344 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 1324025818 1053522035 (270503783) (204)
SUBTOTAL OTHER HIGHER EDUCATION $1849025818 $1578522035 ($270503783) (146)
SUBTOTAL HIGHER EDUCATION $10848003209 $10225398035 ($622605174) (57)
EMPLOYEE BENEFITS
Teacher Retirement System $3721648969 $3431139479 ($290509490) (78)
Optional Retirement Program 249841016 205341297 (44499719) (178)
Higher Education Employees Group Insurance 1066913010 967556924 (99356086) (93) Contributions
Retirement and Group Insurance 51589368 54070178 2480810 48
Social Security and Benefits Replacement Pay 456936472 471706602 14770130 32
SUBTOTAL EMPLOYEE BENEFITS $5546928835 $5129814480 ($417114355) (75)
DEBT SERVICE
Bond Debt Service Payments $7325020 $14248830 $6923810 945
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13229054 $19544160 $6315106 477
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$46796003928 $45916833626 ($879170302) (19)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 48
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $418569 $649000 $230431 551
School for the Blind and Visually Impaired 0 0 0 NA
School for the Deaf 0 0 0 NA
SUBTOTAL PUBLIC EDUCATION $418569 $649000 $230431 551
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 7026644 7345338 318694 45
Lamar University ndash Orange 4875929 5726410 850481 174
Lamar University ndash Port Arthur 4747409 5443103 695694 147
SUBTOTAL LAMAR STATE COLLEGES $16649982 $18514851 $1864869 112
Texas State Technical College System $371497 $748017 $376520 1014 Administration
Texas State Technical College ndash Harlingen 14268123 13915768 (352355) (25)
Texas State Technical College ndash West Texas 4573311 4775206 201895 44
Texas State Technical College ndash Marshall 2486999 2476039 (10960) (04)
Texas State Technical College ndash Waco 18496312 18406710 (89602) (05)
SUBTOTAL TEXAS STATE TECHNICAL $40196242 $40321740 $125498 03 COLLEGES
SUBTOTAL TWO-YEAR INSTITUTIONS $56846224 $58836591 $1990367 35
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 99544565 104786362 5241797 53
The University of Texas at Austin 203175074 210194934 7019860 35
The University of Texas at Dallas 73902392 74735481 833089 11
The University of Texas at El Paso 54257081 54959386 702305 13
The University of Texas ndash Pan American 50448111 51483144 1035033 21
The University of Texas at Brownsville 10270338 10203937 (66401) (06)
The University of Texas of the Permian Basin 10153771 10329321 175550 17
The University of Texas at San Antonio 78194498 81948508 3754010 48
The University of Texas at Tyler 13686400 14342817 656417 48
Texas AampM University System Administrative 9223069 28000 (9195069) (997) and General Offices
Texas AampM University 194931245 184789626 (10141619) (52)
Texas AampM University at Galveston 6714220 6808948 94728 14
Prairie View AampM University 31863723 31715511 (148212) (05)
Tarleton State University 23018364 24485611 1467247 64
Texas AampM University ndash Central Texas 5452712 5246775 (205937) (38)
Texas AampM University ndash Corpus Christi 26308558 28658658 2350100 89
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 49
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $20743629 $21338051 $594422 29
Texas AampM University ndash San Antonio 5716211 7837766 2121555 371
Texas AampM International University 14449349 15531029 1081680 75
West Texas AampM University 20857129 19564863 (1292266) (62)
Texas AampM University ndash Commerce 29344128 23339402 (6004726) (205)
Texas AampM University ndash Texarkana 4114223 4384313 270090 66
University of Houston System Administration 0 0 0 NA
University of Houston 129680228 137483729 7803501 60
University of Houston ndash Clear Lake 23417549 25395583 1978034 84
University of Houston ndash Downtown 30264387 27953427 (2310960) (76)
University of Houston ndash Victoria 9883366 12135138 2251772 228
Midwestern State University 15912994 15446439 (466555) (29)
University of North Texas System 0 0 0 NA Administration
University of North Texas 100805298 105081232 4275934 42
University of North Texas at Dallas 4826456 2312986 (2513470) (521)
Stephen F Austin State University 35525799 33088539 (2437260) (69)
Texas Southern University 47027769 46218672 (809097) (17)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 98116061 103079535 4963474 51
Angelo State University 17654127 18192529 538402 30
Texas Womans University 40098242 42673823 2575581 64
Texas State University System 0 0 0 NA
Lamar University 37445892 41077000 3631108 97
Sam Houston State University 71500172 65729297 (5770875) (81)
Texas State University ndash San Marcos 88567369 89597719 1030350 12
Sul Ross State University 4941096 5045549 104453 21
Sul Ross State University Rio Grande College 2342952 2762451 419499 179
SUBTOTAL GENERAL ACADEMIC $1744378547 $1759986091 $15607544 09 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $22514152 $18054614 ($4459538) (198) Center
The University of Texas Medical Branch at 23120930 24797153 1676223 72 Galveston
The University of Texas Health Science Center 35777999 35483172 (294827) (08) at Houston
The University of Texas Health Science Center 16488403 17234857 746454 45 at San Antonio
The University of Texas MD Anderson Cancer 48597071 55476185 6879114 142 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 50
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center $512055 $569200 $57145 112 at Tyler
Texas AampM University System Health Science 13306322 24908409 11602087 872 Center
University of North Texas Health Science 12596783 16295862 3699079 294 Center at Fort Worth
Texas Tech University Health Sciences Center 23553492 27695220 4141728 176
SUBTOTAL HEALTH-RELATED $196467207 $220514672 $24047465 122 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $950000 $950000 $0 NA
Texas AgriLife Extension Service 46992 18000 (28992) (617)
Texas Engineering Experiment Station 1785036 904418 (880618) (493)
Texas Transportation Institute 0 0 0 NA
Texas Engineering Extension Service 0 0 0 NA
Texas Forest Service 61388596 28912000 (32476596) (529)
Texas Veterinary Medical Diagnostic Laboratory 0 0 0 NA
SUBTOTAL TEXAS AampM UNIVERSITY SERVICES
$64170624 $30784418 ($33386206) (520)
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 111572621 87256791 (24315830) (218)
SUBTOTAL OTHER HIGHER EDUCATION $111572621 $87256791 ($24315830) (218)
SUBTOTAL HIGHER EDUCATION $2173435223 $2157378563 ($16056660) (07)
EMPLOYEE BENEFITS
Teacher Retirement System $188794770 $209600575 $20805805 110
Optional Retirement Program 44328505 42564678 (1763827) (40)
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 0 0 0 NA
Social Security and Benefits Replacement Pay 82274010 85153600 2879590 35
SUBTOTAL EMPLOYEE BENEFITS $315397285 $337318853 $21921568 70
DEBT SERVICE
Bond Debt Service Payments $0 $0 $0 NA
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $0 $0 $0 NA
TOTAL ARTICLE III ndash AGENCIES OF $2489251077 $2495346416 $6095339 02 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 51
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $13298491946 $10520619770 ($2777872176) (209)
School for the Blind and Visually Impaired 5430126 5855880 425754 78
School for the Deaf 4233990 2921862 (1312128) (310)
SUBTOTAL PUBLIC EDUCATION $13308156062 $10529397512 ($2778758550) (209)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $16905000 $0 ($16905000) (1000)
Lamar Institute of Technology 400196 0 (400196) (1000)
Lamar University ndash Orange 229063 0 (229063) (1000)
Lamar University ndash Port Arthur 785470 0 (785470) (1000)
SUBTOTAL LAMAR STATE COLLEGES $1414729 $0 ($1414729) (1000)
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 850530 0 (850530) (1000)
Texas State Technical College ndash West Texas 419578 0 (419578) (1000)
Texas State Technical College ndash Marshall 152123 0 (152123) (1000)
Texas State Technical College ndash Waco 1157191 0 (1157191) (1000)
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$2579422 $0 ($2579422) (1000)
SUBTOTAL TWO-YEAR INSTITUTIONS $20899151 $0 ($20899151) (1000)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 3839588 0 (3839588) (1000)
The University of Texas at Austin 10309405 0 (10309405) (1000)
The University of Texas at Dallas 14524938 0 (14524938) (1000)
The University of Texas at El Paso 2681876 0 (2681876) (1000)
The University of Texas ndash Pan American 2241274 0 (2241274) (1000)
The University of Texas at Brownsville 540108 0 (540108) (1000)
The University of Texas of the Permian Basin 400587 0 (400587) (1000)
The University of Texas at San Antonio 8025733 0 (8025733) (1000)
The University of Texas at Tyler 777002 0 (777002) (1000)
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 10292036 0 (10292036) (1000)
Texas AampM University at Galveston 349135 0 (349135) (1000)
Prairie View AampM University 0 0 0 NA
Tarleton State University 1274872 0 (1274872) (1000)
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 1259502 0 (1259502) (1000)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 52
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville 1112003 0 (1112003) (1000)
Texas AampM University ndash San Antonio $0 $0 $0 NA
Texas AampM International University 658885 0 (658885) (1000)
West Texas AampM University 930966 0 (930966) (1000)
Texas AampM University ndash Commerce 2325217 0 (2325217) (1000)
Texas AampM University ndash Texarkana 6210721 0 (6210721) (1000)
University of Houston System Administration 0 0 0 NA
University of Houston 8707005 0 (8707005) (1000)
University of Houston ndash Clear Lake 1169439 0 (1169439) (1000)
University of Houston ndash Downtown 1398296 0 (1398296) (1000)
University of Houston ndash Victoria 433233 0 (433233) (1000)
Midwestern State University 902565 0 (902565) (1000)
University of North Texas System Administration 5000000 0 (5000000) (1000)
University of North Texas 6872705 0 (6872705) (1000)
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 1499875 0 (1499875) (1000)
Texas Southern University 1221724 0 (1221724) (1000)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 8894371 0 (8894371) (1000)
Angelo State University 2701274 0 (2701274) (1000)
Texas Womans University 1874548 0 (1874548) (1000)
Texas State University System 0 0 0 NA
Lamar University 6473133 0 (6473133) (1000)
Sam Houston State University 6122710 0 (6122710) (1000)
Texas State University ndash San Marcos 4652684 0 (4652684) (1000)
Sul Ross State University 235001 0 (235001) (1000)
Sul Ross State University Rio Grande College 107514 0 (107514) (1000)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$126019925 $0 ($126019925) (1000)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $16614303 $0 ($16614303) (1000) Center
The University of Texas Medical Branch at 6745161 0 (6745161) (1000) Galveston
The University of Texas Health Science Center at 24173646 0 (24173646) (1000) Houston
The University of Texas Health Science Center at 19224332 0 (19224332) (1000) San Antonio
The University of Texas MD Anderson Cancer 634206 0 (634206) (1000) Center
The University of Texas Health Science Center 80210 0 (80210) (1000) at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 53
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $15014608 $0 ($15014608) (1000) Center
University of North Texas Health Science Center 3438054 0 (3438054) (1000) at Fort Worth
Texas Tech University Health Sciences Center 11075479 0 (11075479) (1000)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$96999999 $0 ($96999999) (1000)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $15933582 $15933582 $0 NA
Texas AgriLife Extension Service 25302708 25302708 0 NA
Texas Engineering Experiment Station 137281801 153857672 16575871 121
Texas Transportation Institute 17405197 18757193 1351996 78
Texas Engineering Extension Service 48387893 48387894 1 00
Texas Forest Service 7349101 7429568 80467 11
Texas Veterinary Medical Diagnostic Laboratory 594001 594000 (1) (00)
SUBTOTAL TEXAS AampM UNIVERSITY $252254283 $270262617 $18008334 71 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 197332508 123636426 (73696082) (373)
SUBTOTAL OTHER HIGHER EDUCATION $197332508 $123636426 ($73696082) (373)
SUBTOTAL HIGHER EDUCATION $693505866 $393899043 ($299606823) (432)
EMPLOYEE BENEFITS
Teacher Retirement System $0 $0 $0 NA
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 8832085 8286741 (545344) (62)
Social Security and Benefits Replacement Pay 3888441 3428099 (460342) (118)
SUBTOTAL EMPLOYEE BENEFITS $12720526 $11714840 ($1005686) (79)
DEBT SERVICE
Bond Debt Service Payments $253903 $318484 $64581 254
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $253903 $318484 $64581 254
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$14014636357 $10935329879 ($3079306478) (220)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 54
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $6497580234 $6341237092 ($156343142) (24)
School for the Blind and Visually Impaired 59128170 6236518 (52891652) (895)
School for the Deaf 12738535 13556905 818370 64
SUBTOTAL PUBLIC EDUCATION $6569446939 $6361030515 ($208416424) (32)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 0 0 0 NA
Lamar University ndash Orange 0 0 0 NA
Lamar University ndash Port Arthur 0 0 0 NA
SUBTOTAL LAMAR STATE COLLEGES $0 $0 $0 NA
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 0 0 0 NA
Texas State Technical College ndash West Texas 0 0 0 NA
Texas State Technical College ndash Marshall 0 0 0 NA
Texas State Technical College ndash Waco 0 0 0 NA
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$0 $0 $0 NA
SUBTOTAL TWO-YEAR INSTITUTIONS $0 $0 $0 NA
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $2272110 $2216000 ($56110) (25)
The University of Texas at Arlington 0 0 0 NA
The University of Texas at Austin 0 0 0 NA
The University of Texas at Dallas 0 0 0 NA
The University of Texas at El Paso 2735000 2770000 35000 13
The University of Texas ndash Pan American 642002 457426 (184576) (288)
The University of Texas at Brownsville 0 0 0 NA
The University of Texas of the Permian Basin 0 0 0 NA
The University of Texas at San Antonio 0 0 0 NA
The University of Texas at Tyler 0 0 0 NA
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 7322630 8798533 1475903 202
Texas AampM University at Galveston 0 0 0 NA
Prairie View AampM University 0 0 0 NA
Tarleton State University 0 0 0 NA
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 0 0 0 NA
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 55
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $0 $0 $0 NA
Texas AampM University ndash San Antonio 0 0 0 NA
Texas AampM International University 387050 275774 (111276) (287)
West Texas AampM University 0 0 0 NA
Texas AampM University ndash Commerce 0 0 0 NA
Texas AampM University ndash Texarkana 0 0 0 NA
University of Houston System Administration 0 0 0 NA
University of Houston 0 0 0 NA
University of Houston ndash Clear Lake 0 0 0 NA
University of Houston ndash Downtown 0 0 0 NA
University of Houston ndash Victoria 0 0 0 NA
Midwestern State University 0 0 0 NA
University of North Texas System Administration 0 0 0 NA
University of North Texas 0 0 0 NA
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 0 0 0 NA
Texas Southern University 0 0 0 NA
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 0 0 0 NA
Angelo State University 0 0 0 NA
Texas Womans University 0 0 0 NA
Texas State University System 0 0 0 NA
Lamar University 0 0 0 NA
Sam Houston State University 0 0 0 NA
Texas State University ndash San Marcos 0 0 0 NA
Sul Ross State University 0 0 0 NA
Sul Ross State University Rio Grande College 0 0 0 NA
SUBTOTAL GENERAL ACADEMIC $13358792 $14517733 $1158941 87 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $13297702 $10950720 ($2346982) (176) Center
The University of Texas Medical Branch at 635986341 717559735 81573394 128 Galveston
The University of Texas Health Science Center at 18214102 18116059 (98043) (05) Houston
The University of Texas Health Science Center at 35390281 41303661 5913380 167 San Antonio
The University of Texas MD Anderson Cancer 4248517634 4689528603 441010969 104 Center
The University of Texas Health Science Center 101319808 103577090 2257282 22 at Tyler
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 56
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $19150722 $22122967 $2972245 155 Center
University of North Texas Health Science Center 5569835 10714262 5144427 924 at Fort Worth
Texas Tech University Health Sciences Center 18202700 13906469 (4296231) (236)
SUBTOTAL HEALTH-RELATED $5095649125 $5627779566 $532130441 104 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $12234003 $12210506 ($23497) (02)
Texas AgriLife Extension Service 19066648 18496150 (570498) (30)
Texas Engineering Experiment Station 82520807 85600472 3079665 37
Texas Transportation Institute 76865469 79248320 2382851 31
Texas Engineering Extension Service 103084089 100971982 (2112107) (20)
Texas Forest Service 1034004 1034004 0 NA
Texas Veterinary Medical Diagnostic Laboratory 19772647 17487990 (2284657) (116)
SUBTOTAL TEXAS AampM UNIVERSITY $314577667 $315049424 $471757 01 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 122091572 37272561 (84819011) (695)
SUBTOTAL OTHER HIGHER EDUCATION $1181111524 $1111122229 ($69989295) (59)
SUBTOTAL HIGHER EDUCATION $6604697108 $7068468952 $463771844 70
EMPLOYEE BENEFITS
Teacher Retirement System $127702409 $156653036 $28950627 227
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 1322608 1405026 82418 62 Contributions
Retirement and Group Insurance 1402203 1288774 (113429) (81)
Social Security and Benefits Replacement Pay 17274547 17620470 345923 20
SUBTOTAL EMPLOYEE BENEFITS $147701767 $176967306 $29265539 198
DEBT SERVICE
Bond Debt Service Payments $912 $0 ($912) (1000)
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $912 $0 ($912) (1000)
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF $13116117205 $13523838439 $407721234 31 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 57
- INTRODUCTION
- FUNDING GENERAL ACADEMICS INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
- OTHER NON-FORMULA FUNDING
-
- FUNDING HEALTH-RELATED INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
-
- FUNDING COMMUNITY AND TECHNICAL COLLEGES
-
- OVERVIEW
- COMMUNITY COLLEGES
- TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES
-
- FUNDING TEXAS AampM SYSTEM AGENCIES
- APPENDIX A FREQUENTLY ASKED QUESTIONS
- APPENDIX B TUITION AND FEE PROVISIONS
- APPENDIX C GLOSSARY
- APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
- APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
-
INTRODUCTION
The Texas public higher education system encompasses 38 general academic teaching institutions (including law schools) 50 community and junior college districts one technical college system with four main campuses three lower-division state colleges and nine health-related institutions which operate a total of eight state medical schools three dental schools two pharmacy schools and other allied health and nursing units In addition there are seven agencies that are components of the Texas AampM University System
Private institutions in Texas include 38 four year colleges and universities two junior colleges one medical school and one accredited independent law school
Public institutions serve about 91 percent of the approximately 14 million students enrolled in higher education in Texas
The Texas Higher Education Coordinating Board (THECB) was established in 1965 and is composed of nine members appointed by the Governor for staggered six-year terms THECB provides leadership and coordination for the Texas higher education system to promote excellence in higher education
THECBrsquos responsibilities include assessing Texasrsquo system of higher education and developing recommendations for
FIGURE 1 HISTORICAL SPENDING FOR HIGHER EDUCATION 2002ndash03 TO 2012ndash13 BIENNIA
improvements to the Governor the Legislature and institutions THECB reviews and recommends changes in formulas regarding the allocation of state funds to public institutions to limit duplication of academic programs and unnecessary construction projects THECB also promotes access to high quality programs at diff erent institutional levels and oversees the statersquos student financial aid programs
The Eighty-second Legislature 2011 appropriated $221 billion in the General Appropriations Act (GAA) for the 2012ndash13 biennium to support Texas higher education a 25 percent decrease from the 2010ndash11 biennium (Figure 1) Figure 2 illustrates the sources of revenue also referred to as methods of finance for the $221 billion in state appropriations Generally only small portions of the Federal Funds received by institutions of higher education are reflected in the General Appropriations Act (GAA)
State funds are allocated to public institutions and agencies of higher education in a number of ways
bull direct appropriations through funding formulas and other direct appropriations based on identifi ed needs
bull indirect appropriations not made directly to an institution in its portion of the appropriations bill but used to cover costs related to the institutionrsquos staff
ESTIMATED ESTIMATED ESTIMATED ESTIMATED ESTIMATED BUDGETED BUDGETED BUDGETED BUDGETED BUDGETED APPROPRIATED
IN MILLIONS 2002ndash03 2004ndash05 2006ndash07 2008ndash09 2010ndash11 2012ndash13
General Revenue Funds $102337 $101944 $111762 $127216 $129966 $121723
General RevenuendashDedicated $20675 $23962 $21467 $22578 $24889 $24947 Funds
Other Funds $32494 $40530 $50023 $61974 $64674 $70298
Federal Funds $2674 $3397 $3331 $3090 $6941 $3944
TOTAL HIGHER $158180 $169833 $186583 $214858 $226470 $220912 EDUCATION
Percentage of Statewide Total
137 134 129 125 120 127
STATEWIDE TOTAL $1156786 $1267102 $1450594 $1721315 $1875165 $1734842 ALL ARTICLES
Includes $3269 in ARRA funds SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 1
INTRODUCTION
FIGURE 2 METHODS OF FINANCE FOR HIGHER EDUCATION INSTITUTIONS ndash INCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV )HGHUDO)XQGV
HQHUDO5HYHQXH)XQGV
2WKHU)XQGV
)
SOURCE Legislative Budget Board
for health insurance retirement benefits and social security and
bull other indirect appropriations which are subsequently allocated to an institution such as the Available University Fund
The $221 billion appropriation includes funds trusteed to THECB for distribution to institutions For the 2012ndash13 biennium THECB received more than $10013 million in trusteed funds The majority of these funds are allocated for student financial assistance Those remaining provide funding for the Baylor College of Medicine incentives for the general academic institutions and the Texas Research Incentive Program
Figure 3 shows the percentage of state funding appropriated to the various types of institutions excluding the allocation for employee insurance and retirement benefi ts
State appropriations to THECB that benefi t private institutions include financial assistance programs (eg Tuition Equalizations Grants B-On-Time and related programs) for Texas residents attending approved private institutions per student funding at the Baylor College of Medicine and grant funds from the Advanced Research Program a competitive grant program
Within a group such as general academic institutions state appropriations are allocated in a consistent manner Diff erent
FIGURE 3 APPROPRIATION BY TYPE OF INSTITUTION ndash EXCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
ampRPPXQLWDQG7HFKQLFDOampROOHJHV
HQHUDO$FDGHPLFV
+HDOWKUHODWHG
2WKHU+LJKHU(GXFDWLRQ
$06HUYLFHV
SOURCE Legislative Budget Board
groups of institutions such as general academic institutions and community colleges differ in how the Legislature allocates state appropriations For example all general academic institutions receive funding generated from Instruction and Operations and Infrastructure formulas while community colleges have one formula for Instruction and Administration
While the General Revenue Fundrsquos portion of direct appropriations to institutions is ldquosum certainrdquo the appropriation of Patient Income and Other Educational and General Income (primarily tuition) is ldquoestimatedrdquo Th is means that if patient income or tuition revenue generated by an institution is greater than the amount included in the GAA the institution can spend at a level beyond the amounts in the GAA If an institution generates less tuition revenue it must spend less
The GAA establishes a key distinction for higher education entities differentiating them from other state agencies Statute (Texas Education Code Section 61059(k)) calls for each higher education institution to receive a lump sum appropriation for base funding The GAA expands this concept and provides each higher education institution with one lump sum appropriation For each institution the GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Th is information reflects how the state funds are ldquoallocatedrdquo not how they must be spent Higher education institutions are not bound to spend their appropriation within the specifi ed
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 2
INTRODUCTION
strategy as are regular state agencies An exception to this is debt service on tuition revenue bonds Section 6 Rider 9 in the Higher Education Special Provisions GAA page III-233 limits the use of debt service to pay debt service for tuition revenue bonds Any amount of an appropriation not spent must be returned to the General Revenue Fund at the end of the fi scal year
There are some limitations on how institutions can spend appropriated funds The Texas Constitution (Article VII Section 18(i) and 17 (j)) prohibits with limited exceptions the use of General Revenue Funds for construction projects However the Texas Legislature by two-thirds vote in each house may opt to use General Revenue Funds for construction projects if there is a natural disaster or demonstrated need for the project
Also GAA (Section 6 Rider 8b) Special Provisions Relating Only to State Agencies of Higher Education (page III-233) prohibits the use of appropriated funds for auxiliary purposes such as athletics and parking Section 54 of the Special Provisions (page III-246) also restricts the use of funds in the Research Development Strategy to purposes defi ned in Texas Education Code Section 62091 Communityjunior colleges can spend General Revenue Funds only for instruction and administrative costs (Texas Education Code Section 130003(c))
This report presents the different ways that public institutions and agencies allocate state appropriations and highlights the flexibility with which these appropriations may be expended References to appropriated funds are based on the Eighty-second Legislature Regular Session 2011 2012ndash13 biennium GAA as adjusted for certain appropriations made in Article IX (General Provisions) of the GAA contingency appropriations other bills making appropriations in fi scal years 2012 and 2013 and Governor vetoes Amounts for fiscal year 2011 have been adjusted for the Supplemental Appropriations Bill House Bill 4 Eighty-second Legislature Regular Session 2011 and Senate Bill 2 First Called Session 2011 Each category of institutionmdashgeneral academic health-related community and technical colleges and Texas AampM System agenciesmdashis presented separately Th e only THECB funds detailed in this report are funds that have been distributed to public institutions
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 3
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 4
FUNDING GENERAL ACADEMIC INSTITUTIONS
OVERVIEW General academic institutions are listed in the Texas Education Code (61003) Figure 4 lists the institutions and their enrollments All of the institutions have common goals of instruction research and public service however each has a unique set of academic offerings and a unique regional or statewide mission
General academic institutions receive direct appropriations via funding formulas and non-formula appropriations Direct appropriations are identified in the informational strategies of each institutionrsquos bill pattern in the General Appropriations Act (GAA) As mentioned earlier appropriations are made to institutions as a lump sum Th e informational strategies reflect how state funds are ldquoallocatedrdquo not how they must be spent This means that with a few exceptions higher education entities unlike other state agencies are not required to spend appropriations within a specified funding strategy
The appropriation levels in each strategy refl ect diff erent revenue sources such as General Revenue Funds General RevenuendashDedicated Funds (mostly tuition and fee revenue) and Other Funds These revenue sources are referred to as the ldquomethod of fi nancerdquo Figure 5 illustrates the method of finance for $74 billion in appropriations for general academic institutions including a number of the indirect appropriations referenced in the next paragraph but does not include appropriations for employee retirement benefi ts
There are also appropriations that benefit institutions that are not reflected in the bill pattern of individual institutions including the Higher Education Fund the Available National Research University Fund Available University Fund certain employee benefits and funds trusteed to the Texas Higher Education Coordinating Board (THECB)
Figure 6 presents the percentage of funding related to each of these direct and indirect appropriations All of these appropriations are further described in the following pages
In addition general academic institutions have access to funds not reflected in the state appropriations process Examples of this include indirect cost recovery certain tuition and fees such as ldquodesignated tuitionrdquo and ldquoincidental feesrdquo (both are described in Appendix B) auxiliary operations (ie revenue from athletics student services fees bookstore and parking) and grants and gifts
FIGURE 4 PUBLIC GENERAL ACADEMIC INSTITUTIONS CERTIFIED FALL 2011 HEADCOUNT
INSTITUTION HEADCOUNT
Angelo State University 7077
Lamar University 14021
Midwestern State University 5811
Prairie View AampM University 8425
Sam Houston State University 17527
Stephen F Austin State University 12702
Sul Ross State University 1985
Sul Ross State University Rio Grande College 971
Tarleton State University 9893
Texas AampM International University 7037
Texas AampM University 49861
Texas AampM University ndash Central Texas 2096
Texas AampM University at Galveston 2035
Texas AampM University ndash Commerce 10726
Texas AampM University ndash Corpus Christi 10162
Texas AampM University ndash Kingsville 6731
Texas AampM University ndash San Antonio 3554
Texas AampM University ndash Texarkana 1907
Texas Southern University 9730
Texas State University ndash San Marcos 34087
Texas Tech University 32149
Texas Womanrsquos University 14503
The University of Texas at Arlington 33439
The University of Texas at Austin 51112
The University of Texas at Brownsville 8625
The University of Texas at Dallas 18864
The University of Texas at El Paso 22582
The University of Texas at San Antonio 30968
The University of Texas at Tyler 6628
The University of Texas of the Permian Basin 3831
The University of Texas ndash Pan American 19034
University of Houston 39820
University of Houston ndash Clear Lake 8185
University of Houston ndash Downtown 12918
University of Houston ndash Victoria 4330
University of North Texas 35694
University of North Texas at Dallas 2032
West Texas AampM University 7886
STATEWIDE TOTALS 568938 SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 5
FUNDING GENERAL ACADEMIC INSTITUTIONS
HQHUDO5HYHQXH)XQGV
FIGURE 5 METHOD OF FINANCE FOR GENERAL ACADEMICS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV
2WKHU)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING Nearly 573 percent of state appropriations for general academic institutions are allocated via two funding formulas and two supplements Instruction and Operations Formula Teaching Experience Supplement Infrastructure Formula
and Small Institution Supplement The formulas and supplements are direct appropriations and are primarily based on enrollment
The formula appropriations consist of General Revenue Funds and some Other Educational and General Income (Other EampG) Other EampG includes specific tuition and fee revenue (see Appendix B for a listing of tuition and fee provisions) The inclusion of certain tuition and fee revenue in the formula funding calculation is referred to as an ldquoAll Funds methodologyrdquo to formula funding Th e most significant tuition revenue included in the formula calculation is tuition charged in accordance with Texas Education Code Section 54051 Interim Tuition Rates (referred to as statutory tuition) The statutory tuition rate for the 2012ndash13 academic year is $50 per semester credit hour for Texas residents Th e corresponding tuition rate for a nonresident student is the average nonresident tuition charged to a Texas resident at a public university in each of the five most populous states
Of the $40 billion allocated by the general academic formulas and supplements nearly 728 percent consists of General Revenue Funds with the remainder consisting of General RevenuendashDedicated Funds (Other EampG)
A portion of Other EampG income is set aside for specifi c purposes or allocated to non-formula based strategies in the
FIGURE 6 APPROPRIATIONS FOR GENERAL ACADEMIC INSTITUTIONS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
QIUDVWUXFWXUH)RUPXOD +ROG+DUPOHVV 727$ 021 )RUPXODDQG
1RQ)RUPXOD7HDFKLQJ([SHULHQFH
QVWUXFWLRQamp 2SHUDWLRQV)RUPXOD
ampDSLWDO)XQGV
QVWLWXWLRQDO
(QKDQFHPHQW
6SHFLDOWHPV
ampRQVWLWXWLRQDO)XQGV
5HVHDUFKHYHORSPHQW)XQG
+LJKHU(GXFDWLRQURXSQVXUDQFH2WKHU1RQIRUPXODWHPV
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 6
FUNDING GENERAL ACADEMIC INSTITUTIONS
institutionrsquos bill pattern For example institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) TPEG are grants designed to help students cover their tuition fees and textbook costs when these expenses exceed a certain portion of their familiesrsquo contributions to their educations This set-aside revenue is not part of the tuition and fee revenue used to calculate the funding formulas
INSTRUCTION AND OPERATIONS FORMULA
About 815 percent of formula funds flow through the Instruction and Operations Formula ($32716 million for the 2012ndash13 biennium) and Teaching Experience Supplement ($957 million for the 2012ndash13 biennium) Th e Instruction and Operations formula is calculated as follows
Semester Credit Hours X ProgramLevel Weight X Rate (5371)
Semester credit hours (SCH) are a measurement of how many classes (and the number of students enrolled in those classes) an institution delivers The formula calculation for a biennium uses a ldquobase periodrdquo of SCH The ldquobase periodrdquo used for the 2012ndash13 biennium was the combination of summer 2010 fall 2010 and spring 2011
SCH is weighted by discipline (eg nursing is weighted more than liberal arts) and by level (ie lower and upper division masters doctoral and professional) For instance a lower division liberal arts course receives a weight of 10 A doctoral level liberal arts course receives a weight of 923 A nursing lower division course receives a weight of 203 A doctoral nursing course receives a weight of 925 Beginning with the 2006ndash07 GAA the basis for the weights per discipline was shifted to an aggregation of actual costs based on institutions Annual Financial Reports Currently THECB uses a rolling three year average to adjust the weights each biennium
THECB recommends a rate based on its recommended weights and program enhancements The legislature sets the weights and the rate in the Higher Education Special Provisions of the GAA (page III-238) In practice the legislature has set the rate based on available funding including consideration of enrollment changes and other factors Figure 7 illustrates the Instruction and Operations Formula allocation to institutions
FIGURE 7 DISTRIBUTION OF INSTRUCTION AND OPERATIONS FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
7H[DV$ amp 08QLYHUVLW
2WKHUHQHUDO$FDGHPLFV
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
TEACHING EXPERIENCE SUPPLEMENT
For the 2012ndash13 biennium an additional weight of ten percent is added to lower-division and upper-division semester credit hours taught by tenured and tenure-track faculty The 2012ndash13 GAA includes the following language ldquoFurthermore it is the intent of the Legislature that the weight shall increase by 10 percent per biennium up to 50 percentrdquo (Special Provisions Relating Only to State Agencies of Higher Education Sec 28 page III-238 2012ndash13 GAA)
The Teaching Experience Supplement is calculated as follows
Semester Credit Hours X ProgramLevel Weight Supplement (10) X Rate (5371)
The Teaching Experience Supplement was 5 percent during the 1998ndash99 and 2000ndash01 biennia Th e Seventy-seventh Legislature 2001 increased the supplement to the current 10 percent in 2002ndash03 biennium
INFRASTRUCTURE FORMULA
Almost 16 percent of formula funds flow through the Infrastructure Formula and Small Institution Supplement ($6768 million for the 2012ndash13 biennium) In addition to
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 7
FUNDING GENERAL ACADEMIC INSTITUTIONS
the universities the State Colleges and components of Texas State Technical College also receive infrastructure formula appropriations This formula uses a statewide infrastructure rate which is set in the GAA The statewide infrastructure rate is divided into two rates an Adjusted Utility Rate and an All Other Rate As with the SCH rate the legislature has set the rate based on available funding including consideration of changes in institutional space and other factors
The Infrastructure Formula is calculated as follows
(Adjusted Utility Rate + All Other Rates) X Predicted Square Feet
The Adjusted Utility Rate is 52 percent of the statewide infrastructure rate The 52 percent reflects the percentage of infrastructure formula funds that institutions historically spent on utilities A statewide utility rate is determined and then adjusted for each institution to reflect utility costs relative to other institutions
The All Other Rate is 48 percent of the statewide infrastructure rate and remains constant among institutions It accounts for physical plant grounds maintenance and custodial services
THECBrsquos Space Projection Model for Higher Education Institutions in Texas (space model) estimates square footage for each institution The objective of the space model projection is to calculate the amount of space an institution needs based on the following
bull number program and level of semester credit hours
bull number of faculty non-faculty students programs and library holdings and
bull research and current EampG expenditures
Figure 8 illustrates the Infrastructure Formula allocation to institutions The similarity of the allocation to the Instruction and Operations Formula allocation demonstrates the influence of enrollment on both formula allocations
SMALL INSTITUTION SUPPLEMENT
Prior to the Eighty-fi rst Legislature (2009) general academic institutions with enrollments of less than 5000 received a $750000 annual Small Institution Supplement However the Eighty-first Legislature increased the enrollment threshold to 10000 students and implemented a phase-out
FIGURE 8 DISTRIBUTION OF INFRASTRUCTURE FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
2WKHUHQHUDO$FDGHPLFV
7H[DV$ amp M 8QLYHUVLW
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
(based on the number of students) of the supplement between 5000 and 10000 students for the 2012ndash13 biennium (see Figure 9) This supplement recognizes that institutions have a minimum cost of operation that may not be covered by funds generated through the formulas
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $414 million in General Revenue hold harmless funding for aff ected institutions to minimize the effect of reduced formula funding as a result of overall enrollment declines or declines in upper-division or graduate enrollment Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment than other institutions or a change in utility costs Th e Eighty-second Legislature 2011 provided $444 million in a hold harmless based on total General Revenue Funds (formula and non-formula) for the 2012ndash13 biennium
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 8
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 9 SMALL INSTITUTION SUPPLEMENT RECIPIENTS
The University of Texas at Brownsville
The University of Texas of the Permian Basin
The University of Texas at Tyler
Texas AampM University at Galveston
Prairie View AampM University
Tarleton State University
Texas AampM University ndash Central Texas
Texas AampM University ndash Kingsville
Texas AampM University ndash San Antonio
Texas AampM International University
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston ndash Clear Lake
University of Houston ndash Victoria
Midwestern State University
University of North Texas at Dallas
Texas Southern University
Angelo State University
Sul Ross State University
Sul Ross State University ndash Rio Grande College
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Waco
Texas State Technical College ndash Marshall
Lamar Institute of Technology
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
SOURCE Legislative Budget Board
NON-FORMULA FUNDING
SPECIAL ITEMS
Special Item appropriations to the institutions total $4836 million for the 2012ndash13 biennium In 2012ndash13 $69 million was appropriated to system offices for special items These are direct appropriations to institutions for projects that are not funded by formula but are specifi cally identifi ed by the legislature as needing support An institution is not required to spend the amount identified in a Special Item strategy for that particular project but expenditure reports indicate that institutions often use an entire appropriation along with additional funding for the related project
The majority of special item funding is through the Institutional Enhancement strategy Institutional Enhancement is a $2204 million appropriation for the 2012ndash13 biennium This is a direct appropriation to institutions and was established by the Seventy-sixth Legislature 1999 for the 2000ndash01 biennium Th e fi rst Institutional Enhancement appropriation was based on a consolidation of certain Special Item appropriations in 1999 and an additional $1 million per year was appropriated for each institution Examples of consolidated special items are items that could be funded through the formulas such as general institutional academic and research support
For the 2002ndash03 biennium there was an additional $1 million increase in appropriations for most institutions and a $15 million increase for selected institutions in South Texas and the border region Institutions that benefi ted signifi cantly from the Seventy-seventh Legislaturersquos new University Research and Texas Excellence Funds (House Bill 1839 Seventy-seventh Legislature 2001) or from the Permanent University Fund (PUF) ldquoexcellence fundingrdquo did not receive an increase in Institutional Enhancement funds for the 2002ndash03 biennium
Other Special Items total $2632 million in appropriations for the 2012ndash13 biennium and include the following institutional and instructional support public service items research items other than general research support funding for separate campuses and accreditation program items
TEXAS COMPETITIVE KNOWLEDGE FUND
The Texas Competitive Knowledge Fund (TCKF) is authorized by the General Appropriations Act (GAA) (2012ndash13 Biennium) Article III Higher Education Special Provisions Section 56 The GAA prescribes that this funding will be used to support faculty for the purpose of instructional excellence and research Funding was first allocated in these strategies by the Legislature for the 2008ndash09 biennium
Current institutions receiving TCKF appropriations include The University of Texas at Austin Texas AampM University University of Houston Texas Tech University and Th e University of Texas at Dallas Institutions are allocated funding appropriated to the TCKF based on average research expenditures for the previous three-year period Th e Eighty-second Legislature Regular Session 2011 appropriated $935 million in Texas Competitive Knowledge Fund strategies directly to the institutions This funding level provides approximately $07 million to each institution for every $100 million in research expenditures In practice
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 9
FUNDING GENERAL ACADEMIC INSTITUTIONS
when institutions have first received distributions from the fund appropriations have been reduced from the institutionrsquos special item strategies In subsequent biennia the institution continues to receive appropriations from the TCKF and the reduction in special items is not specifi cally restored
RESEARCH DEVELOPMENT FUND
The Research Development Fund was created by House Bill 3526 Seventy-eighth Legislature Regular Session 2003 and replaced the Texas Excellence and University Research Funds effective September 1 2005 The intent was to combine the Texas Excellence Fund and University Research Fund into a new fund applying a uniform allocation methodology based on a three-year average of each institutionrsquos restricted research expenditures Th e Eighty-fi rst Legislature allocated $653 million (Figure 10) in the 2012ndash13 biennium to individual institutions to fund objectives identical to the Research Development Fund (Section 62091)
TEXAS RESEARCH INCENTIVE PROGRAM
Th e Eighty-first Legislature Regular Session 2009 established the Texas Research Incentive Program (TRIP) at THECB to match state appropriations with certain gifts and endowments received by emerging research universities Th e goal of this $178 million a year program is to create more Tier One universities in Texas
PERFORMANCE INCENTIVE INITIATIVE
The Eightieth Legislature 2007 appropriated $100 million in fiscal year 2009 to THECB to establish a Higher Education Performance Incentive Initiative The funding was for ldquoimprovement in teaching and educational excellence at Texas public general academic institutionsrdquo THECB distributed $80 million for increases in degrees awarded with special weights given to critical fields and at-risk students The remaining $20 million was used to fund scholarships for students graduating in the top 10 percent of their high school class
Th e Eighty-first Legislature Regular Session 2009 maintained the $80 million for the higher education performance incentive initiative (funded by the American Recovery and Reinvestment Act) and increased funding for the Top Ten Percent scholarship program by $34 million bringing total appropriations for the program to $54 million
There were no performance funding incentives for the 2012ndash13 biennium For the 2012ndash13 biennium $396
FIGURE 10 RESEARCH DEVELOPMENT FUND ALLOCATIONS
2012ndash13 BIENNIAL RDF
INSTITUTION ALLOCATION
The University of Texas at Arlington $6032754
The University of Texas at Dallas 8425486
The University of Texas at El Paso 6925040
The University of Texas at Pan American 1147838
The University of Texas at Brownsville 902512
The University of Texas of the Permian Basin 306408
The University of Texas at San Antonio 5491296
The University of Texas at Tyler 434072
Texas AampM University at Galveston 600342
Tarleton State University 1586396
Texas AampM University ndash Corpus Christi 2212356
Texas AampM University ndash Kingsville 1846206
Texas AampM International University 253246
West Texas AampM University 681752
Texas AampM Commerce 436752
Texas AampM Texarkana 9008
University of Houston 10705472
University of Houston ndash Clear Lake 10392
University of Houston ndash Downtown 10248
University of Houston ndash Victoria 2254
Midwestern State University 30066
University of North Texas 2495448
Stephen F Austin University 895696
Texas Southern University 338580
Texas Tech University 8327602
Texas Womanrsquos University 266152
Angelo State University 123176
Lamar University 820010
Sam Houston State University 362574
Texas State University ndash San Marcos 3121164
Sul Ross State University 304040
TOTAL $65296738
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 10
FUNDING GENERAL ACADEMIC INSTITUTIONS
million is appropriated to the Top Ten Percent Scholarship Program
HOLD HARMLESS FUNDING
The Eighty-second Legislature 2011 provided $444 million in General Revenue Funds hold harmless funding for aff ected institutions to minimize the effect of reduced formula and special item funding Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment that other institutions or a change in utility costs
CAPITAL FUNDS
In addition to the constitutional funds discussed in the next subsection there are three types of state appropriation for capital funds tuition revenue bonds Skiles Act revenue bonds and lease payments Almost all of the direct appropriations to institutions related to capital funds are for debt service on tuition revenue bonds
A $5931 million General Revenue Funds appropriation was made for tuition revenue bond debt service for the 2012ndash13 biennium
Tuition revenue bonds must be authorized in statute Once an authorization is made institutions issue bonds and make related debt payments with tuition revenue Th e Texas Public Finance Authority issues tuition revenue bonds for Midwestern State University Stephen F Austin University Texas Southern University and the Texas State Technical Colleges Legislative practice has been to use General Revenue Funds to reimburse institutions for the costs related to this debt service
The legislature first authorized tuition revenue bonds in 1971 In some instances the authorization was a lump sum for the benefit of specific institutions During the Seventy-eighth Legislature 2003 $2689 million in tuition revenue bonds was authorized for specific projects at various higher education institutions The Seventy-ninth Legislature Th ird Called Session 2005 adopted House Bill 153 which authorized the issuance of $1858 billion in tuition revenue bonds for forty-four different institutions Only one tuition revenue bond (House Bill 1775) was adopted by the Eightieth Legislature 2007 for a $13 million nursing building at Stephen F Austin University Th e Eighty-fi rst Legislature 2009 authorized one tuition revenue bond for Texas AampM University at Galveston The Eighty-second Legislature 2011 did not authorize any new tuition revenue bonds
The authority for Skiles Act Revenue Bonds was repealed in 1997 It had allowed institutions to pledge up to $5 from each enrolled student for each regular semester to the payment of bonds authorized under the governing boardrsquos general authority to sell revenue bonds Institutions use their Other Educational and General Income (General Revenuendash Dedicated Funds) to pay the debt service on these previously authorized bonds This is a $10 million appropriation for the 2012ndash13 biennium
Three general academic institutions receive a $3 million General Revenue Fund appropriation for lease payments to community colleges for facilities
CONSTITUTIONAL FUNDS
These funds are appropriated separately in the GAA and not directly appropriated to the institutions (see Appendix D)
The Available University Fund (AUF) established in Section 18 Article VII Texas Constitution consists of the surface income and investment proceeds from the Permanent University Fund (PUF) a state endowment with land grants totaling 21 million acres
Distributions to the AUF consist of investment returns from PUF assets surface income from PUF lands and interest earned on AUF balances For the 2012ndash13 biennium investment returns were $12200 million surface income was $398 million and interest income was $59 million Income from the sale of PUF lands and the lease of mineral interest is retained in the PUF and invested
The total 2012ndash13 estimated appropriation for the AUF is $12660 million The Constitution appropriates two-thirds of the AUF to The University of Texas System and one-third to the Texas AampM University System The two systems may use the AUF for capital purposes (debt service on PUF bonds) for most of their institutions and ldquofor the support and maintenancerdquo of other institutions listed Entities authorized to receive funding for ldquosupport and maintenancerdquo which is now commonly referred to as ldquoAUF Excellence Fundingrdquo are the two system offi ces The University of Texas at Austin Texas AampM University and Prairie View AampM University The systemsrsquo boards of regents determine allocations to individual institutions including health-related institutions and the amounts for ldquoExcellencerdquo Figure 11 lists the recipients and the type of support they received
The Higher Education Fund (HEF) as authorized in Section 17 Article VII Texas Constitution benefits institutions of higher education not eligible for the AUF (see Figure 12)
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 11
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 11 PARTICIPANTS IN THE AVAILABLE UNIVERSITY FUND
EXCELLENCE AND DEBT SERVICE FUNDS
The University of Texas System
The Texas AampM University System
The University of Texas at Austin
Texas AampM University
Prairie View AampM University
DEBT SERVICE ONLY
The University of Texas System Components
The University of Texas at Arlington
The University of Texas at Dallas
The University of Texas at El Paso
The University of Texas of Permian Basin
The University of Texas at San Antonio
The University of Texas at Tyler
The University of Texas Southwestern Medical Center
The University of Texas Medical Branch at Galveston
The University of Texas Health Science Center at Houston
The University of Texas Health Science Center at San Antonio
The University of Texas Health Science Center at Tyler
The University of Texas MD Anderson Cancer Center
Texas AampM University System Components
Texas AampM University at Galveston
Texas AampM University at Tarleton
Texas AampM University ndash San Antonio
Texas AampM University ndash Central Texas
Texas AampM University System Health Science Center
Texas AgriLife Research
Texas AgriLife Extension Service
Texas Engineering Experiment Station
Texas Engineering Extension Service
Texas Transportation Institute
Texas Forest Service
SOURCE Legislative Budget Board
FIGURE 12 PARTICIPANTS IN THE HIGHER EDUCATION FUND
The University of Texas System Components
The University of Texas ndash Pan American
Texas AampM University System Components
Texas AampM University ndash Corpus Christi
Texas AampM International University
Texas AampM University ndash Kingsville
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston System Components
University of Houston
University of Houston ndash Clearlake
University of Houston ndash Downtown
University of Houston ndash Victoria
Independent Institutions
Midwestern State University
Stephen F Austin State University
Texas Southern University
Texas Womanrsquos University
University of North Texas System Components
University of North Texas Health Science Center at Fort Worth
University of North Texas
Texas Tech University System Components
Texas Tech University Health Sciences Center
Angelo State University
Texas State University System Components
Lamar University
Sam Houston State University
Texas State University ndash San Marcos
Sul Ross State University
Sul Ross State Rio Grande College
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
Lamar Institute of Technology
Texas State Technical College System Components
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Marshall
Texas State Technical College ndash Waco
The University of North Texas at Dallas receives its allocation through the University of North Texas SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 12
FUNDING GENERAL ACADEMIC INSTITUTIONS
The HEF is supported by General Revenue Fund appropriations
The distribution of the $525 million HEF appropriation for 2012ndash13 is provided for in statute (Texas Education Code Section 62021) The Constitution calls for a re-allocation of HEF funds every ten years The Seventy-ninth Legislature Regular Session fulfilled this requirement with the enactment of House Bill 3001
The Constitution also allows the legislature to adjust the decennial allocations every five years Th e Eighty-fi rst Legislature Regular Session 2011 exercised this authority by enacting House Bill 51 which adjusted the formula allocation for the HEF funds for fiscal years 2009 through 2015
To maintain the equitable distribution of the HEF appropriation House Bill 51 also corrected the distribution of fiscal year 2009 and 2010 HEF allocations by using revised formula calculations Using these revised formula calculations House Bill 51 factored in updated data elements to generate the annual HEF allocations for the fi ve-year period starting in fiscal year 2011
HEF funds must be used for capital purposes Institutions may use HEF allocations for debt service on HEF bonds or as cash
In 1995 the Texas Constitution was amended to authorize the creation and funding of a dedicated HEF corpus known as the Permanent Higher Education Fund (PHEF) Th is corpus was separate from the annual HEF allocation of General Revenue Funds The PHEF was intended to become a permanent endowment to support non-PUF eligible institutions but never reached its targeted value of $2 billion
The PHEF corpus of $5159 million was rededicated with the enactment of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) The balance of the PHEF was transferred to the NRUF on January 1 2010 and the authorization for the PHEF expired Proposition 4 also allowed the legislature to appropriate some or all of the total returns from the NRUF to provide a source of funding to enable emerging research universities to achieve national prominence
The Eighty-second Legislature 2011 appropriated $124 million in estimated NRUF proceeds to eligible institutions in the 2012ndash13 biennium
House Bill 1000 Eighty-second Legislature Regular Session 2011 established the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution in designated as an emerging research university within the Higher Education Coordinating Boardrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fi scal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of the institutions research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs Texas Tech University and the University of Houston are the only two institutions that received funding through this program in 2012
HIGHER EDUCATION GROUP INSURANCE (HEGI)
The $4631 million General Revenue Fund appropriation for higher education group insurance (HEGI) is not a direct appropriation in the institutionsrsquo bill patterns It is appropriated in a separate section of the GAA entitled ldquoHigher Education Employees Group Insurance Contributionsrdquo This appropriation is intended to help institutions cover the cost of health insurance premiums for institution employees whose salaries are paid from the General Revenue Fund Because The University of Texas and Texas AampM University Systems operate their own health insurance programs they each receive separate appropriations The remaining institutions are included in the program operated by the Employees Retirement System (ERS)
The HEGI appropriation is sum-certain That is the Statersquos General Revenue Fund contributions are limited to each institutionrsquos number of employees enrolled in the health insurance program as of December 1 2012 However the GAA allows ERS The University of Texas and Texas AampM University Systems to transfer HEGI appropriations among institutions within their respective group insurance programs to address shortfalls in General Revenue Funds related to group insurance premiums
SOCIAL SECURITY BENEFITS
An appropriation for social security is included in the GAA at the end of Article III It is an estimated General Revenue
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 13
FUNDING GENERAL ACADEMIC INSTITUTIONS
Fund appropriation to provide the employer matching funds for employees of institutions of higher education (Th is appropriation amount is not included in Figure 3 on page 2)
STAFF GROUP INSURANCE
Staff group insurance is for staff whose salaries are not paid with General Revenue Funds (GR) The appropriation is based on an estimation of the number of non-GR funded employees at an institution as of December 1 2010 Th e total appropriation for all general academic institutions is $1766 million for the 2012ndash13 biennium The method of finance is Other Educational and General Income (which is classified as General RevenuendashDedicated Funds)
RETIREMENT CONTRIBUTIONS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and top administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees participate in TRS a defi ned benefit plan The state funds retirement contributions for TRS equal to 60 percent of an employeersquos salary in fiscal year 2012 and 64 percent in 2013 State contributions for ORP are equal to 60 percent of an employeersquos salary in fiscal years 2012 and 2013 (Th ese appropriation amounts are not included in Figure 3 on page 2)
OTHER NON-FORMULA FUNDING
WORKERSrsquo COMPENSATION
Changes in the structure of the statewide workersrsquo compensation system resulted in most institutions receiving General Revenue Fund appropriations for Workersrsquo Compensation starting in 2006ndash07 However Th e University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool
UNEMPLOYMENT COMPENSATION
Most components of The University of Texas and Texas AampM University Systems have this strategy because they operate their own risk pools Th ese institutions receive General Revenue Fund appropriations for unemployment compensation insurance The appropriation for the 2012ndash13 biennium is $05 million in General Revenue Funds Th e Texas Workforce Commission receives an appropriation to
cover unemployment benefi ts for former state employees for all other higher education institutions
TEXAS PUBLIC EDUCATION GRANTS
According to statute (Texas Education Code Chapter 56 Subchapter C and Texas Education Code Section 54051 [Statutory Tuition]) institutions must set aside a portion of tuition revenue for Texas Public Education Grants (TPEG) Fifteen percent of each resident studentrsquos tuition and 3 percent of each nonresident studentrsquos tuition are set aside for financial aid to students at the institution Texas Education Code Section 56033 provides guidelines on the allocation of TPEG revenue The GAA includes an estimate of the amount of TPEG revenue each institution will generate Th is $2111 million estimated appropriation is considered Other Educational and General Income which are classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
Indirect costs as defined by The Comptroller of Public Accounts are ldquoincurred for a common or joint purpose benefiting more than one cost objectiverdquo Institutions negotiate a percentage of a federal grant for indirect costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
The Seventy-eighth Legislature 2003 allowed universities to retain 100 percent of indirect costs income from research grants and contracts to encourage further research projects conducted by universities
ORGANIZED ACTIVITIES
Organized Activities are activities or enterprises connected with instructional departments whose primary function is training for students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training Revenue from Organized Activities is classified as General RevenuendashDedicated Funds Other EampG Income For the 2012ndash13 biennium $503 million is appropriated for Organized Activities
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 14
FUNDING HEALTH-RELATED INSTITUTIONS
OVERVIEW Appropriations for the nine health-related institutions are similar in structure to the appropriations for general academic institutions There are formula and non-formula funding appropriations made directly to the institutions as well as appropriations that benefit the institutions but are not included in the institutionsrsquo bill patterns such as the Available University Fund certain staff benefi ts and funds trusteed at the Texas Higher Education Coordinating Board (THECB) While health-related institutions do not receive appropriations from the Research Development Fund they share many other types of appropriations similar to general academic institution appropriations Th ose appropriations will be briefly restated in this section of the report Figure 13 lists the institutions and their enrollment
FIGURE 13 PUBLIC HEALTH-RELATED INSTITUTIONS CERTIFIED HEADCOUNT FALL 2011
INSTITUTION HEADCOUNT
UT Southwestern Medical Center 2467
UT Medical Branch at Galveston 2660
UT Health Science Center at Houston 4485
UT Health Science Center at San Antonio 3273
UT M D Anderson Cancer Center 248
UT Health Science Center at Tyler NA
Texas AampM University System Health Science 1958 Center
University of North Texas Health Science 1567 Center at Fort Worth
Texas Tech University Health Sciences Center 3590
Statewide Totals 20248
SOURCE Higher Education Coordinating Board
Like other higher education institutions the appropriations for health-related institutions are a lump sum and funding strategies are presented for informational purposes in the General Appropriations Act (GAA) The funding strategies in a health-related institutionrsquos bill pattern represent how state funds are allocated but not how they must be spent Also certain methods of finance in the appropriation are estimated This means that if for example patient income for an institution is above the amount included in the GAA
the institution can spend more than the amount listed in the GAA
Also health-related institutions have access to an estimated $109 billion outside the appropriations process in 2012ndash13 Examples of this include certain tuition revenue indirect lost recovery grants and gifts
Figure 14 illustrates the 2012ndash13 method of finance for $85 billion in appropriations for health-related institutions including a number of the indirect appropriations but it does not include appropriations for retirement benefi ts
FIGURE 14 METHOD OF FINANCE FOR HEALTH-RELATED INSTITUTIONS 2012ndash13 BIENNIUM
727$ 021
HQHUDO
2WKHU)XQGV3DWLHQWQFRPH
5HYHQXH)XQGV
HQHUDO5HYHQXHsup2HGLFDWHG)XQGV13
Including some tuition and fees SOURCE Legislative Budget Board
FORMULA FUNDING The three primary funding formulas for health-related institutions are Instruction and Operations support Infrastructure support and Research Enhancement Th e University of Texas MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler have additional formula allocations to accommodate their unique missions Each health-related institution also receives formula funding for graduate medical education
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 15
FUNDING HEALTH-RELATED INSTITUTIONS
General Revenue funding and some Other Educational and General Income (Other EampG is classified as General RevenuendashDedicated) fund the formulas Like general academic institutions certain tuition revenue is used in the calculation of the Instruction and Operation support and Infrastructure support formulas Of the $15 billion that is allocated by the health-related institutionsrsquo primary formulas 939 percent is from the General Revenue Fund and the remaining 61 percent is from General RevenuendashDedicated Funds (tuition and fee revenue)
Some tuition and fee income is set aside for specifi c purposes Some specific amounts are unavailable for formula purposes and consequently are not a formula method of fi nance For example health-related institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) and Medical Loans
INSTRUCTION AND OPERATIONS SUPPORT FORMULA
The Instruction and Operations (IampO) support formula represents nearly 755 percent of the primary formula funds for health-related institutions ($9282 million for the 2012ndash13 biennium) It is intended to fund items such as faculty salaries departmental operating expenses instructional administration and libraries It is allocated on a per full-time student equivalent (FTSE) basis with a funding weight predicated on the instructional program of the student This formula applies to all health-related
institutions except The University of Texas Health Science Center at Tyler which did not offer education instruction during the base period for the 2012ndash13 biennium
Figure 15 illustrates the Instruction and Operations support formula among the eight health-related institutions
The Instruction and Operations support formula is calculated as follows
(FTSE X Program Weight X $8874) + SmallMultiple Campus Supplement
FTSE is weighted by discipline For example medicine (4753) is weighted more than pharmacy (1670) Allied Health is assigned a weight of 1000
The Legislature sets the weights and the rate ($8874 adjusted for the 2012ndash13 biennium) in the Higher Education Special Provisions of the GAA (Sec 29 page III-239 and 240) The rate is calculated based on the available revenue for the formula and the number of FTSEs
Programs with enrollments less than 200 receive a Small Campus Supplement (see Figure 16)
FIGURE 15 DISTRIBUTION OF INSTRUCTION AND OPERATIONS SUPPORT FORMULA 2012ndash13 BIENNIUM
727$ 021870$QGHUVRQ 7H[DV$ amp 0+HDOWKampDQFHUampHQWHU 6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV 87+HDOWK6FLHQFHampHQWHUDW6DQ
DW)WRUWK
+HDOWK6FLHQFHampHQWHU$QWRQLR
87+HDOWK6FLHQFH 7H[DV7HFK8QLYHUVLW+HDOWKampHQWHUDW+RXVWRQ 6FLHQFHVampHQWHU
876RXWKZHVWHUQ0HGLFDOampHQWHU
870HGLFDOUDQFK DWDOYHVWRQ
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 16
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 16 SMALL CAMPUS SUPPLEMENT RECIPIENTS
The University of Texas Southwestern Medical Center
No
The University of Texas Medical Branch at Galveston
Yes
The University of Texas Health Science Center at Houston
Yes
The University of Texas Health Science Center at San Antonio
Yes
The University of Texas MD Anderson Cancer Center
No
The University of Texas Health Science Center at Tyler
NA
Texas AampM Health Science Center Yes
University of North Texas Health Science Center at Fort Worth
No
Texas Tech University Health Sciences Center Yes
SOURCE Legislative Budget Board
INFRASTRUCTURE SUPPORT FORMULA
The Infrastructure support formula is 194 percent of the primary formula funding and is intended for utilities and physical plant support ($2383 million for the 2012ndash13 biennium) This formula calculation is similar to that for general academic institutions but includes only one rate ($655) for all institutions except The University of Texas
FIGURE 17 DISTRIBUTION OF INFRASTRUCTURE SUPPORT FORMULA 2012ndash13 BIENNIUM
MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler which have another rate ($625)
THECBrsquos space model predicts square footage for each institution The space model projection is based on the following
bull number and level of FTE students
bull number of faculty
bull single or multiple programs and campuses
bull actual clinical space and
bull research and current EampG expenditures
Because the space projection model does not account for hospital space separate infrastructure funding for hospital space is included in the total funding for hospital and patient-care activities at The University of Texas Medical Branch at Galveston The University of Texas MD Anderson Cancer Center and The University of Texas Health Science Center at Tyler
Figure 17 illustrates the Infrastructure Support Formula allocation to institutions among the nine health-related institutions
727$ 021
87+HDOWK6FLHQFHampHQWHUDW6DQ 870$QGHUVRQampDQFHUampHQWHU$QWRQLR
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW
+RXVWRQ 7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK6FLHQFHVampHQWHU
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 17
FUNDING HEALTH-RELATED INSTITUTIONS
RESEARCH FORMULA
Health-related institutions generate state appropriations to support research through General Revenue Funds in the Research Enhancement formula ($629 million for the 2012ndash13 biennium) The Research Enhancement formula accounts for 51 percent of the primary formula funds and is funded entirely from the General Revenue Fund
The allocation is based on the amount of research generated by each institution
$1412500 + (110 X Research
Expenditures)
This provides a base Institutions report for all institutions current research
regardless of research expenditures to volume THECB
Figure 18 illustrates the Research Enhancement formula allocation to the institutions among the nine health-related institutions
GRADUATE MEDICAL EDUCATION
The Seventy-ninth Legislature 2005 established a new formula for funding graduate medical education in the 2006ndash07 GAA For 2012ndash13 the funding totals $46 million
FIGURE 18 DISTRIBUTION OF RESEARCH ENHANCEMENT FORMULA 2012ndash13 BIENNIUM
727$ 021
870$QGHUVRQampDQFHUampHQWHU
(an additional $109 million is appropriated to the Baylor College of Medicine through the THECB) and provides $4436 per medical resident each year
Figure 19 illustrates the Graduate Medical Education formula allocation to institutions among the nine health related institutions and Baylor College of Medicine
CHEST DISEASE CENTER FORMULA
The Chest Disease Center operations formula which was established during the 2010ndash11 biennium applies only to The University of Texas Health Science Center at Tyler Th e University of Texas Health Science Center at Tyler has a statutory mission to conduct research develop diagnostic and treatment techniques provide training and teaching programs and provide diagnosis and treatment of inpatients and outpatients with respiratory diseases The Chest Disease Center formula is based on the number of primary chest disease patients the institution served Approximately $472 million in General Revenue Funds are appropriated for the 2012ndash13 biennium
CANCER CENTER OPERATIONS FORMULA
The Eightieth Legislature 2007 established in the GAA an Operations formula for funding The University of Texas MD Anderson Cancer Center The University of Texas MD Anderson Cancer Center has a statutory mission to eliminate cancer through patient care research education
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR
7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ 8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
870HGLFDOUDQFKDWDOYHVWRQ 7H[DV7HFK8QLYHUVLW+HDOWK876RXWKZHVWHUQ0HGLFDOampHQWHU
6FLHQFHVampHQWHU
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 18
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 19 DISTRIBUTION OF GRADUATE MEDICAL EDUCATION FORMULA 2012ndash13 BIENNIUM
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
727$ 02187+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR 870$QGHUVRQampDQFHUampHQWHU
87+HDOWK6FLHQFHampHQWHUDW7OHU
7H[DV$ amp 08QLYHULVW6VWHP +HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK 6FLHQFHVampHQWHU
DORUampROOHJHRI0HGLFLQH
and prevention The Operations formula funding is based on the total number of Texas cancer patients the institution served The Operations formula growth in funding may not exceed the average growth in funding for health-related institutions in the Instruction and Operations support formula for the current biennium For the 2012ndash13 biennium this funding formula provided $2125 million in General Revenue Funds
NON-FORMULA FUNDING
PATIENT CARE ACTIVITIES
Some institutions conduct patient care activities generally medical or dental For the 2012ndash13 biennium the estimated appropriation for Patient Income was $56 billion Th e hospital and clinic revenues earned through patient care activities are considered Other Funds which are part of Educational and General Income (not to be confused with Other Educational and General Income which is another subset of Educational and General Income) General Revenue funding supplements patient-care income to varying degrees at each institution Patient Income is an estimated appropriation and is spread across an institutionrsquos funding strategies however it is not used in the calculation of the formulas
INSTITUTIONAL ENHANCEMENT
Institutional Enhancement is a General Revenue Fund appropriation that started in the 2000ndash01 biennium It is designed to allow each institution to address its unique needs and diseconomies of scale at institutions with smaller campuses The total institutional enhancement appropriation for the 2012ndash13 biennium was $42 million which includes $407 million in General Revenue Funds and $16 million in Patient Income
SPECIAL ITEMS
Special items are activities that are not generally funded through the formulas and typically represent an institutionrsquos special needs or areas of expertise The $3107 million in General Revenue Funds for the 2012ndash13 biennium funds items such as residency programs academic outreach programs public service items and research items other than general research support Institutions propose and justify special items and request an amount for each on an ad hoc basis Special items generally remain constant from biennium to biennium unless the item was a one-time expense (eg tornado damage repairs) or the institution has not used the funding for the intended purpose
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 19
FUNDING HEALTH-RELATED INSTITUTIONS
CONSTITUTIONAL FUNDS
These funds are not directly appropriated to institutions in the GAA In other words these funds are not found in a strategy within an institutionrsquos bill pattern
Health-related institutions are eligible for funding from the Available University Fund ($146 million in Other Funds allocated to these institutions by system offices for the 2012ndash 13 biennium) and the Higher Education Fund ($257 million in General Revenue Funds appropriated for the 2012ndash13 biennium) which are presented in detail in the ldquoFunding General Academic Institutionsrdquo section of this report
CAPITAL FUNDS
Just like general academic institutions tuition revenue bonds ($1665 million in General Revenue Funds for related debt service in the 2012ndash13 biennium) are also used to fund capital projects at health-related institutions A detailed presentation of tuition revenue bonds is in the ldquoFunding General Academic Institutionsrdquo section The University of Texas Medical Branch at Galveston and The University of Texas MD Anderson Cancer Center also have separate appropriations for capital projects that are funded primarily with Patient Income
EMPLOYEE BENEFITS
Like general academic institutions health-related institutions benefit from direct and indirect state appropriations related to employee benefi ts The indirect appropriations include Higher Education Group Insurance ($2339 million in General Revenue Funds for the 2012ndash13 biennium) Retirement Contributions and Social Security Benefi ts (all presented in the ldquoFunding General Academic Institutionsrdquo section) The direct appropriations include Staff Group Insurance
For the 2012ndash13 biennium the Workersrsquo Compensation and Unemployment Compensation strategies (all presented in the ldquoFunding General Academic Institutionsrdquo section) are funded directly with General Revenue Funds and General RevenuendashDedicated Funds However The University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool The University of Texas and Texas AampM Systems also manage their own unemployment compensation coverage while all other institutions receive coverage from
the Texas Workforce Commission which receives an appropriation to cover unemployment benefi ts
TEXAS PUBLIC EDUCATION GRANTS
Health-related institutions similar to general academic institutions are subject to the Texas Education Code (sect56031 et al) provision requiring a portion of tuition revenue be set aside to fund Texas Public Education Grants (TPEG) For the 2012ndash13 biennium the estimated TPEG appropriation is $188 million This revenue is considered Other Education and General Income which is classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
As mentioned earlier in this section Indirect Cost Recovery was removed from the GAA for the 2010ndash11 biennium however the individual institution still receives the funds
TOBACCO SETTLEMENT
House Bill 1945 Seventy-sixth Legislature 1999 established the Permanent Health Fund for health-related institutions of Higher Education the Permanent Fund for Minority Health Research and Education the Permanent Fund for Higher Education Nursing Allied Health and Other Health Related Programs and 13 permanent endowments for individual institutions of higher education The $769 million in estimated interest earnings from the endowments for 2012ndash13 (based on estimated interest earnings of 45 percent each year) were appropriated to the health-related institutions
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 20
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW Public two-year lower-level institutions include 50 community and junior college districts four Texas State Technical College (TSTC) campuses and three Lamar State Colleges These institutions were appropriated $22 billion in state funding for the 2012ndash13 biennium Preliminary fall FIGURE 20 TWO-YEAR INSTITUTION FUNDING MECHANISMS 2012ndash13 BIENNIUM
2011 enrollment at these institutions totaled 789713 Figure 20 illustrates the funding mechanisms for these institutions Community colleges accounted for 983 percent of this enrollment total while the Texas State Technical and Lamar State Colleges composed the remaining portion
COMMUNITY COLLEGES
Instruction and Administration General Revenue Funds from the state are based on contact hour driven formulas for two-year institutions Tuition and fee revenues and local tax revenues augment state General Revenue Funds for these costs
Academic Courses Approximately 82 percent of the total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 18 percent of the total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant The state provides no funding for physical plant operations and maintenance Local taxing districts are expected to provide support for physical plant needs Community colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011
Facilities Local communities must provide facilities Community colleges are not eligible to receive Higher Education Fund (HEF) allocations Available University Fund allocations or state tuition revenue bonds
Employee Benefits While community college employees are locally-employed community colleges participate in the Employee Retirement System (ERS) Group Benefits Program for health benefi ts and the Teacher Retirement System(TRS) and Optional Retirement Program (ORP) for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits
Tuition Fee Revenues Tuition and fee revenues are considered institutional funds and are not appropriated by the state Tuition rates vary by institution In 2012 the statewide tuition rates plus fees averaged $73 per semester credit hour but varied from $34 to $208 per semester credit hour
Local Tax Revenue Community Colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011 Local tax revenues are expected to provide support for physical plant needs and augment state General Revenue Funds for instruction and administration costs
SOURCE Legislative Budget Board
TSTCLAMAR COLLEGES
Instruction and Administration General Revenue Funds from the state are based on formulas for two-year institutions Tuition and fee revenues augment General Revenue Funds for these costs
Academic Courses Approximately 39 percent at the Lamar colleges and 28 percent at Texas State Technical College (TSTC) of total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 61 percent at the Lamar colleges and 72 percent at TSTC of total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant State funding based on the formula for general academic institutions The Lamar colleges will receive approximately $71 million and TSTC will receive $157 million in General Revenue Funds for physical plant and utilities in the 2012ndash13 biennium
Facilities The Lamar colleges receive approximately $42 million annually from HEF funds and TSTC receives almost $58 million annually The HEF monies are used to acquire land construct and equip buildings provide major building repair or rehabilitation and acquire capital equipment and library materials
Employee Benefits Both the Lamar colleges and TSTC institutions participate in ERSrsquo Group Benefits Program for health benefits and the TRS and ORP programs for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits of those employees having their salaries paid with General Revenue Funds
Tuition Fee Revenues Certain tuition revenue is appropriated by the state In 2012 for resident students average tuition plus fees was $139 per semester credit hour at the Lamar colleges and $150 per semester credit hour at TSTC
FINANCING HIGHER EDUCATION IN TEXAS ndash ID690 LEGISLATIVE BUDGET BOARD 21
FUNDING COMMUNITY AND TECHNICAL COLLEGES
These institutions are primarily funded based on student contact hours A contact hour is a standard unit of measure that represents an hour of scheduled academic and technical instruction given to students during a semester Community and junior college districts generate almost 958 percent of the state-funded contact hours at two-year institutions TSTC components generate approximately 29 percent of the contact hours and the three Lamar State Colleges account for the 13 percent
COMMUNITY COLLEGES Over 99 percent of the direct appropriations to community colleges are from the General Revenue Fund and are generated through a funding formula The remaining direct appropriations are for isolated ldquospecial itemsrdquo including appropriations for the Southwest Collegiate Institute for the Deaf which is part of the appropriation for Howard College The Texas Education Code Section 130003(a) calls for state appropriations to public community colleges to ldquosupplement local funds for the proper support maintenance operation and improvement of those public junior colleges of Texas that meet the standards prescribed by the chapterrdquo Further Education Code Section 130003(c) indicates that state funds must be used ldquoexclusively for the purpose of paying salaries of instructional and administrative forceshellip and the purchase of supplies and materials for instructional purposesrdquo
Consistent with statute community colleges have their own Instruction and Administration Formula which is funded by General Revenue Funds and based on ldquostudent contact hoursrdquo Unlike general academic institution formulas this formula does not include tuition and fee revenue as part of the method of fi nance
The Eighty-second Legislature 2011 also provided $45 million to certain districts through a new small institution supplemental formula A district is eligible for the supplement if it makes a significantly above-average effort to generate tax income while at the same time experiencing below-average tax revenue and does not have a number of contact hours that exceeds the statewide median Th e Eighty-second Legislature appropriated each eligible district $05 million for the 2012ndash13 biennium
No state funding is provided for physical plant operations and maintenance or for facilities that is supported by local tax eff ort
Three community colleges receive weighted semester credit hour formula funding for a Bachelor of Applied Technology degree program
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $153 million in General Revenue formula hold harmless funding for aff ected community colleges to minimize the effect of reduced formula funding as a result of overall contact hour declines The Eighty-second Legislature 2011 did not provide any hold harmless funding in the 2012ndash13 biennium
Property taxes tuition and fees are other major sources of revenue for community colleges Figure 21 illustrates the estimated sources of funding for community colleges Th e state appropriations in Figure 21 include all formula special item Higher Education Group Insurance appropriations and retirement benefi t appropriations
FIGURE 21 MAJOR SOURCES OF COMMUNITY COLLEGESrsquo OPERATING REVENUE IN BILLIONS FISCAL YEAR 2011
727$ 21
6WDWHampRQWULEXWLRQV
URVV7XLWLRQDQG)HHV
3URSHUW7D[HV
)HGHUDO)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING
The basis of the formula starts with the Texas Higher Education Coordinating Board (THECB) Report of Fundable Operating Expenses (RFOE) (formally called the All Funds Expenditure Report) The study includes all expenditures for instruction and administration (facilities costs are not included) in 26 program areas THECB uses the expenditure data to determine the median cost in the 26 program areasmdashthe ldquoratesrdquo for contact hours in those disciplines THECB then makes a recommendation for
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 22
FUNDING COMMUNITY AND TECHNICAL COLLEGES
funding based on the rates Over the years THECB has used various methodologies as the basis for its funding recommendations Because the RFOE takes into account all funds (state appropriations plus tuition and tax revenue which are not appropriated) THECBrsquos recommendation for state funding has generally not equaled 100 percent of the rates
The amount of the appropriation is a legislative decision based on funds available The appropriation is allocated to the colleges according to each districtrsquos pro-rata share of THECB recommendations
HIGHER EDUCATION GROUP INSURANCE (HEGI)
Like state institutions of higher education community colleges receive General Revenue Fund contributions for group insurance However since community college employees are local not state employees state contributions for health benefits are fully discretionary Other agencies and institutions of higher education report employee eligibility for General Revenue-funded group health insurance benefi ts only if the employeersquos salary is directly paid with General Revenue Funds However in the past community colleges tended to base eligibility for General Revenue-funded benefits if the employeersquos job function fell under an approved ldquoelement of costrdquo This practice caused community colleges to report eligibility for state funded health benefits in a manner that did not always match the source of the employeersquos salary
This practice led to the Governorrsquos veto of the Group Health Insurance appropriation for fiscal year 2009 ($154 million) at the end of the Eightieth Legislative session However an agreement to restore the vetoed funds was reached and returned directly to the districts in House Bill 4586 Eighty-first Legislature Regular Session 2009
The Eight-Second Legislature 2011 allowed community colleges to receive General Revenue Fund contributions for employees whose job function fell under an approved ldquoelement of costrdquo However the Legislature only funded 42 percent of the premium costs for these employees
OTHER STAFF BENEFITS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and certain administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees
participate in TRS a defi ned benefit plan In both instances the state funds retirement contributions equal 60 and 64 percent of an employeersquos salary in fiscal year 2012 and fi scal year 2013 respectively (These appropriation amounts are not included in Figure 2 on page 3)
DRAMATIC ENROLLMENT GROWTH
Since the 1996ndash97 biennium public community colleges have received ldquoDramatic Enrollment Growth Fundingrdquo For the 2000ndash01 biennium this was expanded to include Texas State Technical Colleges and Lamar State Colleges (Lamars) The appropriation was made to THECB Rider 13 page IIIshy53 General Appropriations Act (2010ndash11 Biennium) provided guidelines for distributing this funding
For the 2010ndash11 biennium THECB is authorized to allocate up to $175 million per year to schools experiencing a growth rate of five percent or greater in 2010 and eight percent or greater in 2011 The Eighty-second Legislature 2011 did not provide any dramatic enrollment growth funding in the 2012-13 biennium
OTHER TRUSTEED FUNDS
Students at community colleges also benefi t from Texas Educational Opportunity Grants the student fi nancial aid program appropriation that is allocated by THECB
TEXAS STATE TECHNICAL COLLEGE LAMAR STATE COLLEGES The Texas State Technical Colleges (TSTC) and Lamar State Colleges are allocated a majority of their appropriation via two formulas the Instruction and Administration Formula for two-year institutions and the Infrastructure Formula for general academic institutions Similar to general academic institutions the tuition revenue for these colleges is included in the appropriations bill
Contact hours for vocationaltechnical courses represent approximately 61 percent of total contact hours at the Lamar State Colleges and 72 percent at TSTC institutions Th e remaining contact hours are generated from academic and continuing education courses
Facilities funding is available from the Higher Education Fund for both TSTC and the Lamars State Colleges and both have received Tuition Revenue Bond authorizations
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 23
FUNDING COMMUNITY AND TECHNICAL COLLEGES
The Community Colleges section of this report includes subsections on Higher Education Group Insurance Other Staff Benefits and Dramatic Enrollment Growth Th ese three subsections apply to appropriations for Texas State Technical Colleges and the Lamar State Colleges as well
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 24
FUNDING TEXAS AampM SYSTEM AGENCIES
There are seven research and service agencies that are administered by the Texas AampM University System Th e system agenciesrsquo missions differ from other institutions of higher education in that each system agency focuses on one or two of the three traditional missions of higher education institutions research extension and service (Figure 22)
FIGURE 22 TEXAS AampM SYSTEM AGENCIES MISSIONS AND FUNCTIONS
STATUTORY AUTHORITY MISSIONFUNCTIONS
For the 2012ndash13 biennium the total direct appropriations for Texas AampM System (System) agencies are $8897 million In addition to state appropriations the System agencies receive some Federal Funds that are not included in the General Appropriations Act and have access to private funds While System agencies have significant portions of their Other Funds and Federal Funds appropriated the appropriations are estimated and actual income from these funding sources is subject to signifi cant variation
Texas AampM AgriLife Education Conducts research in the agricultural environmental and life sciences Goals include Research Code Title III enhancing the competitiveness of agricultural industries and natural resource conservation
Chapter 88 Research highlights bioenergy irrigation efficiency and the use of distillerrsquos grain in feedlots Administers the honey bee regulation and feed and fertilizer programs
Texas AampM AgriLife Education Provides training and educational programs including 4-H through extension agents Extension Service Code Title III serving every county in Texas and supported by federal state and county funds Provides
Chapter 88 wildlife and insect management services including feral hog abatement and boll weevil eradication
Texas AampM Education Conducts engineering and technology research with a focus on interdisciplinary research Engineering Code Title III based on statewide priorities Research highlights energy independence effi ciency and Experiment Station Chapter 88 conservation alternative energy and national security
Texas AampM Education Conducts transportation related research and develops technology Approximately 50 Transportation Code Title III percent of research expenditures from interagency contracts are contracted from the Texas Institute Chapter 88 Department of Transportation
Texas AampM Education Provides training technical assistance and emergency response to enhance public Engineering Code Title III safety security and economic growth Operates the Brayden Fire Training Field and the Extension Service Chapter 88 Emergency Operations Training Center Texas Task Force 1 is deployed for emergency
response and search and rescue operations
Texas AampM Forest Education Provides incident management teams and emergency response as well as wildfire Service Code Title III prevention detection and suppression services The Texas Wildfire Protection Plan is
Chapter 88 the agencyrsquos wildfire response model Administers the Rural Volunteer Fire Department Assistance Program which gives grants to local fire departments for equipment and training
Texas AampM Veterinary Education Provides fee-based veterinary medical diagnostic services which contribute to an animal Medical Diagnostic Code Title III and zoonotic disease surveillance system Responds to potential high consequence andor Laboratory Chapter 88 emerging disease events Develops new diagnostic testing technologies
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 25
FUNDING TEXAS AampM SYSTEM AGENCIES
FIGURE 23 TEXAS AampM SYSTEM AGENCIES COMPARED TO INSTITUTIONS OF HIGHER EDUCATION
SIMILARITIES
FUNDING
Both Texas AampM System (System) agencies and institutions of higher education have considerable flexibility in their budgeting and financial operations (ldquolump sumrdquo appropriations)
Both are eligible to receive proceeds from the Permanent University Fund
Both are considered to be institutions of higher education for purposes of employee group health insurance
Both System agencies and institutions of higher education generate and keep 100 percent of indirect cost recovery from research and other grants
PERFORMANCE MEASURES
OPERATIONS
Like other institutions of higher education System agencies are not required to submit operating budgets or strategic plans
Both are statutorily embedded within the Texas AampM Systemrsquos institutional framework
SOURCE Legislative Budget Board
DIFFERENCES
General academic health-related and two-year institutions receive formula funding while System agencies do not
Texas AampM System agencies do not generate revenue in the same manner or amount of other higher education institutions
Performance measures for the System agencies are agency-specific while performance measures for other higher education institutions are standardized
In several ways state funding for System agencies is similar to funding for higher education institutions System agencies have considerable flexibility in their budgeting and fi nancial operations because they receive lump-sum appropriations in the same manner as other institutions of higher education They are eligible to receive funds from the Permanent University Fund (PUF) (They were allocated $153 million from the PUF for debt service in the 2012ndash13 biennium) System agencies are also funded in the same manner as other institutions of higher education with regard to staff benefi ts including employee group health insurance contributions
However there are several funding diff erences between System agencies and other higher education institutions Most significantly System agencies do not receive formula-based funding Also while some System agencies may charge fees for their services they do not generate tuition and fees in the same manner or quantity as other institutions of higher education
As is the case with all institutions the System agencies keep 100 percent of their respective indirect cost recovery income
because this income is derived from earnings on federal grants and is held outside the treasury
For the 2012ndash13 biennium funding associated with infrastructure expenses and utilities for System agencies inside Brazos County is equal to the infrastructure rate (as determined by the General Academic formulas on page 6) for Texas AampM University
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 26
APPENDIX A FREQUENTLY ASKED QUESTIONS
Q What are the limitations on how institutions spend state appropriations
A Generally speaking institutions have great fl exibility in spending appropriated funds however some limitations do exist depending on the source of revenue Appropriated revenue includes General Revenue Funds General Revenuendash Dedicated Funds (mostly tuition and fee income) Other Funds (including Patient Income) and Federal Funds (for certain Texas AampM System Agencies) Th e Texas Constitution (Article VII Section 18(i) and 17(j)) prohibits with limited exceptions the use of General Revenue Funds for acquiring land or for construction projects An exception occurs when the legislature by two-thirds vote in each house expressly determines that there is a demonstrated need for the project
Various provisions in the 2012ndash13 General Appropriations Act (GAA) Higher Education Special Provisions restrict state appropriations These restrictions include the following
bull Section 6 (Rider 8b) which prohibits the use of appropriated funds for auxiliary enterprises
bull Section 6 (Rider 9) which limits the use of these funds to pay debt service for statutorily authorized tuition revenue bonds Any such appropriation not spent must be returned to the General Revenue Fund at the end of the year
bull Section 9 which prohibits the use of appropriated funds for intercollegiate athletics purposes and
bull Section 54 which limits the use of the Research Development Fund to those defined in Education Code Section 62091
Q Would an increase in tuition revenue replace a corresponding amount in General Revenue Funds or would the revenue remain within the institution
A The result depends on how the Legislature responds
For instance assume that the Eight-second Legislature 2011 changed the statute to require institutions to charge nonresident tuition in circumstances where they had previously waived the nonresident tuition rate For the 2012ndash13 biennium institutions would benefit fully from the
increase in tuition revenue (This assumes the formula calculation would not include a projected increase in tuition)
However institutional appropriations in the 2014ndash15 biennium now depend on that legislation passed in the Eighty-third Legislature 2013 Assuming the same number of students (semester credit hours) enroll regardless of changes in tuition policy and that the result of charging nonresident tuition generated $100 million in additional tuition revenue there are three options
1 Reduce General Revenue Funds (GR) in the formulas by $100 million In this scenario the formula rate stays the same and every dollar increase in tuition revenue results in a dollar decrease in GRmdashinstitutional funding does not increase
2 Keep GR the same and run the additional tuition revenue through the formulas Th e formula funding rate would increase and every institution would receive more funds including those institutions that generated no additional tuition revenue
3 Keep GR formula appropriations at the same level and let individual institutions keep the additional tuition revenue they generated outside the formula allocation
Q Are all tuition and fee revenues collected by institutions of higher education included in the appropriations bill
A No None of the tuition and fee revenues collected by community colleges are appropriated
For general academic institutions an estimate of the revenue from certain tuitions and fees such as statutory tuition (Education Code 54051 Tuition Rates) board authorized tuition (Education Code 54008 Tuition Rate Set by Governing Board) Laboratory Fees (Education Code 54501) and certain other fees are appropriated in the GAA as General Revenue FundsndashDedicated Estimated Other Educational and General Income There are a number of other tuitions and fees that are not included in the GAA and therefore not referred to as state funding Such tuitions and fees include but are not limited to designated tuition (Education Code 540513 Redesignation of Building Use Fee) and Incidental Fees (Education Code 54504) Federal
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 27
APPENDIX A FREQUENTLY ASKED QUESTIONS
Funds are also not appropriated to the general academic and health-related institutions
Q Is a decrease in enrollment the only reason an institution would be eligible for formula funding hold harmless
A No Each session the Legislature makes a determination of whether it will make an appropriation for formula hold harmless A decrease in total enrollment is one reason an institution could be eligible for the funding Because the semester credit hours (general academic institutions) full-time student equivalents (health-related institutions) used in the formulas are based on weights (discipline program and course level) a change in the type of student enrollment regardless of total enrollment could also make an institution eligible for hold harmless funding
Q What are Educational and General Funds
A ldquoOther Educational and General Incomerdquo is a subset of ldquoEducational and General Incomerdquo The following are included in the Education Code (51009(c)) defi nition for ldquoEducational and General Fundsrdquo net tuition special course fees charged under Education Code 54051(e) and (l) lab fees student teaching fees hospital and clinic fees organized activity fees and proceeds from the sale of educational and general equipment
Q What does it mean to be a Tier One institution
A The Tier One reference is often derived from the Carnegie Foundation for the Advancement of Teachingrsquos prior system for classifying institutions of higher education As part of the 1994 version of the Carnegie Classification there were four categories for doctorate granting institutions Research Universities I Research Universities II Doctoral Universities I and Doctoral Universities II ldquoTier Onerdquo was synonymous with Research Universities I Such institutions had to off er a full range of baccalaureate programs award 50 or more doctoral degrees each year and receive annually at least $40 million or more in federal research funds Two institutions in Texas (The University of Texas at Austin and Texas AampM University) met these criteria The 2000 version of the Carnegie Classification collapsed the categories for doctorate granting institutions from four to two Doctoral Research UniversitiesmdashExtensive and DoctoralResearch UniversitiesmdashIntensive Six public institutions in Texas (Texas AampM University Texas Tech University University of Houston University of North Texas The University of Texas at Arlington and The University of Texas at Austin) meet the criteria for DoctoralResearch Universitiesmdash
Extensive In 2005 however the classifi cation structure returned to a more restricted top tier of institutions classifi ed as ldquoResearch Universities (very high research activity)rdquo Both The University of Texas at Austin and Texas AampM University are now counted in this category but any reference to Tier One usually refers to the 1994 Carnegie Classifi cation
Q What is the space model What is the base number of square feet needed
A In 1992 the Texas Higher Education Coordinating Board approved the Space Projection Model for Higher Education Institutions in Texas for public universities to assess the net assignable square feet (NASF) of educational and general space an institution needs There are fi ve categories incorporated into the model teaching library research offi ce and support space Space needs for auxiliary purposes such as dormitories or athletics are not included in the model Square footage amounts are assigned based on a number of elements within each category including the number of students and their program levels and the amount of research expenditures The space model was fi rst incorporated into the funding formulas for general academic institutions in 1997
Q What are ldquoOrganized Activitiesrdquo
A General academic institutions have a funding strategy titled ldquoOrganized Activitiesrdquo These are activities or enterprises that are connected with instructional departments Th ey are intended primarily to give training to students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training
Q What are tuition revenue bonds
A Established in 1971 under Education Code 5513 tuition revenue bonds are bonds (not to exceed 50 years) issued by institutions of higher education for the purpose of ldquoproviding funds to acquire purchase construct improve enlarge andor equip any property buildings structures activities services operations or other facilities for and on behalf of its institution or institutions or any branch of branches thereofrdquo Each institutionsystem is authorized and required to pay debt service on its bonds Although the authorization and issuance of the bonds is not contingent on an appropriation by the state for related debt service the Legislature has provided General Revenue Funds to reimburse institutions for costs related to debt service However in the 2004ndash05 GAA the legislature changed this practice and only provided General Revenue Fund reimbursements for interest
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 28
APPENDIX A FREQUENTLY ASKED QUESTIONS
on bonds issued after March 31 2003 The 2006ndash07 GAA renewed the practice of reimbursing institutions for the costs related to debt service The 2008ndash09 GAA and 2010-11 GAA continues this practice
Q What Is Proportionality
A Pursuant to Section 608 of Article IX of the 2012ndash13 GAA the legislative intent of proportionality is to ldquomaximize balances in the General Revenue Fundrdquo by harmonizing salary funding source with benefits funding source Th is effectively means the Legislature limits its General Revenue Fund contributions for benefits only to those employees having salaries paid with General Revenue Funds As such proportionality requires employee health and retirement benefits be paid in ldquoproportionrdquo to the funding source of salaries To this end institutions are obligated to submit the Accounting Policy Statement 011 Benefits Proportional by Fund (APS 011) report to the Comptroller Th is document provides a structure by which state and local contributions are ldquosettled uprdquo in light of the fiscal years fund proportionality
Q What Is the National Research University Fund
A In 1995 the Texas Constitution was amended to authorize the creation and funding of the Permanent Higher Education Fund (PHEF) The PHEF was intended eventually to become a permanent endowment to support non-Permanent University Fund eligible institutions However the PHEF corpus was rededicated with the voter passage of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) In 2009 Proposition 4 transferred the balance of the PHEF to the credit of the NRUF as of January 1 2010 and repealed the constitutional authorization for the PHEF
The NRUF is intended to provide a source of funding to enable emerging research universities in Texas to achieve national prominence as major research universities Article VII of the Texas Constitution authorizes the Legislature to appropriate some or all of the total return on all investment assets of the NRUF for the purposes of the fund except for two caveats (1) the Legislature may not increase distributions from the fund if the purchasing power of investment assets for any rolling 10-year period is not preserved and (2) the amount appropriated from the proceeds of the NRUF corpus in any fiscal year must be capped at 7 percent of the investment assetsrsquo average net fair market value Until the NRUF has been invested long enough to determine its purchasing power over a 10-year period the Legislature is
authorized to use other means of preserving the purchasing power of the fund
House Bill 1000 Eighty-second Legislature Regular Session 2011 establishes the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution is designated as an emerging research university within the THECBrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fiscal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of institutionrsquos research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 29
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 30
APPENDIX B TUITION AND FEE PROVISIONS
VTCA Texas Education Code Section 54003 states No institution of higher education may collect from students attending the institution any tuition fee or charge of any kind except as permitted by lawhellip
The laws governing tuition and fees at institutions of higher education are found in Education Code Section 54 including a limited number of rules that relate to tuition and fees charged by junior and community colleges Education Code Section 54 includes statutes regarding statewide tuition and fee authority rules regarding residency for tuition and fee purposes and various exemptions for tuition and fees from nonresidency status Also it includes specific fee authority for individual institutions Figure B1 provides a listing of tuition and fee authorizations in Education Code Section 54 but does not include the items presented below or the various exemption and waiver provisions (Details about each provision can be found at httpwwwcapitolstate txus) Th ere are isolated instances outside Chapter 54 whereby the boards of regents are authorized to charge for specific services provided to students
This appendix highlights some of the more prominent tuition and fee provisions and indicates whether the related revenue is or is not included in the General Appropriations Act (GAA)
INCLUDED IN THE GENERAL APPROPRIATIONS ACT Tuition and fee revenue included in the GAA as General Revenue DedicatedndashFunds is referenced as ldquoOther Education and General Incomerdquo The amounts are ldquoEstimatedrdquo so whatever amount of revenue generated is the actual amount available to the institution to spend
54051 Tuition Rates (statutory tuition) In conjunction with Section 540512 Interim Tuition Rates resident tuition for undergraduate students reached $50 per semester credit hour in the 2005ndash06 academic year (the 2006 state fi scal year) Tuition for nonresident students at general academic medical and dental institutions is based on the average of nonresident tuition rates in the five most populous states other than Texas The Texas Higher Education Coordinating Board must make this computation each academic year
54008 Tuition Rate Set by Governing Board (also known as board authorized tuition) Applies to graduate programs Subsection (d) specifies that it is not to be used in the GAA as an offset to General Revenue Funds It is distributed across formula strategies after the formula calculation
54501 Laboratory Fees The fee amount must be sufficient to cover the general costs of laboratory materials and supplies used by a student It is not to be less than $2 or more than $30 per semester and it must not exceed the actual cost of materials and supplies
NOT INCLUDED IN THE GENERAL APPROPRIATIONS ACT 540513 Designated Tuition Statute defi nes designated tuition as an institutional fund which means the revenue is not considered part of ldquoeducational and general fundsrdquo Th e governing board can waive designated tuition for a student (see 54261) Statute specifies that this revenue not be used in the GAA as a way to offset General Revenue
54503 Student Services Fees This is intended for activities which are separate from the regularly scheduled academic functions of the institution and directly involve or benefi t students Except for The University of Texas at Austin (see 54513) and components of the University of Houston System (see 545061) the maximum of all compulsory student services cannot exceed $250 per semester It is kept separate from educational and general funds
54504 Incidental Fees The governing board sets the fee which must reasonably reflect the actual cost of the materials or services for which the fee is collected Examples of unearned fees include late registration library fi nes microfilming fees thesis or doctoral manuscript reproduction or filing fees and bad check charges
5516 Board Responsibility The governing board is authorized to ldquofix and collect rentals rates and chargesrdquo
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 31
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54006 Refund or Adjustment of Tuition and Mandatory Fees for Dropped Courses and Student Withdrawals
540065 Tuition Rebate for Certain Undergraduates
54007 Option to Pay Tuition by Installment
540071 Authority of Institution to Provide Payment Options for Student with Delayed Financial Aid
54009 Increase in Tuition Rate or Fees
54010 Reduction in Tuition
54011 Tuition Limit in Cases of Concurrent Enrollment
54012 Tuition Rates for Certain Doctoral Students
54014 Tuition for Repeated or Excessive Undergraduate Hours
54015 Billing and Notifi cation for Tuition
54016 Fixed Tuition Rate Program for Certain Transfer Students at General Academic Teaching Institutions
54052ndash54057 Residency Provisions
542031 Dependent Children of Residents Who are Members of Armed Forces Deployed on Combat Duty
54204 Children of Disabled Firefighters and Law Enforcement Officers
542041 Disabled Peace Officers
54205 Blind Deaf Students
54206 Foreign Service Officers
54208 Firefighters Enrolled in Fire Science Courses
542081 Peace Officers Enrolled in Certain Courses
54211 Faculty and Dependents
54212 Teaching and Research Assistant
54213 Scholarship Student
54214 Biomedical Research Program Scholarship Student
54221 The University of Texas System Science and Technology Development Management and Transfer
54222 Economic Development and Diversification
54223 Tuition Rates for Olympic Athletes
54231 Resident of Boarding State or Nation or Participant in Student Exchange Program Tuition
54232 NATO Agreement
54233 Academic Common Market
54241 Military Personnel and Dependents
54331 Students from other Nations of the American Hemisphere
54341 Veterans and Other Military Personnel Dependents
54342 Prisoners of War
54343 Children of Prisoners of War or Persons Missing in Action
54344 Participants in Military Funerals
54345 Assistance for Tuition and Fees for Members of State Military Forces
54351 Children of Disabled Firefighters and Law Enforcement Officers
54352 Disabled Peace Officers Optional Exemption
54353 Firefighters and Peace Officers Enrolled in Certain Courses
543531 Firefighters Enrolled in Fire Science Courses
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 32
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54354 Education Benefits for Certain Survivors
54355 Children of Professional Nursing Program Faculty
54356 Preceptors for Professional Nursing Education Programs
54363 Educational Aids
54364 Blind Deaf Students
54365 Senior Citizens Optional Benefit
545011 Charges and Fees for Certain Payments
54502 General Deposits
545021 Student Deposit Fund Composition and Uses
545025 Proration of Fees
545031 Student Fee Advisory Committee
545032 Student Fee Advisory Committee the Texas AampM University System
545041 Environmental Service Fee
54505 Vehicle Registration Fees and Other Fees Related to Parking and Traffic
54506 Fees and Charges for Services to the Public the University of Houston System
545061 Student Services Fees the University of Houston System
545062 Student Fees Advisory Committee the University of Houston System
54507 Group Hospital and Medical Services Fees Texas AampM University System
54508 Medical Services Fee Texas Tech University System Components
545081 Medical Services Fee University of North Texas System Institutions
545082 Medical Services Fee Midwestern State University
545085 Medical Services Fee Texas Womanrsquos University
545089 Medical Services Fee Texas State University System Components
5450891 Medical Services Fee The University of Texas System Components
54509 Student Recreation Fee Texas Tech University System Components
545091 Student Recreational Facility Fee University of North Texas
54510 Student Recreational Sports Fee The University of Texas at Austin
54511 Student Fees for Bus Service Texas State University
545111 Environmental Service Fee Southwest Texas State University
54512 Shuttle Bus Fee The University of Texas at Arlington
545121 Intercollegiate Athletic Fee The University of Texas at Arlington
545122 Recreational Facility Fee The University of Texas at Arlington
54513 Student Service Fees The University of Texas at Austin
545131 International Education Fee The University of Texas at Austin
545132 International Education Fee
545133 Martin Luther King Jr Statue Fee The University of Texas at Austin
545134 Washington DC Internship Education Fee
545135 Barbara Jordan and Cesar Chavez Statues Fee The University of Texas at Austin
54515 Student Union Fee
54518 University Center Fee Midwestern State University
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 33
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54519 Student Union Fee North Texas State University
545191 Intercollegiate Athletic Fee University of North Texas
54520 University Center Student Fee Stephen F Austin State University
545201 Recreational Sports Fee Stephen F Austin State University
54521 Student Center Facility Fees Texas AampM University System
54522 Student Center Fees Texas Southern University
545221 Recreational Facility Fee Texas Southern University
545222 Medical Services Fee Texas Southern University
545223 Intercollegiate Athletics Fee Texas Southern University
54523 Student Center Fees Texas State University System
545241 Student Union Fees Texas Tech University System
54525 Fees for Student Centers Texas Womanrsquos University
545251 Student Fitness and Recreational Fee Texas Womanrsquos University
54526 Student Fees for University Centers the University of Houston
54527 Student Fees for University Center Facilities the University of Houston-Downtown College
54528 Recreational Facility Fee the University of Houston
54529 Student Union Fee The University of Texas at Arlington
54530 Student Union Fees The University of Texas at Austin
54531 Student Union Building Fees The University of Texas at Dallas
545311 Transportation Fee The University of Texas at Dallas
545312 Student Services Building Fee The University of Texas at Dallas
545313 Intramural and Intercollegiate Athletics Fee The University of Texas at Dallas
54532 Student Union Building Fees The University of Texas at San Antonio
545321 Transportation Fee The University of Texas at San Antonio
545322 Intercollegiate Athletics Fee The University of Texas at San Antonio
54533 Student Union Fees The University of Texas of the Permian Basin
545331 Intercollegiate Athletic Fee The University of Texas of the Permian Basin
545332 Fees for Student Services Building The University of Texas of the Permian Basin
54534 Arts and Performance Center Fee The University of Texas at Tyler
545341 Student Recreational Facility Fee The University of Texas at Tyler
545342 Intercollegiate Athletics Fee The University of Texas at Tyler
545343 Student Union Fee The University of Texas at Tyler
54535 Student Union Fee The University of Texas at El Paso
54536 Fees for Student Health Services Building The University of Texas at Austin
54537 Fees for Student Services Building The University of Texas at Austin
545371 Gregory Gymnasium Renovation Fee The University of Texas at Austin
545372 Aquatics Center Fee The University of Texas at Austin
54538 Recreational Sports Fee Texas State University System
545381 Intercollegiate Athletics Fee Certain Institutions in Texas State University System
545382 Intercollegiate Athletics Fee Texas State University ndash San Marcos
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 34
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54539 Recreational Sports Fee the Texas AampM University System
545391 Intercollegiate Athletics Fee Texas AampM University ndash Corpus Christi
545392 Intercollegiate Athletics Fee Texas AampM University ndash Kingsville
545393 Intercollegiate Athletics Fee Prairie View AampM University
545394 Intercollegiate Athletics Fee Tarleton State University
545395 Intercollegiate Athletics Fee Texas AampM International University
545396 Intercollegiate Athletics Fees West Texas AampM University
545397 Intercollegiate Athletics Fees Texas AampM University ndash Commerce
545398 Student Endowment Fund Fee Texas AampM University ndash Corpus Christi
54540 Student Center Fee University of Houston ndash Clear Lake
54541 Recreational Facility Fee The University of Texas at El Paso
54542 Student Union Building Fee The University of Texas ndash Pan American
545421 Sports Recreation and Wellness Facility Fee The University of Texas ndash Pan American
54543 Recreational Facility Fee The University of Texas at San Antonio
54544 Recreational Facility Fee The University of Texas at Dallas
545441 Student Recreational and Health Facilities Fee Midwestern State University
545442 Intercollegiate Athletics Fee Midwestern State University
54545 Fees for Continuing Education Courses
54546 Student Union Fees The University of Texas at Brownsville
54550 Wellness Recreational and Fitness Complex Fee The University of Texas at Brownsville
54551 Intercollegiate Athletics Fee The University of Texas at Brownsville
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 35
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 36
APPENDIX C GLOSSARY
APPROPRIATION METHODOLOGIES Direct Appropriation The actual appropriation either estimated or sum certain listed in that institutionrsquos portion of the General Appropriations Act (GAA)
Indirect Appropriation An appropriation made on behalf of an institution but not listed in that institutionrsquos portion of the GAA Examples include appropriations to the Available University Fund the Higher Education Fund and the Higher Education Coordinating Board all of which are ultimately allocated to institutions
Estimated Appropriation An estimated appropriation is a figure in the GAA that best reflects the information available about the revenue source but the amount available for an institution to spend is contingent on the amount of revenue actually generated If the actual amount of revenue is less than the estimated amount the institution is limited to the lower amount If more revenue is generated than the estimated amount the institution can spend the higher amount
Sum Certain Appropriation A sum certain appropriation in the GAA means that an institution is limited to spend no more than the level of appropriation noted in the institutionrsquos bill pattern in the GAA
Lump Sum Appropriation Texas Education Code Section 61059(k) calls for flexibility in funds appropriated to higher education institutions A lump sum appropriation is a single amount that is unrestricted which means that it can be used for any variety of strategies The GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Higher education institutions are not required to spend their appropriation within specified strategies One exception to this is the Tuition Revenue Bond strategy which represents the appropriation related to debt service on related bonds and must be spent as appropriated or it is reverted to the treasury
METHODS OF FINANCE General Revenue (GR) The non-dedicated portion of the General Revenue Fund is the statersquos primary operating fund Most state tax revenue many state fees and various other sources of revenue are deposited as non-dedicated General Revenue Funds
General RevenuendashDedicated (GRndashD) This is the dedicated portion of General Revenue Funds For higher education institutions the bulk of General RevenuendashDedicated Fund appropriations consist of tuition and fee revenue generated by the institutions These include the tuition and fee revenue included as ldquoOther Educational and General Incomerdquo (defined below) ldquoboard authorized tuitionrdquo (Texas Education Code Section 54008)
Other Funds State funds not included in General Revenue Funds or General RevenuendashDedicated Funds For institutions of higher education these include the Available University Fund and Patient Income generated by health-related institutions
FUND TYPES Educational and General Income Th e Texas Education Code (51009(c)) definition for ldquoEducational and General Fundsrdquo includes (a) net tuition (b) special course fees charged under Education Code Section 54051(e) and (l) (c) lab fees (d) student teaching fees (e) hospital and clinic fees (f ) organized activity fees and (g) proceeds from the sale of educational and general equipment
Institutional Funds Texas Education Code Section 51009(b) defines institutional funds as those that are not ldquoeducational and general fundsrdquo An example of an institutional fund is ldquodesignated tuitionrdquo (Texas Education Code Section 540513) These funds are not included in the GAA
Local Funds Texas Education Code Section 51009(a) defines local funds as net tuition certain special course fees lab fees student teaching fees hospital and clinic fees organized activity fees proceeds from the sale of educational and general equipment and indirect cost recovery fees Th is revenue is accounted for as ldquoeducational and general fundsrdquo and is included in the GAA
Other Educational and General Income The GAA includes some tuition and fees collected by institutions of higher education (General RevenuendashDedicated Funds) Th e revenue from tuition and fees such as statutory tuition (see texas Education Code Section 54051 Tuition Rates) board authorized tuition (see Texas Education Code Section 54008 Tuition Rate Set by Governing Board) Laboratory
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 37
APPENDIX C GLOSSARY
Fees (Texas Education Code Section 54501) and certain other fees are considered Other Educational and General Income (Other EampG) and are appropriated in the GAA as General RevenuendashDedicated Funds Other Educational and General Income is a subset of Educational and General Income (EampG Income)
Patient Income Health-related institutions that operate hospitals or dental clinics generate patient income from services rendered It is allocated as a method of finance to the related institution across a range of strategies in the institutionrsquos bill pattern (Other Funds) For the 2010ndash11 biennium more than $48 billion in patient income was appropriated making it the largest method of fi nance for health-related institutions
OTHER ITEMS Indirect Cost Recovery Institutions negotiate a percentage of a grant with the federal government for Indirect Costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 38
FI
GU
RE
D1
CO
MPA
RIS
ON
OF
CO
NST
ITU
TIO
NA
L A
ND
RES
EARC
H F
UN
DS
201
2ndash13
BIE
NN
IUM
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Avai
labl
e $1
061
4 m
illio
nTe
xas
Con
stitu
tion
hellip
for
Texa
s C
onst
itutio
nU
nive
rsity
the
purp
ose
of a
cqui
ring
Fund
(E
stim
ated
) la
nd
con
stru
ctin
g an
dFo
r su
ppor
t and
equi
ppin
g bu
ildin
gsm
aint
enan
ce
UT
Aus
tin
or o
ther
per
man
ent
Texa
s A
ampM
Uni
vers
ity
impr
ovem
ents
maj
orP
rairi
e Vi
ew U
nive
rsity
UT
repa
ir an
d re
habi
litat
ion
Sys
tem
Aamp
M S
yste
mof
bui
ldin
gs a
nd o
ther
perm
anen
t im
prov
emen
ts
For d
ebt s
ervi
ce
All
acqu
iring
cap
ital
com
pone
nts
incl
udin
g th
eeq
uipm
ent a
nd li
brar
yTA
MU
Sys
tem
Age
ncie
s bo
oks
and
libra
ryex
cept
Tex
as V
eter
inar
y m
ater
ials
and
refu
ndin
gM
edic
al D
iagn
ostic
bond
s or
not
es is
sued
Labo
rato
ry (w
hich
per
unde
r thi
s S
ectio
n
Edu
catio
n C
ode
Sec
tion
887
01 i
s a
stat
e ag
ency
Als
o
for
the
purp
ose
unde
r the
juris
dict
ion
of th
e su
ppor
t and
and
supe
rvis
ion
of th
em
aint
enan
ce o
f The
Tex
as
boar
d)
and
excl
udin
gA
ampM
Uni
vers
ity S
yste
mU
T P
an A
mer
ican
and
UT
adm
inis
tratio
n T
exas
Aamp
M
Bro
wns
ville
(bec
ause
they
Uni
vers
ity a
nd P
rairi
e re
ceiv
e H
EF
allo
catio
ns -
View
Aamp
M U
nive
rsity
and
an
inst
itutio
n ca
nnot
rece
ive
The
Uni
vers
ity o
f Tex
as a
t bo
th A
UF
and
HE
F do
llars
) A
ustin
and
The
Uni
vers
ity
of T
exas
Sys
tem
Hig
her
$525
0 m
illio
nTo
sup
port
inst
itutio
ns
Arti
cle
VII
Sec
tion
17(c
)E
duca
tion
inel
igib
le fo
r AU
F su
ppor
t pr
ovid
es a
n al
low
ance
toFu
nd
add
a ne
w in
stitu
tion
by a
Arti
cle
VII
Sec
tion
23
vote
of b
oth
hous
es o
f17
(a)
fo
r the
pur
pose
the
Legi
slat
ure
if th
e ne
wof
acq
uirin
g la
nd
inst
itutio
n is
out
side
the
UT
cons
truct
ing
and
equi
ppin
gan
d A
ampM
Sys
tem
s
build
ings
m
ajor
repa
ir
acq
uisi
tion
of c
apita
leq
uipm
ent
oth
erpe
rman
ent i
mpr
ovem
ents
or
cap
ital e
quip
men
t use
djo
intly
for e
duca
tiona
l and
gene
ral a
ctiv
ities
Arti
cle
VII
Sec
tion
18(a
-j) o
f the
Tex
as
Con
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Arti
cle
VII
Sec
tion
17(a
-l) o
f the
Tex
as
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
620
02
Gen
eral
App
ropr
iatio
nsA
ct
Texa
s C
onst
itutio
n re
quire
s 1
3 of
the
annu
al
AU
F pr
ocee
ds b
e tra
nsfe
rred
to th
e Te
xas
Aamp
M U
nive
rsity
Sys
tem
E
ach
Sys
tem
offi
cede
term
ines
how
to a
ppor
tion
its s
hare
of t
heA
UF
betw
een
debt
ser
vice
and
sup
port
and
mai
nten
ance
w
ithin
gui
delin
es s
pecifi e
d by
the
Texa
s C
onst
itutio
n
Arti
cle
VII
Sec
tion
17(a
) req
uire
s th
e H
EF
beal
loca
ted
usin
g an
equ
itabl
e fo
rmul
a d
efi n
edin
the
Edu
catio
n C
ode
(Sec
tion
620
21) a
sT
he a
lloca
tion
of fu
nds
unde
r thi
s su
bsec
tion
ism
ade
in a
ccor
danc
e w
ith a
n eq
uita
ble
form
ula
cons
istin
g of
the
follo
win
g el
emen
ts
spac
e defi c
it fa
cilit
ies
cond
ition
ins
titut
iona
l com
plex
ity
and
a se
para
te a
lloca
tion
for
the
Texa
s S
tate
Te
chni
cal C
olle
ge S
yste
m
THE
CB
adm
inis
ters
the
HE
F fo
rmul
a re
allo
catio
nad
viso
ry p
roce
ss
Edu
catio
n C
ode
(Sec
tion
620
21) p
rovi
des
a by
-in
stitu
tion
brea
kout
of a
nnua
l HE
F ap
prop
riatio
ns
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 39
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Nat
iona
l $1
24
mill
ion
Res
earc
hU
nive
rsity
(E
stim
ated
)Fu
nd
Res
earc
h $6
53
mill
ion
Dev
elop
men
tFu
nd
Texa
s $9
35
mill
ion
Com
petit
ive
Kno
wle
dge
Fund
Arti
cle
VII
Sec
tion
20(a
)
for t
he p
urpo
se o
f pr
ovid
ing
a de
dica
ted
inde
pend
ent
and
equi
tabl
eso
urce
of f
undi
ng to
enab
le e
mer
ging
rese
arch
univ
ersi
ties
in th
is s
tate
to a
chie
ve n
atio
nal
prom
inen
ce a
s m
ajor
rese
arch
uni
vers
ities
Arti
cle
VII
Sec
tion
20 (h
)
onl
y fo
r the
sup
port
and
mai
nten
ance
of
educ
atio
nal a
nd g
ener
alac
tiviti
es th
at p
rom
ote
incr
ease
d re
sear
chca
paci
ty a
t the
uni
vers
ity
Edu
catio
n C
ode
Sec
tion
hellipto
pro
mot
e62
091
in
crea
sed
rese
arch
capa
city
at e
ligib
le g
ener
alac
adem
ic te
achi
ngin
stitu
tions
Sec
tion
56 o
f Hig
her
Edu
catio
n S
peci
alP
rovi
sion
s G
AA
201
2ndash13
bi
enni
um
hellipto
sup
port
facu
lty fo
r the
pur
pose
of
inst
ruct
iona
l exc
elle
nce
and
rese
arch
Des
igna
ted
an e
mer
ging
rese
arch
uni
vers
ity b
yTe
xas
Hig
her E
duca
tion
Coo
rdin
atin
g B
oard
R
epor
ts a
t lea
st $
45 m
illio
nin
rest
ricte
d re
sear
chex
pend
iture
s in
eac
h of
the
last
2 y
ears
P
lus
four
of t
he fo
llow
ing
addi
tiona
l crit
eria
1)
End
owm
ents
gt $
400
mill
ion
2) P
rodu
ces
gt 20
0 P
hDs
per y
ear
3) S
elec
tive
ente
ring
Fres
hmen
cla
ss
4) M
embe
r of P
hi B
eta
Kap
pa o
r equ
ival
ent
5) P
osse
sses
hig
h qu
ality
facu
lty a
nd6)
Dem
onst
rate
dco
mm
itmen
t to
high
-qua
lity
grad
uate
edu
catio
n
Edu
catio
n C
ode
Sec
tion
Elig
ible
inst
itutio
n62
092
m
eans
a g
ener
al a
cade
mic
teac
hing
inst
itutio
n a
sdefi n
ed b
y S
ectio
n 61
003
ot
her t
han
The
Uni
vers
ity o
f Te
xas
at A
ustin
Tex
as A
ampM
U
nive
rsity
or P
rairi
e Vi
ew
Aamp
M U
nive
rsity
Uni
vers
ity o
f Tex
as a
t A
ustin
Uni
vers
ity o
f Tex
as
at D
alla
s T
exas
Aamp
M
Uni
vers
ity T
exas
Tec
h U
nive
rsity
Uni
vers
ity o
f H
oust
on
Arti
cle
VII
Sec
tion
20 (a
-h)
of th
e Te
xas
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
621
41
Gen
eral
App
ropr
iatio
nA
ct
Edu
catio
n C
ode
Sec
tion
Not
e th
e62
091
RD
F as
a s
tand
-alo
neap
prop
riatio
n ite
m h
asno
t bee
n fu
nded
sin
ceth
e 20
06ndash0
7 bi
enni
um
How
ever
fun
ds c
alle
d th
e R
DF
have
bee
nap
prop
riate
d di
rect
lyin
to th
e bi
ll pa
ttern
s of
each
elig
ible
Gen
eral
Aca
dem
ic In
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Edu
catio
n C
ode
Sec
tion
621
46 (c
)
o
fth
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for
dist
ribut
ion
in a
sta
tefi s
cal y
ear
each
elig
ible
in
stitu
tion
is e
ntitl
ed to
a d
istri
butio
n in
an
amou
nteq
ual t
o th
e su
m o
fon
e-se
vent
h of
the
tota
l am
ount
app
ropr
iate
d(1
)an
dan
equ
al s
hare
of a
ny a
mou
nt re
mai
ning
afte
r(2
)di
strib
utio
ns a
re c
alcu
late
d un
der S
ubdi
visi
on (1
)no
t to
exce
ed a
n am
ount
equ
al to
one
-four
th o
fth
at re
mai
ning
am
ount
Edu
catio
n C
ode
Sec
tion
621
46 (e
)If
the
num
ber o
f ins
titut
ions
that
are
elig
ible
for
dist
ribut
ions
in a
sta
tefi s
cal y
ear i
s m
ore
than
four
eac
h el
igib
le in
stitu
tion
is e
ntitl
ed to
an
equa
l sh
are
of th
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for d
istri
butio
n in
thatfi s
cal y
ear
Edu
catio
n C
ode
Sec
tion
620
95
The
am
ount
shal
l be
appo
rtion
ed a
mon
g th
e el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of
rest
ricte
d re
sear
ch fu
nds
expe
nded
by
each
inst
itutio
n pe
r yea
r for
the
thre
e pr
eced
ing
stat
efi s
cal y
ears
The
2012
ndash13
appr
opria
tion
prov
ided
abo
ut $
07
mill
ion
to e
ach
elig
ible
inst
itutio
n fo
r eve
ry $
100
mill
ion
in u
nres
trict
ed re
sear
ch e
xpen
ditu
res
asav
erag
ed o
ver a
3-y
ear p
erio
d
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 40
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Res
earc
h N
one
U
nive
rsity
D
evel
opm
ent
Fund
Texa
s $3
56
mill
ion
Res
earc
hIn
cent
ive
Pro
gram
SO
UR
CE L
egis
lativ
e B
udge
t Boa
rd
Texa
s E
duca
tion
Cod
e S
ectio
n 62
051
to
pro
vide
fund
ing
tore
sear
ch u
nive
rsiti
esan
d em
ergi
ng re
sear
chun
iver
sitie
s fo
r the
recr
uitm
ent a
nd re
tent
ion
of h
ighl
y qu
alifi
ed fa
culty
an
d th
e en
hanc
emen
t of
rese
arch
pro
duct
ivity
at
thos
e un
iver
sitie
s
Edu
catio
n C
ode
Sec
tion
hellipto
pro
vide
621
22
mat
chin
g fu
nds
to a
ssis
tel
igib
le in
stitu
tions
inle
vera
ging
priv
ate
gifts
for t
he e
nhan
cem
ent o
fre
sear
ch p
rodu
ctiv
ity a
ndfa
culty
recr
uitm
ent
Edu
catio
n C
ode
Sec
tion
620
51
Elig
ible
inst
itutio
nm
eans
an
inst
itutio
nof
hig
her e
duca
tion
desi
gnat
ed a
s a
rese
arch
univ
ersi
ty o
r em
ergi
ngre
sear
ch u
nive
rsity
und
erth
e co
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
E
ligib
le62
121
in
stitu
tion
mea
ns a
nin
stitu
tion
of h
ighe
red
ucat
ion
desi
gnat
ed a
san
em
ergi
ng re
sear
chun
iver
sity
und
er th
eco
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
620
51
Edu
catio
n C
ode
Sec
tion
(Hou
se B
ill 5
162
121
Eig
hty-fi r
st R
egul
ar
Ses
sion
)
Edu
catio
n C
ode
Sec
tion
620
53
t
o el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of t
otal
rese
arch
fund
s ex
pend
ed b
y ea
ch in
stitu
tion
annu
ally
dur
ing
the
thre
e m
ost r
ecen
t sta
tefi s
cal
year
s a
ccor
ding
to th
e fo
llow
ing
rate
s
at le
ast $
1 m
illio
n fo
r eve
ry $
10 m
illio
n of
(1)
the
aver
age
annu
al a
mou
nt o
f tho
se re
sear
chfu
nds
expe
nded
by
the
inst
itutio
n if
that
ave
rage
amou
nt fo
r the
inst
itutio
n is
$50
mill
ion
or m
ore
and
at le
ast $
500
000
for e
very
$10
mill
ion
of(2
)th
e av
erag
e an
nual
am
ount
of t
hose
rese
arch
fund
s ex
pend
ed b
y th
e in
stitu
tion
if th
at a
vera
geam
ount
for t
he in
stitu
tion
is le
ss th
an $
50 m
illio
n
Edu
catio
n C
ode
Sec
tion
621
23
hellipis
ent
itled
to re
ceiv
e o
ut o
f fun
ds a
ppro
pria
ted
for t
hepu
rpos
es o
f the
pro
gram
for t
hatfi
sca
l yea
r a
mat
chin
g gr
ant i
n an
am
ount
det
erm
ined
acco
rdin
g to
the
follo
win
g ra
tes
50 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(1)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$10
000
0 or
mor
e bu
t not
mor
eth
an $
999
999
75 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(2)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$1
mill
ion
or m
ore
but n
ot m
ore
than
$1
999
999
or
100
perc
ent o
f the
am
ount
of t
he g
ifts
and
(3)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$2
mill
ion
or m
ore
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 41
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 42
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $50119391873 $47339213388 ($2780178485) (55)
School for the Blind and Visually Impaired 93388870 41245345 (52143525) (558)
School for the Deaf 53083657 52695245 (388412) (07)
SUBTOTAL PUBLIC EDUCATION $50265864400 $47433153978 ($2832710422) (56)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1745695460 $1749380723 $3685263 02
Lamar Institute of Technology 27568721 28708990 1140269 41
Lamar University ndash Orange 18484576 19164769 680193 37
Lamar University ndash Port Arthur 23780405 22119709 (1660696) (70)
SUBTOTAL LAMAR STATE COLLEGES $69833702 $69993468 $159766 02
Texas State Technical College System $16493826 $5351461 ($11142365) (676) Administration
Texas State Technical College ndash Harlingen 50980986 49093510 (1887476) (37)
Texas State Technical College ndash West Texas 27965791 24970291 (2995500) (107)
Texas State Technical College ndash Marshall 11434368 10995468 (438900) (38)
Texas State Technical College ndash Waco 68111562 73596786 5485224 81
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$174986533 $164007516 ($10979017) (63)
SUBTOTAL TWO-YEAR INSTITUTIONS $1990515695 $1983381707 ($7133988) (04)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $19099360 $18147200 ($952160) (50)
The University of Texas at Arlington 275081581 288654156 13572575 49
The University of Texas at Austin 749518863 702739665 (46779198) (62)
The University of Texas at Dallas 230535884 223513862 (7022022) (30)
The University of Texas at El Paso 202195230 195511098 (6684132) (33)
The University of Texas ndash Pan American 169039177 162830092 (6209085) (37)
The University of Texas at Brownsville 61910963 57628718 (4282245) (69)
The University of Texas of the Permian Basin 58194080 59145561 951481 16
The University of Texas at San Antonio 273182023 260495772 (12686251) (46)
The University of Texas at Tyler 71137295 66147545 (4989750) (70)
Texas AampM University System Administrative and 20701573 4501868 (16199705) (783) General Offices
Texas AampM University 700537434 651599219 (48938215) (70)
Texas AampM University at Galveston 43799673 37773622 (6026051) (138)
Prairie View AampM University 134247361 122639379 (11607982) (86)
Tarleton State University 87292499 83950084 (3342415) (38)
Texas AampM University ndash Central Texas 29460313 30599703 1139390 39
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 43
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Corpus Christi $121534331 $110283074 ($11251257) (93)
Texas AampM University ndash Kingsville 82466491 75368253 (7098238) (86)
Texas AampM University ndash San Antonio 27154411 37125363 9970952 367
Texas AampM International University 83231209 73816324 (9414885) (113)
West Texas AampM University 79410486 72847023 (6563463) (83)
Texas AampM University ndash Commerce 99558312 89920628 (9637684) (97)
Texas AampM University ndash Texarkana 41409091 34754968 (6654123) (161)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 450003385 394815403 (55187982) (123)
University of Houston ndash Clear Lake 83394543 71849633 (11544910) (138)
University of Houston ndash Downtown 88104670 67926822 (20177848) (229)
University of Houston ndash Victoria 42631672 39786959 (2844713) (67)
Midwestern State University 54249721 48828454 (5421267) (100)
University of North Texas System Administration 9789067 6732226 (3056841) (312)
University of North Texas 302350602 296355351 (5995251) (20)
University of North Texas at Dallas 35156605 30478388 (4678217) (133)
Stephen F Austin State University 121843336 108728674 (13114662) (108)
Texas Southern University 174127907 150903873 (23224034) (133)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 368026094 357056343 (10969751) (30)
Angelo State University 68450875 64053866 (4397009) (64)
Texas Womans University 146639127 135140923 (11498204) (78)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 121909453 111926905 (9982548) (82)
Sam Houston State University 162684291 145338873 (17345418) (107)
Texas State University ndash San Marcos 261940220 254492644 (7447576) (28)
Sul Ross State University 34008142 37804020 3795878 112
Sul Ross State University Rio Grande College 13112804 12127383 (985421) (75)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$6217659551 $5853308379 ($364351172) (59)
HEALTH-RELATED INSTITUTIONS -
The University of Texas Southwestern Medical $339025963 $278284511 ($60741452) (179) Center
The University of Texas Medical Branch at 1252556677 1214546039 (38010638) (30) Galveston
The University of Texas Health Science Center at 356632008 347880533 (8751475) (25) Houston
The University of Texas Health Science Center at 357022348 319153560 (37868788) (106) San Antonio
The University of Texas MD Anderson Cancer 4614023153 5043439860 429416707 93 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 44
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center at $170568794 $176002869 $5434075 32 Tyler
Texas AampM University System Health Science 252705800 241434175 (11271625) (45) Center
University of North Texas Health Science Center 141974215 140131956 (1842259) (13) at Fort Worth
Texas Tech University Health Sciences Center 361096839 333314809 (27782030) (77)
SUBTOTAL HEALTH-RELATED INSTITUTIONS $7845605797 $8094188312 $248582515 32
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $137560226 $130327148 ($7233078) (53)
Texas AgriLife Extension Service 137837443 128253897 (9583546) (70)
Texas Engineering Experiment Station 249008314 268154320 19146006 77
Texas Transportation Institute 96056916 99288013 3231097 34
Texas Engineering Extension Service 164895453 161748713 (3146740) (19)
Texas Forest Service 108765979 196355520 87589541 805
Texas Veterinary Medical Diagnostic Laboratory 32693561 29601103 (3092458) (95)
SUBTOTAL TEXAS AampM UNIVERSITY $926817892 $1013728714 $86910822 94 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 1755022519 1301687813 (453334706) (258)
SUBTOTAL OTHER HIGHER EDUCATION $3339042471 $2900537481 ($438504990) (131)
SUBTOTAL HIGHER EDUCATION $20319641406 $19845144593 ($474496813) (23)
EMPLOYEE BENEFITS
Teacher Retirement System $4038146148 $3797393090 ($240753058) (60)
Optional Retirement Program 294169521 247905975 (46263546) (157)
Higher Education Employees Group Insurance 1068235618 968961950 (99273668) (93) Contributions
Retirement and Group Insurance 61823656 63645693 1822037 29
Social Security and Benefits Replacement Pay 560373470 577908771 17535301 31
SUBTOTAL EMPLOYEE BENEFITS $6022748413 $5655815479 ($366932934) (61)
DEBT SERVICE
Bond Debt Service Payments $7579835 $14567314 $6987479 922
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13483869 $19862644 $6378775 473
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION $76416008567 $72871348360 ($3544660207) (46) 1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 45
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $30322901124 $30476707526 $153806402 05
School for the Blind and Visually Impaired 28830574 29152947 322373 11
School for the Deaf 36111132 36216478 105346 03
SUBTOTAL PUBLIC EDUCATION $30387842830 $30542076951 $154234121 05
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1728790460 $1749380723 $20590263 12
Lamar Institute of Technology 20141881 21363652 1221771 61
Lamar University ndash Orange 13379584 13438359 58775 04
Lamar University ndash Port Arthur 18247526 16676606 (1570920) (86)
SUBTOTAL LAMAR STATE COLLEGES $51768991 $51478617 ($290374) (06)
Texas State Technical College System $16122329 $4603444 ($11518885) (714) Administration
Texas State Technical College ndash Harlingen 35862333 35177742 (684591) (19)
Texas State Technical College ndash West Texas 22972902 20195085 (2777817) (121)
Texas State Technical College ndash Marshall 8795246 8519429 (275817) (31)
Texas State Technical College ndash Waco 48458059 55190076 6732017 139
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$132210869 $123685776 ($8525093) (64)
SUBTOTAL TWO-YEAR INSTITUTIONS $1912770320 $1924545116 $11774796 06
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $16827250 $15931200 ($896050) (53)
The University of Texas at Arlington 171697428 183867794 12170366 71
The University of Texas at Austin 536034384 492544731 (43489653) (81)
The University of Texas at Dallas 142108554 148778381 6669827 47
The University of Texas at El Paso 142521273 137781712 (4739561) (33)
The University of Texas ndash Pan American 115707790 110889522 (4818268) (42)
The University of Texas at Brownsville 51100517 47424781 (3675736) (72)
The University of Texas of the Permian Basin 47639722 48816240 1176518 25
The University of Texas at San Antonio 186961792 178547264 (8414528) (45)
The University of Texas at Tyler 56673893 51804728 (4869165) (86)
Texas AampM University System Administrative 11478504 4473868 (7004636) (610) and General Offices
Texas AampM University 487991523 458011060 (29980463) (61)
Texas AampM University at Galveston 36736318 30964674 (5771644) (157)
Prairie View AampM University 102383638 90923868 (11459770) (112)
Tarleton State University 62999263 59464473 (3534790) (56)
Texas AampM University ndash Central Texas 24007601 25352928 1345327 56
Texas AampM University ndash Corpus Christi 93966271 81624416 (12341855) (131)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 46
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $60610859 $54030202 ($6580657) (109)
Texas AampM University ndash San Antonio 21438200 29287597 7849397 366
Texas AampM International University 67735925 58009521 (9726404) (144)
West Texas AampM University 57622391 53282160 (4340231) (75)
Texas AampM University ndash Commerce 67888967 66581226 (1307741) (19)
Texas AampM University ndash Texarkana 31084147 30370655 (713492) (23)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 311616152 257331674 (54284478) (174)
University of Houston ndash Clear Lake 58807555 46454050 (12353505) (210)
University of Houston ndash Downtown 56441987 39973395 (16468592) (292)
University of Houston ndash Victoria 32315073 27651821 (4663252) (144)
Midwestern State University 37434162 33382015 (4052147) (108)
University of North Texas System Administration 4789067 6732226 1943159 406
University of North Texas 194672599 191274119 (3398480) (17)
University of North Texas at Dallas 30330149 28165402 (2164747) (71)
Stephen F Austin State University 84817662 75640135 (9177527) (108)
Texas Southern University 125878414 104685201 (21193213) (168)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 261015662 253976808 (7038854) (27)
Angelo State University 48095474 45861337 (2234137) (46)
Texas Womans University 104666337 92467100 (12199237) (117)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 77990428 70849905 (7140523) (92)
Sam Houston State University 85061409 79609576 (5451833) (64)
Texas State University ndash San Marcos 168720167 164894925 (3825242) (23)
Sul Ross State University 28832045 32758471 3926426 136
Sul Ross State University Rio Grande College 10662338 9364932 (1297406) (122)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$4333902287 $4078804555 ($255097732) (59)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $286599806 $249279177 ($37320629) (130) Center
The University of Texas Medical Branch at 586704245 472189151 (114515094) (195) Galveston
The University of Texas Health Science Center 278466261 294281302 15815041 57 at Houston
The University of Texas Health Science Center 285919332 260615042 (25304290) (89) at San Antonio
The University of Texas MD Anderson Cancer 316274242 298435072 (17839170) (56) Center
The University of Texas Health Science Center 68656721 71856579 3199858 47 at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 47
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $205234148 $194402799 ($10831349) (53) Center
University of North Texas Health Science Center 120369543 113121832 (7247711) (60) at Fort Worth
Texas Tech University Health Sciences Center 308265168 291713120 (16552048) (54)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$2456489466 $2245894074 ($210595392) (86)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $108442641 $101233060 ($7209581) (66)
Texas AgriLife Extension Service 93421095 84437039 (8984056) (96)
Texas Engineering Experiment Station 27420670 27791758 371088 14
Texas Transportation Institute 1786250 1282500 (503750) (282)
Texas Engineering Extension Service 13423471 12388837 (1034634) (77)
Texas Forest Service 38994278 158979948 119985670 3077
Texas Veterinary Medical Diagnostic Laboratory 12326913 11519113 (807800) (66)
SUBTOTAL TEXAS AampM UNIVERSITY $295815318 $397632255 $101816937 344 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 1324025818 1053522035 (270503783) (204)
SUBTOTAL OTHER HIGHER EDUCATION $1849025818 $1578522035 ($270503783) (146)
SUBTOTAL HIGHER EDUCATION $10848003209 $10225398035 ($622605174) (57)
EMPLOYEE BENEFITS
Teacher Retirement System $3721648969 $3431139479 ($290509490) (78)
Optional Retirement Program 249841016 205341297 (44499719) (178)
Higher Education Employees Group Insurance 1066913010 967556924 (99356086) (93) Contributions
Retirement and Group Insurance 51589368 54070178 2480810 48
Social Security and Benefits Replacement Pay 456936472 471706602 14770130 32
SUBTOTAL EMPLOYEE BENEFITS $5546928835 $5129814480 ($417114355) (75)
DEBT SERVICE
Bond Debt Service Payments $7325020 $14248830 $6923810 945
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13229054 $19544160 $6315106 477
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$46796003928 $45916833626 ($879170302) (19)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 48
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $418569 $649000 $230431 551
School for the Blind and Visually Impaired 0 0 0 NA
School for the Deaf 0 0 0 NA
SUBTOTAL PUBLIC EDUCATION $418569 $649000 $230431 551
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 7026644 7345338 318694 45
Lamar University ndash Orange 4875929 5726410 850481 174
Lamar University ndash Port Arthur 4747409 5443103 695694 147
SUBTOTAL LAMAR STATE COLLEGES $16649982 $18514851 $1864869 112
Texas State Technical College System $371497 $748017 $376520 1014 Administration
Texas State Technical College ndash Harlingen 14268123 13915768 (352355) (25)
Texas State Technical College ndash West Texas 4573311 4775206 201895 44
Texas State Technical College ndash Marshall 2486999 2476039 (10960) (04)
Texas State Technical College ndash Waco 18496312 18406710 (89602) (05)
SUBTOTAL TEXAS STATE TECHNICAL $40196242 $40321740 $125498 03 COLLEGES
SUBTOTAL TWO-YEAR INSTITUTIONS $56846224 $58836591 $1990367 35
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 99544565 104786362 5241797 53
The University of Texas at Austin 203175074 210194934 7019860 35
The University of Texas at Dallas 73902392 74735481 833089 11
The University of Texas at El Paso 54257081 54959386 702305 13
The University of Texas ndash Pan American 50448111 51483144 1035033 21
The University of Texas at Brownsville 10270338 10203937 (66401) (06)
The University of Texas of the Permian Basin 10153771 10329321 175550 17
The University of Texas at San Antonio 78194498 81948508 3754010 48
The University of Texas at Tyler 13686400 14342817 656417 48
Texas AampM University System Administrative 9223069 28000 (9195069) (997) and General Offices
Texas AampM University 194931245 184789626 (10141619) (52)
Texas AampM University at Galveston 6714220 6808948 94728 14
Prairie View AampM University 31863723 31715511 (148212) (05)
Tarleton State University 23018364 24485611 1467247 64
Texas AampM University ndash Central Texas 5452712 5246775 (205937) (38)
Texas AampM University ndash Corpus Christi 26308558 28658658 2350100 89
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 49
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $20743629 $21338051 $594422 29
Texas AampM University ndash San Antonio 5716211 7837766 2121555 371
Texas AampM International University 14449349 15531029 1081680 75
West Texas AampM University 20857129 19564863 (1292266) (62)
Texas AampM University ndash Commerce 29344128 23339402 (6004726) (205)
Texas AampM University ndash Texarkana 4114223 4384313 270090 66
University of Houston System Administration 0 0 0 NA
University of Houston 129680228 137483729 7803501 60
University of Houston ndash Clear Lake 23417549 25395583 1978034 84
University of Houston ndash Downtown 30264387 27953427 (2310960) (76)
University of Houston ndash Victoria 9883366 12135138 2251772 228
Midwestern State University 15912994 15446439 (466555) (29)
University of North Texas System 0 0 0 NA Administration
University of North Texas 100805298 105081232 4275934 42
University of North Texas at Dallas 4826456 2312986 (2513470) (521)
Stephen F Austin State University 35525799 33088539 (2437260) (69)
Texas Southern University 47027769 46218672 (809097) (17)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 98116061 103079535 4963474 51
Angelo State University 17654127 18192529 538402 30
Texas Womans University 40098242 42673823 2575581 64
Texas State University System 0 0 0 NA
Lamar University 37445892 41077000 3631108 97
Sam Houston State University 71500172 65729297 (5770875) (81)
Texas State University ndash San Marcos 88567369 89597719 1030350 12
Sul Ross State University 4941096 5045549 104453 21
Sul Ross State University Rio Grande College 2342952 2762451 419499 179
SUBTOTAL GENERAL ACADEMIC $1744378547 $1759986091 $15607544 09 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $22514152 $18054614 ($4459538) (198) Center
The University of Texas Medical Branch at 23120930 24797153 1676223 72 Galveston
The University of Texas Health Science Center 35777999 35483172 (294827) (08) at Houston
The University of Texas Health Science Center 16488403 17234857 746454 45 at San Antonio
The University of Texas MD Anderson Cancer 48597071 55476185 6879114 142 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 50
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center $512055 $569200 $57145 112 at Tyler
Texas AampM University System Health Science 13306322 24908409 11602087 872 Center
University of North Texas Health Science 12596783 16295862 3699079 294 Center at Fort Worth
Texas Tech University Health Sciences Center 23553492 27695220 4141728 176
SUBTOTAL HEALTH-RELATED $196467207 $220514672 $24047465 122 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $950000 $950000 $0 NA
Texas AgriLife Extension Service 46992 18000 (28992) (617)
Texas Engineering Experiment Station 1785036 904418 (880618) (493)
Texas Transportation Institute 0 0 0 NA
Texas Engineering Extension Service 0 0 0 NA
Texas Forest Service 61388596 28912000 (32476596) (529)
Texas Veterinary Medical Diagnostic Laboratory 0 0 0 NA
SUBTOTAL TEXAS AampM UNIVERSITY SERVICES
$64170624 $30784418 ($33386206) (520)
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 111572621 87256791 (24315830) (218)
SUBTOTAL OTHER HIGHER EDUCATION $111572621 $87256791 ($24315830) (218)
SUBTOTAL HIGHER EDUCATION $2173435223 $2157378563 ($16056660) (07)
EMPLOYEE BENEFITS
Teacher Retirement System $188794770 $209600575 $20805805 110
Optional Retirement Program 44328505 42564678 (1763827) (40)
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 0 0 0 NA
Social Security and Benefits Replacement Pay 82274010 85153600 2879590 35
SUBTOTAL EMPLOYEE BENEFITS $315397285 $337318853 $21921568 70
DEBT SERVICE
Bond Debt Service Payments $0 $0 $0 NA
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $0 $0 $0 NA
TOTAL ARTICLE III ndash AGENCIES OF $2489251077 $2495346416 $6095339 02 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 51
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $13298491946 $10520619770 ($2777872176) (209)
School for the Blind and Visually Impaired 5430126 5855880 425754 78
School for the Deaf 4233990 2921862 (1312128) (310)
SUBTOTAL PUBLIC EDUCATION $13308156062 $10529397512 ($2778758550) (209)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $16905000 $0 ($16905000) (1000)
Lamar Institute of Technology 400196 0 (400196) (1000)
Lamar University ndash Orange 229063 0 (229063) (1000)
Lamar University ndash Port Arthur 785470 0 (785470) (1000)
SUBTOTAL LAMAR STATE COLLEGES $1414729 $0 ($1414729) (1000)
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 850530 0 (850530) (1000)
Texas State Technical College ndash West Texas 419578 0 (419578) (1000)
Texas State Technical College ndash Marshall 152123 0 (152123) (1000)
Texas State Technical College ndash Waco 1157191 0 (1157191) (1000)
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$2579422 $0 ($2579422) (1000)
SUBTOTAL TWO-YEAR INSTITUTIONS $20899151 $0 ($20899151) (1000)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 3839588 0 (3839588) (1000)
The University of Texas at Austin 10309405 0 (10309405) (1000)
The University of Texas at Dallas 14524938 0 (14524938) (1000)
The University of Texas at El Paso 2681876 0 (2681876) (1000)
The University of Texas ndash Pan American 2241274 0 (2241274) (1000)
The University of Texas at Brownsville 540108 0 (540108) (1000)
The University of Texas of the Permian Basin 400587 0 (400587) (1000)
The University of Texas at San Antonio 8025733 0 (8025733) (1000)
The University of Texas at Tyler 777002 0 (777002) (1000)
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 10292036 0 (10292036) (1000)
Texas AampM University at Galveston 349135 0 (349135) (1000)
Prairie View AampM University 0 0 0 NA
Tarleton State University 1274872 0 (1274872) (1000)
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 1259502 0 (1259502) (1000)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 52
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville 1112003 0 (1112003) (1000)
Texas AampM University ndash San Antonio $0 $0 $0 NA
Texas AampM International University 658885 0 (658885) (1000)
West Texas AampM University 930966 0 (930966) (1000)
Texas AampM University ndash Commerce 2325217 0 (2325217) (1000)
Texas AampM University ndash Texarkana 6210721 0 (6210721) (1000)
University of Houston System Administration 0 0 0 NA
University of Houston 8707005 0 (8707005) (1000)
University of Houston ndash Clear Lake 1169439 0 (1169439) (1000)
University of Houston ndash Downtown 1398296 0 (1398296) (1000)
University of Houston ndash Victoria 433233 0 (433233) (1000)
Midwestern State University 902565 0 (902565) (1000)
University of North Texas System Administration 5000000 0 (5000000) (1000)
University of North Texas 6872705 0 (6872705) (1000)
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 1499875 0 (1499875) (1000)
Texas Southern University 1221724 0 (1221724) (1000)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 8894371 0 (8894371) (1000)
Angelo State University 2701274 0 (2701274) (1000)
Texas Womans University 1874548 0 (1874548) (1000)
Texas State University System 0 0 0 NA
Lamar University 6473133 0 (6473133) (1000)
Sam Houston State University 6122710 0 (6122710) (1000)
Texas State University ndash San Marcos 4652684 0 (4652684) (1000)
Sul Ross State University 235001 0 (235001) (1000)
Sul Ross State University Rio Grande College 107514 0 (107514) (1000)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$126019925 $0 ($126019925) (1000)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $16614303 $0 ($16614303) (1000) Center
The University of Texas Medical Branch at 6745161 0 (6745161) (1000) Galveston
The University of Texas Health Science Center at 24173646 0 (24173646) (1000) Houston
The University of Texas Health Science Center at 19224332 0 (19224332) (1000) San Antonio
The University of Texas MD Anderson Cancer 634206 0 (634206) (1000) Center
The University of Texas Health Science Center 80210 0 (80210) (1000) at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 53
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $15014608 $0 ($15014608) (1000) Center
University of North Texas Health Science Center 3438054 0 (3438054) (1000) at Fort Worth
Texas Tech University Health Sciences Center 11075479 0 (11075479) (1000)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$96999999 $0 ($96999999) (1000)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $15933582 $15933582 $0 NA
Texas AgriLife Extension Service 25302708 25302708 0 NA
Texas Engineering Experiment Station 137281801 153857672 16575871 121
Texas Transportation Institute 17405197 18757193 1351996 78
Texas Engineering Extension Service 48387893 48387894 1 00
Texas Forest Service 7349101 7429568 80467 11
Texas Veterinary Medical Diagnostic Laboratory 594001 594000 (1) (00)
SUBTOTAL TEXAS AampM UNIVERSITY $252254283 $270262617 $18008334 71 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 197332508 123636426 (73696082) (373)
SUBTOTAL OTHER HIGHER EDUCATION $197332508 $123636426 ($73696082) (373)
SUBTOTAL HIGHER EDUCATION $693505866 $393899043 ($299606823) (432)
EMPLOYEE BENEFITS
Teacher Retirement System $0 $0 $0 NA
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 8832085 8286741 (545344) (62)
Social Security and Benefits Replacement Pay 3888441 3428099 (460342) (118)
SUBTOTAL EMPLOYEE BENEFITS $12720526 $11714840 ($1005686) (79)
DEBT SERVICE
Bond Debt Service Payments $253903 $318484 $64581 254
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $253903 $318484 $64581 254
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$14014636357 $10935329879 ($3079306478) (220)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 54
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $6497580234 $6341237092 ($156343142) (24)
School for the Blind and Visually Impaired 59128170 6236518 (52891652) (895)
School for the Deaf 12738535 13556905 818370 64
SUBTOTAL PUBLIC EDUCATION $6569446939 $6361030515 ($208416424) (32)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 0 0 0 NA
Lamar University ndash Orange 0 0 0 NA
Lamar University ndash Port Arthur 0 0 0 NA
SUBTOTAL LAMAR STATE COLLEGES $0 $0 $0 NA
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 0 0 0 NA
Texas State Technical College ndash West Texas 0 0 0 NA
Texas State Technical College ndash Marshall 0 0 0 NA
Texas State Technical College ndash Waco 0 0 0 NA
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$0 $0 $0 NA
SUBTOTAL TWO-YEAR INSTITUTIONS $0 $0 $0 NA
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $2272110 $2216000 ($56110) (25)
The University of Texas at Arlington 0 0 0 NA
The University of Texas at Austin 0 0 0 NA
The University of Texas at Dallas 0 0 0 NA
The University of Texas at El Paso 2735000 2770000 35000 13
The University of Texas ndash Pan American 642002 457426 (184576) (288)
The University of Texas at Brownsville 0 0 0 NA
The University of Texas of the Permian Basin 0 0 0 NA
The University of Texas at San Antonio 0 0 0 NA
The University of Texas at Tyler 0 0 0 NA
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 7322630 8798533 1475903 202
Texas AampM University at Galveston 0 0 0 NA
Prairie View AampM University 0 0 0 NA
Tarleton State University 0 0 0 NA
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 0 0 0 NA
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 55
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $0 $0 $0 NA
Texas AampM University ndash San Antonio 0 0 0 NA
Texas AampM International University 387050 275774 (111276) (287)
West Texas AampM University 0 0 0 NA
Texas AampM University ndash Commerce 0 0 0 NA
Texas AampM University ndash Texarkana 0 0 0 NA
University of Houston System Administration 0 0 0 NA
University of Houston 0 0 0 NA
University of Houston ndash Clear Lake 0 0 0 NA
University of Houston ndash Downtown 0 0 0 NA
University of Houston ndash Victoria 0 0 0 NA
Midwestern State University 0 0 0 NA
University of North Texas System Administration 0 0 0 NA
University of North Texas 0 0 0 NA
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 0 0 0 NA
Texas Southern University 0 0 0 NA
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 0 0 0 NA
Angelo State University 0 0 0 NA
Texas Womans University 0 0 0 NA
Texas State University System 0 0 0 NA
Lamar University 0 0 0 NA
Sam Houston State University 0 0 0 NA
Texas State University ndash San Marcos 0 0 0 NA
Sul Ross State University 0 0 0 NA
Sul Ross State University Rio Grande College 0 0 0 NA
SUBTOTAL GENERAL ACADEMIC $13358792 $14517733 $1158941 87 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $13297702 $10950720 ($2346982) (176) Center
The University of Texas Medical Branch at 635986341 717559735 81573394 128 Galveston
The University of Texas Health Science Center at 18214102 18116059 (98043) (05) Houston
The University of Texas Health Science Center at 35390281 41303661 5913380 167 San Antonio
The University of Texas MD Anderson Cancer 4248517634 4689528603 441010969 104 Center
The University of Texas Health Science Center 101319808 103577090 2257282 22 at Tyler
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 56
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $19150722 $22122967 $2972245 155 Center
University of North Texas Health Science Center 5569835 10714262 5144427 924 at Fort Worth
Texas Tech University Health Sciences Center 18202700 13906469 (4296231) (236)
SUBTOTAL HEALTH-RELATED $5095649125 $5627779566 $532130441 104 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $12234003 $12210506 ($23497) (02)
Texas AgriLife Extension Service 19066648 18496150 (570498) (30)
Texas Engineering Experiment Station 82520807 85600472 3079665 37
Texas Transportation Institute 76865469 79248320 2382851 31
Texas Engineering Extension Service 103084089 100971982 (2112107) (20)
Texas Forest Service 1034004 1034004 0 NA
Texas Veterinary Medical Diagnostic Laboratory 19772647 17487990 (2284657) (116)
SUBTOTAL TEXAS AampM UNIVERSITY $314577667 $315049424 $471757 01 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 122091572 37272561 (84819011) (695)
SUBTOTAL OTHER HIGHER EDUCATION $1181111524 $1111122229 ($69989295) (59)
SUBTOTAL HIGHER EDUCATION $6604697108 $7068468952 $463771844 70
EMPLOYEE BENEFITS
Teacher Retirement System $127702409 $156653036 $28950627 227
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 1322608 1405026 82418 62 Contributions
Retirement and Group Insurance 1402203 1288774 (113429) (81)
Social Security and Benefits Replacement Pay 17274547 17620470 345923 20
SUBTOTAL EMPLOYEE BENEFITS $147701767 $176967306 $29265539 198
DEBT SERVICE
Bond Debt Service Payments $912 $0 ($912) (1000)
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $912 $0 ($912) (1000)
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF $13116117205 $13523838439 $407721234 31 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 57
- INTRODUCTION
- FUNDING GENERAL ACADEMICS INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
- OTHER NON-FORMULA FUNDING
-
- FUNDING HEALTH-RELATED INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
-
- FUNDING COMMUNITY AND TECHNICAL COLLEGES
-
- OVERVIEW
- COMMUNITY COLLEGES
- TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES
-
- FUNDING TEXAS AampM SYSTEM AGENCIES
- APPENDIX A FREQUENTLY ASKED QUESTIONS
- APPENDIX B TUITION AND FEE PROVISIONS
- APPENDIX C GLOSSARY
- APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
- APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
-
INTRODUCTION
FIGURE 2 METHODS OF FINANCE FOR HIGHER EDUCATION INSTITUTIONS ndash INCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV )HGHUDO)XQGV
HQHUDO5HYHQXH)XQGV
2WKHU)XQGV
)
SOURCE Legislative Budget Board
for health insurance retirement benefits and social security and
bull other indirect appropriations which are subsequently allocated to an institution such as the Available University Fund
The $221 billion appropriation includes funds trusteed to THECB for distribution to institutions For the 2012ndash13 biennium THECB received more than $10013 million in trusteed funds The majority of these funds are allocated for student financial assistance Those remaining provide funding for the Baylor College of Medicine incentives for the general academic institutions and the Texas Research Incentive Program
Figure 3 shows the percentage of state funding appropriated to the various types of institutions excluding the allocation for employee insurance and retirement benefi ts
State appropriations to THECB that benefi t private institutions include financial assistance programs (eg Tuition Equalizations Grants B-On-Time and related programs) for Texas residents attending approved private institutions per student funding at the Baylor College of Medicine and grant funds from the Advanced Research Program a competitive grant program
Within a group such as general academic institutions state appropriations are allocated in a consistent manner Diff erent
FIGURE 3 APPROPRIATION BY TYPE OF INSTITUTION ndash EXCLUDING BENEFITS 2012ndash13 BIENNIUM
10216 727$ 021
ampRPPXQLWDQG7HFKQLFDOampROOHJHV
HQHUDO$FDGHPLFV
+HDOWKUHODWHG
2WKHU+LJKHU(GXFDWLRQ
$06HUYLFHV
SOURCE Legislative Budget Board
groups of institutions such as general academic institutions and community colleges differ in how the Legislature allocates state appropriations For example all general academic institutions receive funding generated from Instruction and Operations and Infrastructure formulas while community colleges have one formula for Instruction and Administration
While the General Revenue Fundrsquos portion of direct appropriations to institutions is ldquosum certainrdquo the appropriation of Patient Income and Other Educational and General Income (primarily tuition) is ldquoestimatedrdquo Th is means that if patient income or tuition revenue generated by an institution is greater than the amount included in the GAA the institution can spend at a level beyond the amounts in the GAA If an institution generates less tuition revenue it must spend less
The GAA establishes a key distinction for higher education entities differentiating them from other state agencies Statute (Texas Education Code Section 61059(k)) calls for each higher education institution to receive a lump sum appropriation for base funding The GAA expands this concept and provides each higher education institution with one lump sum appropriation For each institution the GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Th is information reflects how the state funds are ldquoallocatedrdquo not how they must be spent Higher education institutions are not bound to spend their appropriation within the specifi ed
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 2
INTRODUCTION
strategy as are regular state agencies An exception to this is debt service on tuition revenue bonds Section 6 Rider 9 in the Higher Education Special Provisions GAA page III-233 limits the use of debt service to pay debt service for tuition revenue bonds Any amount of an appropriation not spent must be returned to the General Revenue Fund at the end of the fi scal year
There are some limitations on how institutions can spend appropriated funds The Texas Constitution (Article VII Section 18(i) and 17 (j)) prohibits with limited exceptions the use of General Revenue Funds for construction projects However the Texas Legislature by two-thirds vote in each house may opt to use General Revenue Funds for construction projects if there is a natural disaster or demonstrated need for the project
Also GAA (Section 6 Rider 8b) Special Provisions Relating Only to State Agencies of Higher Education (page III-233) prohibits the use of appropriated funds for auxiliary purposes such as athletics and parking Section 54 of the Special Provisions (page III-246) also restricts the use of funds in the Research Development Strategy to purposes defi ned in Texas Education Code Section 62091 Communityjunior colleges can spend General Revenue Funds only for instruction and administrative costs (Texas Education Code Section 130003(c))
This report presents the different ways that public institutions and agencies allocate state appropriations and highlights the flexibility with which these appropriations may be expended References to appropriated funds are based on the Eighty-second Legislature Regular Session 2011 2012ndash13 biennium GAA as adjusted for certain appropriations made in Article IX (General Provisions) of the GAA contingency appropriations other bills making appropriations in fi scal years 2012 and 2013 and Governor vetoes Amounts for fiscal year 2011 have been adjusted for the Supplemental Appropriations Bill House Bill 4 Eighty-second Legislature Regular Session 2011 and Senate Bill 2 First Called Session 2011 Each category of institutionmdashgeneral academic health-related community and technical colleges and Texas AampM System agenciesmdashis presented separately Th e only THECB funds detailed in this report are funds that have been distributed to public institutions
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 3
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 4
FUNDING GENERAL ACADEMIC INSTITUTIONS
OVERVIEW General academic institutions are listed in the Texas Education Code (61003) Figure 4 lists the institutions and their enrollments All of the institutions have common goals of instruction research and public service however each has a unique set of academic offerings and a unique regional or statewide mission
General academic institutions receive direct appropriations via funding formulas and non-formula appropriations Direct appropriations are identified in the informational strategies of each institutionrsquos bill pattern in the General Appropriations Act (GAA) As mentioned earlier appropriations are made to institutions as a lump sum Th e informational strategies reflect how state funds are ldquoallocatedrdquo not how they must be spent This means that with a few exceptions higher education entities unlike other state agencies are not required to spend appropriations within a specified funding strategy
The appropriation levels in each strategy refl ect diff erent revenue sources such as General Revenue Funds General RevenuendashDedicated Funds (mostly tuition and fee revenue) and Other Funds These revenue sources are referred to as the ldquomethod of fi nancerdquo Figure 5 illustrates the method of finance for $74 billion in appropriations for general academic institutions including a number of the indirect appropriations referenced in the next paragraph but does not include appropriations for employee retirement benefi ts
There are also appropriations that benefit institutions that are not reflected in the bill pattern of individual institutions including the Higher Education Fund the Available National Research University Fund Available University Fund certain employee benefits and funds trusteed to the Texas Higher Education Coordinating Board (THECB)
Figure 6 presents the percentage of funding related to each of these direct and indirect appropriations All of these appropriations are further described in the following pages
In addition general academic institutions have access to funds not reflected in the state appropriations process Examples of this include indirect cost recovery certain tuition and fees such as ldquodesignated tuitionrdquo and ldquoincidental feesrdquo (both are described in Appendix B) auxiliary operations (ie revenue from athletics student services fees bookstore and parking) and grants and gifts
FIGURE 4 PUBLIC GENERAL ACADEMIC INSTITUTIONS CERTIFIED FALL 2011 HEADCOUNT
INSTITUTION HEADCOUNT
Angelo State University 7077
Lamar University 14021
Midwestern State University 5811
Prairie View AampM University 8425
Sam Houston State University 17527
Stephen F Austin State University 12702
Sul Ross State University 1985
Sul Ross State University Rio Grande College 971
Tarleton State University 9893
Texas AampM International University 7037
Texas AampM University 49861
Texas AampM University ndash Central Texas 2096
Texas AampM University at Galveston 2035
Texas AampM University ndash Commerce 10726
Texas AampM University ndash Corpus Christi 10162
Texas AampM University ndash Kingsville 6731
Texas AampM University ndash San Antonio 3554
Texas AampM University ndash Texarkana 1907
Texas Southern University 9730
Texas State University ndash San Marcos 34087
Texas Tech University 32149
Texas Womanrsquos University 14503
The University of Texas at Arlington 33439
The University of Texas at Austin 51112
The University of Texas at Brownsville 8625
The University of Texas at Dallas 18864
The University of Texas at El Paso 22582
The University of Texas at San Antonio 30968
The University of Texas at Tyler 6628
The University of Texas of the Permian Basin 3831
The University of Texas ndash Pan American 19034
University of Houston 39820
University of Houston ndash Clear Lake 8185
University of Houston ndash Downtown 12918
University of Houston ndash Victoria 4330
University of North Texas 35694
University of North Texas at Dallas 2032
West Texas AampM University 7886
STATEWIDE TOTALS 568938 SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 5
FUNDING GENERAL ACADEMIC INSTITUTIONS
HQHUDO5HYHQXH)XQGV
FIGURE 5 METHOD OF FINANCE FOR GENERAL ACADEMICS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV
2WKHU)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING Nearly 573 percent of state appropriations for general academic institutions are allocated via two funding formulas and two supplements Instruction and Operations Formula Teaching Experience Supplement Infrastructure Formula
and Small Institution Supplement The formulas and supplements are direct appropriations and are primarily based on enrollment
The formula appropriations consist of General Revenue Funds and some Other Educational and General Income (Other EampG) Other EampG includes specific tuition and fee revenue (see Appendix B for a listing of tuition and fee provisions) The inclusion of certain tuition and fee revenue in the formula funding calculation is referred to as an ldquoAll Funds methodologyrdquo to formula funding Th e most significant tuition revenue included in the formula calculation is tuition charged in accordance with Texas Education Code Section 54051 Interim Tuition Rates (referred to as statutory tuition) The statutory tuition rate for the 2012ndash13 academic year is $50 per semester credit hour for Texas residents Th e corresponding tuition rate for a nonresident student is the average nonresident tuition charged to a Texas resident at a public university in each of the five most populous states
Of the $40 billion allocated by the general academic formulas and supplements nearly 728 percent consists of General Revenue Funds with the remainder consisting of General RevenuendashDedicated Funds (Other EampG)
A portion of Other EampG income is set aside for specifi c purposes or allocated to non-formula based strategies in the
FIGURE 6 APPROPRIATIONS FOR GENERAL ACADEMIC INSTITUTIONS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
QIUDVWUXFWXUH)RUPXOD +ROG+DUPOHVV 727$ 021 )RUPXODDQG
1RQ)RUPXOD7HDFKLQJ([SHULHQFH
QVWUXFWLRQamp 2SHUDWLRQV)RUPXOD
ampDSLWDO)XQGV
QVWLWXWLRQDO
(QKDQFHPHQW
6SHFLDOWHPV
ampRQVWLWXWLRQDO)XQGV
5HVHDUFKHYHORSPHQW)XQG
+LJKHU(GXFDWLRQURXSQVXUDQFH2WKHU1RQIRUPXODWHPV
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 6
FUNDING GENERAL ACADEMIC INSTITUTIONS
institutionrsquos bill pattern For example institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) TPEG are grants designed to help students cover their tuition fees and textbook costs when these expenses exceed a certain portion of their familiesrsquo contributions to their educations This set-aside revenue is not part of the tuition and fee revenue used to calculate the funding formulas
INSTRUCTION AND OPERATIONS FORMULA
About 815 percent of formula funds flow through the Instruction and Operations Formula ($32716 million for the 2012ndash13 biennium) and Teaching Experience Supplement ($957 million for the 2012ndash13 biennium) Th e Instruction and Operations formula is calculated as follows
Semester Credit Hours X ProgramLevel Weight X Rate (5371)
Semester credit hours (SCH) are a measurement of how many classes (and the number of students enrolled in those classes) an institution delivers The formula calculation for a biennium uses a ldquobase periodrdquo of SCH The ldquobase periodrdquo used for the 2012ndash13 biennium was the combination of summer 2010 fall 2010 and spring 2011
SCH is weighted by discipline (eg nursing is weighted more than liberal arts) and by level (ie lower and upper division masters doctoral and professional) For instance a lower division liberal arts course receives a weight of 10 A doctoral level liberal arts course receives a weight of 923 A nursing lower division course receives a weight of 203 A doctoral nursing course receives a weight of 925 Beginning with the 2006ndash07 GAA the basis for the weights per discipline was shifted to an aggregation of actual costs based on institutions Annual Financial Reports Currently THECB uses a rolling three year average to adjust the weights each biennium
THECB recommends a rate based on its recommended weights and program enhancements The legislature sets the weights and the rate in the Higher Education Special Provisions of the GAA (page III-238) In practice the legislature has set the rate based on available funding including consideration of enrollment changes and other factors Figure 7 illustrates the Instruction and Operations Formula allocation to institutions
FIGURE 7 DISTRIBUTION OF INSTRUCTION AND OPERATIONS FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
7H[DV$ amp 08QLYHUVLW
2WKHUHQHUDO$FDGHPLFV
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
TEACHING EXPERIENCE SUPPLEMENT
For the 2012ndash13 biennium an additional weight of ten percent is added to lower-division and upper-division semester credit hours taught by tenured and tenure-track faculty The 2012ndash13 GAA includes the following language ldquoFurthermore it is the intent of the Legislature that the weight shall increase by 10 percent per biennium up to 50 percentrdquo (Special Provisions Relating Only to State Agencies of Higher Education Sec 28 page III-238 2012ndash13 GAA)
The Teaching Experience Supplement is calculated as follows
Semester Credit Hours X ProgramLevel Weight Supplement (10) X Rate (5371)
The Teaching Experience Supplement was 5 percent during the 1998ndash99 and 2000ndash01 biennia Th e Seventy-seventh Legislature 2001 increased the supplement to the current 10 percent in 2002ndash03 biennium
INFRASTRUCTURE FORMULA
Almost 16 percent of formula funds flow through the Infrastructure Formula and Small Institution Supplement ($6768 million for the 2012ndash13 biennium) In addition to
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 7
FUNDING GENERAL ACADEMIC INSTITUTIONS
the universities the State Colleges and components of Texas State Technical College also receive infrastructure formula appropriations This formula uses a statewide infrastructure rate which is set in the GAA The statewide infrastructure rate is divided into two rates an Adjusted Utility Rate and an All Other Rate As with the SCH rate the legislature has set the rate based on available funding including consideration of changes in institutional space and other factors
The Infrastructure Formula is calculated as follows
(Adjusted Utility Rate + All Other Rates) X Predicted Square Feet
The Adjusted Utility Rate is 52 percent of the statewide infrastructure rate The 52 percent reflects the percentage of infrastructure formula funds that institutions historically spent on utilities A statewide utility rate is determined and then adjusted for each institution to reflect utility costs relative to other institutions
The All Other Rate is 48 percent of the statewide infrastructure rate and remains constant among institutions It accounts for physical plant grounds maintenance and custodial services
THECBrsquos Space Projection Model for Higher Education Institutions in Texas (space model) estimates square footage for each institution The objective of the space model projection is to calculate the amount of space an institution needs based on the following
bull number program and level of semester credit hours
bull number of faculty non-faculty students programs and library holdings and
bull research and current EampG expenditures
Figure 8 illustrates the Infrastructure Formula allocation to institutions The similarity of the allocation to the Instruction and Operations Formula allocation demonstrates the influence of enrollment on both formula allocations
SMALL INSTITUTION SUPPLEMENT
Prior to the Eighty-fi rst Legislature (2009) general academic institutions with enrollments of less than 5000 received a $750000 annual Small Institution Supplement However the Eighty-first Legislature increased the enrollment threshold to 10000 students and implemented a phase-out
FIGURE 8 DISTRIBUTION OF INFRASTRUCTURE FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
2WKHUHQHUDO$FDGHPLFV
7H[DV$ amp M 8QLYHUVLW
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
(based on the number of students) of the supplement between 5000 and 10000 students for the 2012ndash13 biennium (see Figure 9) This supplement recognizes that institutions have a minimum cost of operation that may not be covered by funds generated through the formulas
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $414 million in General Revenue hold harmless funding for aff ected institutions to minimize the effect of reduced formula funding as a result of overall enrollment declines or declines in upper-division or graduate enrollment Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment than other institutions or a change in utility costs Th e Eighty-second Legislature 2011 provided $444 million in a hold harmless based on total General Revenue Funds (formula and non-formula) for the 2012ndash13 biennium
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 8
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 9 SMALL INSTITUTION SUPPLEMENT RECIPIENTS
The University of Texas at Brownsville
The University of Texas of the Permian Basin
The University of Texas at Tyler
Texas AampM University at Galveston
Prairie View AampM University
Tarleton State University
Texas AampM University ndash Central Texas
Texas AampM University ndash Kingsville
Texas AampM University ndash San Antonio
Texas AampM International University
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston ndash Clear Lake
University of Houston ndash Victoria
Midwestern State University
University of North Texas at Dallas
Texas Southern University
Angelo State University
Sul Ross State University
Sul Ross State University ndash Rio Grande College
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Waco
Texas State Technical College ndash Marshall
Lamar Institute of Technology
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
SOURCE Legislative Budget Board
NON-FORMULA FUNDING
SPECIAL ITEMS
Special Item appropriations to the institutions total $4836 million for the 2012ndash13 biennium In 2012ndash13 $69 million was appropriated to system offices for special items These are direct appropriations to institutions for projects that are not funded by formula but are specifi cally identifi ed by the legislature as needing support An institution is not required to spend the amount identified in a Special Item strategy for that particular project but expenditure reports indicate that institutions often use an entire appropriation along with additional funding for the related project
The majority of special item funding is through the Institutional Enhancement strategy Institutional Enhancement is a $2204 million appropriation for the 2012ndash13 biennium This is a direct appropriation to institutions and was established by the Seventy-sixth Legislature 1999 for the 2000ndash01 biennium Th e fi rst Institutional Enhancement appropriation was based on a consolidation of certain Special Item appropriations in 1999 and an additional $1 million per year was appropriated for each institution Examples of consolidated special items are items that could be funded through the formulas such as general institutional academic and research support
For the 2002ndash03 biennium there was an additional $1 million increase in appropriations for most institutions and a $15 million increase for selected institutions in South Texas and the border region Institutions that benefi ted signifi cantly from the Seventy-seventh Legislaturersquos new University Research and Texas Excellence Funds (House Bill 1839 Seventy-seventh Legislature 2001) or from the Permanent University Fund (PUF) ldquoexcellence fundingrdquo did not receive an increase in Institutional Enhancement funds for the 2002ndash03 biennium
Other Special Items total $2632 million in appropriations for the 2012ndash13 biennium and include the following institutional and instructional support public service items research items other than general research support funding for separate campuses and accreditation program items
TEXAS COMPETITIVE KNOWLEDGE FUND
The Texas Competitive Knowledge Fund (TCKF) is authorized by the General Appropriations Act (GAA) (2012ndash13 Biennium) Article III Higher Education Special Provisions Section 56 The GAA prescribes that this funding will be used to support faculty for the purpose of instructional excellence and research Funding was first allocated in these strategies by the Legislature for the 2008ndash09 biennium
Current institutions receiving TCKF appropriations include The University of Texas at Austin Texas AampM University University of Houston Texas Tech University and Th e University of Texas at Dallas Institutions are allocated funding appropriated to the TCKF based on average research expenditures for the previous three-year period Th e Eighty-second Legislature Regular Session 2011 appropriated $935 million in Texas Competitive Knowledge Fund strategies directly to the institutions This funding level provides approximately $07 million to each institution for every $100 million in research expenditures In practice
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 9
FUNDING GENERAL ACADEMIC INSTITUTIONS
when institutions have first received distributions from the fund appropriations have been reduced from the institutionrsquos special item strategies In subsequent biennia the institution continues to receive appropriations from the TCKF and the reduction in special items is not specifi cally restored
RESEARCH DEVELOPMENT FUND
The Research Development Fund was created by House Bill 3526 Seventy-eighth Legislature Regular Session 2003 and replaced the Texas Excellence and University Research Funds effective September 1 2005 The intent was to combine the Texas Excellence Fund and University Research Fund into a new fund applying a uniform allocation methodology based on a three-year average of each institutionrsquos restricted research expenditures Th e Eighty-fi rst Legislature allocated $653 million (Figure 10) in the 2012ndash13 biennium to individual institutions to fund objectives identical to the Research Development Fund (Section 62091)
TEXAS RESEARCH INCENTIVE PROGRAM
Th e Eighty-first Legislature Regular Session 2009 established the Texas Research Incentive Program (TRIP) at THECB to match state appropriations with certain gifts and endowments received by emerging research universities Th e goal of this $178 million a year program is to create more Tier One universities in Texas
PERFORMANCE INCENTIVE INITIATIVE
The Eightieth Legislature 2007 appropriated $100 million in fiscal year 2009 to THECB to establish a Higher Education Performance Incentive Initiative The funding was for ldquoimprovement in teaching and educational excellence at Texas public general academic institutionsrdquo THECB distributed $80 million for increases in degrees awarded with special weights given to critical fields and at-risk students The remaining $20 million was used to fund scholarships for students graduating in the top 10 percent of their high school class
Th e Eighty-first Legislature Regular Session 2009 maintained the $80 million for the higher education performance incentive initiative (funded by the American Recovery and Reinvestment Act) and increased funding for the Top Ten Percent scholarship program by $34 million bringing total appropriations for the program to $54 million
There were no performance funding incentives for the 2012ndash13 biennium For the 2012ndash13 biennium $396
FIGURE 10 RESEARCH DEVELOPMENT FUND ALLOCATIONS
2012ndash13 BIENNIAL RDF
INSTITUTION ALLOCATION
The University of Texas at Arlington $6032754
The University of Texas at Dallas 8425486
The University of Texas at El Paso 6925040
The University of Texas at Pan American 1147838
The University of Texas at Brownsville 902512
The University of Texas of the Permian Basin 306408
The University of Texas at San Antonio 5491296
The University of Texas at Tyler 434072
Texas AampM University at Galveston 600342
Tarleton State University 1586396
Texas AampM University ndash Corpus Christi 2212356
Texas AampM University ndash Kingsville 1846206
Texas AampM International University 253246
West Texas AampM University 681752
Texas AampM Commerce 436752
Texas AampM Texarkana 9008
University of Houston 10705472
University of Houston ndash Clear Lake 10392
University of Houston ndash Downtown 10248
University of Houston ndash Victoria 2254
Midwestern State University 30066
University of North Texas 2495448
Stephen F Austin University 895696
Texas Southern University 338580
Texas Tech University 8327602
Texas Womanrsquos University 266152
Angelo State University 123176
Lamar University 820010
Sam Houston State University 362574
Texas State University ndash San Marcos 3121164
Sul Ross State University 304040
TOTAL $65296738
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 10
FUNDING GENERAL ACADEMIC INSTITUTIONS
million is appropriated to the Top Ten Percent Scholarship Program
HOLD HARMLESS FUNDING
The Eighty-second Legislature 2011 provided $444 million in General Revenue Funds hold harmless funding for aff ected institutions to minimize the effect of reduced formula and special item funding Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment that other institutions or a change in utility costs
CAPITAL FUNDS
In addition to the constitutional funds discussed in the next subsection there are three types of state appropriation for capital funds tuition revenue bonds Skiles Act revenue bonds and lease payments Almost all of the direct appropriations to institutions related to capital funds are for debt service on tuition revenue bonds
A $5931 million General Revenue Funds appropriation was made for tuition revenue bond debt service for the 2012ndash13 biennium
Tuition revenue bonds must be authorized in statute Once an authorization is made institutions issue bonds and make related debt payments with tuition revenue Th e Texas Public Finance Authority issues tuition revenue bonds for Midwestern State University Stephen F Austin University Texas Southern University and the Texas State Technical Colleges Legislative practice has been to use General Revenue Funds to reimburse institutions for the costs related to this debt service
The legislature first authorized tuition revenue bonds in 1971 In some instances the authorization was a lump sum for the benefit of specific institutions During the Seventy-eighth Legislature 2003 $2689 million in tuition revenue bonds was authorized for specific projects at various higher education institutions The Seventy-ninth Legislature Th ird Called Session 2005 adopted House Bill 153 which authorized the issuance of $1858 billion in tuition revenue bonds for forty-four different institutions Only one tuition revenue bond (House Bill 1775) was adopted by the Eightieth Legislature 2007 for a $13 million nursing building at Stephen F Austin University Th e Eighty-fi rst Legislature 2009 authorized one tuition revenue bond for Texas AampM University at Galveston The Eighty-second Legislature 2011 did not authorize any new tuition revenue bonds
The authority for Skiles Act Revenue Bonds was repealed in 1997 It had allowed institutions to pledge up to $5 from each enrolled student for each regular semester to the payment of bonds authorized under the governing boardrsquos general authority to sell revenue bonds Institutions use their Other Educational and General Income (General Revenuendash Dedicated Funds) to pay the debt service on these previously authorized bonds This is a $10 million appropriation for the 2012ndash13 biennium
Three general academic institutions receive a $3 million General Revenue Fund appropriation for lease payments to community colleges for facilities
CONSTITUTIONAL FUNDS
These funds are appropriated separately in the GAA and not directly appropriated to the institutions (see Appendix D)
The Available University Fund (AUF) established in Section 18 Article VII Texas Constitution consists of the surface income and investment proceeds from the Permanent University Fund (PUF) a state endowment with land grants totaling 21 million acres
Distributions to the AUF consist of investment returns from PUF assets surface income from PUF lands and interest earned on AUF balances For the 2012ndash13 biennium investment returns were $12200 million surface income was $398 million and interest income was $59 million Income from the sale of PUF lands and the lease of mineral interest is retained in the PUF and invested
The total 2012ndash13 estimated appropriation for the AUF is $12660 million The Constitution appropriates two-thirds of the AUF to The University of Texas System and one-third to the Texas AampM University System The two systems may use the AUF for capital purposes (debt service on PUF bonds) for most of their institutions and ldquofor the support and maintenancerdquo of other institutions listed Entities authorized to receive funding for ldquosupport and maintenancerdquo which is now commonly referred to as ldquoAUF Excellence Fundingrdquo are the two system offi ces The University of Texas at Austin Texas AampM University and Prairie View AampM University The systemsrsquo boards of regents determine allocations to individual institutions including health-related institutions and the amounts for ldquoExcellencerdquo Figure 11 lists the recipients and the type of support they received
The Higher Education Fund (HEF) as authorized in Section 17 Article VII Texas Constitution benefits institutions of higher education not eligible for the AUF (see Figure 12)
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 11
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 11 PARTICIPANTS IN THE AVAILABLE UNIVERSITY FUND
EXCELLENCE AND DEBT SERVICE FUNDS
The University of Texas System
The Texas AampM University System
The University of Texas at Austin
Texas AampM University
Prairie View AampM University
DEBT SERVICE ONLY
The University of Texas System Components
The University of Texas at Arlington
The University of Texas at Dallas
The University of Texas at El Paso
The University of Texas of Permian Basin
The University of Texas at San Antonio
The University of Texas at Tyler
The University of Texas Southwestern Medical Center
The University of Texas Medical Branch at Galveston
The University of Texas Health Science Center at Houston
The University of Texas Health Science Center at San Antonio
The University of Texas Health Science Center at Tyler
The University of Texas MD Anderson Cancer Center
Texas AampM University System Components
Texas AampM University at Galveston
Texas AampM University at Tarleton
Texas AampM University ndash San Antonio
Texas AampM University ndash Central Texas
Texas AampM University System Health Science Center
Texas AgriLife Research
Texas AgriLife Extension Service
Texas Engineering Experiment Station
Texas Engineering Extension Service
Texas Transportation Institute
Texas Forest Service
SOURCE Legislative Budget Board
FIGURE 12 PARTICIPANTS IN THE HIGHER EDUCATION FUND
The University of Texas System Components
The University of Texas ndash Pan American
Texas AampM University System Components
Texas AampM University ndash Corpus Christi
Texas AampM International University
Texas AampM University ndash Kingsville
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston System Components
University of Houston
University of Houston ndash Clearlake
University of Houston ndash Downtown
University of Houston ndash Victoria
Independent Institutions
Midwestern State University
Stephen F Austin State University
Texas Southern University
Texas Womanrsquos University
University of North Texas System Components
University of North Texas Health Science Center at Fort Worth
University of North Texas
Texas Tech University System Components
Texas Tech University Health Sciences Center
Angelo State University
Texas State University System Components
Lamar University
Sam Houston State University
Texas State University ndash San Marcos
Sul Ross State University
Sul Ross State Rio Grande College
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
Lamar Institute of Technology
Texas State Technical College System Components
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Marshall
Texas State Technical College ndash Waco
The University of North Texas at Dallas receives its allocation through the University of North Texas SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 12
FUNDING GENERAL ACADEMIC INSTITUTIONS
The HEF is supported by General Revenue Fund appropriations
The distribution of the $525 million HEF appropriation for 2012ndash13 is provided for in statute (Texas Education Code Section 62021) The Constitution calls for a re-allocation of HEF funds every ten years The Seventy-ninth Legislature Regular Session fulfilled this requirement with the enactment of House Bill 3001
The Constitution also allows the legislature to adjust the decennial allocations every five years Th e Eighty-fi rst Legislature Regular Session 2011 exercised this authority by enacting House Bill 51 which adjusted the formula allocation for the HEF funds for fiscal years 2009 through 2015
To maintain the equitable distribution of the HEF appropriation House Bill 51 also corrected the distribution of fiscal year 2009 and 2010 HEF allocations by using revised formula calculations Using these revised formula calculations House Bill 51 factored in updated data elements to generate the annual HEF allocations for the fi ve-year period starting in fiscal year 2011
HEF funds must be used for capital purposes Institutions may use HEF allocations for debt service on HEF bonds or as cash
In 1995 the Texas Constitution was amended to authorize the creation and funding of a dedicated HEF corpus known as the Permanent Higher Education Fund (PHEF) Th is corpus was separate from the annual HEF allocation of General Revenue Funds The PHEF was intended to become a permanent endowment to support non-PUF eligible institutions but never reached its targeted value of $2 billion
The PHEF corpus of $5159 million was rededicated with the enactment of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) The balance of the PHEF was transferred to the NRUF on January 1 2010 and the authorization for the PHEF expired Proposition 4 also allowed the legislature to appropriate some or all of the total returns from the NRUF to provide a source of funding to enable emerging research universities to achieve national prominence
The Eighty-second Legislature 2011 appropriated $124 million in estimated NRUF proceeds to eligible institutions in the 2012ndash13 biennium
House Bill 1000 Eighty-second Legislature Regular Session 2011 established the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution in designated as an emerging research university within the Higher Education Coordinating Boardrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fi scal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of the institutions research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs Texas Tech University and the University of Houston are the only two institutions that received funding through this program in 2012
HIGHER EDUCATION GROUP INSURANCE (HEGI)
The $4631 million General Revenue Fund appropriation for higher education group insurance (HEGI) is not a direct appropriation in the institutionsrsquo bill patterns It is appropriated in a separate section of the GAA entitled ldquoHigher Education Employees Group Insurance Contributionsrdquo This appropriation is intended to help institutions cover the cost of health insurance premiums for institution employees whose salaries are paid from the General Revenue Fund Because The University of Texas and Texas AampM University Systems operate their own health insurance programs they each receive separate appropriations The remaining institutions are included in the program operated by the Employees Retirement System (ERS)
The HEGI appropriation is sum-certain That is the Statersquos General Revenue Fund contributions are limited to each institutionrsquos number of employees enrolled in the health insurance program as of December 1 2012 However the GAA allows ERS The University of Texas and Texas AampM University Systems to transfer HEGI appropriations among institutions within their respective group insurance programs to address shortfalls in General Revenue Funds related to group insurance premiums
SOCIAL SECURITY BENEFITS
An appropriation for social security is included in the GAA at the end of Article III It is an estimated General Revenue
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 13
FUNDING GENERAL ACADEMIC INSTITUTIONS
Fund appropriation to provide the employer matching funds for employees of institutions of higher education (Th is appropriation amount is not included in Figure 3 on page 2)
STAFF GROUP INSURANCE
Staff group insurance is for staff whose salaries are not paid with General Revenue Funds (GR) The appropriation is based on an estimation of the number of non-GR funded employees at an institution as of December 1 2010 Th e total appropriation for all general academic institutions is $1766 million for the 2012ndash13 biennium The method of finance is Other Educational and General Income (which is classified as General RevenuendashDedicated Funds)
RETIREMENT CONTRIBUTIONS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and top administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees participate in TRS a defi ned benefit plan The state funds retirement contributions for TRS equal to 60 percent of an employeersquos salary in fiscal year 2012 and 64 percent in 2013 State contributions for ORP are equal to 60 percent of an employeersquos salary in fiscal years 2012 and 2013 (Th ese appropriation amounts are not included in Figure 3 on page 2)
OTHER NON-FORMULA FUNDING
WORKERSrsquo COMPENSATION
Changes in the structure of the statewide workersrsquo compensation system resulted in most institutions receiving General Revenue Fund appropriations for Workersrsquo Compensation starting in 2006ndash07 However Th e University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool
UNEMPLOYMENT COMPENSATION
Most components of The University of Texas and Texas AampM University Systems have this strategy because they operate their own risk pools Th ese institutions receive General Revenue Fund appropriations for unemployment compensation insurance The appropriation for the 2012ndash13 biennium is $05 million in General Revenue Funds Th e Texas Workforce Commission receives an appropriation to
cover unemployment benefi ts for former state employees for all other higher education institutions
TEXAS PUBLIC EDUCATION GRANTS
According to statute (Texas Education Code Chapter 56 Subchapter C and Texas Education Code Section 54051 [Statutory Tuition]) institutions must set aside a portion of tuition revenue for Texas Public Education Grants (TPEG) Fifteen percent of each resident studentrsquos tuition and 3 percent of each nonresident studentrsquos tuition are set aside for financial aid to students at the institution Texas Education Code Section 56033 provides guidelines on the allocation of TPEG revenue The GAA includes an estimate of the amount of TPEG revenue each institution will generate Th is $2111 million estimated appropriation is considered Other Educational and General Income which are classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
Indirect costs as defined by The Comptroller of Public Accounts are ldquoincurred for a common or joint purpose benefiting more than one cost objectiverdquo Institutions negotiate a percentage of a federal grant for indirect costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
The Seventy-eighth Legislature 2003 allowed universities to retain 100 percent of indirect costs income from research grants and contracts to encourage further research projects conducted by universities
ORGANIZED ACTIVITIES
Organized Activities are activities or enterprises connected with instructional departments whose primary function is training for students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training Revenue from Organized Activities is classified as General RevenuendashDedicated Funds Other EampG Income For the 2012ndash13 biennium $503 million is appropriated for Organized Activities
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 14
FUNDING HEALTH-RELATED INSTITUTIONS
OVERVIEW Appropriations for the nine health-related institutions are similar in structure to the appropriations for general academic institutions There are formula and non-formula funding appropriations made directly to the institutions as well as appropriations that benefit the institutions but are not included in the institutionsrsquo bill patterns such as the Available University Fund certain staff benefi ts and funds trusteed at the Texas Higher Education Coordinating Board (THECB) While health-related institutions do not receive appropriations from the Research Development Fund they share many other types of appropriations similar to general academic institution appropriations Th ose appropriations will be briefly restated in this section of the report Figure 13 lists the institutions and their enrollment
FIGURE 13 PUBLIC HEALTH-RELATED INSTITUTIONS CERTIFIED HEADCOUNT FALL 2011
INSTITUTION HEADCOUNT
UT Southwestern Medical Center 2467
UT Medical Branch at Galveston 2660
UT Health Science Center at Houston 4485
UT Health Science Center at San Antonio 3273
UT M D Anderson Cancer Center 248
UT Health Science Center at Tyler NA
Texas AampM University System Health Science 1958 Center
University of North Texas Health Science 1567 Center at Fort Worth
Texas Tech University Health Sciences Center 3590
Statewide Totals 20248
SOURCE Higher Education Coordinating Board
Like other higher education institutions the appropriations for health-related institutions are a lump sum and funding strategies are presented for informational purposes in the General Appropriations Act (GAA) The funding strategies in a health-related institutionrsquos bill pattern represent how state funds are allocated but not how they must be spent Also certain methods of finance in the appropriation are estimated This means that if for example patient income for an institution is above the amount included in the GAA
the institution can spend more than the amount listed in the GAA
Also health-related institutions have access to an estimated $109 billion outside the appropriations process in 2012ndash13 Examples of this include certain tuition revenue indirect lost recovery grants and gifts
Figure 14 illustrates the 2012ndash13 method of finance for $85 billion in appropriations for health-related institutions including a number of the indirect appropriations but it does not include appropriations for retirement benefi ts
FIGURE 14 METHOD OF FINANCE FOR HEALTH-RELATED INSTITUTIONS 2012ndash13 BIENNIUM
727$ 021
HQHUDO
2WKHU)XQGV3DWLHQWQFRPH
5HYHQXH)XQGV
HQHUDO5HYHQXHsup2HGLFDWHG)XQGV13
Including some tuition and fees SOURCE Legislative Budget Board
FORMULA FUNDING The three primary funding formulas for health-related institutions are Instruction and Operations support Infrastructure support and Research Enhancement Th e University of Texas MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler have additional formula allocations to accommodate their unique missions Each health-related institution also receives formula funding for graduate medical education
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 15
FUNDING HEALTH-RELATED INSTITUTIONS
General Revenue funding and some Other Educational and General Income (Other EampG is classified as General RevenuendashDedicated) fund the formulas Like general academic institutions certain tuition revenue is used in the calculation of the Instruction and Operation support and Infrastructure support formulas Of the $15 billion that is allocated by the health-related institutionsrsquo primary formulas 939 percent is from the General Revenue Fund and the remaining 61 percent is from General RevenuendashDedicated Funds (tuition and fee revenue)
Some tuition and fee income is set aside for specifi c purposes Some specific amounts are unavailable for formula purposes and consequently are not a formula method of fi nance For example health-related institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) and Medical Loans
INSTRUCTION AND OPERATIONS SUPPORT FORMULA
The Instruction and Operations (IampO) support formula represents nearly 755 percent of the primary formula funds for health-related institutions ($9282 million for the 2012ndash13 biennium) It is intended to fund items such as faculty salaries departmental operating expenses instructional administration and libraries It is allocated on a per full-time student equivalent (FTSE) basis with a funding weight predicated on the instructional program of the student This formula applies to all health-related
institutions except The University of Texas Health Science Center at Tyler which did not offer education instruction during the base period for the 2012ndash13 biennium
Figure 15 illustrates the Instruction and Operations support formula among the eight health-related institutions
The Instruction and Operations support formula is calculated as follows
(FTSE X Program Weight X $8874) + SmallMultiple Campus Supplement
FTSE is weighted by discipline For example medicine (4753) is weighted more than pharmacy (1670) Allied Health is assigned a weight of 1000
The Legislature sets the weights and the rate ($8874 adjusted for the 2012ndash13 biennium) in the Higher Education Special Provisions of the GAA (Sec 29 page III-239 and 240) The rate is calculated based on the available revenue for the formula and the number of FTSEs
Programs with enrollments less than 200 receive a Small Campus Supplement (see Figure 16)
FIGURE 15 DISTRIBUTION OF INSTRUCTION AND OPERATIONS SUPPORT FORMULA 2012ndash13 BIENNIUM
727$ 021870$QGHUVRQ 7H[DV$ amp 0+HDOWKampDQFHUampHQWHU 6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV 87+HDOWK6FLHQFHampHQWHUDW6DQ
DW)WRUWK
+HDOWK6FLHQFHampHQWHU$QWRQLR
87+HDOWK6FLHQFH 7H[DV7HFK8QLYHUVLW+HDOWKampHQWHUDW+RXVWRQ 6FLHQFHVampHQWHU
876RXWKZHVWHUQ0HGLFDOampHQWHU
870HGLFDOUDQFK DWDOYHVWRQ
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 16
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 16 SMALL CAMPUS SUPPLEMENT RECIPIENTS
The University of Texas Southwestern Medical Center
No
The University of Texas Medical Branch at Galveston
Yes
The University of Texas Health Science Center at Houston
Yes
The University of Texas Health Science Center at San Antonio
Yes
The University of Texas MD Anderson Cancer Center
No
The University of Texas Health Science Center at Tyler
NA
Texas AampM Health Science Center Yes
University of North Texas Health Science Center at Fort Worth
No
Texas Tech University Health Sciences Center Yes
SOURCE Legislative Budget Board
INFRASTRUCTURE SUPPORT FORMULA
The Infrastructure support formula is 194 percent of the primary formula funding and is intended for utilities and physical plant support ($2383 million for the 2012ndash13 biennium) This formula calculation is similar to that for general academic institutions but includes only one rate ($655) for all institutions except The University of Texas
FIGURE 17 DISTRIBUTION OF INFRASTRUCTURE SUPPORT FORMULA 2012ndash13 BIENNIUM
MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler which have another rate ($625)
THECBrsquos space model predicts square footage for each institution The space model projection is based on the following
bull number and level of FTE students
bull number of faculty
bull single or multiple programs and campuses
bull actual clinical space and
bull research and current EampG expenditures
Because the space projection model does not account for hospital space separate infrastructure funding for hospital space is included in the total funding for hospital and patient-care activities at The University of Texas Medical Branch at Galveston The University of Texas MD Anderson Cancer Center and The University of Texas Health Science Center at Tyler
Figure 17 illustrates the Infrastructure Support Formula allocation to institutions among the nine health-related institutions
727$ 021
87+HDOWK6FLHQFHampHQWHUDW6DQ 870$QGHUVRQampDQFHUampHQWHU$QWRQLR
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW
+RXVWRQ 7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK6FLHQFHVampHQWHU
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 17
FUNDING HEALTH-RELATED INSTITUTIONS
RESEARCH FORMULA
Health-related institutions generate state appropriations to support research through General Revenue Funds in the Research Enhancement formula ($629 million for the 2012ndash13 biennium) The Research Enhancement formula accounts for 51 percent of the primary formula funds and is funded entirely from the General Revenue Fund
The allocation is based on the amount of research generated by each institution
$1412500 + (110 X Research
Expenditures)
This provides a base Institutions report for all institutions current research
regardless of research expenditures to volume THECB
Figure 18 illustrates the Research Enhancement formula allocation to the institutions among the nine health-related institutions
GRADUATE MEDICAL EDUCATION
The Seventy-ninth Legislature 2005 established a new formula for funding graduate medical education in the 2006ndash07 GAA For 2012ndash13 the funding totals $46 million
FIGURE 18 DISTRIBUTION OF RESEARCH ENHANCEMENT FORMULA 2012ndash13 BIENNIUM
727$ 021
870$QGHUVRQampDQFHUampHQWHU
(an additional $109 million is appropriated to the Baylor College of Medicine through the THECB) and provides $4436 per medical resident each year
Figure 19 illustrates the Graduate Medical Education formula allocation to institutions among the nine health related institutions and Baylor College of Medicine
CHEST DISEASE CENTER FORMULA
The Chest Disease Center operations formula which was established during the 2010ndash11 biennium applies only to The University of Texas Health Science Center at Tyler Th e University of Texas Health Science Center at Tyler has a statutory mission to conduct research develop diagnostic and treatment techniques provide training and teaching programs and provide diagnosis and treatment of inpatients and outpatients with respiratory diseases The Chest Disease Center formula is based on the number of primary chest disease patients the institution served Approximately $472 million in General Revenue Funds are appropriated for the 2012ndash13 biennium
CANCER CENTER OPERATIONS FORMULA
The Eightieth Legislature 2007 established in the GAA an Operations formula for funding The University of Texas MD Anderson Cancer Center The University of Texas MD Anderson Cancer Center has a statutory mission to eliminate cancer through patient care research education
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR
7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ 8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
870HGLFDOUDQFKDWDOYHVWRQ 7H[DV7HFK8QLYHUVLW+HDOWK876RXWKZHVWHUQ0HGLFDOampHQWHU
6FLHQFHVampHQWHU
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 18
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 19 DISTRIBUTION OF GRADUATE MEDICAL EDUCATION FORMULA 2012ndash13 BIENNIUM
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
727$ 02187+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR 870$QGHUVRQampDQFHUampHQWHU
87+HDOWK6FLHQFHampHQWHUDW7OHU
7H[DV$ amp 08QLYHULVW6VWHP +HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK 6FLHQFHVampHQWHU
DORUampROOHJHRI0HGLFLQH
and prevention The Operations formula funding is based on the total number of Texas cancer patients the institution served The Operations formula growth in funding may not exceed the average growth in funding for health-related institutions in the Instruction and Operations support formula for the current biennium For the 2012ndash13 biennium this funding formula provided $2125 million in General Revenue Funds
NON-FORMULA FUNDING
PATIENT CARE ACTIVITIES
Some institutions conduct patient care activities generally medical or dental For the 2012ndash13 biennium the estimated appropriation for Patient Income was $56 billion Th e hospital and clinic revenues earned through patient care activities are considered Other Funds which are part of Educational and General Income (not to be confused with Other Educational and General Income which is another subset of Educational and General Income) General Revenue funding supplements patient-care income to varying degrees at each institution Patient Income is an estimated appropriation and is spread across an institutionrsquos funding strategies however it is not used in the calculation of the formulas
INSTITUTIONAL ENHANCEMENT
Institutional Enhancement is a General Revenue Fund appropriation that started in the 2000ndash01 biennium It is designed to allow each institution to address its unique needs and diseconomies of scale at institutions with smaller campuses The total institutional enhancement appropriation for the 2012ndash13 biennium was $42 million which includes $407 million in General Revenue Funds and $16 million in Patient Income
SPECIAL ITEMS
Special items are activities that are not generally funded through the formulas and typically represent an institutionrsquos special needs or areas of expertise The $3107 million in General Revenue Funds for the 2012ndash13 biennium funds items such as residency programs academic outreach programs public service items and research items other than general research support Institutions propose and justify special items and request an amount for each on an ad hoc basis Special items generally remain constant from biennium to biennium unless the item was a one-time expense (eg tornado damage repairs) or the institution has not used the funding for the intended purpose
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 19
FUNDING HEALTH-RELATED INSTITUTIONS
CONSTITUTIONAL FUNDS
These funds are not directly appropriated to institutions in the GAA In other words these funds are not found in a strategy within an institutionrsquos bill pattern
Health-related institutions are eligible for funding from the Available University Fund ($146 million in Other Funds allocated to these institutions by system offices for the 2012ndash 13 biennium) and the Higher Education Fund ($257 million in General Revenue Funds appropriated for the 2012ndash13 biennium) which are presented in detail in the ldquoFunding General Academic Institutionsrdquo section of this report
CAPITAL FUNDS
Just like general academic institutions tuition revenue bonds ($1665 million in General Revenue Funds for related debt service in the 2012ndash13 biennium) are also used to fund capital projects at health-related institutions A detailed presentation of tuition revenue bonds is in the ldquoFunding General Academic Institutionsrdquo section The University of Texas Medical Branch at Galveston and The University of Texas MD Anderson Cancer Center also have separate appropriations for capital projects that are funded primarily with Patient Income
EMPLOYEE BENEFITS
Like general academic institutions health-related institutions benefit from direct and indirect state appropriations related to employee benefi ts The indirect appropriations include Higher Education Group Insurance ($2339 million in General Revenue Funds for the 2012ndash13 biennium) Retirement Contributions and Social Security Benefi ts (all presented in the ldquoFunding General Academic Institutionsrdquo section) The direct appropriations include Staff Group Insurance
For the 2012ndash13 biennium the Workersrsquo Compensation and Unemployment Compensation strategies (all presented in the ldquoFunding General Academic Institutionsrdquo section) are funded directly with General Revenue Funds and General RevenuendashDedicated Funds However The University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool The University of Texas and Texas AampM Systems also manage their own unemployment compensation coverage while all other institutions receive coverage from
the Texas Workforce Commission which receives an appropriation to cover unemployment benefi ts
TEXAS PUBLIC EDUCATION GRANTS
Health-related institutions similar to general academic institutions are subject to the Texas Education Code (sect56031 et al) provision requiring a portion of tuition revenue be set aside to fund Texas Public Education Grants (TPEG) For the 2012ndash13 biennium the estimated TPEG appropriation is $188 million This revenue is considered Other Education and General Income which is classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
As mentioned earlier in this section Indirect Cost Recovery was removed from the GAA for the 2010ndash11 biennium however the individual institution still receives the funds
TOBACCO SETTLEMENT
House Bill 1945 Seventy-sixth Legislature 1999 established the Permanent Health Fund for health-related institutions of Higher Education the Permanent Fund for Minority Health Research and Education the Permanent Fund for Higher Education Nursing Allied Health and Other Health Related Programs and 13 permanent endowments for individual institutions of higher education The $769 million in estimated interest earnings from the endowments for 2012ndash13 (based on estimated interest earnings of 45 percent each year) were appropriated to the health-related institutions
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 20
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW Public two-year lower-level institutions include 50 community and junior college districts four Texas State Technical College (TSTC) campuses and three Lamar State Colleges These institutions were appropriated $22 billion in state funding for the 2012ndash13 biennium Preliminary fall FIGURE 20 TWO-YEAR INSTITUTION FUNDING MECHANISMS 2012ndash13 BIENNIUM
2011 enrollment at these institutions totaled 789713 Figure 20 illustrates the funding mechanisms for these institutions Community colleges accounted for 983 percent of this enrollment total while the Texas State Technical and Lamar State Colleges composed the remaining portion
COMMUNITY COLLEGES
Instruction and Administration General Revenue Funds from the state are based on contact hour driven formulas for two-year institutions Tuition and fee revenues and local tax revenues augment state General Revenue Funds for these costs
Academic Courses Approximately 82 percent of the total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 18 percent of the total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant The state provides no funding for physical plant operations and maintenance Local taxing districts are expected to provide support for physical plant needs Community colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011
Facilities Local communities must provide facilities Community colleges are not eligible to receive Higher Education Fund (HEF) allocations Available University Fund allocations or state tuition revenue bonds
Employee Benefits While community college employees are locally-employed community colleges participate in the Employee Retirement System (ERS) Group Benefits Program for health benefi ts and the Teacher Retirement System(TRS) and Optional Retirement Program (ORP) for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits
Tuition Fee Revenues Tuition and fee revenues are considered institutional funds and are not appropriated by the state Tuition rates vary by institution In 2012 the statewide tuition rates plus fees averaged $73 per semester credit hour but varied from $34 to $208 per semester credit hour
Local Tax Revenue Community Colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011 Local tax revenues are expected to provide support for physical plant needs and augment state General Revenue Funds for instruction and administration costs
SOURCE Legislative Budget Board
TSTCLAMAR COLLEGES
Instruction and Administration General Revenue Funds from the state are based on formulas for two-year institutions Tuition and fee revenues augment General Revenue Funds for these costs
Academic Courses Approximately 39 percent at the Lamar colleges and 28 percent at Texas State Technical College (TSTC) of total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 61 percent at the Lamar colleges and 72 percent at TSTC of total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant State funding based on the formula for general academic institutions The Lamar colleges will receive approximately $71 million and TSTC will receive $157 million in General Revenue Funds for physical plant and utilities in the 2012ndash13 biennium
Facilities The Lamar colleges receive approximately $42 million annually from HEF funds and TSTC receives almost $58 million annually The HEF monies are used to acquire land construct and equip buildings provide major building repair or rehabilitation and acquire capital equipment and library materials
Employee Benefits Both the Lamar colleges and TSTC institutions participate in ERSrsquo Group Benefits Program for health benefits and the TRS and ORP programs for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits of those employees having their salaries paid with General Revenue Funds
Tuition Fee Revenues Certain tuition revenue is appropriated by the state In 2012 for resident students average tuition plus fees was $139 per semester credit hour at the Lamar colleges and $150 per semester credit hour at TSTC
FINANCING HIGHER EDUCATION IN TEXAS ndash ID690 LEGISLATIVE BUDGET BOARD 21
FUNDING COMMUNITY AND TECHNICAL COLLEGES
These institutions are primarily funded based on student contact hours A contact hour is a standard unit of measure that represents an hour of scheduled academic and technical instruction given to students during a semester Community and junior college districts generate almost 958 percent of the state-funded contact hours at two-year institutions TSTC components generate approximately 29 percent of the contact hours and the three Lamar State Colleges account for the 13 percent
COMMUNITY COLLEGES Over 99 percent of the direct appropriations to community colleges are from the General Revenue Fund and are generated through a funding formula The remaining direct appropriations are for isolated ldquospecial itemsrdquo including appropriations for the Southwest Collegiate Institute for the Deaf which is part of the appropriation for Howard College The Texas Education Code Section 130003(a) calls for state appropriations to public community colleges to ldquosupplement local funds for the proper support maintenance operation and improvement of those public junior colleges of Texas that meet the standards prescribed by the chapterrdquo Further Education Code Section 130003(c) indicates that state funds must be used ldquoexclusively for the purpose of paying salaries of instructional and administrative forceshellip and the purchase of supplies and materials for instructional purposesrdquo
Consistent with statute community colleges have their own Instruction and Administration Formula which is funded by General Revenue Funds and based on ldquostudent contact hoursrdquo Unlike general academic institution formulas this formula does not include tuition and fee revenue as part of the method of fi nance
The Eighty-second Legislature 2011 also provided $45 million to certain districts through a new small institution supplemental formula A district is eligible for the supplement if it makes a significantly above-average effort to generate tax income while at the same time experiencing below-average tax revenue and does not have a number of contact hours that exceeds the statewide median Th e Eighty-second Legislature appropriated each eligible district $05 million for the 2012ndash13 biennium
No state funding is provided for physical plant operations and maintenance or for facilities that is supported by local tax eff ort
Three community colleges receive weighted semester credit hour formula funding for a Bachelor of Applied Technology degree program
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $153 million in General Revenue formula hold harmless funding for aff ected community colleges to minimize the effect of reduced formula funding as a result of overall contact hour declines The Eighty-second Legislature 2011 did not provide any hold harmless funding in the 2012ndash13 biennium
Property taxes tuition and fees are other major sources of revenue for community colleges Figure 21 illustrates the estimated sources of funding for community colleges Th e state appropriations in Figure 21 include all formula special item Higher Education Group Insurance appropriations and retirement benefi t appropriations
FIGURE 21 MAJOR SOURCES OF COMMUNITY COLLEGESrsquo OPERATING REVENUE IN BILLIONS FISCAL YEAR 2011
727$ 21
6WDWHampRQWULEXWLRQV
URVV7XLWLRQDQG)HHV
3URSHUW7D[HV
)HGHUDO)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING
The basis of the formula starts with the Texas Higher Education Coordinating Board (THECB) Report of Fundable Operating Expenses (RFOE) (formally called the All Funds Expenditure Report) The study includes all expenditures for instruction and administration (facilities costs are not included) in 26 program areas THECB uses the expenditure data to determine the median cost in the 26 program areasmdashthe ldquoratesrdquo for contact hours in those disciplines THECB then makes a recommendation for
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 22
FUNDING COMMUNITY AND TECHNICAL COLLEGES
funding based on the rates Over the years THECB has used various methodologies as the basis for its funding recommendations Because the RFOE takes into account all funds (state appropriations plus tuition and tax revenue which are not appropriated) THECBrsquos recommendation for state funding has generally not equaled 100 percent of the rates
The amount of the appropriation is a legislative decision based on funds available The appropriation is allocated to the colleges according to each districtrsquos pro-rata share of THECB recommendations
HIGHER EDUCATION GROUP INSURANCE (HEGI)
Like state institutions of higher education community colleges receive General Revenue Fund contributions for group insurance However since community college employees are local not state employees state contributions for health benefits are fully discretionary Other agencies and institutions of higher education report employee eligibility for General Revenue-funded group health insurance benefi ts only if the employeersquos salary is directly paid with General Revenue Funds However in the past community colleges tended to base eligibility for General Revenue-funded benefits if the employeersquos job function fell under an approved ldquoelement of costrdquo This practice caused community colleges to report eligibility for state funded health benefits in a manner that did not always match the source of the employeersquos salary
This practice led to the Governorrsquos veto of the Group Health Insurance appropriation for fiscal year 2009 ($154 million) at the end of the Eightieth Legislative session However an agreement to restore the vetoed funds was reached and returned directly to the districts in House Bill 4586 Eighty-first Legislature Regular Session 2009
The Eight-Second Legislature 2011 allowed community colleges to receive General Revenue Fund contributions for employees whose job function fell under an approved ldquoelement of costrdquo However the Legislature only funded 42 percent of the premium costs for these employees
OTHER STAFF BENEFITS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and certain administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees
participate in TRS a defi ned benefit plan In both instances the state funds retirement contributions equal 60 and 64 percent of an employeersquos salary in fiscal year 2012 and fi scal year 2013 respectively (These appropriation amounts are not included in Figure 2 on page 3)
DRAMATIC ENROLLMENT GROWTH
Since the 1996ndash97 biennium public community colleges have received ldquoDramatic Enrollment Growth Fundingrdquo For the 2000ndash01 biennium this was expanded to include Texas State Technical Colleges and Lamar State Colleges (Lamars) The appropriation was made to THECB Rider 13 page IIIshy53 General Appropriations Act (2010ndash11 Biennium) provided guidelines for distributing this funding
For the 2010ndash11 biennium THECB is authorized to allocate up to $175 million per year to schools experiencing a growth rate of five percent or greater in 2010 and eight percent or greater in 2011 The Eighty-second Legislature 2011 did not provide any dramatic enrollment growth funding in the 2012-13 biennium
OTHER TRUSTEED FUNDS
Students at community colleges also benefi t from Texas Educational Opportunity Grants the student fi nancial aid program appropriation that is allocated by THECB
TEXAS STATE TECHNICAL COLLEGE LAMAR STATE COLLEGES The Texas State Technical Colleges (TSTC) and Lamar State Colleges are allocated a majority of their appropriation via two formulas the Instruction and Administration Formula for two-year institutions and the Infrastructure Formula for general academic institutions Similar to general academic institutions the tuition revenue for these colleges is included in the appropriations bill
Contact hours for vocationaltechnical courses represent approximately 61 percent of total contact hours at the Lamar State Colleges and 72 percent at TSTC institutions Th e remaining contact hours are generated from academic and continuing education courses
Facilities funding is available from the Higher Education Fund for both TSTC and the Lamars State Colleges and both have received Tuition Revenue Bond authorizations
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 23
FUNDING COMMUNITY AND TECHNICAL COLLEGES
The Community Colleges section of this report includes subsections on Higher Education Group Insurance Other Staff Benefits and Dramatic Enrollment Growth Th ese three subsections apply to appropriations for Texas State Technical Colleges and the Lamar State Colleges as well
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 24
FUNDING TEXAS AampM SYSTEM AGENCIES
There are seven research and service agencies that are administered by the Texas AampM University System Th e system agenciesrsquo missions differ from other institutions of higher education in that each system agency focuses on one or two of the three traditional missions of higher education institutions research extension and service (Figure 22)
FIGURE 22 TEXAS AampM SYSTEM AGENCIES MISSIONS AND FUNCTIONS
STATUTORY AUTHORITY MISSIONFUNCTIONS
For the 2012ndash13 biennium the total direct appropriations for Texas AampM System (System) agencies are $8897 million In addition to state appropriations the System agencies receive some Federal Funds that are not included in the General Appropriations Act and have access to private funds While System agencies have significant portions of their Other Funds and Federal Funds appropriated the appropriations are estimated and actual income from these funding sources is subject to signifi cant variation
Texas AampM AgriLife Education Conducts research in the agricultural environmental and life sciences Goals include Research Code Title III enhancing the competitiveness of agricultural industries and natural resource conservation
Chapter 88 Research highlights bioenergy irrigation efficiency and the use of distillerrsquos grain in feedlots Administers the honey bee regulation and feed and fertilizer programs
Texas AampM AgriLife Education Provides training and educational programs including 4-H through extension agents Extension Service Code Title III serving every county in Texas and supported by federal state and county funds Provides
Chapter 88 wildlife and insect management services including feral hog abatement and boll weevil eradication
Texas AampM Education Conducts engineering and technology research with a focus on interdisciplinary research Engineering Code Title III based on statewide priorities Research highlights energy independence effi ciency and Experiment Station Chapter 88 conservation alternative energy and national security
Texas AampM Education Conducts transportation related research and develops technology Approximately 50 Transportation Code Title III percent of research expenditures from interagency contracts are contracted from the Texas Institute Chapter 88 Department of Transportation
Texas AampM Education Provides training technical assistance and emergency response to enhance public Engineering Code Title III safety security and economic growth Operates the Brayden Fire Training Field and the Extension Service Chapter 88 Emergency Operations Training Center Texas Task Force 1 is deployed for emergency
response and search and rescue operations
Texas AampM Forest Education Provides incident management teams and emergency response as well as wildfire Service Code Title III prevention detection and suppression services The Texas Wildfire Protection Plan is
Chapter 88 the agencyrsquos wildfire response model Administers the Rural Volunteer Fire Department Assistance Program which gives grants to local fire departments for equipment and training
Texas AampM Veterinary Education Provides fee-based veterinary medical diagnostic services which contribute to an animal Medical Diagnostic Code Title III and zoonotic disease surveillance system Responds to potential high consequence andor Laboratory Chapter 88 emerging disease events Develops new diagnostic testing technologies
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 25
FUNDING TEXAS AampM SYSTEM AGENCIES
FIGURE 23 TEXAS AampM SYSTEM AGENCIES COMPARED TO INSTITUTIONS OF HIGHER EDUCATION
SIMILARITIES
FUNDING
Both Texas AampM System (System) agencies and institutions of higher education have considerable flexibility in their budgeting and financial operations (ldquolump sumrdquo appropriations)
Both are eligible to receive proceeds from the Permanent University Fund
Both are considered to be institutions of higher education for purposes of employee group health insurance
Both System agencies and institutions of higher education generate and keep 100 percent of indirect cost recovery from research and other grants
PERFORMANCE MEASURES
OPERATIONS
Like other institutions of higher education System agencies are not required to submit operating budgets or strategic plans
Both are statutorily embedded within the Texas AampM Systemrsquos institutional framework
SOURCE Legislative Budget Board
DIFFERENCES
General academic health-related and two-year institutions receive formula funding while System agencies do not
Texas AampM System agencies do not generate revenue in the same manner or amount of other higher education institutions
Performance measures for the System agencies are agency-specific while performance measures for other higher education institutions are standardized
In several ways state funding for System agencies is similar to funding for higher education institutions System agencies have considerable flexibility in their budgeting and fi nancial operations because they receive lump-sum appropriations in the same manner as other institutions of higher education They are eligible to receive funds from the Permanent University Fund (PUF) (They were allocated $153 million from the PUF for debt service in the 2012ndash13 biennium) System agencies are also funded in the same manner as other institutions of higher education with regard to staff benefi ts including employee group health insurance contributions
However there are several funding diff erences between System agencies and other higher education institutions Most significantly System agencies do not receive formula-based funding Also while some System agencies may charge fees for their services they do not generate tuition and fees in the same manner or quantity as other institutions of higher education
As is the case with all institutions the System agencies keep 100 percent of their respective indirect cost recovery income
because this income is derived from earnings on federal grants and is held outside the treasury
For the 2012ndash13 biennium funding associated with infrastructure expenses and utilities for System agencies inside Brazos County is equal to the infrastructure rate (as determined by the General Academic formulas on page 6) for Texas AampM University
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 26
APPENDIX A FREQUENTLY ASKED QUESTIONS
Q What are the limitations on how institutions spend state appropriations
A Generally speaking institutions have great fl exibility in spending appropriated funds however some limitations do exist depending on the source of revenue Appropriated revenue includes General Revenue Funds General Revenuendash Dedicated Funds (mostly tuition and fee income) Other Funds (including Patient Income) and Federal Funds (for certain Texas AampM System Agencies) Th e Texas Constitution (Article VII Section 18(i) and 17(j)) prohibits with limited exceptions the use of General Revenue Funds for acquiring land or for construction projects An exception occurs when the legislature by two-thirds vote in each house expressly determines that there is a demonstrated need for the project
Various provisions in the 2012ndash13 General Appropriations Act (GAA) Higher Education Special Provisions restrict state appropriations These restrictions include the following
bull Section 6 (Rider 8b) which prohibits the use of appropriated funds for auxiliary enterprises
bull Section 6 (Rider 9) which limits the use of these funds to pay debt service for statutorily authorized tuition revenue bonds Any such appropriation not spent must be returned to the General Revenue Fund at the end of the year
bull Section 9 which prohibits the use of appropriated funds for intercollegiate athletics purposes and
bull Section 54 which limits the use of the Research Development Fund to those defined in Education Code Section 62091
Q Would an increase in tuition revenue replace a corresponding amount in General Revenue Funds or would the revenue remain within the institution
A The result depends on how the Legislature responds
For instance assume that the Eight-second Legislature 2011 changed the statute to require institutions to charge nonresident tuition in circumstances where they had previously waived the nonresident tuition rate For the 2012ndash13 biennium institutions would benefit fully from the
increase in tuition revenue (This assumes the formula calculation would not include a projected increase in tuition)
However institutional appropriations in the 2014ndash15 biennium now depend on that legislation passed in the Eighty-third Legislature 2013 Assuming the same number of students (semester credit hours) enroll regardless of changes in tuition policy and that the result of charging nonresident tuition generated $100 million in additional tuition revenue there are three options
1 Reduce General Revenue Funds (GR) in the formulas by $100 million In this scenario the formula rate stays the same and every dollar increase in tuition revenue results in a dollar decrease in GRmdashinstitutional funding does not increase
2 Keep GR the same and run the additional tuition revenue through the formulas Th e formula funding rate would increase and every institution would receive more funds including those institutions that generated no additional tuition revenue
3 Keep GR formula appropriations at the same level and let individual institutions keep the additional tuition revenue they generated outside the formula allocation
Q Are all tuition and fee revenues collected by institutions of higher education included in the appropriations bill
A No None of the tuition and fee revenues collected by community colleges are appropriated
For general academic institutions an estimate of the revenue from certain tuitions and fees such as statutory tuition (Education Code 54051 Tuition Rates) board authorized tuition (Education Code 54008 Tuition Rate Set by Governing Board) Laboratory Fees (Education Code 54501) and certain other fees are appropriated in the GAA as General Revenue FundsndashDedicated Estimated Other Educational and General Income There are a number of other tuitions and fees that are not included in the GAA and therefore not referred to as state funding Such tuitions and fees include but are not limited to designated tuition (Education Code 540513 Redesignation of Building Use Fee) and Incidental Fees (Education Code 54504) Federal
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 27
APPENDIX A FREQUENTLY ASKED QUESTIONS
Funds are also not appropriated to the general academic and health-related institutions
Q Is a decrease in enrollment the only reason an institution would be eligible for formula funding hold harmless
A No Each session the Legislature makes a determination of whether it will make an appropriation for formula hold harmless A decrease in total enrollment is one reason an institution could be eligible for the funding Because the semester credit hours (general academic institutions) full-time student equivalents (health-related institutions) used in the formulas are based on weights (discipline program and course level) a change in the type of student enrollment regardless of total enrollment could also make an institution eligible for hold harmless funding
Q What are Educational and General Funds
A ldquoOther Educational and General Incomerdquo is a subset of ldquoEducational and General Incomerdquo The following are included in the Education Code (51009(c)) defi nition for ldquoEducational and General Fundsrdquo net tuition special course fees charged under Education Code 54051(e) and (l) lab fees student teaching fees hospital and clinic fees organized activity fees and proceeds from the sale of educational and general equipment
Q What does it mean to be a Tier One institution
A The Tier One reference is often derived from the Carnegie Foundation for the Advancement of Teachingrsquos prior system for classifying institutions of higher education As part of the 1994 version of the Carnegie Classification there were four categories for doctorate granting institutions Research Universities I Research Universities II Doctoral Universities I and Doctoral Universities II ldquoTier Onerdquo was synonymous with Research Universities I Such institutions had to off er a full range of baccalaureate programs award 50 or more doctoral degrees each year and receive annually at least $40 million or more in federal research funds Two institutions in Texas (The University of Texas at Austin and Texas AampM University) met these criteria The 2000 version of the Carnegie Classification collapsed the categories for doctorate granting institutions from four to two Doctoral Research UniversitiesmdashExtensive and DoctoralResearch UniversitiesmdashIntensive Six public institutions in Texas (Texas AampM University Texas Tech University University of Houston University of North Texas The University of Texas at Arlington and The University of Texas at Austin) meet the criteria for DoctoralResearch Universitiesmdash
Extensive In 2005 however the classifi cation structure returned to a more restricted top tier of institutions classifi ed as ldquoResearch Universities (very high research activity)rdquo Both The University of Texas at Austin and Texas AampM University are now counted in this category but any reference to Tier One usually refers to the 1994 Carnegie Classifi cation
Q What is the space model What is the base number of square feet needed
A In 1992 the Texas Higher Education Coordinating Board approved the Space Projection Model for Higher Education Institutions in Texas for public universities to assess the net assignable square feet (NASF) of educational and general space an institution needs There are fi ve categories incorporated into the model teaching library research offi ce and support space Space needs for auxiliary purposes such as dormitories or athletics are not included in the model Square footage amounts are assigned based on a number of elements within each category including the number of students and their program levels and the amount of research expenditures The space model was fi rst incorporated into the funding formulas for general academic institutions in 1997
Q What are ldquoOrganized Activitiesrdquo
A General academic institutions have a funding strategy titled ldquoOrganized Activitiesrdquo These are activities or enterprises that are connected with instructional departments Th ey are intended primarily to give training to students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training
Q What are tuition revenue bonds
A Established in 1971 under Education Code 5513 tuition revenue bonds are bonds (not to exceed 50 years) issued by institutions of higher education for the purpose of ldquoproviding funds to acquire purchase construct improve enlarge andor equip any property buildings structures activities services operations or other facilities for and on behalf of its institution or institutions or any branch of branches thereofrdquo Each institutionsystem is authorized and required to pay debt service on its bonds Although the authorization and issuance of the bonds is not contingent on an appropriation by the state for related debt service the Legislature has provided General Revenue Funds to reimburse institutions for costs related to debt service However in the 2004ndash05 GAA the legislature changed this practice and only provided General Revenue Fund reimbursements for interest
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 28
APPENDIX A FREQUENTLY ASKED QUESTIONS
on bonds issued after March 31 2003 The 2006ndash07 GAA renewed the practice of reimbursing institutions for the costs related to debt service The 2008ndash09 GAA and 2010-11 GAA continues this practice
Q What Is Proportionality
A Pursuant to Section 608 of Article IX of the 2012ndash13 GAA the legislative intent of proportionality is to ldquomaximize balances in the General Revenue Fundrdquo by harmonizing salary funding source with benefits funding source Th is effectively means the Legislature limits its General Revenue Fund contributions for benefits only to those employees having salaries paid with General Revenue Funds As such proportionality requires employee health and retirement benefits be paid in ldquoproportionrdquo to the funding source of salaries To this end institutions are obligated to submit the Accounting Policy Statement 011 Benefits Proportional by Fund (APS 011) report to the Comptroller Th is document provides a structure by which state and local contributions are ldquosettled uprdquo in light of the fiscal years fund proportionality
Q What Is the National Research University Fund
A In 1995 the Texas Constitution was amended to authorize the creation and funding of the Permanent Higher Education Fund (PHEF) The PHEF was intended eventually to become a permanent endowment to support non-Permanent University Fund eligible institutions However the PHEF corpus was rededicated with the voter passage of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) In 2009 Proposition 4 transferred the balance of the PHEF to the credit of the NRUF as of January 1 2010 and repealed the constitutional authorization for the PHEF
The NRUF is intended to provide a source of funding to enable emerging research universities in Texas to achieve national prominence as major research universities Article VII of the Texas Constitution authorizes the Legislature to appropriate some or all of the total return on all investment assets of the NRUF for the purposes of the fund except for two caveats (1) the Legislature may not increase distributions from the fund if the purchasing power of investment assets for any rolling 10-year period is not preserved and (2) the amount appropriated from the proceeds of the NRUF corpus in any fiscal year must be capped at 7 percent of the investment assetsrsquo average net fair market value Until the NRUF has been invested long enough to determine its purchasing power over a 10-year period the Legislature is
authorized to use other means of preserving the purchasing power of the fund
House Bill 1000 Eighty-second Legislature Regular Session 2011 establishes the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution is designated as an emerging research university within the THECBrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fiscal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of institutionrsquos research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 29
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 30
APPENDIX B TUITION AND FEE PROVISIONS
VTCA Texas Education Code Section 54003 states No institution of higher education may collect from students attending the institution any tuition fee or charge of any kind except as permitted by lawhellip
The laws governing tuition and fees at institutions of higher education are found in Education Code Section 54 including a limited number of rules that relate to tuition and fees charged by junior and community colleges Education Code Section 54 includes statutes regarding statewide tuition and fee authority rules regarding residency for tuition and fee purposes and various exemptions for tuition and fees from nonresidency status Also it includes specific fee authority for individual institutions Figure B1 provides a listing of tuition and fee authorizations in Education Code Section 54 but does not include the items presented below or the various exemption and waiver provisions (Details about each provision can be found at httpwwwcapitolstate txus) Th ere are isolated instances outside Chapter 54 whereby the boards of regents are authorized to charge for specific services provided to students
This appendix highlights some of the more prominent tuition and fee provisions and indicates whether the related revenue is or is not included in the General Appropriations Act (GAA)
INCLUDED IN THE GENERAL APPROPRIATIONS ACT Tuition and fee revenue included in the GAA as General Revenue DedicatedndashFunds is referenced as ldquoOther Education and General Incomerdquo The amounts are ldquoEstimatedrdquo so whatever amount of revenue generated is the actual amount available to the institution to spend
54051 Tuition Rates (statutory tuition) In conjunction with Section 540512 Interim Tuition Rates resident tuition for undergraduate students reached $50 per semester credit hour in the 2005ndash06 academic year (the 2006 state fi scal year) Tuition for nonresident students at general academic medical and dental institutions is based on the average of nonresident tuition rates in the five most populous states other than Texas The Texas Higher Education Coordinating Board must make this computation each academic year
54008 Tuition Rate Set by Governing Board (also known as board authorized tuition) Applies to graduate programs Subsection (d) specifies that it is not to be used in the GAA as an offset to General Revenue Funds It is distributed across formula strategies after the formula calculation
54501 Laboratory Fees The fee amount must be sufficient to cover the general costs of laboratory materials and supplies used by a student It is not to be less than $2 or more than $30 per semester and it must not exceed the actual cost of materials and supplies
NOT INCLUDED IN THE GENERAL APPROPRIATIONS ACT 540513 Designated Tuition Statute defi nes designated tuition as an institutional fund which means the revenue is not considered part of ldquoeducational and general fundsrdquo Th e governing board can waive designated tuition for a student (see 54261) Statute specifies that this revenue not be used in the GAA as a way to offset General Revenue
54503 Student Services Fees This is intended for activities which are separate from the regularly scheduled academic functions of the institution and directly involve or benefi t students Except for The University of Texas at Austin (see 54513) and components of the University of Houston System (see 545061) the maximum of all compulsory student services cannot exceed $250 per semester It is kept separate from educational and general funds
54504 Incidental Fees The governing board sets the fee which must reasonably reflect the actual cost of the materials or services for which the fee is collected Examples of unearned fees include late registration library fi nes microfilming fees thesis or doctoral manuscript reproduction or filing fees and bad check charges
5516 Board Responsibility The governing board is authorized to ldquofix and collect rentals rates and chargesrdquo
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 31
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54006 Refund or Adjustment of Tuition and Mandatory Fees for Dropped Courses and Student Withdrawals
540065 Tuition Rebate for Certain Undergraduates
54007 Option to Pay Tuition by Installment
540071 Authority of Institution to Provide Payment Options for Student with Delayed Financial Aid
54009 Increase in Tuition Rate or Fees
54010 Reduction in Tuition
54011 Tuition Limit in Cases of Concurrent Enrollment
54012 Tuition Rates for Certain Doctoral Students
54014 Tuition for Repeated or Excessive Undergraduate Hours
54015 Billing and Notifi cation for Tuition
54016 Fixed Tuition Rate Program for Certain Transfer Students at General Academic Teaching Institutions
54052ndash54057 Residency Provisions
542031 Dependent Children of Residents Who are Members of Armed Forces Deployed on Combat Duty
54204 Children of Disabled Firefighters and Law Enforcement Officers
542041 Disabled Peace Officers
54205 Blind Deaf Students
54206 Foreign Service Officers
54208 Firefighters Enrolled in Fire Science Courses
542081 Peace Officers Enrolled in Certain Courses
54211 Faculty and Dependents
54212 Teaching and Research Assistant
54213 Scholarship Student
54214 Biomedical Research Program Scholarship Student
54221 The University of Texas System Science and Technology Development Management and Transfer
54222 Economic Development and Diversification
54223 Tuition Rates for Olympic Athletes
54231 Resident of Boarding State or Nation or Participant in Student Exchange Program Tuition
54232 NATO Agreement
54233 Academic Common Market
54241 Military Personnel and Dependents
54331 Students from other Nations of the American Hemisphere
54341 Veterans and Other Military Personnel Dependents
54342 Prisoners of War
54343 Children of Prisoners of War or Persons Missing in Action
54344 Participants in Military Funerals
54345 Assistance for Tuition and Fees for Members of State Military Forces
54351 Children of Disabled Firefighters and Law Enforcement Officers
54352 Disabled Peace Officers Optional Exemption
54353 Firefighters and Peace Officers Enrolled in Certain Courses
543531 Firefighters Enrolled in Fire Science Courses
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 32
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54354 Education Benefits for Certain Survivors
54355 Children of Professional Nursing Program Faculty
54356 Preceptors for Professional Nursing Education Programs
54363 Educational Aids
54364 Blind Deaf Students
54365 Senior Citizens Optional Benefit
545011 Charges and Fees for Certain Payments
54502 General Deposits
545021 Student Deposit Fund Composition and Uses
545025 Proration of Fees
545031 Student Fee Advisory Committee
545032 Student Fee Advisory Committee the Texas AampM University System
545041 Environmental Service Fee
54505 Vehicle Registration Fees and Other Fees Related to Parking and Traffic
54506 Fees and Charges for Services to the Public the University of Houston System
545061 Student Services Fees the University of Houston System
545062 Student Fees Advisory Committee the University of Houston System
54507 Group Hospital and Medical Services Fees Texas AampM University System
54508 Medical Services Fee Texas Tech University System Components
545081 Medical Services Fee University of North Texas System Institutions
545082 Medical Services Fee Midwestern State University
545085 Medical Services Fee Texas Womanrsquos University
545089 Medical Services Fee Texas State University System Components
5450891 Medical Services Fee The University of Texas System Components
54509 Student Recreation Fee Texas Tech University System Components
545091 Student Recreational Facility Fee University of North Texas
54510 Student Recreational Sports Fee The University of Texas at Austin
54511 Student Fees for Bus Service Texas State University
545111 Environmental Service Fee Southwest Texas State University
54512 Shuttle Bus Fee The University of Texas at Arlington
545121 Intercollegiate Athletic Fee The University of Texas at Arlington
545122 Recreational Facility Fee The University of Texas at Arlington
54513 Student Service Fees The University of Texas at Austin
545131 International Education Fee The University of Texas at Austin
545132 International Education Fee
545133 Martin Luther King Jr Statue Fee The University of Texas at Austin
545134 Washington DC Internship Education Fee
545135 Barbara Jordan and Cesar Chavez Statues Fee The University of Texas at Austin
54515 Student Union Fee
54518 University Center Fee Midwestern State University
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 33
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54519 Student Union Fee North Texas State University
545191 Intercollegiate Athletic Fee University of North Texas
54520 University Center Student Fee Stephen F Austin State University
545201 Recreational Sports Fee Stephen F Austin State University
54521 Student Center Facility Fees Texas AampM University System
54522 Student Center Fees Texas Southern University
545221 Recreational Facility Fee Texas Southern University
545222 Medical Services Fee Texas Southern University
545223 Intercollegiate Athletics Fee Texas Southern University
54523 Student Center Fees Texas State University System
545241 Student Union Fees Texas Tech University System
54525 Fees for Student Centers Texas Womanrsquos University
545251 Student Fitness and Recreational Fee Texas Womanrsquos University
54526 Student Fees for University Centers the University of Houston
54527 Student Fees for University Center Facilities the University of Houston-Downtown College
54528 Recreational Facility Fee the University of Houston
54529 Student Union Fee The University of Texas at Arlington
54530 Student Union Fees The University of Texas at Austin
54531 Student Union Building Fees The University of Texas at Dallas
545311 Transportation Fee The University of Texas at Dallas
545312 Student Services Building Fee The University of Texas at Dallas
545313 Intramural and Intercollegiate Athletics Fee The University of Texas at Dallas
54532 Student Union Building Fees The University of Texas at San Antonio
545321 Transportation Fee The University of Texas at San Antonio
545322 Intercollegiate Athletics Fee The University of Texas at San Antonio
54533 Student Union Fees The University of Texas of the Permian Basin
545331 Intercollegiate Athletic Fee The University of Texas of the Permian Basin
545332 Fees for Student Services Building The University of Texas of the Permian Basin
54534 Arts and Performance Center Fee The University of Texas at Tyler
545341 Student Recreational Facility Fee The University of Texas at Tyler
545342 Intercollegiate Athletics Fee The University of Texas at Tyler
545343 Student Union Fee The University of Texas at Tyler
54535 Student Union Fee The University of Texas at El Paso
54536 Fees for Student Health Services Building The University of Texas at Austin
54537 Fees for Student Services Building The University of Texas at Austin
545371 Gregory Gymnasium Renovation Fee The University of Texas at Austin
545372 Aquatics Center Fee The University of Texas at Austin
54538 Recreational Sports Fee Texas State University System
545381 Intercollegiate Athletics Fee Certain Institutions in Texas State University System
545382 Intercollegiate Athletics Fee Texas State University ndash San Marcos
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 34
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54539 Recreational Sports Fee the Texas AampM University System
545391 Intercollegiate Athletics Fee Texas AampM University ndash Corpus Christi
545392 Intercollegiate Athletics Fee Texas AampM University ndash Kingsville
545393 Intercollegiate Athletics Fee Prairie View AampM University
545394 Intercollegiate Athletics Fee Tarleton State University
545395 Intercollegiate Athletics Fee Texas AampM International University
545396 Intercollegiate Athletics Fees West Texas AampM University
545397 Intercollegiate Athletics Fees Texas AampM University ndash Commerce
545398 Student Endowment Fund Fee Texas AampM University ndash Corpus Christi
54540 Student Center Fee University of Houston ndash Clear Lake
54541 Recreational Facility Fee The University of Texas at El Paso
54542 Student Union Building Fee The University of Texas ndash Pan American
545421 Sports Recreation and Wellness Facility Fee The University of Texas ndash Pan American
54543 Recreational Facility Fee The University of Texas at San Antonio
54544 Recreational Facility Fee The University of Texas at Dallas
545441 Student Recreational and Health Facilities Fee Midwestern State University
545442 Intercollegiate Athletics Fee Midwestern State University
54545 Fees for Continuing Education Courses
54546 Student Union Fees The University of Texas at Brownsville
54550 Wellness Recreational and Fitness Complex Fee The University of Texas at Brownsville
54551 Intercollegiate Athletics Fee The University of Texas at Brownsville
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 35
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 36
APPENDIX C GLOSSARY
APPROPRIATION METHODOLOGIES Direct Appropriation The actual appropriation either estimated or sum certain listed in that institutionrsquos portion of the General Appropriations Act (GAA)
Indirect Appropriation An appropriation made on behalf of an institution but not listed in that institutionrsquos portion of the GAA Examples include appropriations to the Available University Fund the Higher Education Fund and the Higher Education Coordinating Board all of which are ultimately allocated to institutions
Estimated Appropriation An estimated appropriation is a figure in the GAA that best reflects the information available about the revenue source but the amount available for an institution to spend is contingent on the amount of revenue actually generated If the actual amount of revenue is less than the estimated amount the institution is limited to the lower amount If more revenue is generated than the estimated amount the institution can spend the higher amount
Sum Certain Appropriation A sum certain appropriation in the GAA means that an institution is limited to spend no more than the level of appropriation noted in the institutionrsquos bill pattern in the GAA
Lump Sum Appropriation Texas Education Code Section 61059(k) calls for flexibility in funds appropriated to higher education institutions A lump sum appropriation is a single amount that is unrestricted which means that it can be used for any variety of strategies The GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Higher education institutions are not required to spend their appropriation within specified strategies One exception to this is the Tuition Revenue Bond strategy which represents the appropriation related to debt service on related bonds and must be spent as appropriated or it is reverted to the treasury
METHODS OF FINANCE General Revenue (GR) The non-dedicated portion of the General Revenue Fund is the statersquos primary operating fund Most state tax revenue many state fees and various other sources of revenue are deposited as non-dedicated General Revenue Funds
General RevenuendashDedicated (GRndashD) This is the dedicated portion of General Revenue Funds For higher education institutions the bulk of General RevenuendashDedicated Fund appropriations consist of tuition and fee revenue generated by the institutions These include the tuition and fee revenue included as ldquoOther Educational and General Incomerdquo (defined below) ldquoboard authorized tuitionrdquo (Texas Education Code Section 54008)
Other Funds State funds not included in General Revenue Funds or General RevenuendashDedicated Funds For institutions of higher education these include the Available University Fund and Patient Income generated by health-related institutions
FUND TYPES Educational and General Income Th e Texas Education Code (51009(c)) definition for ldquoEducational and General Fundsrdquo includes (a) net tuition (b) special course fees charged under Education Code Section 54051(e) and (l) (c) lab fees (d) student teaching fees (e) hospital and clinic fees (f ) organized activity fees and (g) proceeds from the sale of educational and general equipment
Institutional Funds Texas Education Code Section 51009(b) defines institutional funds as those that are not ldquoeducational and general fundsrdquo An example of an institutional fund is ldquodesignated tuitionrdquo (Texas Education Code Section 540513) These funds are not included in the GAA
Local Funds Texas Education Code Section 51009(a) defines local funds as net tuition certain special course fees lab fees student teaching fees hospital and clinic fees organized activity fees proceeds from the sale of educational and general equipment and indirect cost recovery fees Th is revenue is accounted for as ldquoeducational and general fundsrdquo and is included in the GAA
Other Educational and General Income The GAA includes some tuition and fees collected by institutions of higher education (General RevenuendashDedicated Funds) Th e revenue from tuition and fees such as statutory tuition (see texas Education Code Section 54051 Tuition Rates) board authorized tuition (see Texas Education Code Section 54008 Tuition Rate Set by Governing Board) Laboratory
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 37
APPENDIX C GLOSSARY
Fees (Texas Education Code Section 54501) and certain other fees are considered Other Educational and General Income (Other EampG) and are appropriated in the GAA as General RevenuendashDedicated Funds Other Educational and General Income is a subset of Educational and General Income (EampG Income)
Patient Income Health-related institutions that operate hospitals or dental clinics generate patient income from services rendered It is allocated as a method of finance to the related institution across a range of strategies in the institutionrsquos bill pattern (Other Funds) For the 2010ndash11 biennium more than $48 billion in patient income was appropriated making it the largest method of fi nance for health-related institutions
OTHER ITEMS Indirect Cost Recovery Institutions negotiate a percentage of a grant with the federal government for Indirect Costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 38
FI
GU
RE
D1
CO
MPA
RIS
ON
OF
CO
NST
ITU
TIO
NA
L A
ND
RES
EARC
H F
UN
DS
201
2ndash13
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NN
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2012
ndash13
FUN
D
APP
ROPR
IATI
ON
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NC
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NP
UR
POSE
EL
IGIB
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OD
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Avai
labl
e $1
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4 m
illio
nTe
xas
Con
stitu
tion
hellip
for
Texa
s C
onst
itutio
nU
nive
rsity
the
purp
ose
of a
cqui
ring
Fund
(E
stim
ated
) la
nd
con
stru
ctin
g an
dFo
r su
ppor
t and
equi
ppin
g bu
ildin
gsm
aint
enan
ce
UT
Aus
tin
or o
ther
per
man
ent
Texa
s A
ampM
Uni
vers
ity
impr
ovem
ents
maj
orP
rairi
e Vi
ew U
nive
rsity
UT
repa
ir an
d re
habi
litat
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Sys
tem
Aamp
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yste
mof
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ldin
gs a
nd o
ther
perm
anen
t im
prov
emen
ts
For d
ebt s
ervi
ce
All
acqu
iring
cap
ital
com
pone
nts
incl
udin
g th
eeq
uipm
ent a
nd li
brar
yTA
MU
Sys
tem
Age
ncie
s bo
oks
and
libra
ryex
cept
Tex
as V
eter
inar
y m
ater
ials
and
refu
ndin
gM
edic
al D
iagn
ostic
bond
s or
not
es is
sued
Labo
rato
ry (w
hich
per
unde
r thi
s S
ectio
n
Edu
catio
n C
ode
Sec
tion
887
01 i
s a
stat
e ag
ency
Als
o
for
the
purp
ose
unde
r the
juris
dict
ion
of th
e su
ppor
t and
and
supe
rvis
ion
of th
em
aint
enan
ce o
f The
Tex
as
boar
d)
and
excl
udin
gA
ampM
Uni
vers
ity S
yste
mU
T P
an A
mer
ican
and
UT
adm
inis
tratio
n T
exas
Aamp
M
Bro
wns
ville
(bec
ause
they
Uni
vers
ity a
nd P
rairi
e re
ceiv
e H
EF
allo
catio
ns -
View
Aamp
M U
nive
rsity
and
an
inst
itutio
n ca
nnot
rece
ive
The
Uni
vers
ity o
f Tex
as a
t bo
th A
UF
and
HE
F do
llars
) A
ustin
and
The
Uni
vers
ity
of T
exas
Sys
tem
Hig
her
$525
0 m
illio
nTo
sup
port
inst
itutio
ns
Arti
cle
VII
Sec
tion
17(c
)E
duca
tion
inel
igib
le fo
r AU
F su
ppor
t pr
ovid
es a
n al
low
ance
toFu
nd
add
a ne
w in
stitu
tion
by a
Arti
cle
VII
Sec
tion
23
vote
of b
oth
hous
es o
f17
(a)
fo
r the
pur
pose
the
Legi
slat
ure
if th
e ne
wof
acq
uirin
g la
nd
inst
itutio
n is
out
side
the
UT
cons
truct
ing
and
equi
ppin
gan
d A
ampM
Sys
tem
s
build
ings
m
ajor
repa
ir
acq
uisi
tion
of c
apita
leq
uipm
ent
oth
erpe
rman
ent i
mpr
ovem
ents
or
cap
ital e
quip
men
t use
djo
intly
for e
duca
tiona
l and
gene
ral a
ctiv
ities
Arti
cle
VII
Sec
tion
18(a
-j) o
f the
Tex
as
Con
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Arti
cle
VII
Sec
tion
17(a
-l) o
f the
Tex
as
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
620
02
Gen
eral
App
ropr
iatio
nsA
ct
Texa
s C
onst
itutio
n re
quire
s 1
3 of
the
annu
al
AU
F pr
ocee
ds b
e tra
nsfe
rred
to th
e Te
xas
Aamp
M U
nive
rsity
Sys
tem
E
ach
Sys
tem
offi
cede
term
ines
how
to a
ppor
tion
its s
hare
of t
heA
UF
betw
een
debt
ser
vice
and
sup
port
and
mai
nten
ance
w
ithin
gui
delin
es s
pecifi e
d by
the
Texa
s C
onst
itutio
n
Arti
cle
VII
Sec
tion
17(a
) req
uire
s th
e H
EF
beal
loca
ted
usin
g an
equ
itabl
e fo
rmul
a d
efi n
edin
the
Edu
catio
n C
ode
(Sec
tion
620
21) a
sT
he a
lloca
tion
of fu
nds
unde
r thi
s su
bsec
tion
ism
ade
in a
ccor
danc
e w
ith a
n eq
uita
ble
form
ula
cons
istin
g of
the
follo
win
g el
emen
ts
spac
e defi c
it fa
cilit
ies
cond
ition
ins
titut
iona
l com
plex
ity
and
a se
para
te a
lloca
tion
for
the
Texa
s S
tate
Te
chni
cal C
olle
ge S
yste
m
THE
CB
adm
inis
ters
the
HE
F fo
rmul
a re
allo
catio
nad
viso
ry p
roce
ss
Edu
catio
n C
ode
(Sec
tion
620
21) p
rovi
des
a by
-in
stitu
tion
brea
kout
of a
nnua
l HE
F ap
prop
riatio
ns
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 39
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Nat
iona
l $1
24
mill
ion
Res
earc
hU
nive
rsity
(E
stim
ated
)Fu
nd
Res
earc
h $6
53
mill
ion
Dev
elop
men
tFu
nd
Texa
s $9
35
mill
ion
Com
petit
ive
Kno
wle
dge
Fund
Arti
cle
VII
Sec
tion
20(a
)
for t
he p
urpo
se o
f pr
ovid
ing
a de
dica
ted
inde
pend
ent
and
equi
tabl
eso
urce
of f
undi
ng to
enab
le e
mer
ging
rese
arch
univ
ersi
ties
in th
is s
tate
to a
chie
ve n
atio
nal
prom
inen
ce a
s m
ajor
rese
arch
uni
vers
ities
Arti
cle
VII
Sec
tion
20 (h
)
onl
y fo
r the
sup
port
and
mai
nten
ance
of
educ
atio
nal a
nd g
ener
alac
tiviti
es th
at p
rom
ote
incr
ease
d re
sear
chca
paci
ty a
t the
uni
vers
ity
Edu
catio
n C
ode
Sec
tion
hellipto
pro
mot
e62
091
in
crea
sed
rese
arch
capa
city
at e
ligib
le g
ener
alac
adem
ic te
achi
ngin
stitu
tions
Sec
tion
56 o
f Hig
her
Edu
catio
n S
peci
alP
rovi
sion
s G
AA
201
2ndash13
bi
enni
um
hellipto
sup
port
facu
lty fo
r the
pur
pose
of
inst
ruct
iona
l exc
elle
nce
and
rese
arch
Des
igna
ted
an e
mer
ging
rese
arch
uni
vers
ity b
yTe
xas
Hig
her E
duca
tion
Coo
rdin
atin
g B
oard
R
epor
ts a
t lea
st $
45 m
illio
nin
rest
ricte
d re
sear
chex
pend
iture
s in
eac
h of
the
last
2 y
ears
P
lus
four
of t
he fo
llow
ing
addi
tiona
l crit
eria
1)
End
owm
ents
gt $
400
mill
ion
2) P
rodu
ces
gt 20
0 P
hDs
per y
ear
3) S
elec
tive
ente
ring
Fres
hmen
cla
ss
4) M
embe
r of P
hi B
eta
Kap
pa o
r equ
ival
ent
5) P
osse
sses
hig
h qu
ality
facu
lty a
nd6)
Dem
onst
rate
dco
mm
itmen
t to
high
-qua
lity
grad
uate
edu
catio
n
Edu
catio
n C
ode
Sec
tion
Elig
ible
inst
itutio
n62
092
m
eans
a g
ener
al a
cade
mic
teac
hing
inst
itutio
n a
sdefi n
ed b
y S
ectio
n 61
003
ot
her t
han
The
Uni
vers
ity o
f Te
xas
at A
ustin
Tex
as A
ampM
U
nive
rsity
or P
rairi
e Vi
ew
Aamp
M U
nive
rsity
Uni
vers
ity o
f Tex
as a
t A
ustin
Uni
vers
ity o
f Tex
as
at D
alla
s T
exas
Aamp
M
Uni
vers
ity T
exas
Tec
h U
nive
rsity
Uni
vers
ity o
f H
oust
on
Arti
cle
VII
Sec
tion
20 (a
-h)
of th
e Te
xas
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
621
41
Gen
eral
App
ropr
iatio
nA
ct
Edu
catio
n C
ode
Sec
tion
Not
e th
e62
091
RD
F as
a s
tand
-alo
neap
prop
riatio
n ite
m h
asno
t bee
n fu
nded
sin
ceth
e 20
06ndash0
7 bi
enni
um
How
ever
fun
ds c
alle
d th
e R
DF
have
bee
nap
prop
riate
d di
rect
lyin
to th
e bi
ll pa
ttern
s of
each
elig
ible
Gen
eral
Aca
dem
ic In
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Edu
catio
n C
ode
Sec
tion
621
46 (c
)
o
fth
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for
dist
ribut
ion
in a
sta
tefi s
cal y
ear
each
elig
ible
in
stitu
tion
is e
ntitl
ed to
a d
istri
butio
n in
an
amou
nteq
ual t
o th
e su
m o
fon
e-se
vent
h of
the
tota
l am
ount
app
ropr
iate
d(1
)an
dan
equ
al s
hare
of a
ny a
mou
nt re
mai
ning
afte
r(2
)di
strib
utio
ns a
re c
alcu
late
d un
der S
ubdi
visi
on (1
)no
t to
exce
ed a
n am
ount
equ
al to
one
-four
th o
fth
at re
mai
ning
am
ount
Edu
catio
n C
ode
Sec
tion
621
46 (e
)If
the
num
ber o
f ins
titut
ions
that
are
elig
ible
for
dist
ribut
ions
in a
sta
tefi s
cal y
ear i
s m
ore
than
four
eac
h el
igib
le in
stitu
tion
is e
ntitl
ed to
an
equa
l sh
are
of th
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for d
istri
butio
n in
thatfi s
cal y
ear
Edu
catio
n C
ode
Sec
tion
620
95
The
am
ount
shal
l be
appo
rtion
ed a
mon
g th
e el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of
rest
ricte
d re
sear
ch fu
nds
expe
nded
by
each
inst
itutio
n pe
r yea
r for
the
thre
e pr
eced
ing
stat
efi s
cal y
ears
The
2012
ndash13
appr
opria
tion
prov
ided
abo
ut $
07
mill
ion
to e
ach
elig
ible
inst
itutio
n fo
r eve
ry $
100
mill
ion
in u
nres
trict
ed re
sear
ch e
xpen
ditu
res
asav
erag
ed o
ver a
3-y
ear p
erio
d
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 40
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Res
earc
h N
one
U
nive
rsity
D
evel
opm
ent
Fund
Texa
s $3
56
mill
ion
Res
earc
hIn
cent
ive
Pro
gram
SO
UR
CE L
egis
lativ
e B
udge
t Boa
rd
Texa
s E
duca
tion
Cod
e S
ectio
n 62
051
to
pro
vide
fund
ing
tore
sear
ch u
nive
rsiti
esan
d em
ergi
ng re
sear
chun
iver
sitie
s fo
r the
recr
uitm
ent a
nd re
tent
ion
of h
ighl
y qu
alifi
ed fa
culty
an
d th
e en
hanc
emen
t of
rese
arch
pro
duct
ivity
at
thos
e un
iver
sitie
s
Edu
catio
n C
ode
Sec
tion
hellipto
pro
vide
621
22
mat
chin
g fu
nds
to a
ssis
tel
igib
le in
stitu
tions
inle
vera
ging
priv
ate
gifts
for t
he e
nhan
cem
ent o
fre
sear
ch p
rodu
ctiv
ity a
ndfa
culty
recr
uitm
ent
Edu
catio
n C
ode
Sec
tion
620
51
Elig
ible
inst
itutio
nm
eans
an
inst
itutio
nof
hig
her e
duca
tion
desi
gnat
ed a
s a
rese
arch
univ
ersi
ty o
r em
ergi
ngre
sear
ch u
nive
rsity
und
erth
e co
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
E
ligib
le62
121
in
stitu
tion
mea
ns a
nin
stitu
tion
of h
ighe
red
ucat
ion
desi
gnat
ed a
san
em
ergi
ng re
sear
chun
iver
sity
und
er th
eco
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
620
51
Edu
catio
n C
ode
Sec
tion
(Hou
se B
ill 5
162
121
Eig
hty-fi r
st R
egul
ar
Ses
sion
)
Edu
catio
n C
ode
Sec
tion
620
53
t
o el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of t
otal
rese
arch
fund
s ex
pend
ed b
y ea
ch in
stitu
tion
annu
ally
dur
ing
the
thre
e m
ost r
ecen
t sta
tefi s
cal
year
s a
ccor
ding
to th
e fo
llow
ing
rate
s
at le
ast $
1 m
illio
n fo
r eve
ry $
10 m
illio
n of
(1)
the
aver
age
annu
al a
mou
nt o
f tho
se re
sear
chfu
nds
expe
nded
by
the
inst
itutio
n if
that
ave
rage
amou
nt fo
r the
inst
itutio
n is
$50
mill
ion
or m
ore
and
at le
ast $
500
000
for e
very
$10
mill
ion
of(2
)th
e av
erag
e an
nual
am
ount
of t
hose
rese
arch
fund
s ex
pend
ed b
y th
e in
stitu
tion
if th
at a
vera
geam
ount
for t
he in
stitu
tion
is le
ss th
an $
50 m
illio
n
Edu
catio
n C
ode
Sec
tion
621
23
hellipis
ent
itled
to re
ceiv
e o
ut o
f fun
ds a
ppro
pria
ted
for t
hepu
rpos
es o
f the
pro
gram
for t
hatfi
sca
l yea
r a
mat
chin
g gr
ant i
n an
am
ount
det
erm
ined
acco
rdin
g to
the
follo
win
g ra
tes
50 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(1)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$10
000
0 or
mor
e bu
t not
mor
eth
an $
999
999
75 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(2)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$1
mill
ion
or m
ore
but n
ot m
ore
than
$1
999
999
or
100
perc
ent o
f the
am
ount
of t
he g
ifts
and
(3)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$2
mill
ion
or m
ore
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 41
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 42
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $50119391873 $47339213388 ($2780178485) (55)
School for the Blind and Visually Impaired 93388870 41245345 (52143525) (558)
School for the Deaf 53083657 52695245 (388412) (07)
SUBTOTAL PUBLIC EDUCATION $50265864400 $47433153978 ($2832710422) (56)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1745695460 $1749380723 $3685263 02
Lamar Institute of Technology 27568721 28708990 1140269 41
Lamar University ndash Orange 18484576 19164769 680193 37
Lamar University ndash Port Arthur 23780405 22119709 (1660696) (70)
SUBTOTAL LAMAR STATE COLLEGES $69833702 $69993468 $159766 02
Texas State Technical College System $16493826 $5351461 ($11142365) (676) Administration
Texas State Technical College ndash Harlingen 50980986 49093510 (1887476) (37)
Texas State Technical College ndash West Texas 27965791 24970291 (2995500) (107)
Texas State Technical College ndash Marshall 11434368 10995468 (438900) (38)
Texas State Technical College ndash Waco 68111562 73596786 5485224 81
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$174986533 $164007516 ($10979017) (63)
SUBTOTAL TWO-YEAR INSTITUTIONS $1990515695 $1983381707 ($7133988) (04)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $19099360 $18147200 ($952160) (50)
The University of Texas at Arlington 275081581 288654156 13572575 49
The University of Texas at Austin 749518863 702739665 (46779198) (62)
The University of Texas at Dallas 230535884 223513862 (7022022) (30)
The University of Texas at El Paso 202195230 195511098 (6684132) (33)
The University of Texas ndash Pan American 169039177 162830092 (6209085) (37)
The University of Texas at Brownsville 61910963 57628718 (4282245) (69)
The University of Texas of the Permian Basin 58194080 59145561 951481 16
The University of Texas at San Antonio 273182023 260495772 (12686251) (46)
The University of Texas at Tyler 71137295 66147545 (4989750) (70)
Texas AampM University System Administrative and 20701573 4501868 (16199705) (783) General Offices
Texas AampM University 700537434 651599219 (48938215) (70)
Texas AampM University at Galveston 43799673 37773622 (6026051) (138)
Prairie View AampM University 134247361 122639379 (11607982) (86)
Tarleton State University 87292499 83950084 (3342415) (38)
Texas AampM University ndash Central Texas 29460313 30599703 1139390 39
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 43
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Corpus Christi $121534331 $110283074 ($11251257) (93)
Texas AampM University ndash Kingsville 82466491 75368253 (7098238) (86)
Texas AampM University ndash San Antonio 27154411 37125363 9970952 367
Texas AampM International University 83231209 73816324 (9414885) (113)
West Texas AampM University 79410486 72847023 (6563463) (83)
Texas AampM University ndash Commerce 99558312 89920628 (9637684) (97)
Texas AampM University ndash Texarkana 41409091 34754968 (6654123) (161)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 450003385 394815403 (55187982) (123)
University of Houston ndash Clear Lake 83394543 71849633 (11544910) (138)
University of Houston ndash Downtown 88104670 67926822 (20177848) (229)
University of Houston ndash Victoria 42631672 39786959 (2844713) (67)
Midwestern State University 54249721 48828454 (5421267) (100)
University of North Texas System Administration 9789067 6732226 (3056841) (312)
University of North Texas 302350602 296355351 (5995251) (20)
University of North Texas at Dallas 35156605 30478388 (4678217) (133)
Stephen F Austin State University 121843336 108728674 (13114662) (108)
Texas Southern University 174127907 150903873 (23224034) (133)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 368026094 357056343 (10969751) (30)
Angelo State University 68450875 64053866 (4397009) (64)
Texas Womans University 146639127 135140923 (11498204) (78)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 121909453 111926905 (9982548) (82)
Sam Houston State University 162684291 145338873 (17345418) (107)
Texas State University ndash San Marcos 261940220 254492644 (7447576) (28)
Sul Ross State University 34008142 37804020 3795878 112
Sul Ross State University Rio Grande College 13112804 12127383 (985421) (75)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$6217659551 $5853308379 ($364351172) (59)
HEALTH-RELATED INSTITUTIONS -
The University of Texas Southwestern Medical $339025963 $278284511 ($60741452) (179) Center
The University of Texas Medical Branch at 1252556677 1214546039 (38010638) (30) Galveston
The University of Texas Health Science Center at 356632008 347880533 (8751475) (25) Houston
The University of Texas Health Science Center at 357022348 319153560 (37868788) (106) San Antonio
The University of Texas MD Anderson Cancer 4614023153 5043439860 429416707 93 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 44
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center at $170568794 $176002869 $5434075 32 Tyler
Texas AampM University System Health Science 252705800 241434175 (11271625) (45) Center
University of North Texas Health Science Center 141974215 140131956 (1842259) (13) at Fort Worth
Texas Tech University Health Sciences Center 361096839 333314809 (27782030) (77)
SUBTOTAL HEALTH-RELATED INSTITUTIONS $7845605797 $8094188312 $248582515 32
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $137560226 $130327148 ($7233078) (53)
Texas AgriLife Extension Service 137837443 128253897 (9583546) (70)
Texas Engineering Experiment Station 249008314 268154320 19146006 77
Texas Transportation Institute 96056916 99288013 3231097 34
Texas Engineering Extension Service 164895453 161748713 (3146740) (19)
Texas Forest Service 108765979 196355520 87589541 805
Texas Veterinary Medical Diagnostic Laboratory 32693561 29601103 (3092458) (95)
SUBTOTAL TEXAS AampM UNIVERSITY $926817892 $1013728714 $86910822 94 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 1755022519 1301687813 (453334706) (258)
SUBTOTAL OTHER HIGHER EDUCATION $3339042471 $2900537481 ($438504990) (131)
SUBTOTAL HIGHER EDUCATION $20319641406 $19845144593 ($474496813) (23)
EMPLOYEE BENEFITS
Teacher Retirement System $4038146148 $3797393090 ($240753058) (60)
Optional Retirement Program 294169521 247905975 (46263546) (157)
Higher Education Employees Group Insurance 1068235618 968961950 (99273668) (93) Contributions
Retirement and Group Insurance 61823656 63645693 1822037 29
Social Security and Benefits Replacement Pay 560373470 577908771 17535301 31
SUBTOTAL EMPLOYEE BENEFITS $6022748413 $5655815479 ($366932934) (61)
DEBT SERVICE
Bond Debt Service Payments $7579835 $14567314 $6987479 922
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13483869 $19862644 $6378775 473
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION $76416008567 $72871348360 ($3544660207) (46) 1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 45
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $30322901124 $30476707526 $153806402 05
School for the Blind and Visually Impaired 28830574 29152947 322373 11
School for the Deaf 36111132 36216478 105346 03
SUBTOTAL PUBLIC EDUCATION $30387842830 $30542076951 $154234121 05
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1728790460 $1749380723 $20590263 12
Lamar Institute of Technology 20141881 21363652 1221771 61
Lamar University ndash Orange 13379584 13438359 58775 04
Lamar University ndash Port Arthur 18247526 16676606 (1570920) (86)
SUBTOTAL LAMAR STATE COLLEGES $51768991 $51478617 ($290374) (06)
Texas State Technical College System $16122329 $4603444 ($11518885) (714) Administration
Texas State Technical College ndash Harlingen 35862333 35177742 (684591) (19)
Texas State Technical College ndash West Texas 22972902 20195085 (2777817) (121)
Texas State Technical College ndash Marshall 8795246 8519429 (275817) (31)
Texas State Technical College ndash Waco 48458059 55190076 6732017 139
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$132210869 $123685776 ($8525093) (64)
SUBTOTAL TWO-YEAR INSTITUTIONS $1912770320 $1924545116 $11774796 06
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $16827250 $15931200 ($896050) (53)
The University of Texas at Arlington 171697428 183867794 12170366 71
The University of Texas at Austin 536034384 492544731 (43489653) (81)
The University of Texas at Dallas 142108554 148778381 6669827 47
The University of Texas at El Paso 142521273 137781712 (4739561) (33)
The University of Texas ndash Pan American 115707790 110889522 (4818268) (42)
The University of Texas at Brownsville 51100517 47424781 (3675736) (72)
The University of Texas of the Permian Basin 47639722 48816240 1176518 25
The University of Texas at San Antonio 186961792 178547264 (8414528) (45)
The University of Texas at Tyler 56673893 51804728 (4869165) (86)
Texas AampM University System Administrative 11478504 4473868 (7004636) (610) and General Offices
Texas AampM University 487991523 458011060 (29980463) (61)
Texas AampM University at Galveston 36736318 30964674 (5771644) (157)
Prairie View AampM University 102383638 90923868 (11459770) (112)
Tarleton State University 62999263 59464473 (3534790) (56)
Texas AampM University ndash Central Texas 24007601 25352928 1345327 56
Texas AampM University ndash Corpus Christi 93966271 81624416 (12341855) (131)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 46
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $60610859 $54030202 ($6580657) (109)
Texas AampM University ndash San Antonio 21438200 29287597 7849397 366
Texas AampM International University 67735925 58009521 (9726404) (144)
West Texas AampM University 57622391 53282160 (4340231) (75)
Texas AampM University ndash Commerce 67888967 66581226 (1307741) (19)
Texas AampM University ndash Texarkana 31084147 30370655 (713492) (23)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 311616152 257331674 (54284478) (174)
University of Houston ndash Clear Lake 58807555 46454050 (12353505) (210)
University of Houston ndash Downtown 56441987 39973395 (16468592) (292)
University of Houston ndash Victoria 32315073 27651821 (4663252) (144)
Midwestern State University 37434162 33382015 (4052147) (108)
University of North Texas System Administration 4789067 6732226 1943159 406
University of North Texas 194672599 191274119 (3398480) (17)
University of North Texas at Dallas 30330149 28165402 (2164747) (71)
Stephen F Austin State University 84817662 75640135 (9177527) (108)
Texas Southern University 125878414 104685201 (21193213) (168)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 261015662 253976808 (7038854) (27)
Angelo State University 48095474 45861337 (2234137) (46)
Texas Womans University 104666337 92467100 (12199237) (117)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 77990428 70849905 (7140523) (92)
Sam Houston State University 85061409 79609576 (5451833) (64)
Texas State University ndash San Marcos 168720167 164894925 (3825242) (23)
Sul Ross State University 28832045 32758471 3926426 136
Sul Ross State University Rio Grande College 10662338 9364932 (1297406) (122)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$4333902287 $4078804555 ($255097732) (59)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $286599806 $249279177 ($37320629) (130) Center
The University of Texas Medical Branch at 586704245 472189151 (114515094) (195) Galveston
The University of Texas Health Science Center 278466261 294281302 15815041 57 at Houston
The University of Texas Health Science Center 285919332 260615042 (25304290) (89) at San Antonio
The University of Texas MD Anderson Cancer 316274242 298435072 (17839170) (56) Center
The University of Texas Health Science Center 68656721 71856579 3199858 47 at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 47
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $205234148 $194402799 ($10831349) (53) Center
University of North Texas Health Science Center 120369543 113121832 (7247711) (60) at Fort Worth
Texas Tech University Health Sciences Center 308265168 291713120 (16552048) (54)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$2456489466 $2245894074 ($210595392) (86)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $108442641 $101233060 ($7209581) (66)
Texas AgriLife Extension Service 93421095 84437039 (8984056) (96)
Texas Engineering Experiment Station 27420670 27791758 371088 14
Texas Transportation Institute 1786250 1282500 (503750) (282)
Texas Engineering Extension Service 13423471 12388837 (1034634) (77)
Texas Forest Service 38994278 158979948 119985670 3077
Texas Veterinary Medical Diagnostic Laboratory 12326913 11519113 (807800) (66)
SUBTOTAL TEXAS AampM UNIVERSITY $295815318 $397632255 $101816937 344 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 1324025818 1053522035 (270503783) (204)
SUBTOTAL OTHER HIGHER EDUCATION $1849025818 $1578522035 ($270503783) (146)
SUBTOTAL HIGHER EDUCATION $10848003209 $10225398035 ($622605174) (57)
EMPLOYEE BENEFITS
Teacher Retirement System $3721648969 $3431139479 ($290509490) (78)
Optional Retirement Program 249841016 205341297 (44499719) (178)
Higher Education Employees Group Insurance 1066913010 967556924 (99356086) (93) Contributions
Retirement and Group Insurance 51589368 54070178 2480810 48
Social Security and Benefits Replacement Pay 456936472 471706602 14770130 32
SUBTOTAL EMPLOYEE BENEFITS $5546928835 $5129814480 ($417114355) (75)
DEBT SERVICE
Bond Debt Service Payments $7325020 $14248830 $6923810 945
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13229054 $19544160 $6315106 477
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$46796003928 $45916833626 ($879170302) (19)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 48
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $418569 $649000 $230431 551
School for the Blind and Visually Impaired 0 0 0 NA
School for the Deaf 0 0 0 NA
SUBTOTAL PUBLIC EDUCATION $418569 $649000 $230431 551
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 7026644 7345338 318694 45
Lamar University ndash Orange 4875929 5726410 850481 174
Lamar University ndash Port Arthur 4747409 5443103 695694 147
SUBTOTAL LAMAR STATE COLLEGES $16649982 $18514851 $1864869 112
Texas State Technical College System $371497 $748017 $376520 1014 Administration
Texas State Technical College ndash Harlingen 14268123 13915768 (352355) (25)
Texas State Technical College ndash West Texas 4573311 4775206 201895 44
Texas State Technical College ndash Marshall 2486999 2476039 (10960) (04)
Texas State Technical College ndash Waco 18496312 18406710 (89602) (05)
SUBTOTAL TEXAS STATE TECHNICAL $40196242 $40321740 $125498 03 COLLEGES
SUBTOTAL TWO-YEAR INSTITUTIONS $56846224 $58836591 $1990367 35
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 99544565 104786362 5241797 53
The University of Texas at Austin 203175074 210194934 7019860 35
The University of Texas at Dallas 73902392 74735481 833089 11
The University of Texas at El Paso 54257081 54959386 702305 13
The University of Texas ndash Pan American 50448111 51483144 1035033 21
The University of Texas at Brownsville 10270338 10203937 (66401) (06)
The University of Texas of the Permian Basin 10153771 10329321 175550 17
The University of Texas at San Antonio 78194498 81948508 3754010 48
The University of Texas at Tyler 13686400 14342817 656417 48
Texas AampM University System Administrative 9223069 28000 (9195069) (997) and General Offices
Texas AampM University 194931245 184789626 (10141619) (52)
Texas AampM University at Galveston 6714220 6808948 94728 14
Prairie View AampM University 31863723 31715511 (148212) (05)
Tarleton State University 23018364 24485611 1467247 64
Texas AampM University ndash Central Texas 5452712 5246775 (205937) (38)
Texas AampM University ndash Corpus Christi 26308558 28658658 2350100 89
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 49
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $20743629 $21338051 $594422 29
Texas AampM University ndash San Antonio 5716211 7837766 2121555 371
Texas AampM International University 14449349 15531029 1081680 75
West Texas AampM University 20857129 19564863 (1292266) (62)
Texas AampM University ndash Commerce 29344128 23339402 (6004726) (205)
Texas AampM University ndash Texarkana 4114223 4384313 270090 66
University of Houston System Administration 0 0 0 NA
University of Houston 129680228 137483729 7803501 60
University of Houston ndash Clear Lake 23417549 25395583 1978034 84
University of Houston ndash Downtown 30264387 27953427 (2310960) (76)
University of Houston ndash Victoria 9883366 12135138 2251772 228
Midwestern State University 15912994 15446439 (466555) (29)
University of North Texas System 0 0 0 NA Administration
University of North Texas 100805298 105081232 4275934 42
University of North Texas at Dallas 4826456 2312986 (2513470) (521)
Stephen F Austin State University 35525799 33088539 (2437260) (69)
Texas Southern University 47027769 46218672 (809097) (17)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 98116061 103079535 4963474 51
Angelo State University 17654127 18192529 538402 30
Texas Womans University 40098242 42673823 2575581 64
Texas State University System 0 0 0 NA
Lamar University 37445892 41077000 3631108 97
Sam Houston State University 71500172 65729297 (5770875) (81)
Texas State University ndash San Marcos 88567369 89597719 1030350 12
Sul Ross State University 4941096 5045549 104453 21
Sul Ross State University Rio Grande College 2342952 2762451 419499 179
SUBTOTAL GENERAL ACADEMIC $1744378547 $1759986091 $15607544 09 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $22514152 $18054614 ($4459538) (198) Center
The University of Texas Medical Branch at 23120930 24797153 1676223 72 Galveston
The University of Texas Health Science Center 35777999 35483172 (294827) (08) at Houston
The University of Texas Health Science Center 16488403 17234857 746454 45 at San Antonio
The University of Texas MD Anderson Cancer 48597071 55476185 6879114 142 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 50
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center $512055 $569200 $57145 112 at Tyler
Texas AampM University System Health Science 13306322 24908409 11602087 872 Center
University of North Texas Health Science 12596783 16295862 3699079 294 Center at Fort Worth
Texas Tech University Health Sciences Center 23553492 27695220 4141728 176
SUBTOTAL HEALTH-RELATED $196467207 $220514672 $24047465 122 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $950000 $950000 $0 NA
Texas AgriLife Extension Service 46992 18000 (28992) (617)
Texas Engineering Experiment Station 1785036 904418 (880618) (493)
Texas Transportation Institute 0 0 0 NA
Texas Engineering Extension Service 0 0 0 NA
Texas Forest Service 61388596 28912000 (32476596) (529)
Texas Veterinary Medical Diagnostic Laboratory 0 0 0 NA
SUBTOTAL TEXAS AampM UNIVERSITY SERVICES
$64170624 $30784418 ($33386206) (520)
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 111572621 87256791 (24315830) (218)
SUBTOTAL OTHER HIGHER EDUCATION $111572621 $87256791 ($24315830) (218)
SUBTOTAL HIGHER EDUCATION $2173435223 $2157378563 ($16056660) (07)
EMPLOYEE BENEFITS
Teacher Retirement System $188794770 $209600575 $20805805 110
Optional Retirement Program 44328505 42564678 (1763827) (40)
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 0 0 0 NA
Social Security and Benefits Replacement Pay 82274010 85153600 2879590 35
SUBTOTAL EMPLOYEE BENEFITS $315397285 $337318853 $21921568 70
DEBT SERVICE
Bond Debt Service Payments $0 $0 $0 NA
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $0 $0 $0 NA
TOTAL ARTICLE III ndash AGENCIES OF $2489251077 $2495346416 $6095339 02 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 51
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $13298491946 $10520619770 ($2777872176) (209)
School for the Blind and Visually Impaired 5430126 5855880 425754 78
School for the Deaf 4233990 2921862 (1312128) (310)
SUBTOTAL PUBLIC EDUCATION $13308156062 $10529397512 ($2778758550) (209)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $16905000 $0 ($16905000) (1000)
Lamar Institute of Technology 400196 0 (400196) (1000)
Lamar University ndash Orange 229063 0 (229063) (1000)
Lamar University ndash Port Arthur 785470 0 (785470) (1000)
SUBTOTAL LAMAR STATE COLLEGES $1414729 $0 ($1414729) (1000)
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 850530 0 (850530) (1000)
Texas State Technical College ndash West Texas 419578 0 (419578) (1000)
Texas State Technical College ndash Marshall 152123 0 (152123) (1000)
Texas State Technical College ndash Waco 1157191 0 (1157191) (1000)
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$2579422 $0 ($2579422) (1000)
SUBTOTAL TWO-YEAR INSTITUTIONS $20899151 $0 ($20899151) (1000)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 3839588 0 (3839588) (1000)
The University of Texas at Austin 10309405 0 (10309405) (1000)
The University of Texas at Dallas 14524938 0 (14524938) (1000)
The University of Texas at El Paso 2681876 0 (2681876) (1000)
The University of Texas ndash Pan American 2241274 0 (2241274) (1000)
The University of Texas at Brownsville 540108 0 (540108) (1000)
The University of Texas of the Permian Basin 400587 0 (400587) (1000)
The University of Texas at San Antonio 8025733 0 (8025733) (1000)
The University of Texas at Tyler 777002 0 (777002) (1000)
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 10292036 0 (10292036) (1000)
Texas AampM University at Galveston 349135 0 (349135) (1000)
Prairie View AampM University 0 0 0 NA
Tarleton State University 1274872 0 (1274872) (1000)
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 1259502 0 (1259502) (1000)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 52
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville 1112003 0 (1112003) (1000)
Texas AampM University ndash San Antonio $0 $0 $0 NA
Texas AampM International University 658885 0 (658885) (1000)
West Texas AampM University 930966 0 (930966) (1000)
Texas AampM University ndash Commerce 2325217 0 (2325217) (1000)
Texas AampM University ndash Texarkana 6210721 0 (6210721) (1000)
University of Houston System Administration 0 0 0 NA
University of Houston 8707005 0 (8707005) (1000)
University of Houston ndash Clear Lake 1169439 0 (1169439) (1000)
University of Houston ndash Downtown 1398296 0 (1398296) (1000)
University of Houston ndash Victoria 433233 0 (433233) (1000)
Midwestern State University 902565 0 (902565) (1000)
University of North Texas System Administration 5000000 0 (5000000) (1000)
University of North Texas 6872705 0 (6872705) (1000)
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 1499875 0 (1499875) (1000)
Texas Southern University 1221724 0 (1221724) (1000)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 8894371 0 (8894371) (1000)
Angelo State University 2701274 0 (2701274) (1000)
Texas Womans University 1874548 0 (1874548) (1000)
Texas State University System 0 0 0 NA
Lamar University 6473133 0 (6473133) (1000)
Sam Houston State University 6122710 0 (6122710) (1000)
Texas State University ndash San Marcos 4652684 0 (4652684) (1000)
Sul Ross State University 235001 0 (235001) (1000)
Sul Ross State University Rio Grande College 107514 0 (107514) (1000)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$126019925 $0 ($126019925) (1000)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $16614303 $0 ($16614303) (1000) Center
The University of Texas Medical Branch at 6745161 0 (6745161) (1000) Galveston
The University of Texas Health Science Center at 24173646 0 (24173646) (1000) Houston
The University of Texas Health Science Center at 19224332 0 (19224332) (1000) San Antonio
The University of Texas MD Anderson Cancer 634206 0 (634206) (1000) Center
The University of Texas Health Science Center 80210 0 (80210) (1000) at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 53
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $15014608 $0 ($15014608) (1000) Center
University of North Texas Health Science Center 3438054 0 (3438054) (1000) at Fort Worth
Texas Tech University Health Sciences Center 11075479 0 (11075479) (1000)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$96999999 $0 ($96999999) (1000)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $15933582 $15933582 $0 NA
Texas AgriLife Extension Service 25302708 25302708 0 NA
Texas Engineering Experiment Station 137281801 153857672 16575871 121
Texas Transportation Institute 17405197 18757193 1351996 78
Texas Engineering Extension Service 48387893 48387894 1 00
Texas Forest Service 7349101 7429568 80467 11
Texas Veterinary Medical Diagnostic Laboratory 594001 594000 (1) (00)
SUBTOTAL TEXAS AampM UNIVERSITY $252254283 $270262617 $18008334 71 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 197332508 123636426 (73696082) (373)
SUBTOTAL OTHER HIGHER EDUCATION $197332508 $123636426 ($73696082) (373)
SUBTOTAL HIGHER EDUCATION $693505866 $393899043 ($299606823) (432)
EMPLOYEE BENEFITS
Teacher Retirement System $0 $0 $0 NA
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 8832085 8286741 (545344) (62)
Social Security and Benefits Replacement Pay 3888441 3428099 (460342) (118)
SUBTOTAL EMPLOYEE BENEFITS $12720526 $11714840 ($1005686) (79)
DEBT SERVICE
Bond Debt Service Payments $253903 $318484 $64581 254
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $253903 $318484 $64581 254
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$14014636357 $10935329879 ($3079306478) (220)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 54
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $6497580234 $6341237092 ($156343142) (24)
School for the Blind and Visually Impaired 59128170 6236518 (52891652) (895)
School for the Deaf 12738535 13556905 818370 64
SUBTOTAL PUBLIC EDUCATION $6569446939 $6361030515 ($208416424) (32)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 0 0 0 NA
Lamar University ndash Orange 0 0 0 NA
Lamar University ndash Port Arthur 0 0 0 NA
SUBTOTAL LAMAR STATE COLLEGES $0 $0 $0 NA
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 0 0 0 NA
Texas State Technical College ndash West Texas 0 0 0 NA
Texas State Technical College ndash Marshall 0 0 0 NA
Texas State Technical College ndash Waco 0 0 0 NA
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$0 $0 $0 NA
SUBTOTAL TWO-YEAR INSTITUTIONS $0 $0 $0 NA
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $2272110 $2216000 ($56110) (25)
The University of Texas at Arlington 0 0 0 NA
The University of Texas at Austin 0 0 0 NA
The University of Texas at Dallas 0 0 0 NA
The University of Texas at El Paso 2735000 2770000 35000 13
The University of Texas ndash Pan American 642002 457426 (184576) (288)
The University of Texas at Brownsville 0 0 0 NA
The University of Texas of the Permian Basin 0 0 0 NA
The University of Texas at San Antonio 0 0 0 NA
The University of Texas at Tyler 0 0 0 NA
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 7322630 8798533 1475903 202
Texas AampM University at Galveston 0 0 0 NA
Prairie View AampM University 0 0 0 NA
Tarleton State University 0 0 0 NA
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 0 0 0 NA
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 55
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $0 $0 $0 NA
Texas AampM University ndash San Antonio 0 0 0 NA
Texas AampM International University 387050 275774 (111276) (287)
West Texas AampM University 0 0 0 NA
Texas AampM University ndash Commerce 0 0 0 NA
Texas AampM University ndash Texarkana 0 0 0 NA
University of Houston System Administration 0 0 0 NA
University of Houston 0 0 0 NA
University of Houston ndash Clear Lake 0 0 0 NA
University of Houston ndash Downtown 0 0 0 NA
University of Houston ndash Victoria 0 0 0 NA
Midwestern State University 0 0 0 NA
University of North Texas System Administration 0 0 0 NA
University of North Texas 0 0 0 NA
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 0 0 0 NA
Texas Southern University 0 0 0 NA
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 0 0 0 NA
Angelo State University 0 0 0 NA
Texas Womans University 0 0 0 NA
Texas State University System 0 0 0 NA
Lamar University 0 0 0 NA
Sam Houston State University 0 0 0 NA
Texas State University ndash San Marcos 0 0 0 NA
Sul Ross State University 0 0 0 NA
Sul Ross State University Rio Grande College 0 0 0 NA
SUBTOTAL GENERAL ACADEMIC $13358792 $14517733 $1158941 87 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $13297702 $10950720 ($2346982) (176) Center
The University of Texas Medical Branch at 635986341 717559735 81573394 128 Galveston
The University of Texas Health Science Center at 18214102 18116059 (98043) (05) Houston
The University of Texas Health Science Center at 35390281 41303661 5913380 167 San Antonio
The University of Texas MD Anderson Cancer 4248517634 4689528603 441010969 104 Center
The University of Texas Health Science Center 101319808 103577090 2257282 22 at Tyler
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 56
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $19150722 $22122967 $2972245 155 Center
University of North Texas Health Science Center 5569835 10714262 5144427 924 at Fort Worth
Texas Tech University Health Sciences Center 18202700 13906469 (4296231) (236)
SUBTOTAL HEALTH-RELATED $5095649125 $5627779566 $532130441 104 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $12234003 $12210506 ($23497) (02)
Texas AgriLife Extension Service 19066648 18496150 (570498) (30)
Texas Engineering Experiment Station 82520807 85600472 3079665 37
Texas Transportation Institute 76865469 79248320 2382851 31
Texas Engineering Extension Service 103084089 100971982 (2112107) (20)
Texas Forest Service 1034004 1034004 0 NA
Texas Veterinary Medical Diagnostic Laboratory 19772647 17487990 (2284657) (116)
SUBTOTAL TEXAS AampM UNIVERSITY $314577667 $315049424 $471757 01 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 122091572 37272561 (84819011) (695)
SUBTOTAL OTHER HIGHER EDUCATION $1181111524 $1111122229 ($69989295) (59)
SUBTOTAL HIGHER EDUCATION $6604697108 $7068468952 $463771844 70
EMPLOYEE BENEFITS
Teacher Retirement System $127702409 $156653036 $28950627 227
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 1322608 1405026 82418 62 Contributions
Retirement and Group Insurance 1402203 1288774 (113429) (81)
Social Security and Benefits Replacement Pay 17274547 17620470 345923 20
SUBTOTAL EMPLOYEE BENEFITS $147701767 $176967306 $29265539 198
DEBT SERVICE
Bond Debt Service Payments $912 $0 ($912) (1000)
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $912 $0 ($912) (1000)
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF $13116117205 $13523838439 $407721234 31 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 57
- INTRODUCTION
- FUNDING GENERAL ACADEMICS INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
- OTHER NON-FORMULA FUNDING
-
- FUNDING HEALTH-RELATED INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
-
- FUNDING COMMUNITY AND TECHNICAL COLLEGES
-
- OVERVIEW
- COMMUNITY COLLEGES
- TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES
-
- FUNDING TEXAS AampM SYSTEM AGENCIES
- APPENDIX A FREQUENTLY ASKED QUESTIONS
- APPENDIX B TUITION AND FEE PROVISIONS
- APPENDIX C GLOSSARY
- APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
- APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
-
INTRODUCTION
strategy as are regular state agencies An exception to this is debt service on tuition revenue bonds Section 6 Rider 9 in the Higher Education Special Provisions GAA page III-233 limits the use of debt service to pay debt service for tuition revenue bonds Any amount of an appropriation not spent must be returned to the General Revenue Fund at the end of the fi scal year
There are some limitations on how institutions can spend appropriated funds The Texas Constitution (Article VII Section 18(i) and 17 (j)) prohibits with limited exceptions the use of General Revenue Funds for construction projects However the Texas Legislature by two-thirds vote in each house may opt to use General Revenue Funds for construction projects if there is a natural disaster or demonstrated need for the project
Also GAA (Section 6 Rider 8b) Special Provisions Relating Only to State Agencies of Higher Education (page III-233) prohibits the use of appropriated funds for auxiliary purposes such as athletics and parking Section 54 of the Special Provisions (page III-246) also restricts the use of funds in the Research Development Strategy to purposes defi ned in Texas Education Code Section 62091 Communityjunior colleges can spend General Revenue Funds only for instruction and administrative costs (Texas Education Code Section 130003(c))
This report presents the different ways that public institutions and agencies allocate state appropriations and highlights the flexibility with which these appropriations may be expended References to appropriated funds are based on the Eighty-second Legislature Regular Session 2011 2012ndash13 biennium GAA as adjusted for certain appropriations made in Article IX (General Provisions) of the GAA contingency appropriations other bills making appropriations in fi scal years 2012 and 2013 and Governor vetoes Amounts for fiscal year 2011 have been adjusted for the Supplemental Appropriations Bill House Bill 4 Eighty-second Legislature Regular Session 2011 and Senate Bill 2 First Called Session 2011 Each category of institutionmdashgeneral academic health-related community and technical colleges and Texas AampM System agenciesmdashis presented separately Th e only THECB funds detailed in this report are funds that have been distributed to public institutions
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 3
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 4
FUNDING GENERAL ACADEMIC INSTITUTIONS
OVERVIEW General academic institutions are listed in the Texas Education Code (61003) Figure 4 lists the institutions and their enrollments All of the institutions have common goals of instruction research and public service however each has a unique set of academic offerings and a unique regional or statewide mission
General academic institutions receive direct appropriations via funding formulas and non-formula appropriations Direct appropriations are identified in the informational strategies of each institutionrsquos bill pattern in the General Appropriations Act (GAA) As mentioned earlier appropriations are made to institutions as a lump sum Th e informational strategies reflect how state funds are ldquoallocatedrdquo not how they must be spent This means that with a few exceptions higher education entities unlike other state agencies are not required to spend appropriations within a specified funding strategy
The appropriation levels in each strategy refl ect diff erent revenue sources such as General Revenue Funds General RevenuendashDedicated Funds (mostly tuition and fee revenue) and Other Funds These revenue sources are referred to as the ldquomethod of fi nancerdquo Figure 5 illustrates the method of finance for $74 billion in appropriations for general academic institutions including a number of the indirect appropriations referenced in the next paragraph but does not include appropriations for employee retirement benefi ts
There are also appropriations that benefit institutions that are not reflected in the bill pattern of individual institutions including the Higher Education Fund the Available National Research University Fund Available University Fund certain employee benefits and funds trusteed to the Texas Higher Education Coordinating Board (THECB)
Figure 6 presents the percentage of funding related to each of these direct and indirect appropriations All of these appropriations are further described in the following pages
In addition general academic institutions have access to funds not reflected in the state appropriations process Examples of this include indirect cost recovery certain tuition and fees such as ldquodesignated tuitionrdquo and ldquoincidental feesrdquo (both are described in Appendix B) auxiliary operations (ie revenue from athletics student services fees bookstore and parking) and grants and gifts
FIGURE 4 PUBLIC GENERAL ACADEMIC INSTITUTIONS CERTIFIED FALL 2011 HEADCOUNT
INSTITUTION HEADCOUNT
Angelo State University 7077
Lamar University 14021
Midwestern State University 5811
Prairie View AampM University 8425
Sam Houston State University 17527
Stephen F Austin State University 12702
Sul Ross State University 1985
Sul Ross State University Rio Grande College 971
Tarleton State University 9893
Texas AampM International University 7037
Texas AampM University 49861
Texas AampM University ndash Central Texas 2096
Texas AampM University at Galveston 2035
Texas AampM University ndash Commerce 10726
Texas AampM University ndash Corpus Christi 10162
Texas AampM University ndash Kingsville 6731
Texas AampM University ndash San Antonio 3554
Texas AampM University ndash Texarkana 1907
Texas Southern University 9730
Texas State University ndash San Marcos 34087
Texas Tech University 32149
Texas Womanrsquos University 14503
The University of Texas at Arlington 33439
The University of Texas at Austin 51112
The University of Texas at Brownsville 8625
The University of Texas at Dallas 18864
The University of Texas at El Paso 22582
The University of Texas at San Antonio 30968
The University of Texas at Tyler 6628
The University of Texas of the Permian Basin 3831
The University of Texas ndash Pan American 19034
University of Houston 39820
University of Houston ndash Clear Lake 8185
University of Houston ndash Downtown 12918
University of Houston ndash Victoria 4330
University of North Texas 35694
University of North Texas at Dallas 2032
West Texas AampM University 7886
STATEWIDE TOTALS 568938 SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 5
FUNDING GENERAL ACADEMIC INSTITUTIONS
HQHUDO5HYHQXH)XQGV
FIGURE 5 METHOD OF FINANCE FOR GENERAL ACADEMICS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV
2WKHU)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING Nearly 573 percent of state appropriations for general academic institutions are allocated via two funding formulas and two supplements Instruction and Operations Formula Teaching Experience Supplement Infrastructure Formula
and Small Institution Supplement The formulas and supplements are direct appropriations and are primarily based on enrollment
The formula appropriations consist of General Revenue Funds and some Other Educational and General Income (Other EampG) Other EampG includes specific tuition and fee revenue (see Appendix B for a listing of tuition and fee provisions) The inclusion of certain tuition and fee revenue in the formula funding calculation is referred to as an ldquoAll Funds methodologyrdquo to formula funding Th e most significant tuition revenue included in the formula calculation is tuition charged in accordance with Texas Education Code Section 54051 Interim Tuition Rates (referred to as statutory tuition) The statutory tuition rate for the 2012ndash13 academic year is $50 per semester credit hour for Texas residents Th e corresponding tuition rate for a nonresident student is the average nonresident tuition charged to a Texas resident at a public university in each of the five most populous states
Of the $40 billion allocated by the general academic formulas and supplements nearly 728 percent consists of General Revenue Funds with the remainder consisting of General RevenuendashDedicated Funds (Other EampG)
A portion of Other EampG income is set aside for specifi c purposes or allocated to non-formula based strategies in the
FIGURE 6 APPROPRIATIONS FOR GENERAL ACADEMIC INSTITUTIONS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
QIUDVWUXFWXUH)RUPXOD +ROG+DUPOHVV 727$ 021 )RUPXODDQG
1RQ)RUPXOD7HDFKLQJ([SHULHQFH
QVWUXFWLRQamp 2SHUDWLRQV)RUPXOD
ampDSLWDO)XQGV
QVWLWXWLRQDO
(QKDQFHPHQW
6SHFLDOWHPV
ampRQVWLWXWLRQDO)XQGV
5HVHDUFKHYHORSPHQW)XQG
+LJKHU(GXFDWLRQURXSQVXUDQFH2WKHU1RQIRUPXODWHPV
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 6
FUNDING GENERAL ACADEMIC INSTITUTIONS
institutionrsquos bill pattern For example institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) TPEG are grants designed to help students cover their tuition fees and textbook costs when these expenses exceed a certain portion of their familiesrsquo contributions to their educations This set-aside revenue is not part of the tuition and fee revenue used to calculate the funding formulas
INSTRUCTION AND OPERATIONS FORMULA
About 815 percent of formula funds flow through the Instruction and Operations Formula ($32716 million for the 2012ndash13 biennium) and Teaching Experience Supplement ($957 million for the 2012ndash13 biennium) Th e Instruction and Operations formula is calculated as follows
Semester Credit Hours X ProgramLevel Weight X Rate (5371)
Semester credit hours (SCH) are a measurement of how many classes (and the number of students enrolled in those classes) an institution delivers The formula calculation for a biennium uses a ldquobase periodrdquo of SCH The ldquobase periodrdquo used for the 2012ndash13 biennium was the combination of summer 2010 fall 2010 and spring 2011
SCH is weighted by discipline (eg nursing is weighted more than liberal arts) and by level (ie lower and upper division masters doctoral and professional) For instance a lower division liberal arts course receives a weight of 10 A doctoral level liberal arts course receives a weight of 923 A nursing lower division course receives a weight of 203 A doctoral nursing course receives a weight of 925 Beginning with the 2006ndash07 GAA the basis for the weights per discipline was shifted to an aggregation of actual costs based on institutions Annual Financial Reports Currently THECB uses a rolling three year average to adjust the weights each biennium
THECB recommends a rate based on its recommended weights and program enhancements The legislature sets the weights and the rate in the Higher Education Special Provisions of the GAA (page III-238) In practice the legislature has set the rate based on available funding including consideration of enrollment changes and other factors Figure 7 illustrates the Instruction and Operations Formula allocation to institutions
FIGURE 7 DISTRIBUTION OF INSTRUCTION AND OPERATIONS FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
7H[DV$ amp 08QLYHUVLW
2WKHUHQHUDO$FDGHPLFV
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
TEACHING EXPERIENCE SUPPLEMENT
For the 2012ndash13 biennium an additional weight of ten percent is added to lower-division and upper-division semester credit hours taught by tenured and tenure-track faculty The 2012ndash13 GAA includes the following language ldquoFurthermore it is the intent of the Legislature that the weight shall increase by 10 percent per biennium up to 50 percentrdquo (Special Provisions Relating Only to State Agencies of Higher Education Sec 28 page III-238 2012ndash13 GAA)
The Teaching Experience Supplement is calculated as follows
Semester Credit Hours X ProgramLevel Weight Supplement (10) X Rate (5371)
The Teaching Experience Supplement was 5 percent during the 1998ndash99 and 2000ndash01 biennia Th e Seventy-seventh Legislature 2001 increased the supplement to the current 10 percent in 2002ndash03 biennium
INFRASTRUCTURE FORMULA
Almost 16 percent of formula funds flow through the Infrastructure Formula and Small Institution Supplement ($6768 million for the 2012ndash13 biennium) In addition to
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 7
FUNDING GENERAL ACADEMIC INSTITUTIONS
the universities the State Colleges and components of Texas State Technical College also receive infrastructure formula appropriations This formula uses a statewide infrastructure rate which is set in the GAA The statewide infrastructure rate is divided into two rates an Adjusted Utility Rate and an All Other Rate As with the SCH rate the legislature has set the rate based on available funding including consideration of changes in institutional space and other factors
The Infrastructure Formula is calculated as follows
(Adjusted Utility Rate + All Other Rates) X Predicted Square Feet
The Adjusted Utility Rate is 52 percent of the statewide infrastructure rate The 52 percent reflects the percentage of infrastructure formula funds that institutions historically spent on utilities A statewide utility rate is determined and then adjusted for each institution to reflect utility costs relative to other institutions
The All Other Rate is 48 percent of the statewide infrastructure rate and remains constant among institutions It accounts for physical plant grounds maintenance and custodial services
THECBrsquos Space Projection Model for Higher Education Institutions in Texas (space model) estimates square footage for each institution The objective of the space model projection is to calculate the amount of space an institution needs based on the following
bull number program and level of semester credit hours
bull number of faculty non-faculty students programs and library holdings and
bull research and current EampG expenditures
Figure 8 illustrates the Infrastructure Formula allocation to institutions The similarity of the allocation to the Instruction and Operations Formula allocation demonstrates the influence of enrollment on both formula allocations
SMALL INSTITUTION SUPPLEMENT
Prior to the Eighty-fi rst Legislature (2009) general academic institutions with enrollments of less than 5000 received a $750000 annual Small Institution Supplement However the Eighty-first Legislature increased the enrollment threshold to 10000 students and implemented a phase-out
FIGURE 8 DISTRIBUTION OF INFRASTRUCTURE FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
2WKHUHQHUDO$FDGHPLFV
7H[DV$ amp M 8QLYHUVLW
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
(based on the number of students) of the supplement between 5000 and 10000 students for the 2012ndash13 biennium (see Figure 9) This supplement recognizes that institutions have a minimum cost of operation that may not be covered by funds generated through the formulas
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $414 million in General Revenue hold harmless funding for aff ected institutions to minimize the effect of reduced formula funding as a result of overall enrollment declines or declines in upper-division or graduate enrollment Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment than other institutions or a change in utility costs Th e Eighty-second Legislature 2011 provided $444 million in a hold harmless based on total General Revenue Funds (formula and non-formula) for the 2012ndash13 biennium
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 8
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 9 SMALL INSTITUTION SUPPLEMENT RECIPIENTS
The University of Texas at Brownsville
The University of Texas of the Permian Basin
The University of Texas at Tyler
Texas AampM University at Galveston
Prairie View AampM University
Tarleton State University
Texas AampM University ndash Central Texas
Texas AampM University ndash Kingsville
Texas AampM University ndash San Antonio
Texas AampM International University
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston ndash Clear Lake
University of Houston ndash Victoria
Midwestern State University
University of North Texas at Dallas
Texas Southern University
Angelo State University
Sul Ross State University
Sul Ross State University ndash Rio Grande College
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Waco
Texas State Technical College ndash Marshall
Lamar Institute of Technology
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
SOURCE Legislative Budget Board
NON-FORMULA FUNDING
SPECIAL ITEMS
Special Item appropriations to the institutions total $4836 million for the 2012ndash13 biennium In 2012ndash13 $69 million was appropriated to system offices for special items These are direct appropriations to institutions for projects that are not funded by formula but are specifi cally identifi ed by the legislature as needing support An institution is not required to spend the amount identified in a Special Item strategy for that particular project but expenditure reports indicate that institutions often use an entire appropriation along with additional funding for the related project
The majority of special item funding is through the Institutional Enhancement strategy Institutional Enhancement is a $2204 million appropriation for the 2012ndash13 biennium This is a direct appropriation to institutions and was established by the Seventy-sixth Legislature 1999 for the 2000ndash01 biennium Th e fi rst Institutional Enhancement appropriation was based on a consolidation of certain Special Item appropriations in 1999 and an additional $1 million per year was appropriated for each institution Examples of consolidated special items are items that could be funded through the formulas such as general institutional academic and research support
For the 2002ndash03 biennium there was an additional $1 million increase in appropriations for most institutions and a $15 million increase for selected institutions in South Texas and the border region Institutions that benefi ted signifi cantly from the Seventy-seventh Legislaturersquos new University Research and Texas Excellence Funds (House Bill 1839 Seventy-seventh Legislature 2001) or from the Permanent University Fund (PUF) ldquoexcellence fundingrdquo did not receive an increase in Institutional Enhancement funds for the 2002ndash03 biennium
Other Special Items total $2632 million in appropriations for the 2012ndash13 biennium and include the following institutional and instructional support public service items research items other than general research support funding for separate campuses and accreditation program items
TEXAS COMPETITIVE KNOWLEDGE FUND
The Texas Competitive Knowledge Fund (TCKF) is authorized by the General Appropriations Act (GAA) (2012ndash13 Biennium) Article III Higher Education Special Provisions Section 56 The GAA prescribes that this funding will be used to support faculty for the purpose of instructional excellence and research Funding was first allocated in these strategies by the Legislature for the 2008ndash09 biennium
Current institutions receiving TCKF appropriations include The University of Texas at Austin Texas AampM University University of Houston Texas Tech University and Th e University of Texas at Dallas Institutions are allocated funding appropriated to the TCKF based on average research expenditures for the previous three-year period Th e Eighty-second Legislature Regular Session 2011 appropriated $935 million in Texas Competitive Knowledge Fund strategies directly to the institutions This funding level provides approximately $07 million to each institution for every $100 million in research expenditures In practice
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 9
FUNDING GENERAL ACADEMIC INSTITUTIONS
when institutions have first received distributions from the fund appropriations have been reduced from the institutionrsquos special item strategies In subsequent biennia the institution continues to receive appropriations from the TCKF and the reduction in special items is not specifi cally restored
RESEARCH DEVELOPMENT FUND
The Research Development Fund was created by House Bill 3526 Seventy-eighth Legislature Regular Session 2003 and replaced the Texas Excellence and University Research Funds effective September 1 2005 The intent was to combine the Texas Excellence Fund and University Research Fund into a new fund applying a uniform allocation methodology based on a three-year average of each institutionrsquos restricted research expenditures Th e Eighty-fi rst Legislature allocated $653 million (Figure 10) in the 2012ndash13 biennium to individual institutions to fund objectives identical to the Research Development Fund (Section 62091)
TEXAS RESEARCH INCENTIVE PROGRAM
Th e Eighty-first Legislature Regular Session 2009 established the Texas Research Incentive Program (TRIP) at THECB to match state appropriations with certain gifts and endowments received by emerging research universities Th e goal of this $178 million a year program is to create more Tier One universities in Texas
PERFORMANCE INCENTIVE INITIATIVE
The Eightieth Legislature 2007 appropriated $100 million in fiscal year 2009 to THECB to establish a Higher Education Performance Incentive Initiative The funding was for ldquoimprovement in teaching and educational excellence at Texas public general academic institutionsrdquo THECB distributed $80 million for increases in degrees awarded with special weights given to critical fields and at-risk students The remaining $20 million was used to fund scholarships for students graduating in the top 10 percent of their high school class
Th e Eighty-first Legislature Regular Session 2009 maintained the $80 million for the higher education performance incentive initiative (funded by the American Recovery and Reinvestment Act) and increased funding for the Top Ten Percent scholarship program by $34 million bringing total appropriations for the program to $54 million
There were no performance funding incentives for the 2012ndash13 biennium For the 2012ndash13 biennium $396
FIGURE 10 RESEARCH DEVELOPMENT FUND ALLOCATIONS
2012ndash13 BIENNIAL RDF
INSTITUTION ALLOCATION
The University of Texas at Arlington $6032754
The University of Texas at Dallas 8425486
The University of Texas at El Paso 6925040
The University of Texas at Pan American 1147838
The University of Texas at Brownsville 902512
The University of Texas of the Permian Basin 306408
The University of Texas at San Antonio 5491296
The University of Texas at Tyler 434072
Texas AampM University at Galveston 600342
Tarleton State University 1586396
Texas AampM University ndash Corpus Christi 2212356
Texas AampM University ndash Kingsville 1846206
Texas AampM International University 253246
West Texas AampM University 681752
Texas AampM Commerce 436752
Texas AampM Texarkana 9008
University of Houston 10705472
University of Houston ndash Clear Lake 10392
University of Houston ndash Downtown 10248
University of Houston ndash Victoria 2254
Midwestern State University 30066
University of North Texas 2495448
Stephen F Austin University 895696
Texas Southern University 338580
Texas Tech University 8327602
Texas Womanrsquos University 266152
Angelo State University 123176
Lamar University 820010
Sam Houston State University 362574
Texas State University ndash San Marcos 3121164
Sul Ross State University 304040
TOTAL $65296738
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 10
FUNDING GENERAL ACADEMIC INSTITUTIONS
million is appropriated to the Top Ten Percent Scholarship Program
HOLD HARMLESS FUNDING
The Eighty-second Legislature 2011 provided $444 million in General Revenue Funds hold harmless funding for aff ected institutions to minimize the effect of reduced formula and special item funding Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment that other institutions or a change in utility costs
CAPITAL FUNDS
In addition to the constitutional funds discussed in the next subsection there are three types of state appropriation for capital funds tuition revenue bonds Skiles Act revenue bonds and lease payments Almost all of the direct appropriations to institutions related to capital funds are for debt service on tuition revenue bonds
A $5931 million General Revenue Funds appropriation was made for tuition revenue bond debt service for the 2012ndash13 biennium
Tuition revenue bonds must be authorized in statute Once an authorization is made institutions issue bonds and make related debt payments with tuition revenue Th e Texas Public Finance Authority issues tuition revenue bonds for Midwestern State University Stephen F Austin University Texas Southern University and the Texas State Technical Colleges Legislative practice has been to use General Revenue Funds to reimburse institutions for the costs related to this debt service
The legislature first authorized tuition revenue bonds in 1971 In some instances the authorization was a lump sum for the benefit of specific institutions During the Seventy-eighth Legislature 2003 $2689 million in tuition revenue bonds was authorized for specific projects at various higher education institutions The Seventy-ninth Legislature Th ird Called Session 2005 adopted House Bill 153 which authorized the issuance of $1858 billion in tuition revenue bonds for forty-four different institutions Only one tuition revenue bond (House Bill 1775) was adopted by the Eightieth Legislature 2007 for a $13 million nursing building at Stephen F Austin University Th e Eighty-fi rst Legislature 2009 authorized one tuition revenue bond for Texas AampM University at Galveston The Eighty-second Legislature 2011 did not authorize any new tuition revenue bonds
The authority for Skiles Act Revenue Bonds was repealed in 1997 It had allowed institutions to pledge up to $5 from each enrolled student for each regular semester to the payment of bonds authorized under the governing boardrsquos general authority to sell revenue bonds Institutions use their Other Educational and General Income (General Revenuendash Dedicated Funds) to pay the debt service on these previously authorized bonds This is a $10 million appropriation for the 2012ndash13 biennium
Three general academic institutions receive a $3 million General Revenue Fund appropriation for lease payments to community colleges for facilities
CONSTITUTIONAL FUNDS
These funds are appropriated separately in the GAA and not directly appropriated to the institutions (see Appendix D)
The Available University Fund (AUF) established in Section 18 Article VII Texas Constitution consists of the surface income and investment proceeds from the Permanent University Fund (PUF) a state endowment with land grants totaling 21 million acres
Distributions to the AUF consist of investment returns from PUF assets surface income from PUF lands and interest earned on AUF balances For the 2012ndash13 biennium investment returns were $12200 million surface income was $398 million and interest income was $59 million Income from the sale of PUF lands and the lease of mineral interest is retained in the PUF and invested
The total 2012ndash13 estimated appropriation for the AUF is $12660 million The Constitution appropriates two-thirds of the AUF to The University of Texas System and one-third to the Texas AampM University System The two systems may use the AUF for capital purposes (debt service on PUF bonds) for most of their institutions and ldquofor the support and maintenancerdquo of other institutions listed Entities authorized to receive funding for ldquosupport and maintenancerdquo which is now commonly referred to as ldquoAUF Excellence Fundingrdquo are the two system offi ces The University of Texas at Austin Texas AampM University and Prairie View AampM University The systemsrsquo boards of regents determine allocations to individual institutions including health-related institutions and the amounts for ldquoExcellencerdquo Figure 11 lists the recipients and the type of support they received
The Higher Education Fund (HEF) as authorized in Section 17 Article VII Texas Constitution benefits institutions of higher education not eligible for the AUF (see Figure 12)
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 11
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 11 PARTICIPANTS IN THE AVAILABLE UNIVERSITY FUND
EXCELLENCE AND DEBT SERVICE FUNDS
The University of Texas System
The Texas AampM University System
The University of Texas at Austin
Texas AampM University
Prairie View AampM University
DEBT SERVICE ONLY
The University of Texas System Components
The University of Texas at Arlington
The University of Texas at Dallas
The University of Texas at El Paso
The University of Texas of Permian Basin
The University of Texas at San Antonio
The University of Texas at Tyler
The University of Texas Southwestern Medical Center
The University of Texas Medical Branch at Galveston
The University of Texas Health Science Center at Houston
The University of Texas Health Science Center at San Antonio
The University of Texas Health Science Center at Tyler
The University of Texas MD Anderson Cancer Center
Texas AampM University System Components
Texas AampM University at Galveston
Texas AampM University at Tarleton
Texas AampM University ndash San Antonio
Texas AampM University ndash Central Texas
Texas AampM University System Health Science Center
Texas AgriLife Research
Texas AgriLife Extension Service
Texas Engineering Experiment Station
Texas Engineering Extension Service
Texas Transportation Institute
Texas Forest Service
SOURCE Legislative Budget Board
FIGURE 12 PARTICIPANTS IN THE HIGHER EDUCATION FUND
The University of Texas System Components
The University of Texas ndash Pan American
Texas AampM University System Components
Texas AampM University ndash Corpus Christi
Texas AampM International University
Texas AampM University ndash Kingsville
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston System Components
University of Houston
University of Houston ndash Clearlake
University of Houston ndash Downtown
University of Houston ndash Victoria
Independent Institutions
Midwestern State University
Stephen F Austin State University
Texas Southern University
Texas Womanrsquos University
University of North Texas System Components
University of North Texas Health Science Center at Fort Worth
University of North Texas
Texas Tech University System Components
Texas Tech University Health Sciences Center
Angelo State University
Texas State University System Components
Lamar University
Sam Houston State University
Texas State University ndash San Marcos
Sul Ross State University
Sul Ross State Rio Grande College
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
Lamar Institute of Technology
Texas State Technical College System Components
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Marshall
Texas State Technical College ndash Waco
The University of North Texas at Dallas receives its allocation through the University of North Texas SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 12
FUNDING GENERAL ACADEMIC INSTITUTIONS
The HEF is supported by General Revenue Fund appropriations
The distribution of the $525 million HEF appropriation for 2012ndash13 is provided for in statute (Texas Education Code Section 62021) The Constitution calls for a re-allocation of HEF funds every ten years The Seventy-ninth Legislature Regular Session fulfilled this requirement with the enactment of House Bill 3001
The Constitution also allows the legislature to adjust the decennial allocations every five years Th e Eighty-fi rst Legislature Regular Session 2011 exercised this authority by enacting House Bill 51 which adjusted the formula allocation for the HEF funds for fiscal years 2009 through 2015
To maintain the equitable distribution of the HEF appropriation House Bill 51 also corrected the distribution of fiscal year 2009 and 2010 HEF allocations by using revised formula calculations Using these revised formula calculations House Bill 51 factored in updated data elements to generate the annual HEF allocations for the fi ve-year period starting in fiscal year 2011
HEF funds must be used for capital purposes Institutions may use HEF allocations for debt service on HEF bonds or as cash
In 1995 the Texas Constitution was amended to authorize the creation and funding of a dedicated HEF corpus known as the Permanent Higher Education Fund (PHEF) Th is corpus was separate from the annual HEF allocation of General Revenue Funds The PHEF was intended to become a permanent endowment to support non-PUF eligible institutions but never reached its targeted value of $2 billion
The PHEF corpus of $5159 million was rededicated with the enactment of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) The balance of the PHEF was transferred to the NRUF on January 1 2010 and the authorization for the PHEF expired Proposition 4 also allowed the legislature to appropriate some or all of the total returns from the NRUF to provide a source of funding to enable emerging research universities to achieve national prominence
The Eighty-second Legislature 2011 appropriated $124 million in estimated NRUF proceeds to eligible institutions in the 2012ndash13 biennium
House Bill 1000 Eighty-second Legislature Regular Session 2011 established the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution in designated as an emerging research university within the Higher Education Coordinating Boardrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fi scal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of the institutions research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs Texas Tech University and the University of Houston are the only two institutions that received funding through this program in 2012
HIGHER EDUCATION GROUP INSURANCE (HEGI)
The $4631 million General Revenue Fund appropriation for higher education group insurance (HEGI) is not a direct appropriation in the institutionsrsquo bill patterns It is appropriated in a separate section of the GAA entitled ldquoHigher Education Employees Group Insurance Contributionsrdquo This appropriation is intended to help institutions cover the cost of health insurance premiums for institution employees whose salaries are paid from the General Revenue Fund Because The University of Texas and Texas AampM University Systems operate their own health insurance programs they each receive separate appropriations The remaining institutions are included in the program operated by the Employees Retirement System (ERS)
The HEGI appropriation is sum-certain That is the Statersquos General Revenue Fund contributions are limited to each institutionrsquos number of employees enrolled in the health insurance program as of December 1 2012 However the GAA allows ERS The University of Texas and Texas AampM University Systems to transfer HEGI appropriations among institutions within their respective group insurance programs to address shortfalls in General Revenue Funds related to group insurance premiums
SOCIAL SECURITY BENEFITS
An appropriation for social security is included in the GAA at the end of Article III It is an estimated General Revenue
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 13
FUNDING GENERAL ACADEMIC INSTITUTIONS
Fund appropriation to provide the employer matching funds for employees of institutions of higher education (Th is appropriation amount is not included in Figure 3 on page 2)
STAFF GROUP INSURANCE
Staff group insurance is for staff whose salaries are not paid with General Revenue Funds (GR) The appropriation is based on an estimation of the number of non-GR funded employees at an institution as of December 1 2010 Th e total appropriation for all general academic institutions is $1766 million for the 2012ndash13 biennium The method of finance is Other Educational and General Income (which is classified as General RevenuendashDedicated Funds)
RETIREMENT CONTRIBUTIONS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and top administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees participate in TRS a defi ned benefit plan The state funds retirement contributions for TRS equal to 60 percent of an employeersquos salary in fiscal year 2012 and 64 percent in 2013 State contributions for ORP are equal to 60 percent of an employeersquos salary in fiscal years 2012 and 2013 (Th ese appropriation amounts are not included in Figure 3 on page 2)
OTHER NON-FORMULA FUNDING
WORKERSrsquo COMPENSATION
Changes in the structure of the statewide workersrsquo compensation system resulted in most institutions receiving General Revenue Fund appropriations for Workersrsquo Compensation starting in 2006ndash07 However Th e University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool
UNEMPLOYMENT COMPENSATION
Most components of The University of Texas and Texas AampM University Systems have this strategy because they operate their own risk pools Th ese institutions receive General Revenue Fund appropriations for unemployment compensation insurance The appropriation for the 2012ndash13 biennium is $05 million in General Revenue Funds Th e Texas Workforce Commission receives an appropriation to
cover unemployment benefi ts for former state employees for all other higher education institutions
TEXAS PUBLIC EDUCATION GRANTS
According to statute (Texas Education Code Chapter 56 Subchapter C and Texas Education Code Section 54051 [Statutory Tuition]) institutions must set aside a portion of tuition revenue for Texas Public Education Grants (TPEG) Fifteen percent of each resident studentrsquos tuition and 3 percent of each nonresident studentrsquos tuition are set aside for financial aid to students at the institution Texas Education Code Section 56033 provides guidelines on the allocation of TPEG revenue The GAA includes an estimate of the amount of TPEG revenue each institution will generate Th is $2111 million estimated appropriation is considered Other Educational and General Income which are classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
Indirect costs as defined by The Comptroller of Public Accounts are ldquoincurred for a common or joint purpose benefiting more than one cost objectiverdquo Institutions negotiate a percentage of a federal grant for indirect costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
The Seventy-eighth Legislature 2003 allowed universities to retain 100 percent of indirect costs income from research grants and contracts to encourage further research projects conducted by universities
ORGANIZED ACTIVITIES
Organized Activities are activities or enterprises connected with instructional departments whose primary function is training for students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training Revenue from Organized Activities is classified as General RevenuendashDedicated Funds Other EampG Income For the 2012ndash13 biennium $503 million is appropriated for Organized Activities
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 14
FUNDING HEALTH-RELATED INSTITUTIONS
OVERVIEW Appropriations for the nine health-related institutions are similar in structure to the appropriations for general academic institutions There are formula and non-formula funding appropriations made directly to the institutions as well as appropriations that benefit the institutions but are not included in the institutionsrsquo bill patterns such as the Available University Fund certain staff benefi ts and funds trusteed at the Texas Higher Education Coordinating Board (THECB) While health-related institutions do not receive appropriations from the Research Development Fund they share many other types of appropriations similar to general academic institution appropriations Th ose appropriations will be briefly restated in this section of the report Figure 13 lists the institutions and their enrollment
FIGURE 13 PUBLIC HEALTH-RELATED INSTITUTIONS CERTIFIED HEADCOUNT FALL 2011
INSTITUTION HEADCOUNT
UT Southwestern Medical Center 2467
UT Medical Branch at Galveston 2660
UT Health Science Center at Houston 4485
UT Health Science Center at San Antonio 3273
UT M D Anderson Cancer Center 248
UT Health Science Center at Tyler NA
Texas AampM University System Health Science 1958 Center
University of North Texas Health Science 1567 Center at Fort Worth
Texas Tech University Health Sciences Center 3590
Statewide Totals 20248
SOURCE Higher Education Coordinating Board
Like other higher education institutions the appropriations for health-related institutions are a lump sum and funding strategies are presented for informational purposes in the General Appropriations Act (GAA) The funding strategies in a health-related institutionrsquos bill pattern represent how state funds are allocated but not how they must be spent Also certain methods of finance in the appropriation are estimated This means that if for example patient income for an institution is above the amount included in the GAA
the institution can spend more than the amount listed in the GAA
Also health-related institutions have access to an estimated $109 billion outside the appropriations process in 2012ndash13 Examples of this include certain tuition revenue indirect lost recovery grants and gifts
Figure 14 illustrates the 2012ndash13 method of finance for $85 billion in appropriations for health-related institutions including a number of the indirect appropriations but it does not include appropriations for retirement benefi ts
FIGURE 14 METHOD OF FINANCE FOR HEALTH-RELATED INSTITUTIONS 2012ndash13 BIENNIUM
727$ 021
HQHUDO
2WKHU)XQGV3DWLHQWQFRPH
5HYHQXH)XQGV
HQHUDO5HYHQXHsup2HGLFDWHG)XQGV13
Including some tuition and fees SOURCE Legislative Budget Board
FORMULA FUNDING The three primary funding formulas for health-related institutions are Instruction and Operations support Infrastructure support and Research Enhancement Th e University of Texas MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler have additional formula allocations to accommodate their unique missions Each health-related institution also receives formula funding for graduate medical education
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 15
FUNDING HEALTH-RELATED INSTITUTIONS
General Revenue funding and some Other Educational and General Income (Other EampG is classified as General RevenuendashDedicated) fund the formulas Like general academic institutions certain tuition revenue is used in the calculation of the Instruction and Operation support and Infrastructure support formulas Of the $15 billion that is allocated by the health-related institutionsrsquo primary formulas 939 percent is from the General Revenue Fund and the remaining 61 percent is from General RevenuendashDedicated Funds (tuition and fee revenue)
Some tuition and fee income is set aside for specifi c purposes Some specific amounts are unavailable for formula purposes and consequently are not a formula method of fi nance For example health-related institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) and Medical Loans
INSTRUCTION AND OPERATIONS SUPPORT FORMULA
The Instruction and Operations (IampO) support formula represents nearly 755 percent of the primary formula funds for health-related institutions ($9282 million for the 2012ndash13 biennium) It is intended to fund items such as faculty salaries departmental operating expenses instructional administration and libraries It is allocated on a per full-time student equivalent (FTSE) basis with a funding weight predicated on the instructional program of the student This formula applies to all health-related
institutions except The University of Texas Health Science Center at Tyler which did not offer education instruction during the base period for the 2012ndash13 biennium
Figure 15 illustrates the Instruction and Operations support formula among the eight health-related institutions
The Instruction and Operations support formula is calculated as follows
(FTSE X Program Weight X $8874) + SmallMultiple Campus Supplement
FTSE is weighted by discipline For example medicine (4753) is weighted more than pharmacy (1670) Allied Health is assigned a weight of 1000
The Legislature sets the weights and the rate ($8874 adjusted for the 2012ndash13 biennium) in the Higher Education Special Provisions of the GAA (Sec 29 page III-239 and 240) The rate is calculated based on the available revenue for the formula and the number of FTSEs
Programs with enrollments less than 200 receive a Small Campus Supplement (see Figure 16)
FIGURE 15 DISTRIBUTION OF INSTRUCTION AND OPERATIONS SUPPORT FORMULA 2012ndash13 BIENNIUM
727$ 021870$QGHUVRQ 7H[DV$ amp 0+HDOWKampDQFHUampHQWHU 6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV 87+HDOWK6FLHQFHampHQWHUDW6DQ
DW)WRUWK
+HDOWK6FLHQFHampHQWHU$QWRQLR
87+HDOWK6FLHQFH 7H[DV7HFK8QLYHUVLW+HDOWKampHQWHUDW+RXVWRQ 6FLHQFHVampHQWHU
876RXWKZHVWHUQ0HGLFDOampHQWHU
870HGLFDOUDQFK DWDOYHVWRQ
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 16
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 16 SMALL CAMPUS SUPPLEMENT RECIPIENTS
The University of Texas Southwestern Medical Center
No
The University of Texas Medical Branch at Galveston
Yes
The University of Texas Health Science Center at Houston
Yes
The University of Texas Health Science Center at San Antonio
Yes
The University of Texas MD Anderson Cancer Center
No
The University of Texas Health Science Center at Tyler
NA
Texas AampM Health Science Center Yes
University of North Texas Health Science Center at Fort Worth
No
Texas Tech University Health Sciences Center Yes
SOURCE Legislative Budget Board
INFRASTRUCTURE SUPPORT FORMULA
The Infrastructure support formula is 194 percent of the primary formula funding and is intended for utilities and physical plant support ($2383 million for the 2012ndash13 biennium) This formula calculation is similar to that for general academic institutions but includes only one rate ($655) for all institutions except The University of Texas
FIGURE 17 DISTRIBUTION OF INFRASTRUCTURE SUPPORT FORMULA 2012ndash13 BIENNIUM
MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler which have another rate ($625)
THECBrsquos space model predicts square footage for each institution The space model projection is based on the following
bull number and level of FTE students
bull number of faculty
bull single or multiple programs and campuses
bull actual clinical space and
bull research and current EampG expenditures
Because the space projection model does not account for hospital space separate infrastructure funding for hospital space is included in the total funding for hospital and patient-care activities at The University of Texas Medical Branch at Galveston The University of Texas MD Anderson Cancer Center and The University of Texas Health Science Center at Tyler
Figure 17 illustrates the Infrastructure Support Formula allocation to institutions among the nine health-related institutions
727$ 021
87+HDOWK6FLHQFHampHQWHUDW6DQ 870$QGHUVRQampDQFHUampHQWHU$QWRQLR
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW
+RXVWRQ 7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK6FLHQFHVampHQWHU
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 17
FUNDING HEALTH-RELATED INSTITUTIONS
RESEARCH FORMULA
Health-related institutions generate state appropriations to support research through General Revenue Funds in the Research Enhancement formula ($629 million for the 2012ndash13 biennium) The Research Enhancement formula accounts for 51 percent of the primary formula funds and is funded entirely from the General Revenue Fund
The allocation is based on the amount of research generated by each institution
$1412500 + (110 X Research
Expenditures)
This provides a base Institutions report for all institutions current research
regardless of research expenditures to volume THECB
Figure 18 illustrates the Research Enhancement formula allocation to the institutions among the nine health-related institutions
GRADUATE MEDICAL EDUCATION
The Seventy-ninth Legislature 2005 established a new formula for funding graduate medical education in the 2006ndash07 GAA For 2012ndash13 the funding totals $46 million
FIGURE 18 DISTRIBUTION OF RESEARCH ENHANCEMENT FORMULA 2012ndash13 BIENNIUM
727$ 021
870$QGHUVRQampDQFHUampHQWHU
(an additional $109 million is appropriated to the Baylor College of Medicine through the THECB) and provides $4436 per medical resident each year
Figure 19 illustrates the Graduate Medical Education formula allocation to institutions among the nine health related institutions and Baylor College of Medicine
CHEST DISEASE CENTER FORMULA
The Chest Disease Center operations formula which was established during the 2010ndash11 biennium applies only to The University of Texas Health Science Center at Tyler Th e University of Texas Health Science Center at Tyler has a statutory mission to conduct research develop diagnostic and treatment techniques provide training and teaching programs and provide diagnosis and treatment of inpatients and outpatients with respiratory diseases The Chest Disease Center formula is based on the number of primary chest disease patients the institution served Approximately $472 million in General Revenue Funds are appropriated for the 2012ndash13 biennium
CANCER CENTER OPERATIONS FORMULA
The Eightieth Legislature 2007 established in the GAA an Operations formula for funding The University of Texas MD Anderson Cancer Center The University of Texas MD Anderson Cancer Center has a statutory mission to eliminate cancer through patient care research education
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR
7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ 8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
870HGLFDOUDQFKDWDOYHVWRQ 7H[DV7HFK8QLYHUVLW+HDOWK876RXWKZHVWHUQ0HGLFDOampHQWHU
6FLHQFHVampHQWHU
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 18
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 19 DISTRIBUTION OF GRADUATE MEDICAL EDUCATION FORMULA 2012ndash13 BIENNIUM
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
727$ 02187+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR 870$QGHUVRQampDQFHUampHQWHU
87+HDOWK6FLHQFHampHQWHUDW7OHU
7H[DV$ amp 08QLYHULVW6VWHP +HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK 6FLHQFHVampHQWHU
DORUampROOHJHRI0HGLFLQH
and prevention The Operations formula funding is based on the total number of Texas cancer patients the institution served The Operations formula growth in funding may not exceed the average growth in funding for health-related institutions in the Instruction and Operations support formula for the current biennium For the 2012ndash13 biennium this funding formula provided $2125 million in General Revenue Funds
NON-FORMULA FUNDING
PATIENT CARE ACTIVITIES
Some institutions conduct patient care activities generally medical or dental For the 2012ndash13 biennium the estimated appropriation for Patient Income was $56 billion Th e hospital and clinic revenues earned through patient care activities are considered Other Funds which are part of Educational and General Income (not to be confused with Other Educational and General Income which is another subset of Educational and General Income) General Revenue funding supplements patient-care income to varying degrees at each institution Patient Income is an estimated appropriation and is spread across an institutionrsquos funding strategies however it is not used in the calculation of the formulas
INSTITUTIONAL ENHANCEMENT
Institutional Enhancement is a General Revenue Fund appropriation that started in the 2000ndash01 biennium It is designed to allow each institution to address its unique needs and diseconomies of scale at institutions with smaller campuses The total institutional enhancement appropriation for the 2012ndash13 biennium was $42 million which includes $407 million in General Revenue Funds and $16 million in Patient Income
SPECIAL ITEMS
Special items are activities that are not generally funded through the formulas and typically represent an institutionrsquos special needs or areas of expertise The $3107 million in General Revenue Funds for the 2012ndash13 biennium funds items such as residency programs academic outreach programs public service items and research items other than general research support Institutions propose and justify special items and request an amount for each on an ad hoc basis Special items generally remain constant from biennium to biennium unless the item was a one-time expense (eg tornado damage repairs) or the institution has not used the funding for the intended purpose
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 19
FUNDING HEALTH-RELATED INSTITUTIONS
CONSTITUTIONAL FUNDS
These funds are not directly appropriated to institutions in the GAA In other words these funds are not found in a strategy within an institutionrsquos bill pattern
Health-related institutions are eligible for funding from the Available University Fund ($146 million in Other Funds allocated to these institutions by system offices for the 2012ndash 13 biennium) and the Higher Education Fund ($257 million in General Revenue Funds appropriated for the 2012ndash13 biennium) which are presented in detail in the ldquoFunding General Academic Institutionsrdquo section of this report
CAPITAL FUNDS
Just like general academic institutions tuition revenue bonds ($1665 million in General Revenue Funds for related debt service in the 2012ndash13 biennium) are also used to fund capital projects at health-related institutions A detailed presentation of tuition revenue bonds is in the ldquoFunding General Academic Institutionsrdquo section The University of Texas Medical Branch at Galveston and The University of Texas MD Anderson Cancer Center also have separate appropriations for capital projects that are funded primarily with Patient Income
EMPLOYEE BENEFITS
Like general academic institutions health-related institutions benefit from direct and indirect state appropriations related to employee benefi ts The indirect appropriations include Higher Education Group Insurance ($2339 million in General Revenue Funds for the 2012ndash13 biennium) Retirement Contributions and Social Security Benefi ts (all presented in the ldquoFunding General Academic Institutionsrdquo section) The direct appropriations include Staff Group Insurance
For the 2012ndash13 biennium the Workersrsquo Compensation and Unemployment Compensation strategies (all presented in the ldquoFunding General Academic Institutionsrdquo section) are funded directly with General Revenue Funds and General RevenuendashDedicated Funds However The University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool The University of Texas and Texas AampM Systems also manage their own unemployment compensation coverage while all other institutions receive coverage from
the Texas Workforce Commission which receives an appropriation to cover unemployment benefi ts
TEXAS PUBLIC EDUCATION GRANTS
Health-related institutions similar to general academic institutions are subject to the Texas Education Code (sect56031 et al) provision requiring a portion of tuition revenue be set aside to fund Texas Public Education Grants (TPEG) For the 2012ndash13 biennium the estimated TPEG appropriation is $188 million This revenue is considered Other Education and General Income which is classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
As mentioned earlier in this section Indirect Cost Recovery was removed from the GAA for the 2010ndash11 biennium however the individual institution still receives the funds
TOBACCO SETTLEMENT
House Bill 1945 Seventy-sixth Legislature 1999 established the Permanent Health Fund for health-related institutions of Higher Education the Permanent Fund for Minority Health Research and Education the Permanent Fund for Higher Education Nursing Allied Health and Other Health Related Programs and 13 permanent endowments for individual institutions of higher education The $769 million in estimated interest earnings from the endowments for 2012ndash13 (based on estimated interest earnings of 45 percent each year) were appropriated to the health-related institutions
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 20
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW Public two-year lower-level institutions include 50 community and junior college districts four Texas State Technical College (TSTC) campuses and three Lamar State Colleges These institutions were appropriated $22 billion in state funding for the 2012ndash13 biennium Preliminary fall FIGURE 20 TWO-YEAR INSTITUTION FUNDING MECHANISMS 2012ndash13 BIENNIUM
2011 enrollment at these institutions totaled 789713 Figure 20 illustrates the funding mechanisms for these institutions Community colleges accounted for 983 percent of this enrollment total while the Texas State Technical and Lamar State Colleges composed the remaining portion
COMMUNITY COLLEGES
Instruction and Administration General Revenue Funds from the state are based on contact hour driven formulas for two-year institutions Tuition and fee revenues and local tax revenues augment state General Revenue Funds for these costs
Academic Courses Approximately 82 percent of the total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 18 percent of the total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant The state provides no funding for physical plant operations and maintenance Local taxing districts are expected to provide support for physical plant needs Community colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011
Facilities Local communities must provide facilities Community colleges are not eligible to receive Higher Education Fund (HEF) allocations Available University Fund allocations or state tuition revenue bonds
Employee Benefits While community college employees are locally-employed community colleges participate in the Employee Retirement System (ERS) Group Benefits Program for health benefi ts and the Teacher Retirement System(TRS) and Optional Retirement Program (ORP) for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits
Tuition Fee Revenues Tuition and fee revenues are considered institutional funds and are not appropriated by the state Tuition rates vary by institution In 2012 the statewide tuition rates plus fees averaged $73 per semester credit hour but varied from $34 to $208 per semester credit hour
Local Tax Revenue Community Colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011 Local tax revenues are expected to provide support for physical plant needs and augment state General Revenue Funds for instruction and administration costs
SOURCE Legislative Budget Board
TSTCLAMAR COLLEGES
Instruction and Administration General Revenue Funds from the state are based on formulas for two-year institutions Tuition and fee revenues augment General Revenue Funds for these costs
Academic Courses Approximately 39 percent at the Lamar colleges and 28 percent at Texas State Technical College (TSTC) of total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 61 percent at the Lamar colleges and 72 percent at TSTC of total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant State funding based on the formula for general academic institutions The Lamar colleges will receive approximately $71 million and TSTC will receive $157 million in General Revenue Funds for physical plant and utilities in the 2012ndash13 biennium
Facilities The Lamar colleges receive approximately $42 million annually from HEF funds and TSTC receives almost $58 million annually The HEF monies are used to acquire land construct and equip buildings provide major building repair or rehabilitation and acquire capital equipment and library materials
Employee Benefits Both the Lamar colleges and TSTC institutions participate in ERSrsquo Group Benefits Program for health benefits and the TRS and ORP programs for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits of those employees having their salaries paid with General Revenue Funds
Tuition Fee Revenues Certain tuition revenue is appropriated by the state In 2012 for resident students average tuition plus fees was $139 per semester credit hour at the Lamar colleges and $150 per semester credit hour at TSTC
FINANCING HIGHER EDUCATION IN TEXAS ndash ID690 LEGISLATIVE BUDGET BOARD 21
FUNDING COMMUNITY AND TECHNICAL COLLEGES
These institutions are primarily funded based on student contact hours A contact hour is a standard unit of measure that represents an hour of scheduled academic and technical instruction given to students during a semester Community and junior college districts generate almost 958 percent of the state-funded contact hours at two-year institutions TSTC components generate approximately 29 percent of the contact hours and the three Lamar State Colleges account for the 13 percent
COMMUNITY COLLEGES Over 99 percent of the direct appropriations to community colleges are from the General Revenue Fund and are generated through a funding formula The remaining direct appropriations are for isolated ldquospecial itemsrdquo including appropriations for the Southwest Collegiate Institute for the Deaf which is part of the appropriation for Howard College The Texas Education Code Section 130003(a) calls for state appropriations to public community colleges to ldquosupplement local funds for the proper support maintenance operation and improvement of those public junior colleges of Texas that meet the standards prescribed by the chapterrdquo Further Education Code Section 130003(c) indicates that state funds must be used ldquoexclusively for the purpose of paying salaries of instructional and administrative forceshellip and the purchase of supplies and materials for instructional purposesrdquo
Consistent with statute community colleges have their own Instruction and Administration Formula which is funded by General Revenue Funds and based on ldquostudent contact hoursrdquo Unlike general academic institution formulas this formula does not include tuition and fee revenue as part of the method of fi nance
The Eighty-second Legislature 2011 also provided $45 million to certain districts through a new small institution supplemental formula A district is eligible for the supplement if it makes a significantly above-average effort to generate tax income while at the same time experiencing below-average tax revenue and does not have a number of contact hours that exceeds the statewide median Th e Eighty-second Legislature appropriated each eligible district $05 million for the 2012ndash13 biennium
No state funding is provided for physical plant operations and maintenance or for facilities that is supported by local tax eff ort
Three community colleges receive weighted semester credit hour formula funding for a Bachelor of Applied Technology degree program
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $153 million in General Revenue formula hold harmless funding for aff ected community colleges to minimize the effect of reduced formula funding as a result of overall contact hour declines The Eighty-second Legislature 2011 did not provide any hold harmless funding in the 2012ndash13 biennium
Property taxes tuition and fees are other major sources of revenue for community colleges Figure 21 illustrates the estimated sources of funding for community colleges Th e state appropriations in Figure 21 include all formula special item Higher Education Group Insurance appropriations and retirement benefi t appropriations
FIGURE 21 MAJOR SOURCES OF COMMUNITY COLLEGESrsquo OPERATING REVENUE IN BILLIONS FISCAL YEAR 2011
727$ 21
6WDWHampRQWULEXWLRQV
URVV7XLWLRQDQG)HHV
3URSHUW7D[HV
)HGHUDO)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING
The basis of the formula starts with the Texas Higher Education Coordinating Board (THECB) Report of Fundable Operating Expenses (RFOE) (formally called the All Funds Expenditure Report) The study includes all expenditures for instruction and administration (facilities costs are not included) in 26 program areas THECB uses the expenditure data to determine the median cost in the 26 program areasmdashthe ldquoratesrdquo for contact hours in those disciplines THECB then makes a recommendation for
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 22
FUNDING COMMUNITY AND TECHNICAL COLLEGES
funding based on the rates Over the years THECB has used various methodologies as the basis for its funding recommendations Because the RFOE takes into account all funds (state appropriations plus tuition and tax revenue which are not appropriated) THECBrsquos recommendation for state funding has generally not equaled 100 percent of the rates
The amount of the appropriation is a legislative decision based on funds available The appropriation is allocated to the colleges according to each districtrsquos pro-rata share of THECB recommendations
HIGHER EDUCATION GROUP INSURANCE (HEGI)
Like state institutions of higher education community colleges receive General Revenue Fund contributions for group insurance However since community college employees are local not state employees state contributions for health benefits are fully discretionary Other agencies and institutions of higher education report employee eligibility for General Revenue-funded group health insurance benefi ts only if the employeersquos salary is directly paid with General Revenue Funds However in the past community colleges tended to base eligibility for General Revenue-funded benefits if the employeersquos job function fell under an approved ldquoelement of costrdquo This practice caused community colleges to report eligibility for state funded health benefits in a manner that did not always match the source of the employeersquos salary
This practice led to the Governorrsquos veto of the Group Health Insurance appropriation for fiscal year 2009 ($154 million) at the end of the Eightieth Legislative session However an agreement to restore the vetoed funds was reached and returned directly to the districts in House Bill 4586 Eighty-first Legislature Regular Session 2009
The Eight-Second Legislature 2011 allowed community colleges to receive General Revenue Fund contributions for employees whose job function fell under an approved ldquoelement of costrdquo However the Legislature only funded 42 percent of the premium costs for these employees
OTHER STAFF BENEFITS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and certain administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees
participate in TRS a defi ned benefit plan In both instances the state funds retirement contributions equal 60 and 64 percent of an employeersquos salary in fiscal year 2012 and fi scal year 2013 respectively (These appropriation amounts are not included in Figure 2 on page 3)
DRAMATIC ENROLLMENT GROWTH
Since the 1996ndash97 biennium public community colleges have received ldquoDramatic Enrollment Growth Fundingrdquo For the 2000ndash01 biennium this was expanded to include Texas State Technical Colleges and Lamar State Colleges (Lamars) The appropriation was made to THECB Rider 13 page IIIshy53 General Appropriations Act (2010ndash11 Biennium) provided guidelines for distributing this funding
For the 2010ndash11 biennium THECB is authorized to allocate up to $175 million per year to schools experiencing a growth rate of five percent or greater in 2010 and eight percent or greater in 2011 The Eighty-second Legislature 2011 did not provide any dramatic enrollment growth funding in the 2012-13 biennium
OTHER TRUSTEED FUNDS
Students at community colleges also benefi t from Texas Educational Opportunity Grants the student fi nancial aid program appropriation that is allocated by THECB
TEXAS STATE TECHNICAL COLLEGE LAMAR STATE COLLEGES The Texas State Technical Colleges (TSTC) and Lamar State Colleges are allocated a majority of their appropriation via two formulas the Instruction and Administration Formula for two-year institutions and the Infrastructure Formula for general academic institutions Similar to general academic institutions the tuition revenue for these colleges is included in the appropriations bill
Contact hours for vocationaltechnical courses represent approximately 61 percent of total contact hours at the Lamar State Colleges and 72 percent at TSTC institutions Th e remaining contact hours are generated from academic and continuing education courses
Facilities funding is available from the Higher Education Fund for both TSTC and the Lamars State Colleges and both have received Tuition Revenue Bond authorizations
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 23
FUNDING COMMUNITY AND TECHNICAL COLLEGES
The Community Colleges section of this report includes subsections on Higher Education Group Insurance Other Staff Benefits and Dramatic Enrollment Growth Th ese three subsections apply to appropriations for Texas State Technical Colleges and the Lamar State Colleges as well
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 24
FUNDING TEXAS AampM SYSTEM AGENCIES
There are seven research and service agencies that are administered by the Texas AampM University System Th e system agenciesrsquo missions differ from other institutions of higher education in that each system agency focuses on one or two of the three traditional missions of higher education institutions research extension and service (Figure 22)
FIGURE 22 TEXAS AampM SYSTEM AGENCIES MISSIONS AND FUNCTIONS
STATUTORY AUTHORITY MISSIONFUNCTIONS
For the 2012ndash13 biennium the total direct appropriations for Texas AampM System (System) agencies are $8897 million In addition to state appropriations the System agencies receive some Federal Funds that are not included in the General Appropriations Act and have access to private funds While System agencies have significant portions of their Other Funds and Federal Funds appropriated the appropriations are estimated and actual income from these funding sources is subject to signifi cant variation
Texas AampM AgriLife Education Conducts research in the agricultural environmental and life sciences Goals include Research Code Title III enhancing the competitiveness of agricultural industries and natural resource conservation
Chapter 88 Research highlights bioenergy irrigation efficiency and the use of distillerrsquos grain in feedlots Administers the honey bee regulation and feed and fertilizer programs
Texas AampM AgriLife Education Provides training and educational programs including 4-H through extension agents Extension Service Code Title III serving every county in Texas and supported by federal state and county funds Provides
Chapter 88 wildlife and insect management services including feral hog abatement and boll weevil eradication
Texas AampM Education Conducts engineering and technology research with a focus on interdisciplinary research Engineering Code Title III based on statewide priorities Research highlights energy independence effi ciency and Experiment Station Chapter 88 conservation alternative energy and national security
Texas AampM Education Conducts transportation related research and develops technology Approximately 50 Transportation Code Title III percent of research expenditures from interagency contracts are contracted from the Texas Institute Chapter 88 Department of Transportation
Texas AampM Education Provides training technical assistance and emergency response to enhance public Engineering Code Title III safety security and economic growth Operates the Brayden Fire Training Field and the Extension Service Chapter 88 Emergency Operations Training Center Texas Task Force 1 is deployed for emergency
response and search and rescue operations
Texas AampM Forest Education Provides incident management teams and emergency response as well as wildfire Service Code Title III prevention detection and suppression services The Texas Wildfire Protection Plan is
Chapter 88 the agencyrsquos wildfire response model Administers the Rural Volunteer Fire Department Assistance Program which gives grants to local fire departments for equipment and training
Texas AampM Veterinary Education Provides fee-based veterinary medical diagnostic services which contribute to an animal Medical Diagnostic Code Title III and zoonotic disease surveillance system Responds to potential high consequence andor Laboratory Chapter 88 emerging disease events Develops new diagnostic testing technologies
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 25
FUNDING TEXAS AampM SYSTEM AGENCIES
FIGURE 23 TEXAS AampM SYSTEM AGENCIES COMPARED TO INSTITUTIONS OF HIGHER EDUCATION
SIMILARITIES
FUNDING
Both Texas AampM System (System) agencies and institutions of higher education have considerable flexibility in their budgeting and financial operations (ldquolump sumrdquo appropriations)
Both are eligible to receive proceeds from the Permanent University Fund
Both are considered to be institutions of higher education for purposes of employee group health insurance
Both System agencies and institutions of higher education generate and keep 100 percent of indirect cost recovery from research and other grants
PERFORMANCE MEASURES
OPERATIONS
Like other institutions of higher education System agencies are not required to submit operating budgets or strategic plans
Both are statutorily embedded within the Texas AampM Systemrsquos institutional framework
SOURCE Legislative Budget Board
DIFFERENCES
General academic health-related and two-year institutions receive formula funding while System agencies do not
Texas AampM System agencies do not generate revenue in the same manner or amount of other higher education institutions
Performance measures for the System agencies are agency-specific while performance measures for other higher education institutions are standardized
In several ways state funding for System agencies is similar to funding for higher education institutions System agencies have considerable flexibility in their budgeting and fi nancial operations because they receive lump-sum appropriations in the same manner as other institutions of higher education They are eligible to receive funds from the Permanent University Fund (PUF) (They were allocated $153 million from the PUF for debt service in the 2012ndash13 biennium) System agencies are also funded in the same manner as other institutions of higher education with regard to staff benefi ts including employee group health insurance contributions
However there are several funding diff erences between System agencies and other higher education institutions Most significantly System agencies do not receive formula-based funding Also while some System agencies may charge fees for their services they do not generate tuition and fees in the same manner or quantity as other institutions of higher education
As is the case with all institutions the System agencies keep 100 percent of their respective indirect cost recovery income
because this income is derived from earnings on federal grants and is held outside the treasury
For the 2012ndash13 biennium funding associated with infrastructure expenses and utilities for System agencies inside Brazos County is equal to the infrastructure rate (as determined by the General Academic formulas on page 6) for Texas AampM University
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 26
APPENDIX A FREQUENTLY ASKED QUESTIONS
Q What are the limitations on how institutions spend state appropriations
A Generally speaking institutions have great fl exibility in spending appropriated funds however some limitations do exist depending on the source of revenue Appropriated revenue includes General Revenue Funds General Revenuendash Dedicated Funds (mostly tuition and fee income) Other Funds (including Patient Income) and Federal Funds (for certain Texas AampM System Agencies) Th e Texas Constitution (Article VII Section 18(i) and 17(j)) prohibits with limited exceptions the use of General Revenue Funds for acquiring land or for construction projects An exception occurs when the legislature by two-thirds vote in each house expressly determines that there is a demonstrated need for the project
Various provisions in the 2012ndash13 General Appropriations Act (GAA) Higher Education Special Provisions restrict state appropriations These restrictions include the following
bull Section 6 (Rider 8b) which prohibits the use of appropriated funds for auxiliary enterprises
bull Section 6 (Rider 9) which limits the use of these funds to pay debt service for statutorily authorized tuition revenue bonds Any such appropriation not spent must be returned to the General Revenue Fund at the end of the year
bull Section 9 which prohibits the use of appropriated funds for intercollegiate athletics purposes and
bull Section 54 which limits the use of the Research Development Fund to those defined in Education Code Section 62091
Q Would an increase in tuition revenue replace a corresponding amount in General Revenue Funds or would the revenue remain within the institution
A The result depends on how the Legislature responds
For instance assume that the Eight-second Legislature 2011 changed the statute to require institutions to charge nonresident tuition in circumstances where they had previously waived the nonresident tuition rate For the 2012ndash13 biennium institutions would benefit fully from the
increase in tuition revenue (This assumes the formula calculation would not include a projected increase in tuition)
However institutional appropriations in the 2014ndash15 biennium now depend on that legislation passed in the Eighty-third Legislature 2013 Assuming the same number of students (semester credit hours) enroll regardless of changes in tuition policy and that the result of charging nonresident tuition generated $100 million in additional tuition revenue there are three options
1 Reduce General Revenue Funds (GR) in the formulas by $100 million In this scenario the formula rate stays the same and every dollar increase in tuition revenue results in a dollar decrease in GRmdashinstitutional funding does not increase
2 Keep GR the same and run the additional tuition revenue through the formulas Th e formula funding rate would increase and every institution would receive more funds including those institutions that generated no additional tuition revenue
3 Keep GR formula appropriations at the same level and let individual institutions keep the additional tuition revenue they generated outside the formula allocation
Q Are all tuition and fee revenues collected by institutions of higher education included in the appropriations bill
A No None of the tuition and fee revenues collected by community colleges are appropriated
For general academic institutions an estimate of the revenue from certain tuitions and fees such as statutory tuition (Education Code 54051 Tuition Rates) board authorized tuition (Education Code 54008 Tuition Rate Set by Governing Board) Laboratory Fees (Education Code 54501) and certain other fees are appropriated in the GAA as General Revenue FundsndashDedicated Estimated Other Educational and General Income There are a number of other tuitions and fees that are not included in the GAA and therefore not referred to as state funding Such tuitions and fees include but are not limited to designated tuition (Education Code 540513 Redesignation of Building Use Fee) and Incidental Fees (Education Code 54504) Federal
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 27
APPENDIX A FREQUENTLY ASKED QUESTIONS
Funds are also not appropriated to the general academic and health-related institutions
Q Is a decrease in enrollment the only reason an institution would be eligible for formula funding hold harmless
A No Each session the Legislature makes a determination of whether it will make an appropriation for formula hold harmless A decrease in total enrollment is one reason an institution could be eligible for the funding Because the semester credit hours (general academic institutions) full-time student equivalents (health-related institutions) used in the formulas are based on weights (discipline program and course level) a change in the type of student enrollment regardless of total enrollment could also make an institution eligible for hold harmless funding
Q What are Educational and General Funds
A ldquoOther Educational and General Incomerdquo is a subset of ldquoEducational and General Incomerdquo The following are included in the Education Code (51009(c)) defi nition for ldquoEducational and General Fundsrdquo net tuition special course fees charged under Education Code 54051(e) and (l) lab fees student teaching fees hospital and clinic fees organized activity fees and proceeds from the sale of educational and general equipment
Q What does it mean to be a Tier One institution
A The Tier One reference is often derived from the Carnegie Foundation for the Advancement of Teachingrsquos prior system for classifying institutions of higher education As part of the 1994 version of the Carnegie Classification there were four categories for doctorate granting institutions Research Universities I Research Universities II Doctoral Universities I and Doctoral Universities II ldquoTier Onerdquo was synonymous with Research Universities I Such institutions had to off er a full range of baccalaureate programs award 50 or more doctoral degrees each year and receive annually at least $40 million or more in federal research funds Two institutions in Texas (The University of Texas at Austin and Texas AampM University) met these criteria The 2000 version of the Carnegie Classification collapsed the categories for doctorate granting institutions from four to two Doctoral Research UniversitiesmdashExtensive and DoctoralResearch UniversitiesmdashIntensive Six public institutions in Texas (Texas AampM University Texas Tech University University of Houston University of North Texas The University of Texas at Arlington and The University of Texas at Austin) meet the criteria for DoctoralResearch Universitiesmdash
Extensive In 2005 however the classifi cation structure returned to a more restricted top tier of institutions classifi ed as ldquoResearch Universities (very high research activity)rdquo Both The University of Texas at Austin and Texas AampM University are now counted in this category but any reference to Tier One usually refers to the 1994 Carnegie Classifi cation
Q What is the space model What is the base number of square feet needed
A In 1992 the Texas Higher Education Coordinating Board approved the Space Projection Model for Higher Education Institutions in Texas for public universities to assess the net assignable square feet (NASF) of educational and general space an institution needs There are fi ve categories incorporated into the model teaching library research offi ce and support space Space needs for auxiliary purposes such as dormitories or athletics are not included in the model Square footage amounts are assigned based on a number of elements within each category including the number of students and their program levels and the amount of research expenditures The space model was fi rst incorporated into the funding formulas for general academic institutions in 1997
Q What are ldquoOrganized Activitiesrdquo
A General academic institutions have a funding strategy titled ldquoOrganized Activitiesrdquo These are activities or enterprises that are connected with instructional departments Th ey are intended primarily to give training to students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training
Q What are tuition revenue bonds
A Established in 1971 under Education Code 5513 tuition revenue bonds are bonds (not to exceed 50 years) issued by institutions of higher education for the purpose of ldquoproviding funds to acquire purchase construct improve enlarge andor equip any property buildings structures activities services operations or other facilities for and on behalf of its institution or institutions or any branch of branches thereofrdquo Each institutionsystem is authorized and required to pay debt service on its bonds Although the authorization and issuance of the bonds is not contingent on an appropriation by the state for related debt service the Legislature has provided General Revenue Funds to reimburse institutions for costs related to debt service However in the 2004ndash05 GAA the legislature changed this practice and only provided General Revenue Fund reimbursements for interest
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 28
APPENDIX A FREQUENTLY ASKED QUESTIONS
on bonds issued after March 31 2003 The 2006ndash07 GAA renewed the practice of reimbursing institutions for the costs related to debt service The 2008ndash09 GAA and 2010-11 GAA continues this practice
Q What Is Proportionality
A Pursuant to Section 608 of Article IX of the 2012ndash13 GAA the legislative intent of proportionality is to ldquomaximize balances in the General Revenue Fundrdquo by harmonizing salary funding source with benefits funding source Th is effectively means the Legislature limits its General Revenue Fund contributions for benefits only to those employees having salaries paid with General Revenue Funds As such proportionality requires employee health and retirement benefits be paid in ldquoproportionrdquo to the funding source of salaries To this end institutions are obligated to submit the Accounting Policy Statement 011 Benefits Proportional by Fund (APS 011) report to the Comptroller Th is document provides a structure by which state and local contributions are ldquosettled uprdquo in light of the fiscal years fund proportionality
Q What Is the National Research University Fund
A In 1995 the Texas Constitution was amended to authorize the creation and funding of the Permanent Higher Education Fund (PHEF) The PHEF was intended eventually to become a permanent endowment to support non-Permanent University Fund eligible institutions However the PHEF corpus was rededicated with the voter passage of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) In 2009 Proposition 4 transferred the balance of the PHEF to the credit of the NRUF as of January 1 2010 and repealed the constitutional authorization for the PHEF
The NRUF is intended to provide a source of funding to enable emerging research universities in Texas to achieve national prominence as major research universities Article VII of the Texas Constitution authorizes the Legislature to appropriate some or all of the total return on all investment assets of the NRUF for the purposes of the fund except for two caveats (1) the Legislature may not increase distributions from the fund if the purchasing power of investment assets for any rolling 10-year period is not preserved and (2) the amount appropriated from the proceeds of the NRUF corpus in any fiscal year must be capped at 7 percent of the investment assetsrsquo average net fair market value Until the NRUF has been invested long enough to determine its purchasing power over a 10-year period the Legislature is
authorized to use other means of preserving the purchasing power of the fund
House Bill 1000 Eighty-second Legislature Regular Session 2011 establishes the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution is designated as an emerging research university within the THECBrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fiscal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of institutionrsquos research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 29
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 30
APPENDIX B TUITION AND FEE PROVISIONS
VTCA Texas Education Code Section 54003 states No institution of higher education may collect from students attending the institution any tuition fee or charge of any kind except as permitted by lawhellip
The laws governing tuition and fees at institutions of higher education are found in Education Code Section 54 including a limited number of rules that relate to tuition and fees charged by junior and community colleges Education Code Section 54 includes statutes regarding statewide tuition and fee authority rules regarding residency for tuition and fee purposes and various exemptions for tuition and fees from nonresidency status Also it includes specific fee authority for individual institutions Figure B1 provides a listing of tuition and fee authorizations in Education Code Section 54 but does not include the items presented below or the various exemption and waiver provisions (Details about each provision can be found at httpwwwcapitolstate txus) Th ere are isolated instances outside Chapter 54 whereby the boards of regents are authorized to charge for specific services provided to students
This appendix highlights some of the more prominent tuition and fee provisions and indicates whether the related revenue is or is not included in the General Appropriations Act (GAA)
INCLUDED IN THE GENERAL APPROPRIATIONS ACT Tuition and fee revenue included in the GAA as General Revenue DedicatedndashFunds is referenced as ldquoOther Education and General Incomerdquo The amounts are ldquoEstimatedrdquo so whatever amount of revenue generated is the actual amount available to the institution to spend
54051 Tuition Rates (statutory tuition) In conjunction with Section 540512 Interim Tuition Rates resident tuition for undergraduate students reached $50 per semester credit hour in the 2005ndash06 academic year (the 2006 state fi scal year) Tuition for nonresident students at general academic medical and dental institutions is based on the average of nonresident tuition rates in the five most populous states other than Texas The Texas Higher Education Coordinating Board must make this computation each academic year
54008 Tuition Rate Set by Governing Board (also known as board authorized tuition) Applies to graduate programs Subsection (d) specifies that it is not to be used in the GAA as an offset to General Revenue Funds It is distributed across formula strategies after the formula calculation
54501 Laboratory Fees The fee amount must be sufficient to cover the general costs of laboratory materials and supplies used by a student It is not to be less than $2 or more than $30 per semester and it must not exceed the actual cost of materials and supplies
NOT INCLUDED IN THE GENERAL APPROPRIATIONS ACT 540513 Designated Tuition Statute defi nes designated tuition as an institutional fund which means the revenue is not considered part of ldquoeducational and general fundsrdquo Th e governing board can waive designated tuition for a student (see 54261) Statute specifies that this revenue not be used in the GAA as a way to offset General Revenue
54503 Student Services Fees This is intended for activities which are separate from the regularly scheduled academic functions of the institution and directly involve or benefi t students Except for The University of Texas at Austin (see 54513) and components of the University of Houston System (see 545061) the maximum of all compulsory student services cannot exceed $250 per semester It is kept separate from educational and general funds
54504 Incidental Fees The governing board sets the fee which must reasonably reflect the actual cost of the materials or services for which the fee is collected Examples of unearned fees include late registration library fi nes microfilming fees thesis or doctoral manuscript reproduction or filing fees and bad check charges
5516 Board Responsibility The governing board is authorized to ldquofix and collect rentals rates and chargesrdquo
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 31
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54006 Refund or Adjustment of Tuition and Mandatory Fees for Dropped Courses and Student Withdrawals
540065 Tuition Rebate for Certain Undergraduates
54007 Option to Pay Tuition by Installment
540071 Authority of Institution to Provide Payment Options for Student with Delayed Financial Aid
54009 Increase in Tuition Rate or Fees
54010 Reduction in Tuition
54011 Tuition Limit in Cases of Concurrent Enrollment
54012 Tuition Rates for Certain Doctoral Students
54014 Tuition for Repeated or Excessive Undergraduate Hours
54015 Billing and Notifi cation for Tuition
54016 Fixed Tuition Rate Program for Certain Transfer Students at General Academic Teaching Institutions
54052ndash54057 Residency Provisions
542031 Dependent Children of Residents Who are Members of Armed Forces Deployed on Combat Duty
54204 Children of Disabled Firefighters and Law Enforcement Officers
542041 Disabled Peace Officers
54205 Blind Deaf Students
54206 Foreign Service Officers
54208 Firefighters Enrolled in Fire Science Courses
542081 Peace Officers Enrolled in Certain Courses
54211 Faculty and Dependents
54212 Teaching and Research Assistant
54213 Scholarship Student
54214 Biomedical Research Program Scholarship Student
54221 The University of Texas System Science and Technology Development Management and Transfer
54222 Economic Development and Diversification
54223 Tuition Rates for Olympic Athletes
54231 Resident of Boarding State or Nation or Participant in Student Exchange Program Tuition
54232 NATO Agreement
54233 Academic Common Market
54241 Military Personnel and Dependents
54331 Students from other Nations of the American Hemisphere
54341 Veterans and Other Military Personnel Dependents
54342 Prisoners of War
54343 Children of Prisoners of War or Persons Missing in Action
54344 Participants in Military Funerals
54345 Assistance for Tuition and Fees for Members of State Military Forces
54351 Children of Disabled Firefighters and Law Enforcement Officers
54352 Disabled Peace Officers Optional Exemption
54353 Firefighters and Peace Officers Enrolled in Certain Courses
543531 Firefighters Enrolled in Fire Science Courses
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 32
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54354 Education Benefits for Certain Survivors
54355 Children of Professional Nursing Program Faculty
54356 Preceptors for Professional Nursing Education Programs
54363 Educational Aids
54364 Blind Deaf Students
54365 Senior Citizens Optional Benefit
545011 Charges and Fees for Certain Payments
54502 General Deposits
545021 Student Deposit Fund Composition and Uses
545025 Proration of Fees
545031 Student Fee Advisory Committee
545032 Student Fee Advisory Committee the Texas AampM University System
545041 Environmental Service Fee
54505 Vehicle Registration Fees and Other Fees Related to Parking and Traffic
54506 Fees and Charges for Services to the Public the University of Houston System
545061 Student Services Fees the University of Houston System
545062 Student Fees Advisory Committee the University of Houston System
54507 Group Hospital and Medical Services Fees Texas AampM University System
54508 Medical Services Fee Texas Tech University System Components
545081 Medical Services Fee University of North Texas System Institutions
545082 Medical Services Fee Midwestern State University
545085 Medical Services Fee Texas Womanrsquos University
545089 Medical Services Fee Texas State University System Components
5450891 Medical Services Fee The University of Texas System Components
54509 Student Recreation Fee Texas Tech University System Components
545091 Student Recreational Facility Fee University of North Texas
54510 Student Recreational Sports Fee The University of Texas at Austin
54511 Student Fees for Bus Service Texas State University
545111 Environmental Service Fee Southwest Texas State University
54512 Shuttle Bus Fee The University of Texas at Arlington
545121 Intercollegiate Athletic Fee The University of Texas at Arlington
545122 Recreational Facility Fee The University of Texas at Arlington
54513 Student Service Fees The University of Texas at Austin
545131 International Education Fee The University of Texas at Austin
545132 International Education Fee
545133 Martin Luther King Jr Statue Fee The University of Texas at Austin
545134 Washington DC Internship Education Fee
545135 Barbara Jordan and Cesar Chavez Statues Fee The University of Texas at Austin
54515 Student Union Fee
54518 University Center Fee Midwestern State University
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 33
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54519 Student Union Fee North Texas State University
545191 Intercollegiate Athletic Fee University of North Texas
54520 University Center Student Fee Stephen F Austin State University
545201 Recreational Sports Fee Stephen F Austin State University
54521 Student Center Facility Fees Texas AampM University System
54522 Student Center Fees Texas Southern University
545221 Recreational Facility Fee Texas Southern University
545222 Medical Services Fee Texas Southern University
545223 Intercollegiate Athletics Fee Texas Southern University
54523 Student Center Fees Texas State University System
545241 Student Union Fees Texas Tech University System
54525 Fees for Student Centers Texas Womanrsquos University
545251 Student Fitness and Recreational Fee Texas Womanrsquos University
54526 Student Fees for University Centers the University of Houston
54527 Student Fees for University Center Facilities the University of Houston-Downtown College
54528 Recreational Facility Fee the University of Houston
54529 Student Union Fee The University of Texas at Arlington
54530 Student Union Fees The University of Texas at Austin
54531 Student Union Building Fees The University of Texas at Dallas
545311 Transportation Fee The University of Texas at Dallas
545312 Student Services Building Fee The University of Texas at Dallas
545313 Intramural and Intercollegiate Athletics Fee The University of Texas at Dallas
54532 Student Union Building Fees The University of Texas at San Antonio
545321 Transportation Fee The University of Texas at San Antonio
545322 Intercollegiate Athletics Fee The University of Texas at San Antonio
54533 Student Union Fees The University of Texas of the Permian Basin
545331 Intercollegiate Athletic Fee The University of Texas of the Permian Basin
545332 Fees for Student Services Building The University of Texas of the Permian Basin
54534 Arts and Performance Center Fee The University of Texas at Tyler
545341 Student Recreational Facility Fee The University of Texas at Tyler
545342 Intercollegiate Athletics Fee The University of Texas at Tyler
545343 Student Union Fee The University of Texas at Tyler
54535 Student Union Fee The University of Texas at El Paso
54536 Fees for Student Health Services Building The University of Texas at Austin
54537 Fees for Student Services Building The University of Texas at Austin
545371 Gregory Gymnasium Renovation Fee The University of Texas at Austin
545372 Aquatics Center Fee The University of Texas at Austin
54538 Recreational Sports Fee Texas State University System
545381 Intercollegiate Athletics Fee Certain Institutions in Texas State University System
545382 Intercollegiate Athletics Fee Texas State University ndash San Marcos
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 34
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54539 Recreational Sports Fee the Texas AampM University System
545391 Intercollegiate Athletics Fee Texas AampM University ndash Corpus Christi
545392 Intercollegiate Athletics Fee Texas AampM University ndash Kingsville
545393 Intercollegiate Athletics Fee Prairie View AampM University
545394 Intercollegiate Athletics Fee Tarleton State University
545395 Intercollegiate Athletics Fee Texas AampM International University
545396 Intercollegiate Athletics Fees West Texas AampM University
545397 Intercollegiate Athletics Fees Texas AampM University ndash Commerce
545398 Student Endowment Fund Fee Texas AampM University ndash Corpus Christi
54540 Student Center Fee University of Houston ndash Clear Lake
54541 Recreational Facility Fee The University of Texas at El Paso
54542 Student Union Building Fee The University of Texas ndash Pan American
545421 Sports Recreation and Wellness Facility Fee The University of Texas ndash Pan American
54543 Recreational Facility Fee The University of Texas at San Antonio
54544 Recreational Facility Fee The University of Texas at Dallas
545441 Student Recreational and Health Facilities Fee Midwestern State University
545442 Intercollegiate Athletics Fee Midwestern State University
54545 Fees for Continuing Education Courses
54546 Student Union Fees The University of Texas at Brownsville
54550 Wellness Recreational and Fitness Complex Fee The University of Texas at Brownsville
54551 Intercollegiate Athletics Fee The University of Texas at Brownsville
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 35
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 36
APPENDIX C GLOSSARY
APPROPRIATION METHODOLOGIES Direct Appropriation The actual appropriation either estimated or sum certain listed in that institutionrsquos portion of the General Appropriations Act (GAA)
Indirect Appropriation An appropriation made on behalf of an institution but not listed in that institutionrsquos portion of the GAA Examples include appropriations to the Available University Fund the Higher Education Fund and the Higher Education Coordinating Board all of which are ultimately allocated to institutions
Estimated Appropriation An estimated appropriation is a figure in the GAA that best reflects the information available about the revenue source but the amount available for an institution to spend is contingent on the amount of revenue actually generated If the actual amount of revenue is less than the estimated amount the institution is limited to the lower amount If more revenue is generated than the estimated amount the institution can spend the higher amount
Sum Certain Appropriation A sum certain appropriation in the GAA means that an institution is limited to spend no more than the level of appropriation noted in the institutionrsquos bill pattern in the GAA
Lump Sum Appropriation Texas Education Code Section 61059(k) calls for flexibility in funds appropriated to higher education institutions A lump sum appropriation is a single amount that is unrestricted which means that it can be used for any variety of strategies The GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Higher education institutions are not required to spend their appropriation within specified strategies One exception to this is the Tuition Revenue Bond strategy which represents the appropriation related to debt service on related bonds and must be spent as appropriated or it is reverted to the treasury
METHODS OF FINANCE General Revenue (GR) The non-dedicated portion of the General Revenue Fund is the statersquos primary operating fund Most state tax revenue many state fees and various other sources of revenue are deposited as non-dedicated General Revenue Funds
General RevenuendashDedicated (GRndashD) This is the dedicated portion of General Revenue Funds For higher education institutions the bulk of General RevenuendashDedicated Fund appropriations consist of tuition and fee revenue generated by the institutions These include the tuition and fee revenue included as ldquoOther Educational and General Incomerdquo (defined below) ldquoboard authorized tuitionrdquo (Texas Education Code Section 54008)
Other Funds State funds not included in General Revenue Funds or General RevenuendashDedicated Funds For institutions of higher education these include the Available University Fund and Patient Income generated by health-related institutions
FUND TYPES Educational and General Income Th e Texas Education Code (51009(c)) definition for ldquoEducational and General Fundsrdquo includes (a) net tuition (b) special course fees charged under Education Code Section 54051(e) and (l) (c) lab fees (d) student teaching fees (e) hospital and clinic fees (f ) organized activity fees and (g) proceeds from the sale of educational and general equipment
Institutional Funds Texas Education Code Section 51009(b) defines institutional funds as those that are not ldquoeducational and general fundsrdquo An example of an institutional fund is ldquodesignated tuitionrdquo (Texas Education Code Section 540513) These funds are not included in the GAA
Local Funds Texas Education Code Section 51009(a) defines local funds as net tuition certain special course fees lab fees student teaching fees hospital and clinic fees organized activity fees proceeds from the sale of educational and general equipment and indirect cost recovery fees Th is revenue is accounted for as ldquoeducational and general fundsrdquo and is included in the GAA
Other Educational and General Income The GAA includes some tuition and fees collected by institutions of higher education (General RevenuendashDedicated Funds) Th e revenue from tuition and fees such as statutory tuition (see texas Education Code Section 54051 Tuition Rates) board authorized tuition (see Texas Education Code Section 54008 Tuition Rate Set by Governing Board) Laboratory
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 37
APPENDIX C GLOSSARY
Fees (Texas Education Code Section 54501) and certain other fees are considered Other Educational and General Income (Other EampG) and are appropriated in the GAA as General RevenuendashDedicated Funds Other Educational and General Income is a subset of Educational and General Income (EampG Income)
Patient Income Health-related institutions that operate hospitals or dental clinics generate patient income from services rendered It is allocated as a method of finance to the related institution across a range of strategies in the institutionrsquos bill pattern (Other Funds) For the 2010ndash11 biennium more than $48 billion in patient income was appropriated making it the largest method of fi nance for health-related institutions
OTHER ITEMS Indirect Cost Recovery Institutions negotiate a percentage of a grant with the federal government for Indirect Costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 38
FI
GU
RE
D1
CO
MPA
RIS
ON
OF
CO
NST
ITU
TIO
NA
L A
ND
RES
EARC
H F
UN
DS
201
2ndash13
BIE
NN
IUM
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Avai
labl
e $1
061
4 m
illio
nTe
xas
Con
stitu
tion
hellip
for
Texa
s C
onst
itutio
nU
nive
rsity
the
purp
ose
of a
cqui
ring
Fund
(E
stim
ated
) la
nd
con
stru
ctin
g an
dFo
r su
ppor
t and
equi
ppin
g bu
ildin
gsm
aint
enan
ce
UT
Aus
tin
or o
ther
per
man
ent
Texa
s A
ampM
Uni
vers
ity
impr
ovem
ents
maj
orP
rairi
e Vi
ew U
nive
rsity
UT
repa
ir an
d re
habi
litat
ion
Sys
tem
Aamp
M S
yste
mof
bui
ldin
gs a
nd o
ther
perm
anen
t im
prov
emen
ts
For d
ebt s
ervi
ce
All
acqu
iring
cap
ital
com
pone
nts
incl
udin
g th
eeq
uipm
ent a
nd li
brar
yTA
MU
Sys
tem
Age
ncie
s bo
oks
and
libra
ryex
cept
Tex
as V
eter
inar
y m
ater
ials
and
refu
ndin
gM
edic
al D
iagn
ostic
bond
s or
not
es is
sued
Labo
rato
ry (w
hich
per
unde
r thi
s S
ectio
n
Edu
catio
n C
ode
Sec
tion
887
01 i
s a
stat
e ag
ency
Als
o
for
the
purp
ose
unde
r the
juris
dict
ion
of th
e su
ppor
t and
and
supe
rvis
ion
of th
em
aint
enan
ce o
f The
Tex
as
boar
d)
and
excl
udin
gA
ampM
Uni
vers
ity S
yste
mU
T P
an A
mer
ican
and
UT
adm
inis
tratio
n T
exas
Aamp
M
Bro
wns
ville
(bec
ause
they
Uni
vers
ity a
nd P
rairi
e re
ceiv
e H
EF
allo
catio
ns -
View
Aamp
M U
nive
rsity
and
an
inst
itutio
n ca
nnot
rece
ive
The
Uni
vers
ity o
f Tex
as a
t bo
th A
UF
and
HE
F do
llars
) A
ustin
and
The
Uni
vers
ity
of T
exas
Sys
tem
Hig
her
$525
0 m
illio
nTo
sup
port
inst
itutio
ns
Arti
cle
VII
Sec
tion
17(c
)E
duca
tion
inel
igib
le fo
r AU
F su
ppor
t pr
ovid
es a
n al
low
ance
toFu
nd
add
a ne
w in
stitu
tion
by a
Arti
cle
VII
Sec
tion
23
vote
of b
oth
hous
es o
f17
(a)
fo
r the
pur
pose
the
Legi
slat
ure
if th
e ne
wof
acq
uirin
g la
nd
inst
itutio
n is
out
side
the
UT
cons
truct
ing
and
equi
ppin
gan
d A
ampM
Sys
tem
s
build
ings
m
ajor
repa
ir
acq
uisi
tion
of c
apita
leq
uipm
ent
oth
erpe
rman
ent i
mpr
ovem
ents
or
cap
ital e
quip
men
t use
djo
intly
for e
duca
tiona
l and
gene
ral a
ctiv
ities
Arti
cle
VII
Sec
tion
18(a
-j) o
f the
Tex
as
Con
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Arti
cle
VII
Sec
tion
17(a
-l) o
f the
Tex
as
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
620
02
Gen
eral
App
ropr
iatio
nsA
ct
Texa
s C
onst
itutio
n re
quire
s 1
3 of
the
annu
al
AU
F pr
ocee
ds b
e tra
nsfe
rred
to th
e Te
xas
Aamp
M U
nive
rsity
Sys
tem
E
ach
Sys
tem
offi
cede
term
ines
how
to a
ppor
tion
its s
hare
of t
heA
UF
betw
een
debt
ser
vice
and
sup
port
and
mai
nten
ance
w
ithin
gui
delin
es s
pecifi e
d by
the
Texa
s C
onst
itutio
n
Arti
cle
VII
Sec
tion
17(a
) req
uire
s th
e H
EF
beal
loca
ted
usin
g an
equ
itabl
e fo
rmul
a d
efi n
edin
the
Edu
catio
n C
ode
(Sec
tion
620
21) a
sT
he a
lloca
tion
of fu
nds
unde
r thi
s su
bsec
tion
ism
ade
in a
ccor
danc
e w
ith a
n eq
uita
ble
form
ula
cons
istin
g of
the
follo
win
g el
emen
ts
spac
e defi c
it fa
cilit
ies
cond
ition
ins
titut
iona
l com
plex
ity
and
a se
para
te a
lloca
tion
for
the
Texa
s S
tate
Te
chni
cal C
olle
ge S
yste
m
THE
CB
adm
inis
ters
the
HE
F fo
rmul
a re
allo
catio
nad
viso
ry p
roce
ss
Edu
catio
n C
ode
(Sec
tion
620
21) p
rovi
des
a by
-in
stitu
tion
brea
kout
of a
nnua
l HE
F ap
prop
riatio
ns
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 39
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Nat
iona
l $1
24
mill
ion
Res
earc
hU
nive
rsity
(E
stim
ated
)Fu
nd
Res
earc
h $6
53
mill
ion
Dev
elop
men
tFu
nd
Texa
s $9
35
mill
ion
Com
petit
ive
Kno
wle
dge
Fund
Arti
cle
VII
Sec
tion
20(a
)
for t
he p
urpo
se o
f pr
ovid
ing
a de
dica
ted
inde
pend
ent
and
equi
tabl
eso
urce
of f
undi
ng to
enab
le e
mer
ging
rese
arch
univ
ersi
ties
in th
is s
tate
to a
chie
ve n
atio
nal
prom
inen
ce a
s m
ajor
rese
arch
uni
vers
ities
Arti
cle
VII
Sec
tion
20 (h
)
onl
y fo
r the
sup
port
and
mai
nten
ance
of
educ
atio
nal a
nd g
ener
alac
tiviti
es th
at p
rom
ote
incr
ease
d re
sear
chca
paci
ty a
t the
uni
vers
ity
Edu
catio
n C
ode
Sec
tion
hellipto
pro
mot
e62
091
in
crea
sed
rese
arch
capa
city
at e
ligib
le g
ener
alac
adem
ic te
achi
ngin
stitu
tions
Sec
tion
56 o
f Hig
her
Edu
catio
n S
peci
alP
rovi
sion
s G
AA
201
2ndash13
bi
enni
um
hellipto
sup
port
facu
lty fo
r the
pur
pose
of
inst
ruct
iona
l exc
elle
nce
and
rese
arch
Des
igna
ted
an e
mer
ging
rese
arch
uni
vers
ity b
yTe
xas
Hig
her E
duca
tion
Coo
rdin
atin
g B
oard
R
epor
ts a
t lea
st $
45 m
illio
nin
rest
ricte
d re
sear
chex
pend
iture
s in
eac
h of
the
last
2 y
ears
P
lus
four
of t
he fo
llow
ing
addi
tiona
l crit
eria
1)
End
owm
ents
gt $
400
mill
ion
2) P
rodu
ces
gt 20
0 P
hDs
per y
ear
3) S
elec
tive
ente
ring
Fres
hmen
cla
ss
4) M
embe
r of P
hi B
eta
Kap
pa o
r equ
ival
ent
5) P
osse
sses
hig
h qu
ality
facu
lty a
nd6)
Dem
onst
rate
dco
mm
itmen
t to
high
-qua
lity
grad
uate
edu
catio
n
Edu
catio
n C
ode
Sec
tion
Elig
ible
inst
itutio
n62
092
m
eans
a g
ener
al a
cade
mic
teac
hing
inst
itutio
n a
sdefi n
ed b
y S
ectio
n 61
003
ot
her t
han
The
Uni
vers
ity o
f Te
xas
at A
ustin
Tex
as A
ampM
U
nive
rsity
or P
rairi
e Vi
ew
Aamp
M U
nive
rsity
Uni
vers
ity o
f Tex
as a
t A
ustin
Uni
vers
ity o
f Tex
as
at D
alla
s T
exas
Aamp
M
Uni
vers
ity T
exas
Tec
h U
nive
rsity
Uni
vers
ity o
f H
oust
on
Arti
cle
VII
Sec
tion
20 (a
-h)
of th
e Te
xas
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
621
41
Gen
eral
App
ropr
iatio
nA
ct
Edu
catio
n C
ode
Sec
tion
Not
e th
e62
091
RD
F as
a s
tand
-alo
neap
prop
riatio
n ite
m h
asno
t bee
n fu
nded
sin
ceth
e 20
06ndash0
7 bi
enni
um
How
ever
fun
ds c
alle
d th
e R
DF
have
bee
nap
prop
riate
d di
rect
lyin
to th
e bi
ll pa
ttern
s of
each
elig
ible
Gen
eral
Aca
dem
ic In
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Edu
catio
n C
ode
Sec
tion
621
46 (c
)
o
fth
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for
dist
ribut
ion
in a
sta
tefi s
cal y
ear
each
elig
ible
in
stitu
tion
is e
ntitl
ed to
a d
istri
butio
n in
an
amou
nteq
ual t
o th
e su
m o
fon
e-se
vent
h of
the
tota
l am
ount
app
ropr
iate
d(1
)an
dan
equ
al s
hare
of a
ny a
mou
nt re
mai
ning
afte
r(2
)di
strib
utio
ns a
re c
alcu
late
d un
der S
ubdi
visi
on (1
)no
t to
exce
ed a
n am
ount
equ
al to
one
-four
th o
fth
at re
mai
ning
am
ount
Edu
catio
n C
ode
Sec
tion
621
46 (e
)If
the
num
ber o
f ins
titut
ions
that
are
elig
ible
for
dist
ribut
ions
in a
sta
tefi s
cal y
ear i
s m
ore
than
four
eac
h el
igib
le in
stitu
tion
is e
ntitl
ed to
an
equa
l sh
are
of th
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for d
istri
butio
n in
thatfi s
cal y
ear
Edu
catio
n C
ode
Sec
tion
620
95
The
am
ount
shal
l be
appo
rtion
ed a
mon
g th
e el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of
rest
ricte
d re
sear
ch fu
nds
expe
nded
by
each
inst
itutio
n pe
r yea
r for
the
thre
e pr
eced
ing
stat
efi s
cal y
ears
The
2012
ndash13
appr
opria
tion
prov
ided
abo
ut $
07
mill
ion
to e
ach
elig
ible
inst
itutio
n fo
r eve
ry $
100
mill
ion
in u
nres
trict
ed re
sear
ch e
xpen
ditu
res
asav
erag
ed o
ver a
3-y
ear p
erio
d
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 40
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Res
earc
h N
one
U
nive
rsity
D
evel
opm
ent
Fund
Texa
s $3
56
mill
ion
Res
earc
hIn
cent
ive
Pro
gram
SO
UR
CE L
egis
lativ
e B
udge
t Boa
rd
Texa
s E
duca
tion
Cod
e S
ectio
n 62
051
to
pro
vide
fund
ing
tore
sear
ch u
nive
rsiti
esan
d em
ergi
ng re
sear
chun
iver
sitie
s fo
r the
recr
uitm
ent a
nd re
tent
ion
of h
ighl
y qu
alifi
ed fa
culty
an
d th
e en
hanc
emen
t of
rese
arch
pro
duct
ivity
at
thos
e un
iver
sitie
s
Edu
catio
n C
ode
Sec
tion
hellipto
pro
vide
621
22
mat
chin
g fu
nds
to a
ssis
tel
igib
le in
stitu
tions
inle
vera
ging
priv
ate
gifts
for t
he e
nhan
cem
ent o
fre
sear
ch p
rodu
ctiv
ity a
ndfa
culty
recr
uitm
ent
Edu
catio
n C
ode
Sec
tion
620
51
Elig
ible
inst
itutio
nm
eans
an
inst
itutio
nof
hig
her e
duca
tion
desi
gnat
ed a
s a
rese
arch
univ
ersi
ty o
r em
ergi
ngre
sear
ch u
nive
rsity
und
erth
e co
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
E
ligib
le62
121
in
stitu
tion
mea
ns a
nin
stitu
tion
of h
ighe
red
ucat
ion
desi
gnat
ed a
san
em
ergi
ng re
sear
chun
iver
sity
und
er th
eco
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
620
51
Edu
catio
n C
ode
Sec
tion
(Hou
se B
ill 5
162
121
Eig
hty-fi r
st R
egul
ar
Ses
sion
)
Edu
catio
n C
ode
Sec
tion
620
53
t
o el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of t
otal
rese
arch
fund
s ex
pend
ed b
y ea
ch in
stitu
tion
annu
ally
dur
ing
the
thre
e m
ost r
ecen
t sta
tefi s
cal
year
s a
ccor
ding
to th
e fo
llow
ing
rate
s
at le
ast $
1 m
illio
n fo
r eve
ry $
10 m
illio
n of
(1)
the
aver
age
annu
al a
mou
nt o
f tho
se re
sear
chfu
nds
expe
nded
by
the
inst
itutio
n if
that
ave
rage
amou
nt fo
r the
inst
itutio
n is
$50
mill
ion
or m
ore
and
at le
ast $
500
000
for e
very
$10
mill
ion
of(2
)th
e av
erag
e an
nual
am
ount
of t
hose
rese
arch
fund
s ex
pend
ed b
y th
e in
stitu
tion
if th
at a
vera
geam
ount
for t
he in
stitu
tion
is le
ss th
an $
50 m
illio
n
Edu
catio
n C
ode
Sec
tion
621
23
hellipis
ent
itled
to re
ceiv
e o
ut o
f fun
ds a
ppro
pria
ted
for t
hepu
rpos
es o
f the
pro
gram
for t
hatfi
sca
l yea
r a
mat
chin
g gr
ant i
n an
am
ount
det
erm
ined
acco
rdin
g to
the
follo
win
g ra
tes
50 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(1)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$10
000
0 or
mor
e bu
t not
mor
eth
an $
999
999
75 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(2)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$1
mill
ion
or m
ore
but n
ot m
ore
than
$1
999
999
or
100
perc
ent o
f the
am
ount
of t
he g
ifts
and
(3)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$2
mill
ion
or m
ore
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 41
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 42
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $50119391873 $47339213388 ($2780178485) (55)
School for the Blind and Visually Impaired 93388870 41245345 (52143525) (558)
School for the Deaf 53083657 52695245 (388412) (07)
SUBTOTAL PUBLIC EDUCATION $50265864400 $47433153978 ($2832710422) (56)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1745695460 $1749380723 $3685263 02
Lamar Institute of Technology 27568721 28708990 1140269 41
Lamar University ndash Orange 18484576 19164769 680193 37
Lamar University ndash Port Arthur 23780405 22119709 (1660696) (70)
SUBTOTAL LAMAR STATE COLLEGES $69833702 $69993468 $159766 02
Texas State Technical College System $16493826 $5351461 ($11142365) (676) Administration
Texas State Technical College ndash Harlingen 50980986 49093510 (1887476) (37)
Texas State Technical College ndash West Texas 27965791 24970291 (2995500) (107)
Texas State Technical College ndash Marshall 11434368 10995468 (438900) (38)
Texas State Technical College ndash Waco 68111562 73596786 5485224 81
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$174986533 $164007516 ($10979017) (63)
SUBTOTAL TWO-YEAR INSTITUTIONS $1990515695 $1983381707 ($7133988) (04)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $19099360 $18147200 ($952160) (50)
The University of Texas at Arlington 275081581 288654156 13572575 49
The University of Texas at Austin 749518863 702739665 (46779198) (62)
The University of Texas at Dallas 230535884 223513862 (7022022) (30)
The University of Texas at El Paso 202195230 195511098 (6684132) (33)
The University of Texas ndash Pan American 169039177 162830092 (6209085) (37)
The University of Texas at Brownsville 61910963 57628718 (4282245) (69)
The University of Texas of the Permian Basin 58194080 59145561 951481 16
The University of Texas at San Antonio 273182023 260495772 (12686251) (46)
The University of Texas at Tyler 71137295 66147545 (4989750) (70)
Texas AampM University System Administrative and 20701573 4501868 (16199705) (783) General Offices
Texas AampM University 700537434 651599219 (48938215) (70)
Texas AampM University at Galveston 43799673 37773622 (6026051) (138)
Prairie View AampM University 134247361 122639379 (11607982) (86)
Tarleton State University 87292499 83950084 (3342415) (38)
Texas AampM University ndash Central Texas 29460313 30599703 1139390 39
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 43
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Corpus Christi $121534331 $110283074 ($11251257) (93)
Texas AampM University ndash Kingsville 82466491 75368253 (7098238) (86)
Texas AampM University ndash San Antonio 27154411 37125363 9970952 367
Texas AampM International University 83231209 73816324 (9414885) (113)
West Texas AampM University 79410486 72847023 (6563463) (83)
Texas AampM University ndash Commerce 99558312 89920628 (9637684) (97)
Texas AampM University ndash Texarkana 41409091 34754968 (6654123) (161)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 450003385 394815403 (55187982) (123)
University of Houston ndash Clear Lake 83394543 71849633 (11544910) (138)
University of Houston ndash Downtown 88104670 67926822 (20177848) (229)
University of Houston ndash Victoria 42631672 39786959 (2844713) (67)
Midwestern State University 54249721 48828454 (5421267) (100)
University of North Texas System Administration 9789067 6732226 (3056841) (312)
University of North Texas 302350602 296355351 (5995251) (20)
University of North Texas at Dallas 35156605 30478388 (4678217) (133)
Stephen F Austin State University 121843336 108728674 (13114662) (108)
Texas Southern University 174127907 150903873 (23224034) (133)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 368026094 357056343 (10969751) (30)
Angelo State University 68450875 64053866 (4397009) (64)
Texas Womans University 146639127 135140923 (11498204) (78)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 121909453 111926905 (9982548) (82)
Sam Houston State University 162684291 145338873 (17345418) (107)
Texas State University ndash San Marcos 261940220 254492644 (7447576) (28)
Sul Ross State University 34008142 37804020 3795878 112
Sul Ross State University Rio Grande College 13112804 12127383 (985421) (75)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$6217659551 $5853308379 ($364351172) (59)
HEALTH-RELATED INSTITUTIONS -
The University of Texas Southwestern Medical $339025963 $278284511 ($60741452) (179) Center
The University of Texas Medical Branch at 1252556677 1214546039 (38010638) (30) Galveston
The University of Texas Health Science Center at 356632008 347880533 (8751475) (25) Houston
The University of Texas Health Science Center at 357022348 319153560 (37868788) (106) San Antonio
The University of Texas MD Anderson Cancer 4614023153 5043439860 429416707 93 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 44
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center at $170568794 $176002869 $5434075 32 Tyler
Texas AampM University System Health Science 252705800 241434175 (11271625) (45) Center
University of North Texas Health Science Center 141974215 140131956 (1842259) (13) at Fort Worth
Texas Tech University Health Sciences Center 361096839 333314809 (27782030) (77)
SUBTOTAL HEALTH-RELATED INSTITUTIONS $7845605797 $8094188312 $248582515 32
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $137560226 $130327148 ($7233078) (53)
Texas AgriLife Extension Service 137837443 128253897 (9583546) (70)
Texas Engineering Experiment Station 249008314 268154320 19146006 77
Texas Transportation Institute 96056916 99288013 3231097 34
Texas Engineering Extension Service 164895453 161748713 (3146740) (19)
Texas Forest Service 108765979 196355520 87589541 805
Texas Veterinary Medical Diagnostic Laboratory 32693561 29601103 (3092458) (95)
SUBTOTAL TEXAS AampM UNIVERSITY $926817892 $1013728714 $86910822 94 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 1755022519 1301687813 (453334706) (258)
SUBTOTAL OTHER HIGHER EDUCATION $3339042471 $2900537481 ($438504990) (131)
SUBTOTAL HIGHER EDUCATION $20319641406 $19845144593 ($474496813) (23)
EMPLOYEE BENEFITS
Teacher Retirement System $4038146148 $3797393090 ($240753058) (60)
Optional Retirement Program 294169521 247905975 (46263546) (157)
Higher Education Employees Group Insurance 1068235618 968961950 (99273668) (93) Contributions
Retirement and Group Insurance 61823656 63645693 1822037 29
Social Security and Benefits Replacement Pay 560373470 577908771 17535301 31
SUBTOTAL EMPLOYEE BENEFITS $6022748413 $5655815479 ($366932934) (61)
DEBT SERVICE
Bond Debt Service Payments $7579835 $14567314 $6987479 922
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13483869 $19862644 $6378775 473
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION $76416008567 $72871348360 ($3544660207) (46) 1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 45
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $30322901124 $30476707526 $153806402 05
School for the Blind and Visually Impaired 28830574 29152947 322373 11
School for the Deaf 36111132 36216478 105346 03
SUBTOTAL PUBLIC EDUCATION $30387842830 $30542076951 $154234121 05
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1728790460 $1749380723 $20590263 12
Lamar Institute of Technology 20141881 21363652 1221771 61
Lamar University ndash Orange 13379584 13438359 58775 04
Lamar University ndash Port Arthur 18247526 16676606 (1570920) (86)
SUBTOTAL LAMAR STATE COLLEGES $51768991 $51478617 ($290374) (06)
Texas State Technical College System $16122329 $4603444 ($11518885) (714) Administration
Texas State Technical College ndash Harlingen 35862333 35177742 (684591) (19)
Texas State Technical College ndash West Texas 22972902 20195085 (2777817) (121)
Texas State Technical College ndash Marshall 8795246 8519429 (275817) (31)
Texas State Technical College ndash Waco 48458059 55190076 6732017 139
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$132210869 $123685776 ($8525093) (64)
SUBTOTAL TWO-YEAR INSTITUTIONS $1912770320 $1924545116 $11774796 06
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $16827250 $15931200 ($896050) (53)
The University of Texas at Arlington 171697428 183867794 12170366 71
The University of Texas at Austin 536034384 492544731 (43489653) (81)
The University of Texas at Dallas 142108554 148778381 6669827 47
The University of Texas at El Paso 142521273 137781712 (4739561) (33)
The University of Texas ndash Pan American 115707790 110889522 (4818268) (42)
The University of Texas at Brownsville 51100517 47424781 (3675736) (72)
The University of Texas of the Permian Basin 47639722 48816240 1176518 25
The University of Texas at San Antonio 186961792 178547264 (8414528) (45)
The University of Texas at Tyler 56673893 51804728 (4869165) (86)
Texas AampM University System Administrative 11478504 4473868 (7004636) (610) and General Offices
Texas AampM University 487991523 458011060 (29980463) (61)
Texas AampM University at Galveston 36736318 30964674 (5771644) (157)
Prairie View AampM University 102383638 90923868 (11459770) (112)
Tarleton State University 62999263 59464473 (3534790) (56)
Texas AampM University ndash Central Texas 24007601 25352928 1345327 56
Texas AampM University ndash Corpus Christi 93966271 81624416 (12341855) (131)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 46
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $60610859 $54030202 ($6580657) (109)
Texas AampM University ndash San Antonio 21438200 29287597 7849397 366
Texas AampM International University 67735925 58009521 (9726404) (144)
West Texas AampM University 57622391 53282160 (4340231) (75)
Texas AampM University ndash Commerce 67888967 66581226 (1307741) (19)
Texas AampM University ndash Texarkana 31084147 30370655 (713492) (23)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 311616152 257331674 (54284478) (174)
University of Houston ndash Clear Lake 58807555 46454050 (12353505) (210)
University of Houston ndash Downtown 56441987 39973395 (16468592) (292)
University of Houston ndash Victoria 32315073 27651821 (4663252) (144)
Midwestern State University 37434162 33382015 (4052147) (108)
University of North Texas System Administration 4789067 6732226 1943159 406
University of North Texas 194672599 191274119 (3398480) (17)
University of North Texas at Dallas 30330149 28165402 (2164747) (71)
Stephen F Austin State University 84817662 75640135 (9177527) (108)
Texas Southern University 125878414 104685201 (21193213) (168)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 261015662 253976808 (7038854) (27)
Angelo State University 48095474 45861337 (2234137) (46)
Texas Womans University 104666337 92467100 (12199237) (117)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 77990428 70849905 (7140523) (92)
Sam Houston State University 85061409 79609576 (5451833) (64)
Texas State University ndash San Marcos 168720167 164894925 (3825242) (23)
Sul Ross State University 28832045 32758471 3926426 136
Sul Ross State University Rio Grande College 10662338 9364932 (1297406) (122)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$4333902287 $4078804555 ($255097732) (59)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $286599806 $249279177 ($37320629) (130) Center
The University of Texas Medical Branch at 586704245 472189151 (114515094) (195) Galveston
The University of Texas Health Science Center 278466261 294281302 15815041 57 at Houston
The University of Texas Health Science Center 285919332 260615042 (25304290) (89) at San Antonio
The University of Texas MD Anderson Cancer 316274242 298435072 (17839170) (56) Center
The University of Texas Health Science Center 68656721 71856579 3199858 47 at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 47
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $205234148 $194402799 ($10831349) (53) Center
University of North Texas Health Science Center 120369543 113121832 (7247711) (60) at Fort Worth
Texas Tech University Health Sciences Center 308265168 291713120 (16552048) (54)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$2456489466 $2245894074 ($210595392) (86)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $108442641 $101233060 ($7209581) (66)
Texas AgriLife Extension Service 93421095 84437039 (8984056) (96)
Texas Engineering Experiment Station 27420670 27791758 371088 14
Texas Transportation Institute 1786250 1282500 (503750) (282)
Texas Engineering Extension Service 13423471 12388837 (1034634) (77)
Texas Forest Service 38994278 158979948 119985670 3077
Texas Veterinary Medical Diagnostic Laboratory 12326913 11519113 (807800) (66)
SUBTOTAL TEXAS AampM UNIVERSITY $295815318 $397632255 $101816937 344 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 1324025818 1053522035 (270503783) (204)
SUBTOTAL OTHER HIGHER EDUCATION $1849025818 $1578522035 ($270503783) (146)
SUBTOTAL HIGHER EDUCATION $10848003209 $10225398035 ($622605174) (57)
EMPLOYEE BENEFITS
Teacher Retirement System $3721648969 $3431139479 ($290509490) (78)
Optional Retirement Program 249841016 205341297 (44499719) (178)
Higher Education Employees Group Insurance 1066913010 967556924 (99356086) (93) Contributions
Retirement and Group Insurance 51589368 54070178 2480810 48
Social Security and Benefits Replacement Pay 456936472 471706602 14770130 32
SUBTOTAL EMPLOYEE BENEFITS $5546928835 $5129814480 ($417114355) (75)
DEBT SERVICE
Bond Debt Service Payments $7325020 $14248830 $6923810 945
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13229054 $19544160 $6315106 477
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$46796003928 $45916833626 ($879170302) (19)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 48
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $418569 $649000 $230431 551
School for the Blind and Visually Impaired 0 0 0 NA
School for the Deaf 0 0 0 NA
SUBTOTAL PUBLIC EDUCATION $418569 $649000 $230431 551
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 7026644 7345338 318694 45
Lamar University ndash Orange 4875929 5726410 850481 174
Lamar University ndash Port Arthur 4747409 5443103 695694 147
SUBTOTAL LAMAR STATE COLLEGES $16649982 $18514851 $1864869 112
Texas State Technical College System $371497 $748017 $376520 1014 Administration
Texas State Technical College ndash Harlingen 14268123 13915768 (352355) (25)
Texas State Technical College ndash West Texas 4573311 4775206 201895 44
Texas State Technical College ndash Marshall 2486999 2476039 (10960) (04)
Texas State Technical College ndash Waco 18496312 18406710 (89602) (05)
SUBTOTAL TEXAS STATE TECHNICAL $40196242 $40321740 $125498 03 COLLEGES
SUBTOTAL TWO-YEAR INSTITUTIONS $56846224 $58836591 $1990367 35
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 99544565 104786362 5241797 53
The University of Texas at Austin 203175074 210194934 7019860 35
The University of Texas at Dallas 73902392 74735481 833089 11
The University of Texas at El Paso 54257081 54959386 702305 13
The University of Texas ndash Pan American 50448111 51483144 1035033 21
The University of Texas at Brownsville 10270338 10203937 (66401) (06)
The University of Texas of the Permian Basin 10153771 10329321 175550 17
The University of Texas at San Antonio 78194498 81948508 3754010 48
The University of Texas at Tyler 13686400 14342817 656417 48
Texas AampM University System Administrative 9223069 28000 (9195069) (997) and General Offices
Texas AampM University 194931245 184789626 (10141619) (52)
Texas AampM University at Galveston 6714220 6808948 94728 14
Prairie View AampM University 31863723 31715511 (148212) (05)
Tarleton State University 23018364 24485611 1467247 64
Texas AampM University ndash Central Texas 5452712 5246775 (205937) (38)
Texas AampM University ndash Corpus Christi 26308558 28658658 2350100 89
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 49
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $20743629 $21338051 $594422 29
Texas AampM University ndash San Antonio 5716211 7837766 2121555 371
Texas AampM International University 14449349 15531029 1081680 75
West Texas AampM University 20857129 19564863 (1292266) (62)
Texas AampM University ndash Commerce 29344128 23339402 (6004726) (205)
Texas AampM University ndash Texarkana 4114223 4384313 270090 66
University of Houston System Administration 0 0 0 NA
University of Houston 129680228 137483729 7803501 60
University of Houston ndash Clear Lake 23417549 25395583 1978034 84
University of Houston ndash Downtown 30264387 27953427 (2310960) (76)
University of Houston ndash Victoria 9883366 12135138 2251772 228
Midwestern State University 15912994 15446439 (466555) (29)
University of North Texas System 0 0 0 NA Administration
University of North Texas 100805298 105081232 4275934 42
University of North Texas at Dallas 4826456 2312986 (2513470) (521)
Stephen F Austin State University 35525799 33088539 (2437260) (69)
Texas Southern University 47027769 46218672 (809097) (17)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 98116061 103079535 4963474 51
Angelo State University 17654127 18192529 538402 30
Texas Womans University 40098242 42673823 2575581 64
Texas State University System 0 0 0 NA
Lamar University 37445892 41077000 3631108 97
Sam Houston State University 71500172 65729297 (5770875) (81)
Texas State University ndash San Marcos 88567369 89597719 1030350 12
Sul Ross State University 4941096 5045549 104453 21
Sul Ross State University Rio Grande College 2342952 2762451 419499 179
SUBTOTAL GENERAL ACADEMIC $1744378547 $1759986091 $15607544 09 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $22514152 $18054614 ($4459538) (198) Center
The University of Texas Medical Branch at 23120930 24797153 1676223 72 Galveston
The University of Texas Health Science Center 35777999 35483172 (294827) (08) at Houston
The University of Texas Health Science Center 16488403 17234857 746454 45 at San Antonio
The University of Texas MD Anderson Cancer 48597071 55476185 6879114 142 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 50
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center $512055 $569200 $57145 112 at Tyler
Texas AampM University System Health Science 13306322 24908409 11602087 872 Center
University of North Texas Health Science 12596783 16295862 3699079 294 Center at Fort Worth
Texas Tech University Health Sciences Center 23553492 27695220 4141728 176
SUBTOTAL HEALTH-RELATED $196467207 $220514672 $24047465 122 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $950000 $950000 $0 NA
Texas AgriLife Extension Service 46992 18000 (28992) (617)
Texas Engineering Experiment Station 1785036 904418 (880618) (493)
Texas Transportation Institute 0 0 0 NA
Texas Engineering Extension Service 0 0 0 NA
Texas Forest Service 61388596 28912000 (32476596) (529)
Texas Veterinary Medical Diagnostic Laboratory 0 0 0 NA
SUBTOTAL TEXAS AampM UNIVERSITY SERVICES
$64170624 $30784418 ($33386206) (520)
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 111572621 87256791 (24315830) (218)
SUBTOTAL OTHER HIGHER EDUCATION $111572621 $87256791 ($24315830) (218)
SUBTOTAL HIGHER EDUCATION $2173435223 $2157378563 ($16056660) (07)
EMPLOYEE BENEFITS
Teacher Retirement System $188794770 $209600575 $20805805 110
Optional Retirement Program 44328505 42564678 (1763827) (40)
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 0 0 0 NA
Social Security and Benefits Replacement Pay 82274010 85153600 2879590 35
SUBTOTAL EMPLOYEE BENEFITS $315397285 $337318853 $21921568 70
DEBT SERVICE
Bond Debt Service Payments $0 $0 $0 NA
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $0 $0 $0 NA
TOTAL ARTICLE III ndash AGENCIES OF $2489251077 $2495346416 $6095339 02 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 51
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $13298491946 $10520619770 ($2777872176) (209)
School for the Blind and Visually Impaired 5430126 5855880 425754 78
School for the Deaf 4233990 2921862 (1312128) (310)
SUBTOTAL PUBLIC EDUCATION $13308156062 $10529397512 ($2778758550) (209)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $16905000 $0 ($16905000) (1000)
Lamar Institute of Technology 400196 0 (400196) (1000)
Lamar University ndash Orange 229063 0 (229063) (1000)
Lamar University ndash Port Arthur 785470 0 (785470) (1000)
SUBTOTAL LAMAR STATE COLLEGES $1414729 $0 ($1414729) (1000)
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 850530 0 (850530) (1000)
Texas State Technical College ndash West Texas 419578 0 (419578) (1000)
Texas State Technical College ndash Marshall 152123 0 (152123) (1000)
Texas State Technical College ndash Waco 1157191 0 (1157191) (1000)
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$2579422 $0 ($2579422) (1000)
SUBTOTAL TWO-YEAR INSTITUTIONS $20899151 $0 ($20899151) (1000)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 3839588 0 (3839588) (1000)
The University of Texas at Austin 10309405 0 (10309405) (1000)
The University of Texas at Dallas 14524938 0 (14524938) (1000)
The University of Texas at El Paso 2681876 0 (2681876) (1000)
The University of Texas ndash Pan American 2241274 0 (2241274) (1000)
The University of Texas at Brownsville 540108 0 (540108) (1000)
The University of Texas of the Permian Basin 400587 0 (400587) (1000)
The University of Texas at San Antonio 8025733 0 (8025733) (1000)
The University of Texas at Tyler 777002 0 (777002) (1000)
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 10292036 0 (10292036) (1000)
Texas AampM University at Galveston 349135 0 (349135) (1000)
Prairie View AampM University 0 0 0 NA
Tarleton State University 1274872 0 (1274872) (1000)
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 1259502 0 (1259502) (1000)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 52
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville 1112003 0 (1112003) (1000)
Texas AampM University ndash San Antonio $0 $0 $0 NA
Texas AampM International University 658885 0 (658885) (1000)
West Texas AampM University 930966 0 (930966) (1000)
Texas AampM University ndash Commerce 2325217 0 (2325217) (1000)
Texas AampM University ndash Texarkana 6210721 0 (6210721) (1000)
University of Houston System Administration 0 0 0 NA
University of Houston 8707005 0 (8707005) (1000)
University of Houston ndash Clear Lake 1169439 0 (1169439) (1000)
University of Houston ndash Downtown 1398296 0 (1398296) (1000)
University of Houston ndash Victoria 433233 0 (433233) (1000)
Midwestern State University 902565 0 (902565) (1000)
University of North Texas System Administration 5000000 0 (5000000) (1000)
University of North Texas 6872705 0 (6872705) (1000)
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 1499875 0 (1499875) (1000)
Texas Southern University 1221724 0 (1221724) (1000)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 8894371 0 (8894371) (1000)
Angelo State University 2701274 0 (2701274) (1000)
Texas Womans University 1874548 0 (1874548) (1000)
Texas State University System 0 0 0 NA
Lamar University 6473133 0 (6473133) (1000)
Sam Houston State University 6122710 0 (6122710) (1000)
Texas State University ndash San Marcos 4652684 0 (4652684) (1000)
Sul Ross State University 235001 0 (235001) (1000)
Sul Ross State University Rio Grande College 107514 0 (107514) (1000)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$126019925 $0 ($126019925) (1000)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $16614303 $0 ($16614303) (1000) Center
The University of Texas Medical Branch at 6745161 0 (6745161) (1000) Galveston
The University of Texas Health Science Center at 24173646 0 (24173646) (1000) Houston
The University of Texas Health Science Center at 19224332 0 (19224332) (1000) San Antonio
The University of Texas MD Anderson Cancer 634206 0 (634206) (1000) Center
The University of Texas Health Science Center 80210 0 (80210) (1000) at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 53
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $15014608 $0 ($15014608) (1000) Center
University of North Texas Health Science Center 3438054 0 (3438054) (1000) at Fort Worth
Texas Tech University Health Sciences Center 11075479 0 (11075479) (1000)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$96999999 $0 ($96999999) (1000)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $15933582 $15933582 $0 NA
Texas AgriLife Extension Service 25302708 25302708 0 NA
Texas Engineering Experiment Station 137281801 153857672 16575871 121
Texas Transportation Institute 17405197 18757193 1351996 78
Texas Engineering Extension Service 48387893 48387894 1 00
Texas Forest Service 7349101 7429568 80467 11
Texas Veterinary Medical Diagnostic Laboratory 594001 594000 (1) (00)
SUBTOTAL TEXAS AampM UNIVERSITY $252254283 $270262617 $18008334 71 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 197332508 123636426 (73696082) (373)
SUBTOTAL OTHER HIGHER EDUCATION $197332508 $123636426 ($73696082) (373)
SUBTOTAL HIGHER EDUCATION $693505866 $393899043 ($299606823) (432)
EMPLOYEE BENEFITS
Teacher Retirement System $0 $0 $0 NA
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 8832085 8286741 (545344) (62)
Social Security and Benefits Replacement Pay 3888441 3428099 (460342) (118)
SUBTOTAL EMPLOYEE BENEFITS $12720526 $11714840 ($1005686) (79)
DEBT SERVICE
Bond Debt Service Payments $253903 $318484 $64581 254
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $253903 $318484 $64581 254
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$14014636357 $10935329879 ($3079306478) (220)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 54
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $6497580234 $6341237092 ($156343142) (24)
School for the Blind and Visually Impaired 59128170 6236518 (52891652) (895)
School for the Deaf 12738535 13556905 818370 64
SUBTOTAL PUBLIC EDUCATION $6569446939 $6361030515 ($208416424) (32)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 0 0 0 NA
Lamar University ndash Orange 0 0 0 NA
Lamar University ndash Port Arthur 0 0 0 NA
SUBTOTAL LAMAR STATE COLLEGES $0 $0 $0 NA
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 0 0 0 NA
Texas State Technical College ndash West Texas 0 0 0 NA
Texas State Technical College ndash Marshall 0 0 0 NA
Texas State Technical College ndash Waco 0 0 0 NA
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$0 $0 $0 NA
SUBTOTAL TWO-YEAR INSTITUTIONS $0 $0 $0 NA
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $2272110 $2216000 ($56110) (25)
The University of Texas at Arlington 0 0 0 NA
The University of Texas at Austin 0 0 0 NA
The University of Texas at Dallas 0 0 0 NA
The University of Texas at El Paso 2735000 2770000 35000 13
The University of Texas ndash Pan American 642002 457426 (184576) (288)
The University of Texas at Brownsville 0 0 0 NA
The University of Texas of the Permian Basin 0 0 0 NA
The University of Texas at San Antonio 0 0 0 NA
The University of Texas at Tyler 0 0 0 NA
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 7322630 8798533 1475903 202
Texas AampM University at Galveston 0 0 0 NA
Prairie View AampM University 0 0 0 NA
Tarleton State University 0 0 0 NA
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 0 0 0 NA
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 55
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $0 $0 $0 NA
Texas AampM University ndash San Antonio 0 0 0 NA
Texas AampM International University 387050 275774 (111276) (287)
West Texas AampM University 0 0 0 NA
Texas AampM University ndash Commerce 0 0 0 NA
Texas AampM University ndash Texarkana 0 0 0 NA
University of Houston System Administration 0 0 0 NA
University of Houston 0 0 0 NA
University of Houston ndash Clear Lake 0 0 0 NA
University of Houston ndash Downtown 0 0 0 NA
University of Houston ndash Victoria 0 0 0 NA
Midwestern State University 0 0 0 NA
University of North Texas System Administration 0 0 0 NA
University of North Texas 0 0 0 NA
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 0 0 0 NA
Texas Southern University 0 0 0 NA
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 0 0 0 NA
Angelo State University 0 0 0 NA
Texas Womans University 0 0 0 NA
Texas State University System 0 0 0 NA
Lamar University 0 0 0 NA
Sam Houston State University 0 0 0 NA
Texas State University ndash San Marcos 0 0 0 NA
Sul Ross State University 0 0 0 NA
Sul Ross State University Rio Grande College 0 0 0 NA
SUBTOTAL GENERAL ACADEMIC $13358792 $14517733 $1158941 87 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $13297702 $10950720 ($2346982) (176) Center
The University of Texas Medical Branch at 635986341 717559735 81573394 128 Galveston
The University of Texas Health Science Center at 18214102 18116059 (98043) (05) Houston
The University of Texas Health Science Center at 35390281 41303661 5913380 167 San Antonio
The University of Texas MD Anderson Cancer 4248517634 4689528603 441010969 104 Center
The University of Texas Health Science Center 101319808 103577090 2257282 22 at Tyler
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 56
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $19150722 $22122967 $2972245 155 Center
University of North Texas Health Science Center 5569835 10714262 5144427 924 at Fort Worth
Texas Tech University Health Sciences Center 18202700 13906469 (4296231) (236)
SUBTOTAL HEALTH-RELATED $5095649125 $5627779566 $532130441 104 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $12234003 $12210506 ($23497) (02)
Texas AgriLife Extension Service 19066648 18496150 (570498) (30)
Texas Engineering Experiment Station 82520807 85600472 3079665 37
Texas Transportation Institute 76865469 79248320 2382851 31
Texas Engineering Extension Service 103084089 100971982 (2112107) (20)
Texas Forest Service 1034004 1034004 0 NA
Texas Veterinary Medical Diagnostic Laboratory 19772647 17487990 (2284657) (116)
SUBTOTAL TEXAS AampM UNIVERSITY $314577667 $315049424 $471757 01 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 122091572 37272561 (84819011) (695)
SUBTOTAL OTHER HIGHER EDUCATION $1181111524 $1111122229 ($69989295) (59)
SUBTOTAL HIGHER EDUCATION $6604697108 $7068468952 $463771844 70
EMPLOYEE BENEFITS
Teacher Retirement System $127702409 $156653036 $28950627 227
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 1322608 1405026 82418 62 Contributions
Retirement and Group Insurance 1402203 1288774 (113429) (81)
Social Security and Benefits Replacement Pay 17274547 17620470 345923 20
SUBTOTAL EMPLOYEE BENEFITS $147701767 $176967306 $29265539 198
DEBT SERVICE
Bond Debt Service Payments $912 $0 ($912) (1000)
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $912 $0 ($912) (1000)
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF $13116117205 $13523838439 $407721234 31 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 57
- INTRODUCTION
- FUNDING GENERAL ACADEMICS INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
- OTHER NON-FORMULA FUNDING
-
- FUNDING HEALTH-RELATED INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
-
- FUNDING COMMUNITY AND TECHNICAL COLLEGES
-
- OVERVIEW
- COMMUNITY COLLEGES
- TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES
-
- FUNDING TEXAS AampM SYSTEM AGENCIES
- APPENDIX A FREQUENTLY ASKED QUESTIONS
- APPENDIX B TUITION AND FEE PROVISIONS
- APPENDIX C GLOSSARY
- APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
- APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
-
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 4
FUNDING GENERAL ACADEMIC INSTITUTIONS
OVERVIEW General academic institutions are listed in the Texas Education Code (61003) Figure 4 lists the institutions and their enrollments All of the institutions have common goals of instruction research and public service however each has a unique set of academic offerings and a unique regional or statewide mission
General academic institutions receive direct appropriations via funding formulas and non-formula appropriations Direct appropriations are identified in the informational strategies of each institutionrsquos bill pattern in the General Appropriations Act (GAA) As mentioned earlier appropriations are made to institutions as a lump sum Th e informational strategies reflect how state funds are ldquoallocatedrdquo not how they must be spent This means that with a few exceptions higher education entities unlike other state agencies are not required to spend appropriations within a specified funding strategy
The appropriation levels in each strategy refl ect diff erent revenue sources such as General Revenue Funds General RevenuendashDedicated Funds (mostly tuition and fee revenue) and Other Funds These revenue sources are referred to as the ldquomethod of fi nancerdquo Figure 5 illustrates the method of finance for $74 billion in appropriations for general academic institutions including a number of the indirect appropriations referenced in the next paragraph but does not include appropriations for employee retirement benefi ts
There are also appropriations that benefit institutions that are not reflected in the bill pattern of individual institutions including the Higher Education Fund the Available National Research University Fund Available University Fund certain employee benefits and funds trusteed to the Texas Higher Education Coordinating Board (THECB)
Figure 6 presents the percentage of funding related to each of these direct and indirect appropriations All of these appropriations are further described in the following pages
In addition general academic institutions have access to funds not reflected in the state appropriations process Examples of this include indirect cost recovery certain tuition and fees such as ldquodesignated tuitionrdquo and ldquoincidental feesrdquo (both are described in Appendix B) auxiliary operations (ie revenue from athletics student services fees bookstore and parking) and grants and gifts
FIGURE 4 PUBLIC GENERAL ACADEMIC INSTITUTIONS CERTIFIED FALL 2011 HEADCOUNT
INSTITUTION HEADCOUNT
Angelo State University 7077
Lamar University 14021
Midwestern State University 5811
Prairie View AampM University 8425
Sam Houston State University 17527
Stephen F Austin State University 12702
Sul Ross State University 1985
Sul Ross State University Rio Grande College 971
Tarleton State University 9893
Texas AampM International University 7037
Texas AampM University 49861
Texas AampM University ndash Central Texas 2096
Texas AampM University at Galveston 2035
Texas AampM University ndash Commerce 10726
Texas AampM University ndash Corpus Christi 10162
Texas AampM University ndash Kingsville 6731
Texas AampM University ndash San Antonio 3554
Texas AampM University ndash Texarkana 1907
Texas Southern University 9730
Texas State University ndash San Marcos 34087
Texas Tech University 32149
Texas Womanrsquos University 14503
The University of Texas at Arlington 33439
The University of Texas at Austin 51112
The University of Texas at Brownsville 8625
The University of Texas at Dallas 18864
The University of Texas at El Paso 22582
The University of Texas at San Antonio 30968
The University of Texas at Tyler 6628
The University of Texas of the Permian Basin 3831
The University of Texas ndash Pan American 19034
University of Houston 39820
University of Houston ndash Clear Lake 8185
University of Houston ndash Downtown 12918
University of Houston ndash Victoria 4330
University of North Texas 35694
University of North Texas at Dallas 2032
West Texas AampM University 7886
STATEWIDE TOTALS 568938 SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 5
FUNDING GENERAL ACADEMIC INSTITUTIONS
HQHUDO5HYHQXH)XQGV
FIGURE 5 METHOD OF FINANCE FOR GENERAL ACADEMICS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV
2WKHU)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING Nearly 573 percent of state appropriations for general academic institutions are allocated via two funding formulas and two supplements Instruction and Operations Formula Teaching Experience Supplement Infrastructure Formula
and Small Institution Supplement The formulas and supplements are direct appropriations and are primarily based on enrollment
The formula appropriations consist of General Revenue Funds and some Other Educational and General Income (Other EampG) Other EampG includes specific tuition and fee revenue (see Appendix B for a listing of tuition and fee provisions) The inclusion of certain tuition and fee revenue in the formula funding calculation is referred to as an ldquoAll Funds methodologyrdquo to formula funding Th e most significant tuition revenue included in the formula calculation is tuition charged in accordance with Texas Education Code Section 54051 Interim Tuition Rates (referred to as statutory tuition) The statutory tuition rate for the 2012ndash13 academic year is $50 per semester credit hour for Texas residents Th e corresponding tuition rate for a nonresident student is the average nonresident tuition charged to a Texas resident at a public university in each of the five most populous states
Of the $40 billion allocated by the general academic formulas and supplements nearly 728 percent consists of General Revenue Funds with the remainder consisting of General RevenuendashDedicated Funds (Other EampG)
A portion of Other EampG income is set aside for specifi c purposes or allocated to non-formula based strategies in the
FIGURE 6 APPROPRIATIONS FOR GENERAL ACADEMIC INSTITUTIONS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
QIUDVWUXFWXUH)RUPXOD +ROG+DUPOHVV 727$ 021 )RUPXODDQG
1RQ)RUPXOD7HDFKLQJ([SHULHQFH
QVWUXFWLRQamp 2SHUDWLRQV)RUPXOD
ampDSLWDO)XQGV
QVWLWXWLRQDO
(QKDQFHPHQW
6SHFLDOWHPV
ampRQVWLWXWLRQDO)XQGV
5HVHDUFKHYHORSPHQW)XQG
+LJKHU(GXFDWLRQURXSQVXUDQFH2WKHU1RQIRUPXODWHPV
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 6
FUNDING GENERAL ACADEMIC INSTITUTIONS
institutionrsquos bill pattern For example institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) TPEG are grants designed to help students cover their tuition fees and textbook costs when these expenses exceed a certain portion of their familiesrsquo contributions to their educations This set-aside revenue is not part of the tuition and fee revenue used to calculate the funding formulas
INSTRUCTION AND OPERATIONS FORMULA
About 815 percent of formula funds flow through the Instruction and Operations Formula ($32716 million for the 2012ndash13 biennium) and Teaching Experience Supplement ($957 million for the 2012ndash13 biennium) Th e Instruction and Operations formula is calculated as follows
Semester Credit Hours X ProgramLevel Weight X Rate (5371)
Semester credit hours (SCH) are a measurement of how many classes (and the number of students enrolled in those classes) an institution delivers The formula calculation for a biennium uses a ldquobase periodrdquo of SCH The ldquobase periodrdquo used for the 2012ndash13 biennium was the combination of summer 2010 fall 2010 and spring 2011
SCH is weighted by discipline (eg nursing is weighted more than liberal arts) and by level (ie lower and upper division masters doctoral and professional) For instance a lower division liberal arts course receives a weight of 10 A doctoral level liberal arts course receives a weight of 923 A nursing lower division course receives a weight of 203 A doctoral nursing course receives a weight of 925 Beginning with the 2006ndash07 GAA the basis for the weights per discipline was shifted to an aggregation of actual costs based on institutions Annual Financial Reports Currently THECB uses a rolling three year average to adjust the weights each biennium
THECB recommends a rate based on its recommended weights and program enhancements The legislature sets the weights and the rate in the Higher Education Special Provisions of the GAA (page III-238) In practice the legislature has set the rate based on available funding including consideration of enrollment changes and other factors Figure 7 illustrates the Instruction and Operations Formula allocation to institutions
FIGURE 7 DISTRIBUTION OF INSTRUCTION AND OPERATIONS FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
7H[DV$ amp 08QLYHUVLW
2WKHUHQHUDO$FDGHPLFV
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
TEACHING EXPERIENCE SUPPLEMENT
For the 2012ndash13 biennium an additional weight of ten percent is added to lower-division and upper-division semester credit hours taught by tenured and tenure-track faculty The 2012ndash13 GAA includes the following language ldquoFurthermore it is the intent of the Legislature that the weight shall increase by 10 percent per biennium up to 50 percentrdquo (Special Provisions Relating Only to State Agencies of Higher Education Sec 28 page III-238 2012ndash13 GAA)
The Teaching Experience Supplement is calculated as follows
Semester Credit Hours X ProgramLevel Weight Supplement (10) X Rate (5371)
The Teaching Experience Supplement was 5 percent during the 1998ndash99 and 2000ndash01 biennia Th e Seventy-seventh Legislature 2001 increased the supplement to the current 10 percent in 2002ndash03 biennium
INFRASTRUCTURE FORMULA
Almost 16 percent of formula funds flow through the Infrastructure Formula and Small Institution Supplement ($6768 million for the 2012ndash13 biennium) In addition to
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 7
FUNDING GENERAL ACADEMIC INSTITUTIONS
the universities the State Colleges and components of Texas State Technical College also receive infrastructure formula appropriations This formula uses a statewide infrastructure rate which is set in the GAA The statewide infrastructure rate is divided into two rates an Adjusted Utility Rate and an All Other Rate As with the SCH rate the legislature has set the rate based on available funding including consideration of changes in institutional space and other factors
The Infrastructure Formula is calculated as follows
(Adjusted Utility Rate + All Other Rates) X Predicted Square Feet
The Adjusted Utility Rate is 52 percent of the statewide infrastructure rate The 52 percent reflects the percentage of infrastructure formula funds that institutions historically spent on utilities A statewide utility rate is determined and then adjusted for each institution to reflect utility costs relative to other institutions
The All Other Rate is 48 percent of the statewide infrastructure rate and remains constant among institutions It accounts for physical plant grounds maintenance and custodial services
THECBrsquos Space Projection Model for Higher Education Institutions in Texas (space model) estimates square footage for each institution The objective of the space model projection is to calculate the amount of space an institution needs based on the following
bull number program and level of semester credit hours
bull number of faculty non-faculty students programs and library holdings and
bull research and current EampG expenditures
Figure 8 illustrates the Infrastructure Formula allocation to institutions The similarity of the allocation to the Instruction and Operations Formula allocation demonstrates the influence of enrollment on both formula allocations
SMALL INSTITUTION SUPPLEMENT
Prior to the Eighty-fi rst Legislature (2009) general academic institutions with enrollments of less than 5000 received a $750000 annual Small Institution Supplement However the Eighty-first Legislature increased the enrollment threshold to 10000 students and implemented a phase-out
FIGURE 8 DISTRIBUTION OF INFRASTRUCTURE FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
2WKHUHQHUDO$FDGHPLFV
7H[DV$ amp M 8QLYHUVLW
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
(based on the number of students) of the supplement between 5000 and 10000 students for the 2012ndash13 biennium (see Figure 9) This supplement recognizes that institutions have a minimum cost of operation that may not be covered by funds generated through the formulas
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $414 million in General Revenue hold harmless funding for aff ected institutions to minimize the effect of reduced formula funding as a result of overall enrollment declines or declines in upper-division or graduate enrollment Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment than other institutions or a change in utility costs Th e Eighty-second Legislature 2011 provided $444 million in a hold harmless based on total General Revenue Funds (formula and non-formula) for the 2012ndash13 biennium
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 8
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 9 SMALL INSTITUTION SUPPLEMENT RECIPIENTS
The University of Texas at Brownsville
The University of Texas of the Permian Basin
The University of Texas at Tyler
Texas AampM University at Galveston
Prairie View AampM University
Tarleton State University
Texas AampM University ndash Central Texas
Texas AampM University ndash Kingsville
Texas AampM University ndash San Antonio
Texas AampM International University
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston ndash Clear Lake
University of Houston ndash Victoria
Midwestern State University
University of North Texas at Dallas
Texas Southern University
Angelo State University
Sul Ross State University
Sul Ross State University ndash Rio Grande College
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Waco
Texas State Technical College ndash Marshall
Lamar Institute of Technology
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
SOURCE Legislative Budget Board
NON-FORMULA FUNDING
SPECIAL ITEMS
Special Item appropriations to the institutions total $4836 million for the 2012ndash13 biennium In 2012ndash13 $69 million was appropriated to system offices for special items These are direct appropriations to institutions for projects that are not funded by formula but are specifi cally identifi ed by the legislature as needing support An institution is not required to spend the amount identified in a Special Item strategy for that particular project but expenditure reports indicate that institutions often use an entire appropriation along with additional funding for the related project
The majority of special item funding is through the Institutional Enhancement strategy Institutional Enhancement is a $2204 million appropriation for the 2012ndash13 biennium This is a direct appropriation to institutions and was established by the Seventy-sixth Legislature 1999 for the 2000ndash01 biennium Th e fi rst Institutional Enhancement appropriation was based on a consolidation of certain Special Item appropriations in 1999 and an additional $1 million per year was appropriated for each institution Examples of consolidated special items are items that could be funded through the formulas such as general institutional academic and research support
For the 2002ndash03 biennium there was an additional $1 million increase in appropriations for most institutions and a $15 million increase for selected institutions in South Texas and the border region Institutions that benefi ted signifi cantly from the Seventy-seventh Legislaturersquos new University Research and Texas Excellence Funds (House Bill 1839 Seventy-seventh Legislature 2001) or from the Permanent University Fund (PUF) ldquoexcellence fundingrdquo did not receive an increase in Institutional Enhancement funds for the 2002ndash03 biennium
Other Special Items total $2632 million in appropriations for the 2012ndash13 biennium and include the following institutional and instructional support public service items research items other than general research support funding for separate campuses and accreditation program items
TEXAS COMPETITIVE KNOWLEDGE FUND
The Texas Competitive Knowledge Fund (TCKF) is authorized by the General Appropriations Act (GAA) (2012ndash13 Biennium) Article III Higher Education Special Provisions Section 56 The GAA prescribes that this funding will be used to support faculty for the purpose of instructional excellence and research Funding was first allocated in these strategies by the Legislature for the 2008ndash09 biennium
Current institutions receiving TCKF appropriations include The University of Texas at Austin Texas AampM University University of Houston Texas Tech University and Th e University of Texas at Dallas Institutions are allocated funding appropriated to the TCKF based on average research expenditures for the previous three-year period Th e Eighty-second Legislature Regular Session 2011 appropriated $935 million in Texas Competitive Knowledge Fund strategies directly to the institutions This funding level provides approximately $07 million to each institution for every $100 million in research expenditures In practice
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 9
FUNDING GENERAL ACADEMIC INSTITUTIONS
when institutions have first received distributions from the fund appropriations have been reduced from the institutionrsquos special item strategies In subsequent biennia the institution continues to receive appropriations from the TCKF and the reduction in special items is not specifi cally restored
RESEARCH DEVELOPMENT FUND
The Research Development Fund was created by House Bill 3526 Seventy-eighth Legislature Regular Session 2003 and replaced the Texas Excellence and University Research Funds effective September 1 2005 The intent was to combine the Texas Excellence Fund and University Research Fund into a new fund applying a uniform allocation methodology based on a three-year average of each institutionrsquos restricted research expenditures Th e Eighty-fi rst Legislature allocated $653 million (Figure 10) in the 2012ndash13 biennium to individual institutions to fund objectives identical to the Research Development Fund (Section 62091)
TEXAS RESEARCH INCENTIVE PROGRAM
Th e Eighty-first Legislature Regular Session 2009 established the Texas Research Incentive Program (TRIP) at THECB to match state appropriations with certain gifts and endowments received by emerging research universities Th e goal of this $178 million a year program is to create more Tier One universities in Texas
PERFORMANCE INCENTIVE INITIATIVE
The Eightieth Legislature 2007 appropriated $100 million in fiscal year 2009 to THECB to establish a Higher Education Performance Incentive Initiative The funding was for ldquoimprovement in teaching and educational excellence at Texas public general academic institutionsrdquo THECB distributed $80 million for increases in degrees awarded with special weights given to critical fields and at-risk students The remaining $20 million was used to fund scholarships for students graduating in the top 10 percent of their high school class
Th e Eighty-first Legislature Regular Session 2009 maintained the $80 million for the higher education performance incentive initiative (funded by the American Recovery and Reinvestment Act) and increased funding for the Top Ten Percent scholarship program by $34 million bringing total appropriations for the program to $54 million
There were no performance funding incentives for the 2012ndash13 biennium For the 2012ndash13 biennium $396
FIGURE 10 RESEARCH DEVELOPMENT FUND ALLOCATIONS
2012ndash13 BIENNIAL RDF
INSTITUTION ALLOCATION
The University of Texas at Arlington $6032754
The University of Texas at Dallas 8425486
The University of Texas at El Paso 6925040
The University of Texas at Pan American 1147838
The University of Texas at Brownsville 902512
The University of Texas of the Permian Basin 306408
The University of Texas at San Antonio 5491296
The University of Texas at Tyler 434072
Texas AampM University at Galveston 600342
Tarleton State University 1586396
Texas AampM University ndash Corpus Christi 2212356
Texas AampM University ndash Kingsville 1846206
Texas AampM International University 253246
West Texas AampM University 681752
Texas AampM Commerce 436752
Texas AampM Texarkana 9008
University of Houston 10705472
University of Houston ndash Clear Lake 10392
University of Houston ndash Downtown 10248
University of Houston ndash Victoria 2254
Midwestern State University 30066
University of North Texas 2495448
Stephen F Austin University 895696
Texas Southern University 338580
Texas Tech University 8327602
Texas Womanrsquos University 266152
Angelo State University 123176
Lamar University 820010
Sam Houston State University 362574
Texas State University ndash San Marcos 3121164
Sul Ross State University 304040
TOTAL $65296738
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 10
FUNDING GENERAL ACADEMIC INSTITUTIONS
million is appropriated to the Top Ten Percent Scholarship Program
HOLD HARMLESS FUNDING
The Eighty-second Legislature 2011 provided $444 million in General Revenue Funds hold harmless funding for aff ected institutions to minimize the effect of reduced formula and special item funding Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment that other institutions or a change in utility costs
CAPITAL FUNDS
In addition to the constitutional funds discussed in the next subsection there are three types of state appropriation for capital funds tuition revenue bonds Skiles Act revenue bonds and lease payments Almost all of the direct appropriations to institutions related to capital funds are for debt service on tuition revenue bonds
A $5931 million General Revenue Funds appropriation was made for tuition revenue bond debt service for the 2012ndash13 biennium
Tuition revenue bonds must be authorized in statute Once an authorization is made institutions issue bonds and make related debt payments with tuition revenue Th e Texas Public Finance Authority issues tuition revenue bonds for Midwestern State University Stephen F Austin University Texas Southern University and the Texas State Technical Colleges Legislative practice has been to use General Revenue Funds to reimburse institutions for the costs related to this debt service
The legislature first authorized tuition revenue bonds in 1971 In some instances the authorization was a lump sum for the benefit of specific institutions During the Seventy-eighth Legislature 2003 $2689 million in tuition revenue bonds was authorized for specific projects at various higher education institutions The Seventy-ninth Legislature Th ird Called Session 2005 adopted House Bill 153 which authorized the issuance of $1858 billion in tuition revenue bonds for forty-four different institutions Only one tuition revenue bond (House Bill 1775) was adopted by the Eightieth Legislature 2007 for a $13 million nursing building at Stephen F Austin University Th e Eighty-fi rst Legislature 2009 authorized one tuition revenue bond for Texas AampM University at Galveston The Eighty-second Legislature 2011 did not authorize any new tuition revenue bonds
The authority for Skiles Act Revenue Bonds was repealed in 1997 It had allowed institutions to pledge up to $5 from each enrolled student for each regular semester to the payment of bonds authorized under the governing boardrsquos general authority to sell revenue bonds Institutions use their Other Educational and General Income (General Revenuendash Dedicated Funds) to pay the debt service on these previously authorized bonds This is a $10 million appropriation for the 2012ndash13 biennium
Three general academic institutions receive a $3 million General Revenue Fund appropriation for lease payments to community colleges for facilities
CONSTITUTIONAL FUNDS
These funds are appropriated separately in the GAA and not directly appropriated to the institutions (see Appendix D)
The Available University Fund (AUF) established in Section 18 Article VII Texas Constitution consists of the surface income and investment proceeds from the Permanent University Fund (PUF) a state endowment with land grants totaling 21 million acres
Distributions to the AUF consist of investment returns from PUF assets surface income from PUF lands and interest earned on AUF balances For the 2012ndash13 biennium investment returns were $12200 million surface income was $398 million and interest income was $59 million Income from the sale of PUF lands and the lease of mineral interest is retained in the PUF and invested
The total 2012ndash13 estimated appropriation for the AUF is $12660 million The Constitution appropriates two-thirds of the AUF to The University of Texas System and one-third to the Texas AampM University System The two systems may use the AUF for capital purposes (debt service on PUF bonds) for most of their institutions and ldquofor the support and maintenancerdquo of other institutions listed Entities authorized to receive funding for ldquosupport and maintenancerdquo which is now commonly referred to as ldquoAUF Excellence Fundingrdquo are the two system offi ces The University of Texas at Austin Texas AampM University and Prairie View AampM University The systemsrsquo boards of regents determine allocations to individual institutions including health-related institutions and the amounts for ldquoExcellencerdquo Figure 11 lists the recipients and the type of support they received
The Higher Education Fund (HEF) as authorized in Section 17 Article VII Texas Constitution benefits institutions of higher education not eligible for the AUF (see Figure 12)
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 11
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 11 PARTICIPANTS IN THE AVAILABLE UNIVERSITY FUND
EXCELLENCE AND DEBT SERVICE FUNDS
The University of Texas System
The Texas AampM University System
The University of Texas at Austin
Texas AampM University
Prairie View AampM University
DEBT SERVICE ONLY
The University of Texas System Components
The University of Texas at Arlington
The University of Texas at Dallas
The University of Texas at El Paso
The University of Texas of Permian Basin
The University of Texas at San Antonio
The University of Texas at Tyler
The University of Texas Southwestern Medical Center
The University of Texas Medical Branch at Galveston
The University of Texas Health Science Center at Houston
The University of Texas Health Science Center at San Antonio
The University of Texas Health Science Center at Tyler
The University of Texas MD Anderson Cancer Center
Texas AampM University System Components
Texas AampM University at Galveston
Texas AampM University at Tarleton
Texas AampM University ndash San Antonio
Texas AampM University ndash Central Texas
Texas AampM University System Health Science Center
Texas AgriLife Research
Texas AgriLife Extension Service
Texas Engineering Experiment Station
Texas Engineering Extension Service
Texas Transportation Institute
Texas Forest Service
SOURCE Legislative Budget Board
FIGURE 12 PARTICIPANTS IN THE HIGHER EDUCATION FUND
The University of Texas System Components
The University of Texas ndash Pan American
Texas AampM University System Components
Texas AampM University ndash Corpus Christi
Texas AampM International University
Texas AampM University ndash Kingsville
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston System Components
University of Houston
University of Houston ndash Clearlake
University of Houston ndash Downtown
University of Houston ndash Victoria
Independent Institutions
Midwestern State University
Stephen F Austin State University
Texas Southern University
Texas Womanrsquos University
University of North Texas System Components
University of North Texas Health Science Center at Fort Worth
University of North Texas
Texas Tech University System Components
Texas Tech University Health Sciences Center
Angelo State University
Texas State University System Components
Lamar University
Sam Houston State University
Texas State University ndash San Marcos
Sul Ross State University
Sul Ross State Rio Grande College
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
Lamar Institute of Technology
Texas State Technical College System Components
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Marshall
Texas State Technical College ndash Waco
The University of North Texas at Dallas receives its allocation through the University of North Texas SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 12
FUNDING GENERAL ACADEMIC INSTITUTIONS
The HEF is supported by General Revenue Fund appropriations
The distribution of the $525 million HEF appropriation for 2012ndash13 is provided for in statute (Texas Education Code Section 62021) The Constitution calls for a re-allocation of HEF funds every ten years The Seventy-ninth Legislature Regular Session fulfilled this requirement with the enactment of House Bill 3001
The Constitution also allows the legislature to adjust the decennial allocations every five years Th e Eighty-fi rst Legislature Regular Session 2011 exercised this authority by enacting House Bill 51 which adjusted the formula allocation for the HEF funds for fiscal years 2009 through 2015
To maintain the equitable distribution of the HEF appropriation House Bill 51 also corrected the distribution of fiscal year 2009 and 2010 HEF allocations by using revised formula calculations Using these revised formula calculations House Bill 51 factored in updated data elements to generate the annual HEF allocations for the fi ve-year period starting in fiscal year 2011
HEF funds must be used for capital purposes Institutions may use HEF allocations for debt service on HEF bonds or as cash
In 1995 the Texas Constitution was amended to authorize the creation and funding of a dedicated HEF corpus known as the Permanent Higher Education Fund (PHEF) Th is corpus was separate from the annual HEF allocation of General Revenue Funds The PHEF was intended to become a permanent endowment to support non-PUF eligible institutions but never reached its targeted value of $2 billion
The PHEF corpus of $5159 million was rededicated with the enactment of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) The balance of the PHEF was transferred to the NRUF on January 1 2010 and the authorization for the PHEF expired Proposition 4 also allowed the legislature to appropriate some or all of the total returns from the NRUF to provide a source of funding to enable emerging research universities to achieve national prominence
The Eighty-second Legislature 2011 appropriated $124 million in estimated NRUF proceeds to eligible institutions in the 2012ndash13 biennium
House Bill 1000 Eighty-second Legislature Regular Session 2011 established the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution in designated as an emerging research university within the Higher Education Coordinating Boardrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fi scal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of the institutions research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs Texas Tech University and the University of Houston are the only two institutions that received funding through this program in 2012
HIGHER EDUCATION GROUP INSURANCE (HEGI)
The $4631 million General Revenue Fund appropriation for higher education group insurance (HEGI) is not a direct appropriation in the institutionsrsquo bill patterns It is appropriated in a separate section of the GAA entitled ldquoHigher Education Employees Group Insurance Contributionsrdquo This appropriation is intended to help institutions cover the cost of health insurance premiums for institution employees whose salaries are paid from the General Revenue Fund Because The University of Texas and Texas AampM University Systems operate their own health insurance programs they each receive separate appropriations The remaining institutions are included in the program operated by the Employees Retirement System (ERS)
The HEGI appropriation is sum-certain That is the Statersquos General Revenue Fund contributions are limited to each institutionrsquos number of employees enrolled in the health insurance program as of December 1 2012 However the GAA allows ERS The University of Texas and Texas AampM University Systems to transfer HEGI appropriations among institutions within their respective group insurance programs to address shortfalls in General Revenue Funds related to group insurance premiums
SOCIAL SECURITY BENEFITS
An appropriation for social security is included in the GAA at the end of Article III It is an estimated General Revenue
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 13
FUNDING GENERAL ACADEMIC INSTITUTIONS
Fund appropriation to provide the employer matching funds for employees of institutions of higher education (Th is appropriation amount is not included in Figure 3 on page 2)
STAFF GROUP INSURANCE
Staff group insurance is for staff whose salaries are not paid with General Revenue Funds (GR) The appropriation is based on an estimation of the number of non-GR funded employees at an institution as of December 1 2010 Th e total appropriation for all general academic institutions is $1766 million for the 2012ndash13 biennium The method of finance is Other Educational and General Income (which is classified as General RevenuendashDedicated Funds)
RETIREMENT CONTRIBUTIONS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and top administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees participate in TRS a defi ned benefit plan The state funds retirement contributions for TRS equal to 60 percent of an employeersquos salary in fiscal year 2012 and 64 percent in 2013 State contributions for ORP are equal to 60 percent of an employeersquos salary in fiscal years 2012 and 2013 (Th ese appropriation amounts are not included in Figure 3 on page 2)
OTHER NON-FORMULA FUNDING
WORKERSrsquo COMPENSATION
Changes in the structure of the statewide workersrsquo compensation system resulted in most institutions receiving General Revenue Fund appropriations for Workersrsquo Compensation starting in 2006ndash07 However Th e University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool
UNEMPLOYMENT COMPENSATION
Most components of The University of Texas and Texas AampM University Systems have this strategy because they operate their own risk pools Th ese institutions receive General Revenue Fund appropriations for unemployment compensation insurance The appropriation for the 2012ndash13 biennium is $05 million in General Revenue Funds Th e Texas Workforce Commission receives an appropriation to
cover unemployment benefi ts for former state employees for all other higher education institutions
TEXAS PUBLIC EDUCATION GRANTS
According to statute (Texas Education Code Chapter 56 Subchapter C and Texas Education Code Section 54051 [Statutory Tuition]) institutions must set aside a portion of tuition revenue for Texas Public Education Grants (TPEG) Fifteen percent of each resident studentrsquos tuition and 3 percent of each nonresident studentrsquos tuition are set aside for financial aid to students at the institution Texas Education Code Section 56033 provides guidelines on the allocation of TPEG revenue The GAA includes an estimate of the amount of TPEG revenue each institution will generate Th is $2111 million estimated appropriation is considered Other Educational and General Income which are classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
Indirect costs as defined by The Comptroller of Public Accounts are ldquoincurred for a common or joint purpose benefiting more than one cost objectiverdquo Institutions negotiate a percentage of a federal grant for indirect costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
The Seventy-eighth Legislature 2003 allowed universities to retain 100 percent of indirect costs income from research grants and contracts to encourage further research projects conducted by universities
ORGANIZED ACTIVITIES
Organized Activities are activities or enterprises connected with instructional departments whose primary function is training for students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training Revenue from Organized Activities is classified as General RevenuendashDedicated Funds Other EampG Income For the 2012ndash13 biennium $503 million is appropriated for Organized Activities
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 14
FUNDING HEALTH-RELATED INSTITUTIONS
OVERVIEW Appropriations for the nine health-related institutions are similar in structure to the appropriations for general academic institutions There are formula and non-formula funding appropriations made directly to the institutions as well as appropriations that benefit the institutions but are not included in the institutionsrsquo bill patterns such as the Available University Fund certain staff benefi ts and funds trusteed at the Texas Higher Education Coordinating Board (THECB) While health-related institutions do not receive appropriations from the Research Development Fund they share many other types of appropriations similar to general academic institution appropriations Th ose appropriations will be briefly restated in this section of the report Figure 13 lists the institutions and their enrollment
FIGURE 13 PUBLIC HEALTH-RELATED INSTITUTIONS CERTIFIED HEADCOUNT FALL 2011
INSTITUTION HEADCOUNT
UT Southwestern Medical Center 2467
UT Medical Branch at Galveston 2660
UT Health Science Center at Houston 4485
UT Health Science Center at San Antonio 3273
UT M D Anderson Cancer Center 248
UT Health Science Center at Tyler NA
Texas AampM University System Health Science 1958 Center
University of North Texas Health Science 1567 Center at Fort Worth
Texas Tech University Health Sciences Center 3590
Statewide Totals 20248
SOURCE Higher Education Coordinating Board
Like other higher education institutions the appropriations for health-related institutions are a lump sum and funding strategies are presented for informational purposes in the General Appropriations Act (GAA) The funding strategies in a health-related institutionrsquos bill pattern represent how state funds are allocated but not how they must be spent Also certain methods of finance in the appropriation are estimated This means that if for example patient income for an institution is above the amount included in the GAA
the institution can spend more than the amount listed in the GAA
Also health-related institutions have access to an estimated $109 billion outside the appropriations process in 2012ndash13 Examples of this include certain tuition revenue indirect lost recovery grants and gifts
Figure 14 illustrates the 2012ndash13 method of finance for $85 billion in appropriations for health-related institutions including a number of the indirect appropriations but it does not include appropriations for retirement benefi ts
FIGURE 14 METHOD OF FINANCE FOR HEALTH-RELATED INSTITUTIONS 2012ndash13 BIENNIUM
727$ 021
HQHUDO
2WKHU)XQGV3DWLHQWQFRPH
5HYHQXH)XQGV
HQHUDO5HYHQXHsup2HGLFDWHG)XQGV13
Including some tuition and fees SOURCE Legislative Budget Board
FORMULA FUNDING The three primary funding formulas for health-related institutions are Instruction and Operations support Infrastructure support and Research Enhancement Th e University of Texas MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler have additional formula allocations to accommodate their unique missions Each health-related institution also receives formula funding for graduate medical education
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 15
FUNDING HEALTH-RELATED INSTITUTIONS
General Revenue funding and some Other Educational and General Income (Other EampG is classified as General RevenuendashDedicated) fund the formulas Like general academic institutions certain tuition revenue is used in the calculation of the Instruction and Operation support and Infrastructure support formulas Of the $15 billion that is allocated by the health-related institutionsrsquo primary formulas 939 percent is from the General Revenue Fund and the remaining 61 percent is from General RevenuendashDedicated Funds (tuition and fee revenue)
Some tuition and fee income is set aside for specifi c purposes Some specific amounts are unavailable for formula purposes and consequently are not a formula method of fi nance For example health-related institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) and Medical Loans
INSTRUCTION AND OPERATIONS SUPPORT FORMULA
The Instruction and Operations (IampO) support formula represents nearly 755 percent of the primary formula funds for health-related institutions ($9282 million for the 2012ndash13 biennium) It is intended to fund items such as faculty salaries departmental operating expenses instructional administration and libraries It is allocated on a per full-time student equivalent (FTSE) basis with a funding weight predicated on the instructional program of the student This formula applies to all health-related
institutions except The University of Texas Health Science Center at Tyler which did not offer education instruction during the base period for the 2012ndash13 biennium
Figure 15 illustrates the Instruction and Operations support formula among the eight health-related institutions
The Instruction and Operations support formula is calculated as follows
(FTSE X Program Weight X $8874) + SmallMultiple Campus Supplement
FTSE is weighted by discipline For example medicine (4753) is weighted more than pharmacy (1670) Allied Health is assigned a weight of 1000
The Legislature sets the weights and the rate ($8874 adjusted for the 2012ndash13 biennium) in the Higher Education Special Provisions of the GAA (Sec 29 page III-239 and 240) The rate is calculated based on the available revenue for the formula and the number of FTSEs
Programs with enrollments less than 200 receive a Small Campus Supplement (see Figure 16)
FIGURE 15 DISTRIBUTION OF INSTRUCTION AND OPERATIONS SUPPORT FORMULA 2012ndash13 BIENNIUM
727$ 021870$QGHUVRQ 7H[DV$ amp 0+HDOWKampDQFHUampHQWHU 6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV 87+HDOWK6FLHQFHampHQWHUDW6DQ
DW)WRUWK
+HDOWK6FLHQFHampHQWHU$QWRQLR
87+HDOWK6FLHQFH 7H[DV7HFK8QLYHUVLW+HDOWKampHQWHUDW+RXVWRQ 6FLHQFHVampHQWHU
876RXWKZHVWHUQ0HGLFDOampHQWHU
870HGLFDOUDQFK DWDOYHVWRQ
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 16
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 16 SMALL CAMPUS SUPPLEMENT RECIPIENTS
The University of Texas Southwestern Medical Center
No
The University of Texas Medical Branch at Galveston
Yes
The University of Texas Health Science Center at Houston
Yes
The University of Texas Health Science Center at San Antonio
Yes
The University of Texas MD Anderson Cancer Center
No
The University of Texas Health Science Center at Tyler
NA
Texas AampM Health Science Center Yes
University of North Texas Health Science Center at Fort Worth
No
Texas Tech University Health Sciences Center Yes
SOURCE Legislative Budget Board
INFRASTRUCTURE SUPPORT FORMULA
The Infrastructure support formula is 194 percent of the primary formula funding and is intended for utilities and physical plant support ($2383 million for the 2012ndash13 biennium) This formula calculation is similar to that for general academic institutions but includes only one rate ($655) for all institutions except The University of Texas
FIGURE 17 DISTRIBUTION OF INFRASTRUCTURE SUPPORT FORMULA 2012ndash13 BIENNIUM
MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler which have another rate ($625)
THECBrsquos space model predicts square footage for each institution The space model projection is based on the following
bull number and level of FTE students
bull number of faculty
bull single or multiple programs and campuses
bull actual clinical space and
bull research and current EampG expenditures
Because the space projection model does not account for hospital space separate infrastructure funding for hospital space is included in the total funding for hospital and patient-care activities at The University of Texas Medical Branch at Galveston The University of Texas MD Anderson Cancer Center and The University of Texas Health Science Center at Tyler
Figure 17 illustrates the Infrastructure Support Formula allocation to institutions among the nine health-related institutions
727$ 021
87+HDOWK6FLHQFHampHQWHUDW6DQ 870$QGHUVRQampDQFHUampHQWHU$QWRQLR
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW
+RXVWRQ 7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK6FLHQFHVampHQWHU
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 17
FUNDING HEALTH-RELATED INSTITUTIONS
RESEARCH FORMULA
Health-related institutions generate state appropriations to support research through General Revenue Funds in the Research Enhancement formula ($629 million for the 2012ndash13 biennium) The Research Enhancement formula accounts for 51 percent of the primary formula funds and is funded entirely from the General Revenue Fund
The allocation is based on the amount of research generated by each institution
$1412500 + (110 X Research
Expenditures)
This provides a base Institutions report for all institutions current research
regardless of research expenditures to volume THECB
Figure 18 illustrates the Research Enhancement formula allocation to the institutions among the nine health-related institutions
GRADUATE MEDICAL EDUCATION
The Seventy-ninth Legislature 2005 established a new formula for funding graduate medical education in the 2006ndash07 GAA For 2012ndash13 the funding totals $46 million
FIGURE 18 DISTRIBUTION OF RESEARCH ENHANCEMENT FORMULA 2012ndash13 BIENNIUM
727$ 021
870$QGHUVRQampDQFHUampHQWHU
(an additional $109 million is appropriated to the Baylor College of Medicine through the THECB) and provides $4436 per medical resident each year
Figure 19 illustrates the Graduate Medical Education formula allocation to institutions among the nine health related institutions and Baylor College of Medicine
CHEST DISEASE CENTER FORMULA
The Chest Disease Center operations formula which was established during the 2010ndash11 biennium applies only to The University of Texas Health Science Center at Tyler Th e University of Texas Health Science Center at Tyler has a statutory mission to conduct research develop diagnostic and treatment techniques provide training and teaching programs and provide diagnosis and treatment of inpatients and outpatients with respiratory diseases The Chest Disease Center formula is based on the number of primary chest disease patients the institution served Approximately $472 million in General Revenue Funds are appropriated for the 2012ndash13 biennium
CANCER CENTER OPERATIONS FORMULA
The Eightieth Legislature 2007 established in the GAA an Operations formula for funding The University of Texas MD Anderson Cancer Center The University of Texas MD Anderson Cancer Center has a statutory mission to eliminate cancer through patient care research education
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR
7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ 8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
870HGLFDOUDQFKDWDOYHVWRQ 7H[DV7HFK8QLYHUVLW+HDOWK876RXWKZHVWHUQ0HGLFDOampHQWHU
6FLHQFHVampHQWHU
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 18
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 19 DISTRIBUTION OF GRADUATE MEDICAL EDUCATION FORMULA 2012ndash13 BIENNIUM
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
727$ 02187+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR 870$QGHUVRQampDQFHUampHQWHU
87+HDOWK6FLHQFHampHQWHUDW7OHU
7H[DV$ amp 08QLYHULVW6VWHP +HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK 6FLHQFHVampHQWHU
DORUampROOHJHRI0HGLFLQH
and prevention The Operations formula funding is based on the total number of Texas cancer patients the institution served The Operations formula growth in funding may not exceed the average growth in funding for health-related institutions in the Instruction and Operations support formula for the current biennium For the 2012ndash13 biennium this funding formula provided $2125 million in General Revenue Funds
NON-FORMULA FUNDING
PATIENT CARE ACTIVITIES
Some institutions conduct patient care activities generally medical or dental For the 2012ndash13 biennium the estimated appropriation for Patient Income was $56 billion Th e hospital and clinic revenues earned through patient care activities are considered Other Funds which are part of Educational and General Income (not to be confused with Other Educational and General Income which is another subset of Educational and General Income) General Revenue funding supplements patient-care income to varying degrees at each institution Patient Income is an estimated appropriation and is spread across an institutionrsquos funding strategies however it is not used in the calculation of the formulas
INSTITUTIONAL ENHANCEMENT
Institutional Enhancement is a General Revenue Fund appropriation that started in the 2000ndash01 biennium It is designed to allow each institution to address its unique needs and diseconomies of scale at institutions with smaller campuses The total institutional enhancement appropriation for the 2012ndash13 biennium was $42 million which includes $407 million in General Revenue Funds and $16 million in Patient Income
SPECIAL ITEMS
Special items are activities that are not generally funded through the formulas and typically represent an institutionrsquos special needs or areas of expertise The $3107 million in General Revenue Funds for the 2012ndash13 biennium funds items such as residency programs academic outreach programs public service items and research items other than general research support Institutions propose and justify special items and request an amount for each on an ad hoc basis Special items generally remain constant from biennium to biennium unless the item was a one-time expense (eg tornado damage repairs) or the institution has not used the funding for the intended purpose
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 19
FUNDING HEALTH-RELATED INSTITUTIONS
CONSTITUTIONAL FUNDS
These funds are not directly appropriated to institutions in the GAA In other words these funds are not found in a strategy within an institutionrsquos bill pattern
Health-related institutions are eligible for funding from the Available University Fund ($146 million in Other Funds allocated to these institutions by system offices for the 2012ndash 13 biennium) and the Higher Education Fund ($257 million in General Revenue Funds appropriated for the 2012ndash13 biennium) which are presented in detail in the ldquoFunding General Academic Institutionsrdquo section of this report
CAPITAL FUNDS
Just like general academic institutions tuition revenue bonds ($1665 million in General Revenue Funds for related debt service in the 2012ndash13 biennium) are also used to fund capital projects at health-related institutions A detailed presentation of tuition revenue bonds is in the ldquoFunding General Academic Institutionsrdquo section The University of Texas Medical Branch at Galveston and The University of Texas MD Anderson Cancer Center also have separate appropriations for capital projects that are funded primarily with Patient Income
EMPLOYEE BENEFITS
Like general academic institutions health-related institutions benefit from direct and indirect state appropriations related to employee benefi ts The indirect appropriations include Higher Education Group Insurance ($2339 million in General Revenue Funds for the 2012ndash13 biennium) Retirement Contributions and Social Security Benefi ts (all presented in the ldquoFunding General Academic Institutionsrdquo section) The direct appropriations include Staff Group Insurance
For the 2012ndash13 biennium the Workersrsquo Compensation and Unemployment Compensation strategies (all presented in the ldquoFunding General Academic Institutionsrdquo section) are funded directly with General Revenue Funds and General RevenuendashDedicated Funds However The University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool The University of Texas and Texas AampM Systems also manage their own unemployment compensation coverage while all other institutions receive coverage from
the Texas Workforce Commission which receives an appropriation to cover unemployment benefi ts
TEXAS PUBLIC EDUCATION GRANTS
Health-related institutions similar to general academic institutions are subject to the Texas Education Code (sect56031 et al) provision requiring a portion of tuition revenue be set aside to fund Texas Public Education Grants (TPEG) For the 2012ndash13 biennium the estimated TPEG appropriation is $188 million This revenue is considered Other Education and General Income which is classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
As mentioned earlier in this section Indirect Cost Recovery was removed from the GAA for the 2010ndash11 biennium however the individual institution still receives the funds
TOBACCO SETTLEMENT
House Bill 1945 Seventy-sixth Legislature 1999 established the Permanent Health Fund for health-related institutions of Higher Education the Permanent Fund for Minority Health Research and Education the Permanent Fund for Higher Education Nursing Allied Health and Other Health Related Programs and 13 permanent endowments for individual institutions of higher education The $769 million in estimated interest earnings from the endowments for 2012ndash13 (based on estimated interest earnings of 45 percent each year) were appropriated to the health-related institutions
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 20
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW Public two-year lower-level institutions include 50 community and junior college districts four Texas State Technical College (TSTC) campuses and three Lamar State Colleges These institutions were appropriated $22 billion in state funding for the 2012ndash13 biennium Preliminary fall FIGURE 20 TWO-YEAR INSTITUTION FUNDING MECHANISMS 2012ndash13 BIENNIUM
2011 enrollment at these institutions totaled 789713 Figure 20 illustrates the funding mechanisms for these institutions Community colleges accounted for 983 percent of this enrollment total while the Texas State Technical and Lamar State Colleges composed the remaining portion
COMMUNITY COLLEGES
Instruction and Administration General Revenue Funds from the state are based on contact hour driven formulas for two-year institutions Tuition and fee revenues and local tax revenues augment state General Revenue Funds for these costs
Academic Courses Approximately 82 percent of the total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 18 percent of the total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant The state provides no funding for physical plant operations and maintenance Local taxing districts are expected to provide support for physical plant needs Community colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011
Facilities Local communities must provide facilities Community colleges are not eligible to receive Higher Education Fund (HEF) allocations Available University Fund allocations or state tuition revenue bonds
Employee Benefits While community college employees are locally-employed community colleges participate in the Employee Retirement System (ERS) Group Benefits Program for health benefi ts and the Teacher Retirement System(TRS) and Optional Retirement Program (ORP) for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits
Tuition Fee Revenues Tuition and fee revenues are considered institutional funds and are not appropriated by the state Tuition rates vary by institution In 2012 the statewide tuition rates plus fees averaged $73 per semester credit hour but varied from $34 to $208 per semester credit hour
Local Tax Revenue Community Colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011 Local tax revenues are expected to provide support for physical plant needs and augment state General Revenue Funds for instruction and administration costs
SOURCE Legislative Budget Board
TSTCLAMAR COLLEGES
Instruction and Administration General Revenue Funds from the state are based on formulas for two-year institutions Tuition and fee revenues augment General Revenue Funds for these costs
Academic Courses Approximately 39 percent at the Lamar colleges and 28 percent at Texas State Technical College (TSTC) of total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 61 percent at the Lamar colleges and 72 percent at TSTC of total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant State funding based on the formula for general academic institutions The Lamar colleges will receive approximately $71 million and TSTC will receive $157 million in General Revenue Funds for physical plant and utilities in the 2012ndash13 biennium
Facilities The Lamar colleges receive approximately $42 million annually from HEF funds and TSTC receives almost $58 million annually The HEF monies are used to acquire land construct and equip buildings provide major building repair or rehabilitation and acquire capital equipment and library materials
Employee Benefits Both the Lamar colleges and TSTC institutions participate in ERSrsquo Group Benefits Program for health benefits and the TRS and ORP programs for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits of those employees having their salaries paid with General Revenue Funds
Tuition Fee Revenues Certain tuition revenue is appropriated by the state In 2012 for resident students average tuition plus fees was $139 per semester credit hour at the Lamar colleges and $150 per semester credit hour at TSTC
FINANCING HIGHER EDUCATION IN TEXAS ndash ID690 LEGISLATIVE BUDGET BOARD 21
FUNDING COMMUNITY AND TECHNICAL COLLEGES
These institutions are primarily funded based on student contact hours A contact hour is a standard unit of measure that represents an hour of scheduled academic and technical instruction given to students during a semester Community and junior college districts generate almost 958 percent of the state-funded contact hours at two-year institutions TSTC components generate approximately 29 percent of the contact hours and the three Lamar State Colleges account for the 13 percent
COMMUNITY COLLEGES Over 99 percent of the direct appropriations to community colleges are from the General Revenue Fund and are generated through a funding formula The remaining direct appropriations are for isolated ldquospecial itemsrdquo including appropriations for the Southwest Collegiate Institute for the Deaf which is part of the appropriation for Howard College The Texas Education Code Section 130003(a) calls for state appropriations to public community colleges to ldquosupplement local funds for the proper support maintenance operation and improvement of those public junior colleges of Texas that meet the standards prescribed by the chapterrdquo Further Education Code Section 130003(c) indicates that state funds must be used ldquoexclusively for the purpose of paying salaries of instructional and administrative forceshellip and the purchase of supplies and materials for instructional purposesrdquo
Consistent with statute community colleges have their own Instruction and Administration Formula which is funded by General Revenue Funds and based on ldquostudent contact hoursrdquo Unlike general academic institution formulas this formula does not include tuition and fee revenue as part of the method of fi nance
The Eighty-second Legislature 2011 also provided $45 million to certain districts through a new small institution supplemental formula A district is eligible for the supplement if it makes a significantly above-average effort to generate tax income while at the same time experiencing below-average tax revenue and does not have a number of contact hours that exceeds the statewide median Th e Eighty-second Legislature appropriated each eligible district $05 million for the 2012ndash13 biennium
No state funding is provided for physical plant operations and maintenance or for facilities that is supported by local tax eff ort
Three community colleges receive weighted semester credit hour formula funding for a Bachelor of Applied Technology degree program
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $153 million in General Revenue formula hold harmless funding for aff ected community colleges to minimize the effect of reduced formula funding as a result of overall contact hour declines The Eighty-second Legislature 2011 did not provide any hold harmless funding in the 2012ndash13 biennium
Property taxes tuition and fees are other major sources of revenue for community colleges Figure 21 illustrates the estimated sources of funding for community colleges Th e state appropriations in Figure 21 include all formula special item Higher Education Group Insurance appropriations and retirement benefi t appropriations
FIGURE 21 MAJOR SOURCES OF COMMUNITY COLLEGESrsquo OPERATING REVENUE IN BILLIONS FISCAL YEAR 2011
727$ 21
6WDWHampRQWULEXWLRQV
URVV7XLWLRQDQG)HHV
3URSHUW7D[HV
)HGHUDO)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING
The basis of the formula starts with the Texas Higher Education Coordinating Board (THECB) Report of Fundable Operating Expenses (RFOE) (formally called the All Funds Expenditure Report) The study includes all expenditures for instruction and administration (facilities costs are not included) in 26 program areas THECB uses the expenditure data to determine the median cost in the 26 program areasmdashthe ldquoratesrdquo for contact hours in those disciplines THECB then makes a recommendation for
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 22
FUNDING COMMUNITY AND TECHNICAL COLLEGES
funding based on the rates Over the years THECB has used various methodologies as the basis for its funding recommendations Because the RFOE takes into account all funds (state appropriations plus tuition and tax revenue which are not appropriated) THECBrsquos recommendation for state funding has generally not equaled 100 percent of the rates
The amount of the appropriation is a legislative decision based on funds available The appropriation is allocated to the colleges according to each districtrsquos pro-rata share of THECB recommendations
HIGHER EDUCATION GROUP INSURANCE (HEGI)
Like state institutions of higher education community colleges receive General Revenue Fund contributions for group insurance However since community college employees are local not state employees state contributions for health benefits are fully discretionary Other agencies and institutions of higher education report employee eligibility for General Revenue-funded group health insurance benefi ts only if the employeersquos salary is directly paid with General Revenue Funds However in the past community colleges tended to base eligibility for General Revenue-funded benefits if the employeersquos job function fell under an approved ldquoelement of costrdquo This practice caused community colleges to report eligibility for state funded health benefits in a manner that did not always match the source of the employeersquos salary
This practice led to the Governorrsquos veto of the Group Health Insurance appropriation for fiscal year 2009 ($154 million) at the end of the Eightieth Legislative session However an agreement to restore the vetoed funds was reached and returned directly to the districts in House Bill 4586 Eighty-first Legislature Regular Session 2009
The Eight-Second Legislature 2011 allowed community colleges to receive General Revenue Fund contributions for employees whose job function fell under an approved ldquoelement of costrdquo However the Legislature only funded 42 percent of the premium costs for these employees
OTHER STAFF BENEFITS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and certain administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees
participate in TRS a defi ned benefit plan In both instances the state funds retirement contributions equal 60 and 64 percent of an employeersquos salary in fiscal year 2012 and fi scal year 2013 respectively (These appropriation amounts are not included in Figure 2 on page 3)
DRAMATIC ENROLLMENT GROWTH
Since the 1996ndash97 biennium public community colleges have received ldquoDramatic Enrollment Growth Fundingrdquo For the 2000ndash01 biennium this was expanded to include Texas State Technical Colleges and Lamar State Colleges (Lamars) The appropriation was made to THECB Rider 13 page IIIshy53 General Appropriations Act (2010ndash11 Biennium) provided guidelines for distributing this funding
For the 2010ndash11 biennium THECB is authorized to allocate up to $175 million per year to schools experiencing a growth rate of five percent or greater in 2010 and eight percent or greater in 2011 The Eighty-second Legislature 2011 did not provide any dramatic enrollment growth funding in the 2012-13 biennium
OTHER TRUSTEED FUNDS
Students at community colleges also benefi t from Texas Educational Opportunity Grants the student fi nancial aid program appropriation that is allocated by THECB
TEXAS STATE TECHNICAL COLLEGE LAMAR STATE COLLEGES The Texas State Technical Colleges (TSTC) and Lamar State Colleges are allocated a majority of their appropriation via two formulas the Instruction and Administration Formula for two-year institutions and the Infrastructure Formula for general academic institutions Similar to general academic institutions the tuition revenue for these colleges is included in the appropriations bill
Contact hours for vocationaltechnical courses represent approximately 61 percent of total contact hours at the Lamar State Colleges and 72 percent at TSTC institutions Th e remaining contact hours are generated from academic and continuing education courses
Facilities funding is available from the Higher Education Fund for both TSTC and the Lamars State Colleges and both have received Tuition Revenue Bond authorizations
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 23
FUNDING COMMUNITY AND TECHNICAL COLLEGES
The Community Colleges section of this report includes subsections on Higher Education Group Insurance Other Staff Benefits and Dramatic Enrollment Growth Th ese three subsections apply to appropriations for Texas State Technical Colleges and the Lamar State Colleges as well
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 24
FUNDING TEXAS AampM SYSTEM AGENCIES
There are seven research and service agencies that are administered by the Texas AampM University System Th e system agenciesrsquo missions differ from other institutions of higher education in that each system agency focuses on one or two of the three traditional missions of higher education institutions research extension and service (Figure 22)
FIGURE 22 TEXAS AampM SYSTEM AGENCIES MISSIONS AND FUNCTIONS
STATUTORY AUTHORITY MISSIONFUNCTIONS
For the 2012ndash13 biennium the total direct appropriations for Texas AampM System (System) agencies are $8897 million In addition to state appropriations the System agencies receive some Federal Funds that are not included in the General Appropriations Act and have access to private funds While System agencies have significant portions of their Other Funds and Federal Funds appropriated the appropriations are estimated and actual income from these funding sources is subject to signifi cant variation
Texas AampM AgriLife Education Conducts research in the agricultural environmental and life sciences Goals include Research Code Title III enhancing the competitiveness of agricultural industries and natural resource conservation
Chapter 88 Research highlights bioenergy irrigation efficiency and the use of distillerrsquos grain in feedlots Administers the honey bee regulation and feed and fertilizer programs
Texas AampM AgriLife Education Provides training and educational programs including 4-H through extension agents Extension Service Code Title III serving every county in Texas and supported by federal state and county funds Provides
Chapter 88 wildlife and insect management services including feral hog abatement and boll weevil eradication
Texas AampM Education Conducts engineering and technology research with a focus on interdisciplinary research Engineering Code Title III based on statewide priorities Research highlights energy independence effi ciency and Experiment Station Chapter 88 conservation alternative energy and national security
Texas AampM Education Conducts transportation related research and develops technology Approximately 50 Transportation Code Title III percent of research expenditures from interagency contracts are contracted from the Texas Institute Chapter 88 Department of Transportation
Texas AampM Education Provides training technical assistance and emergency response to enhance public Engineering Code Title III safety security and economic growth Operates the Brayden Fire Training Field and the Extension Service Chapter 88 Emergency Operations Training Center Texas Task Force 1 is deployed for emergency
response and search and rescue operations
Texas AampM Forest Education Provides incident management teams and emergency response as well as wildfire Service Code Title III prevention detection and suppression services The Texas Wildfire Protection Plan is
Chapter 88 the agencyrsquos wildfire response model Administers the Rural Volunteer Fire Department Assistance Program which gives grants to local fire departments for equipment and training
Texas AampM Veterinary Education Provides fee-based veterinary medical diagnostic services which contribute to an animal Medical Diagnostic Code Title III and zoonotic disease surveillance system Responds to potential high consequence andor Laboratory Chapter 88 emerging disease events Develops new diagnostic testing technologies
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 25
FUNDING TEXAS AampM SYSTEM AGENCIES
FIGURE 23 TEXAS AampM SYSTEM AGENCIES COMPARED TO INSTITUTIONS OF HIGHER EDUCATION
SIMILARITIES
FUNDING
Both Texas AampM System (System) agencies and institutions of higher education have considerable flexibility in their budgeting and financial operations (ldquolump sumrdquo appropriations)
Both are eligible to receive proceeds from the Permanent University Fund
Both are considered to be institutions of higher education for purposes of employee group health insurance
Both System agencies and institutions of higher education generate and keep 100 percent of indirect cost recovery from research and other grants
PERFORMANCE MEASURES
OPERATIONS
Like other institutions of higher education System agencies are not required to submit operating budgets or strategic plans
Both are statutorily embedded within the Texas AampM Systemrsquos institutional framework
SOURCE Legislative Budget Board
DIFFERENCES
General academic health-related and two-year institutions receive formula funding while System agencies do not
Texas AampM System agencies do not generate revenue in the same manner or amount of other higher education institutions
Performance measures for the System agencies are agency-specific while performance measures for other higher education institutions are standardized
In several ways state funding for System agencies is similar to funding for higher education institutions System agencies have considerable flexibility in their budgeting and fi nancial operations because they receive lump-sum appropriations in the same manner as other institutions of higher education They are eligible to receive funds from the Permanent University Fund (PUF) (They were allocated $153 million from the PUF for debt service in the 2012ndash13 biennium) System agencies are also funded in the same manner as other institutions of higher education with regard to staff benefi ts including employee group health insurance contributions
However there are several funding diff erences between System agencies and other higher education institutions Most significantly System agencies do not receive formula-based funding Also while some System agencies may charge fees for their services they do not generate tuition and fees in the same manner or quantity as other institutions of higher education
As is the case with all institutions the System agencies keep 100 percent of their respective indirect cost recovery income
because this income is derived from earnings on federal grants and is held outside the treasury
For the 2012ndash13 biennium funding associated with infrastructure expenses and utilities for System agencies inside Brazos County is equal to the infrastructure rate (as determined by the General Academic formulas on page 6) for Texas AampM University
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 26
APPENDIX A FREQUENTLY ASKED QUESTIONS
Q What are the limitations on how institutions spend state appropriations
A Generally speaking institutions have great fl exibility in spending appropriated funds however some limitations do exist depending on the source of revenue Appropriated revenue includes General Revenue Funds General Revenuendash Dedicated Funds (mostly tuition and fee income) Other Funds (including Patient Income) and Federal Funds (for certain Texas AampM System Agencies) Th e Texas Constitution (Article VII Section 18(i) and 17(j)) prohibits with limited exceptions the use of General Revenue Funds for acquiring land or for construction projects An exception occurs when the legislature by two-thirds vote in each house expressly determines that there is a demonstrated need for the project
Various provisions in the 2012ndash13 General Appropriations Act (GAA) Higher Education Special Provisions restrict state appropriations These restrictions include the following
bull Section 6 (Rider 8b) which prohibits the use of appropriated funds for auxiliary enterprises
bull Section 6 (Rider 9) which limits the use of these funds to pay debt service for statutorily authorized tuition revenue bonds Any such appropriation not spent must be returned to the General Revenue Fund at the end of the year
bull Section 9 which prohibits the use of appropriated funds for intercollegiate athletics purposes and
bull Section 54 which limits the use of the Research Development Fund to those defined in Education Code Section 62091
Q Would an increase in tuition revenue replace a corresponding amount in General Revenue Funds or would the revenue remain within the institution
A The result depends on how the Legislature responds
For instance assume that the Eight-second Legislature 2011 changed the statute to require institutions to charge nonresident tuition in circumstances where they had previously waived the nonresident tuition rate For the 2012ndash13 biennium institutions would benefit fully from the
increase in tuition revenue (This assumes the formula calculation would not include a projected increase in tuition)
However institutional appropriations in the 2014ndash15 biennium now depend on that legislation passed in the Eighty-third Legislature 2013 Assuming the same number of students (semester credit hours) enroll regardless of changes in tuition policy and that the result of charging nonresident tuition generated $100 million in additional tuition revenue there are three options
1 Reduce General Revenue Funds (GR) in the formulas by $100 million In this scenario the formula rate stays the same and every dollar increase in tuition revenue results in a dollar decrease in GRmdashinstitutional funding does not increase
2 Keep GR the same and run the additional tuition revenue through the formulas Th e formula funding rate would increase and every institution would receive more funds including those institutions that generated no additional tuition revenue
3 Keep GR formula appropriations at the same level and let individual institutions keep the additional tuition revenue they generated outside the formula allocation
Q Are all tuition and fee revenues collected by institutions of higher education included in the appropriations bill
A No None of the tuition and fee revenues collected by community colleges are appropriated
For general academic institutions an estimate of the revenue from certain tuitions and fees such as statutory tuition (Education Code 54051 Tuition Rates) board authorized tuition (Education Code 54008 Tuition Rate Set by Governing Board) Laboratory Fees (Education Code 54501) and certain other fees are appropriated in the GAA as General Revenue FundsndashDedicated Estimated Other Educational and General Income There are a number of other tuitions and fees that are not included in the GAA and therefore not referred to as state funding Such tuitions and fees include but are not limited to designated tuition (Education Code 540513 Redesignation of Building Use Fee) and Incidental Fees (Education Code 54504) Federal
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 27
APPENDIX A FREQUENTLY ASKED QUESTIONS
Funds are also not appropriated to the general academic and health-related institutions
Q Is a decrease in enrollment the only reason an institution would be eligible for formula funding hold harmless
A No Each session the Legislature makes a determination of whether it will make an appropriation for formula hold harmless A decrease in total enrollment is one reason an institution could be eligible for the funding Because the semester credit hours (general academic institutions) full-time student equivalents (health-related institutions) used in the formulas are based on weights (discipline program and course level) a change in the type of student enrollment regardless of total enrollment could also make an institution eligible for hold harmless funding
Q What are Educational and General Funds
A ldquoOther Educational and General Incomerdquo is a subset of ldquoEducational and General Incomerdquo The following are included in the Education Code (51009(c)) defi nition for ldquoEducational and General Fundsrdquo net tuition special course fees charged under Education Code 54051(e) and (l) lab fees student teaching fees hospital and clinic fees organized activity fees and proceeds from the sale of educational and general equipment
Q What does it mean to be a Tier One institution
A The Tier One reference is often derived from the Carnegie Foundation for the Advancement of Teachingrsquos prior system for classifying institutions of higher education As part of the 1994 version of the Carnegie Classification there were four categories for doctorate granting institutions Research Universities I Research Universities II Doctoral Universities I and Doctoral Universities II ldquoTier Onerdquo was synonymous with Research Universities I Such institutions had to off er a full range of baccalaureate programs award 50 or more doctoral degrees each year and receive annually at least $40 million or more in federal research funds Two institutions in Texas (The University of Texas at Austin and Texas AampM University) met these criteria The 2000 version of the Carnegie Classification collapsed the categories for doctorate granting institutions from four to two Doctoral Research UniversitiesmdashExtensive and DoctoralResearch UniversitiesmdashIntensive Six public institutions in Texas (Texas AampM University Texas Tech University University of Houston University of North Texas The University of Texas at Arlington and The University of Texas at Austin) meet the criteria for DoctoralResearch Universitiesmdash
Extensive In 2005 however the classifi cation structure returned to a more restricted top tier of institutions classifi ed as ldquoResearch Universities (very high research activity)rdquo Both The University of Texas at Austin and Texas AampM University are now counted in this category but any reference to Tier One usually refers to the 1994 Carnegie Classifi cation
Q What is the space model What is the base number of square feet needed
A In 1992 the Texas Higher Education Coordinating Board approved the Space Projection Model for Higher Education Institutions in Texas for public universities to assess the net assignable square feet (NASF) of educational and general space an institution needs There are fi ve categories incorporated into the model teaching library research offi ce and support space Space needs for auxiliary purposes such as dormitories or athletics are not included in the model Square footage amounts are assigned based on a number of elements within each category including the number of students and their program levels and the amount of research expenditures The space model was fi rst incorporated into the funding formulas for general academic institutions in 1997
Q What are ldquoOrganized Activitiesrdquo
A General academic institutions have a funding strategy titled ldquoOrganized Activitiesrdquo These are activities or enterprises that are connected with instructional departments Th ey are intended primarily to give training to students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training
Q What are tuition revenue bonds
A Established in 1971 under Education Code 5513 tuition revenue bonds are bonds (not to exceed 50 years) issued by institutions of higher education for the purpose of ldquoproviding funds to acquire purchase construct improve enlarge andor equip any property buildings structures activities services operations or other facilities for and on behalf of its institution or institutions or any branch of branches thereofrdquo Each institutionsystem is authorized and required to pay debt service on its bonds Although the authorization and issuance of the bonds is not contingent on an appropriation by the state for related debt service the Legislature has provided General Revenue Funds to reimburse institutions for costs related to debt service However in the 2004ndash05 GAA the legislature changed this practice and only provided General Revenue Fund reimbursements for interest
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 28
APPENDIX A FREQUENTLY ASKED QUESTIONS
on bonds issued after March 31 2003 The 2006ndash07 GAA renewed the practice of reimbursing institutions for the costs related to debt service The 2008ndash09 GAA and 2010-11 GAA continues this practice
Q What Is Proportionality
A Pursuant to Section 608 of Article IX of the 2012ndash13 GAA the legislative intent of proportionality is to ldquomaximize balances in the General Revenue Fundrdquo by harmonizing salary funding source with benefits funding source Th is effectively means the Legislature limits its General Revenue Fund contributions for benefits only to those employees having salaries paid with General Revenue Funds As such proportionality requires employee health and retirement benefits be paid in ldquoproportionrdquo to the funding source of salaries To this end institutions are obligated to submit the Accounting Policy Statement 011 Benefits Proportional by Fund (APS 011) report to the Comptroller Th is document provides a structure by which state and local contributions are ldquosettled uprdquo in light of the fiscal years fund proportionality
Q What Is the National Research University Fund
A In 1995 the Texas Constitution was amended to authorize the creation and funding of the Permanent Higher Education Fund (PHEF) The PHEF was intended eventually to become a permanent endowment to support non-Permanent University Fund eligible institutions However the PHEF corpus was rededicated with the voter passage of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) In 2009 Proposition 4 transferred the balance of the PHEF to the credit of the NRUF as of January 1 2010 and repealed the constitutional authorization for the PHEF
The NRUF is intended to provide a source of funding to enable emerging research universities in Texas to achieve national prominence as major research universities Article VII of the Texas Constitution authorizes the Legislature to appropriate some or all of the total return on all investment assets of the NRUF for the purposes of the fund except for two caveats (1) the Legislature may not increase distributions from the fund if the purchasing power of investment assets for any rolling 10-year period is not preserved and (2) the amount appropriated from the proceeds of the NRUF corpus in any fiscal year must be capped at 7 percent of the investment assetsrsquo average net fair market value Until the NRUF has been invested long enough to determine its purchasing power over a 10-year period the Legislature is
authorized to use other means of preserving the purchasing power of the fund
House Bill 1000 Eighty-second Legislature Regular Session 2011 establishes the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution is designated as an emerging research university within the THECBrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fiscal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of institutionrsquos research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 29
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 30
APPENDIX B TUITION AND FEE PROVISIONS
VTCA Texas Education Code Section 54003 states No institution of higher education may collect from students attending the institution any tuition fee or charge of any kind except as permitted by lawhellip
The laws governing tuition and fees at institutions of higher education are found in Education Code Section 54 including a limited number of rules that relate to tuition and fees charged by junior and community colleges Education Code Section 54 includes statutes regarding statewide tuition and fee authority rules regarding residency for tuition and fee purposes and various exemptions for tuition and fees from nonresidency status Also it includes specific fee authority for individual institutions Figure B1 provides a listing of tuition and fee authorizations in Education Code Section 54 but does not include the items presented below or the various exemption and waiver provisions (Details about each provision can be found at httpwwwcapitolstate txus) Th ere are isolated instances outside Chapter 54 whereby the boards of regents are authorized to charge for specific services provided to students
This appendix highlights some of the more prominent tuition and fee provisions and indicates whether the related revenue is or is not included in the General Appropriations Act (GAA)
INCLUDED IN THE GENERAL APPROPRIATIONS ACT Tuition and fee revenue included in the GAA as General Revenue DedicatedndashFunds is referenced as ldquoOther Education and General Incomerdquo The amounts are ldquoEstimatedrdquo so whatever amount of revenue generated is the actual amount available to the institution to spend
54051 Tuition Rates (statutory tuition) In conjunction with Section 540512 Interim Tuition Rates resident tuition for undergraduate students reached $50 per semester credit hour in the 2005ndash06 academic year (the 2006 state fi scal year) Tuition for nonresident students at general academic medical and dental institutions is based on the average of nonresident tuition rates in the five most populous states other than Texas The Texas Higher Education Coordinating Board must make this computation each academic year
54008 Tuition Rate Set by Governing Board (also known as board authorized tuition) Applies to graduate programs Subsection (d) specifies that it is not to be used in the GAA as an offset to General Revenue Funds It is distributed across formula strategies after the formula calculation
54501 Laboratory Fees The fee amount must be sufficient to cover the general costs of laboratory materials and supplies used by a student It is not to be less than $2 or more than $30 per semester and it must not exceed the actual cost of materials and supplies
NOT INCLUDED IN THE GENERAL APPROPRIATIONS ACT 540513 Designated Tuition Statute defi nes designated tuition as an institutional fund which means the revenue is not considered part of ldquoeducational and general fundsrdquo Th e governing board can waive designated tuition for a student (see 54261) Statute specifies that this revenue not be used in the GAA as a way to offset General Revenue
54503 Student Services Fees This is intended for activities which are separate from the regularly scheduled academic functions of the institution and directly involve or benefi t students Except for The University of Texas at Austin (see 54513) and components of the University of Houston System (see 545061) the maximum of all compulsory student services cannot exceed $250 per semester It is kept separate from educational and general funds
54504 Incidental Fees The governing board sets the fee which must reasonably reflect the actual cost of the materials or services for which the fee is collected Examples of unearned fees include late registration library fi nes microfilming fees thesis or doctoral manuscript reproduction or filing fees and bad check charges
5516 Board Responsibility The governing board is authorized to ldquofix and collect rentals rates and chargesrdquo
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 31
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54006 Refund or Adjustment of Tuition and Mandatory Fees for Dropped Courses and Student Withdrawals
540065 Tuition Rebate for Certain Undergraduates
54007 Option to Pay Tuition by Installment
540071 Authority of Institution to Provide Payment Options for Student with Delayed Financial Aid
54009 Increase in Tuition Rate or Fees
54010 Reduction in Tuition
54011 Tuition Limit in Cases of Concurrent Enrollment
54012 Tuition Rates for Certain Doctoral Students
54014 Tuition for Repeated or Excessive Undergraduate Hours
54015 Billing and Notifi cation for Tuition
54016 Fixed Tuition Rate Program for Certain Transfer Students at General Academic Teaching Institutions
54052ndash54057 Residency Provisions
542031 Dependent Children of Residents Who are Members of Armed Forces Deployed on Combat Duty
54204 Children of Disabled Firefighters and Law Enforcement Officers
542041 Disabled Peace Officers
54205 Blind Deaf Students
54206 Foreign Service Officers
54208 Firefighters Enrolled in Fire Science Courses
542081 Peace Officers Enrolled in Certain Courses
54211 Faculty and Dependents
54212 Teaching and Research Assistant
54213 Scholarship Student
54214 Biomedical Research Program Scholarship Student
54221 The University of Texas System Science and Technology Development Management and Transfer
54222 Economic Development and Diversification
54223 Tuition Rates for Olympic Athletes
54231 Resident of Boarding State or Nation or Participant in Student Exchange Program Tuition
54232 NATO Agreement
54233 Academic Common Market
54241 Military Personnel and Dependents
54331 Students from other Nations of the American Hemisphere
54341 Veterans and Other Military Personnel Dependents
54342 Prisoners of War
54343 Children of Prisoners of War or Persons Missing in Action
54344 Participants in Military Funerals
54345 Assistance for Tuition and Fees for Members of State Military Forces
54351 Children of Disabled Firefighters and Law Enforcement Officers
54352 Disabled Peace Officers Optional Exemption
54353 Firefighters and Peace Officers Enrolled in Certain Courses
543531 Firefighters Enrolled in Fire Science Courses
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 32
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54354 Education Benefits for Certain Survivors
54355 Children of Professional Nursing Program Faculty
54356 Preceptors for Professional Nursing Education Programs
54363 Educational Aids
54364 Blind Deaf Students
54365 Senior Citizens Optional Benefit
545011 Charges and Fees for Certain Payments
54502 General Deposits
545021 Student Deposit Fund Composition and Uses
545025 Proration of Fees
545031 Student Fee Advisory Committee
545032 Student Fee Advisory Committee the Texas AampM University System
545041 Environmental Service Fee
54505 Vehicle Registration Fees and Other Fees Related to Parking and Traffic
54506 Fees and Charges for Services to the Public the University of Houston System
545061 Student Services Fees the University of Houston System
545062 Student Fees Advisory Committee the University of Houston System
54507 Group Hospital and Medical Services Fees Texas AampM University System
54508 Medical Services Fee Texas Tech University System Components
545081 Medical Services Fee University of North Texas System Institutions
545082 Medical Services Fee Midwestern State University
545085 Medical Services Fee Texas Womanrsquos University
545089 Medical Services Fee Texas State University System Components
5450891 Medical Services Fee The University of Texas System Components
54509 Student Recreation Fee Texas Tech University System Components
545091 Student Recreational Facility Fee University of North Texas
54510 Student Recreational Sports Fee The University of Texas at Austin
54511 Student Fees for Bus Service Texas State University
545111 Environmental Service Fee Southwest Texas State University
54512 Shuttle Bus Fee The University of Texas at Arlington
545121 Intercollegiate Athletic Fee The University of Texas at Arlington
545122 Recreational Facility Fee The University of Texas at Arlington
54513 Student Service Fees The University of Texas at Austin
545131 International Education Fee The University of Texas at Austin
545132 International Education Fee
545133 Martin Luther King Jr Statue Fee The University of Texas at Austin
545134 Washington DC Internship Education Fee
545135 Barbara Jordan and Cesar Chavez Statues Fee The University of Texas at Austin
54515 Student Union Fee
54518 University Center Fee Midwestern State University
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 33
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54519 Student Union Fee North Texas State University
545191 Intercollegiate Athletic Fee University of North Texas
54520 University Center Student Fee Stephen F Austin State University
545201 Recreational Sports Fee Stephen F Austin State University
54521 Student Center Facility Fees Texas AampM University System
54522 Student Center Fees Texas Southern University
545221 Recreational Facility Fee Texas Southern University
545222 Medical Services Fee Texas Southern University
545223 Intercollegiate Athletics Fee Texas Southern University
54523 Student Center Fees Texas State University System
545241 Student Union Fees Texas Tech University System
54525 Fees for Student Centers Texas Womanrsquos University
545251 Student Fitness and Recreational Fee Texas Womanrsquos University
54526 Student Fees for University Centers the University of Houston
54527 Student Fees for University Center Facilities the University of Houston-Downtown College
54528 Recreational Facility Fee the University of Houston
54529 Student Union Fee The University of Texas at Arlington
54530 Student Union Fees The University of Texas at Austin
54531 Student Union Building Fees The University of Texas at Dallas
545311 Transportation Fee The University of Texas at Dallas
545312 Student Services Building Fee The University of Texas at Dallas
545313 Intramural and Intercollegiate Athletics Fee The University of Texas at Dallas
54532 Student Union Building Fees The University of Texas at San Antonio
545321 Transportation Fee The University of Texas at San Antonio
545322 Intercollegiate Athletics Fee The University of Texas at San Antonio
54533 Student Union Fees The University of Texas of the Permian Basin
545331 Intercollegiate Athletic Fee The University of Texas of the Permian Basin
545332 Fees for Student Services Building The University of Texas of the Permian Basin
54534 Arts and Performance Center Fee The University of Texas at Tyler
545341 Student Recreational Facility Fee The University of Texas at Tyler
545342 Intercollegiate Athletics Fee The University of Texas at Tyler
545343 Student Union Fee The University of Texas at Tyler
54535 Student Union Fee The University of Texas at El Paso
54536 Fees for Student Health Services Building The University of Texas at Austin
54537 Fees for Student Services Building The University of Texas at Austin
545371 Gregory Gymnasium Renovation Fee The University of Texas at Austin
545372 Aquatics Center Fee The University of Texas at Austin
54538 Recreational Sports Fee Texas State University System
545381 Intercollegiate Athletics Fee Certain Institutions in Texas State University System
545382 Intercollegiate Athletics Fee Texas State University ndash San Marcos
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 34
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54539 Recreational Sports Fee the Texas AampM University System
545391 Intercollegiate Athletics Fee Texas AampM University ndash Corpus Christi
545392 Intercollegiate Athletics Fee Texas AampM University ndash Kingsville
545393 Intercollegiate Athletics Fee Prairie View AampM University
545394 Intercollegiate Athletics Fee Tarleton State University
545395 Intercollegiate Athletics Fee Texas AampM International University
545396 Intercollegiate Athletics Fees West Texas AampM University
545397 Intercollegiate Athletics Fees Texas AampM University ndash Commerce
545398 Student Endowment Fund Fee Texas AampM University ndash Corpus Christi
54540 Student Center Fee University of Houston ndash Clear Lake
54541 Recreational Facility Fee The University of Texas at El Paso
54542 Student Union Building Fee The University of Texas ndash Pan American
545421 Sports Recreation and Wellness Facility Fee The University of Texas ndash Pan American
54543 Recreational Facility Fee The University of Texas at San Antonio
54544 Recreational Facility Fee The University of Texas at Dallas
545441 Student Recreational and Health Facilities Fee Midwestern State University
545442 Intercollegiate Athletics Fee Midwestern State University
54545 Fees for Continuing Education Courses
54546 Student Union Fees The University of Texas at Brownsville
54550 Wellness Recreational and Fitness Complex Fee The University of Texas at Brownsville
54551 Intercollegiate Athletics Fee The University of Texas at Brownsville
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 35
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 36
APPENDIX C GLOSSARY
APPROPRIATION METHODOLOGIES Direct Appropriation The actual appropriation either estimated or sum certain listed in that institutionrsquos portion of the General Appropriations Act (GAA)
Indirect Appropriation An appropriation made on behalf of an institution but not listed in that institutionrsquos portion of the GAA Examples include appropriations to the Available University Fund the Higher Education Fund and the Higher Education Coordinating Board all of which are ultimately allocated to institutions
Estimated Appropriation An estimated appropriation is a figure in the GAA that best reflects the information available about the revenue source but the amount available for an institution to spend is contingent on the amount of revenue actually generated If the actual amount of revenue is less than the estimated amount the institution is limited to the lower amount If more revenue is generated than the estimated amount the institution can spend the higher amount
Sum Certain Appropriation A sum certain appropriation in the GAA means that an institution is limited to spend no more than the level of appropriation noted in the institutionrsquos bill pattern in the GAA
Lump Sum Appropriation Texas Education Code Section 61059(k) calls for flexibility in funds appropriated to higher education institutions A lump sum appropriation is a single amount that is unrestricted which means that it can be used for any variety of strategies The GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Higher education institutions are not required to spend their appropriation within specified strategies One exception to this is the Tuition Revenue Bond strategy which represents the appropriation related to debt service on related bonds and must be spent as appropriated or it is reverted to the treasury
METHODS OF FINANCE General Revenue (GR) The non-dedicated portion of the General Revenue Fund is the statersquos primary operating fund Most state tax revenue many state fees and various other sources of revenue are deposited as non-dedicated General Revenue Funds
General RevenuendashDedicated (GRndashD) This is the dedicated portion of General Revenue Funds For higher education institutions the bulk of General RevenuendashDedicated Fund appropriations consist of tuition and fee revenue generated by the institutions These include the tuition and fee revenue included as ldquoOther Educational and General Incomerdquo (defined below) ldquoboard authorized tuitionrdquo (Texas Education Code Section 54008)
Other Funds State funds not included in General Revenue Funds or General RevenuendashDedicated Funds For institutions of higher education these include the Available University Fund and Patient Income generated by health-related institutions
FUND TYPES Educational and General Income Th e Texas Education Code (51009(c)) definition for ldquoEducational and General Fundsrdquo includes (a) net tuition (b) special course fees charged under Education Code Section 54051(e) and (l) (c) lab fees (d) student teaching fees (e) hospital and clinic fees (f ) organized activity fees and (g) proceeds from the sale of educational and general equipment
Institutional Funds Texas Education Code Section 51009(b) defines institutional funds as those that are not ldquoeducational and general fundsrdquo An example of an institutional fund is ldquodesignated tuitionrdquo (Texas Education Code Section 540513) These funds are not included in the GAA
Local Funds Texas Education Code Section 51009(a) defines local funds as net tuition certain special course fees lab fees student teaching fees hospital and clinic fees organized activity fees proceeds from the sale of educational and general equipment and indirect cost recovery fees Th is revenue is accounted for as ldquoeducational and general fundsrdquo and is included in the GAA
Other Educational and General Income The GAA includes some tuition and fees collected by institutions of higher education (General RevenuendashDedicated Funds) Th e revenue from tuition and fees such as statutory tuition (see texas Education Code Section 54051 Tuition Rates) board authorized tuition (see Texas Education Code Section 54008 Tuition Rate Set by Governing Board) Laboratory
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 37
APPENDIX C GLOSSARY
Fees (Texas Education Code Section 54501) and certain other fees are considered Other Educational and General Income (Other EampG) and are appropriated in the GAA as General RevenuendashDedicated Funds Other Educational and General Income is a subset of Educational and General Income (EampG Income)
Patient Income Health-related institutions that operate hospitals or dental clinics generate patient income from services rendered It is allocated as a method of finance to the related institution across a range of strategies in the institutionrsquos bill pattern (Other Funds) For the 2010ndash11 biennium more than $48 billion in patient income was appropriated making it the largest method of fi nance for health-related institutions
OTHER ITEMS Indirect Cost Recovery Institutions negotiate a percentage of a grant with the federal government for Indirect Costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 38
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OF
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Sec
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ajor
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rman
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ital e
quip
men
t use
djo
intly
for e
duca
tiona
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gene
ral a
ctiv
ities
Arti
cle
VII
Sec
tion
18(a
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f the
Tex
as
Con
stitu
tion
Gen
eral
App
ropr
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nsA
ct
Arti
cle
VII
Sec
tion
17(a
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f the
Tex
as
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
620
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Gen
eral
App
ropr
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s C
onst
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the
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nsfe
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e Te
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tem
offi
cede
term
ines
how
to a
ppor
tion
its s
hare
of t
heA
UF
betw
een
debt
ser
vice
and
sup
port
and
mai
nten
ance
w
ithin
gui
delin
es s
pecifi e
d by
the
Texa
s C
onst
itutio
n
Arti
cle
VII
Sec
tion
17(a
) req
uire
s th
e H
EF
beal
loca
ted
usin
g an
equ
itabl
e fo
rmul
a d
efi n
edin
the
Edu
catio
n C
ode
(Sec
tion
620
21) a
sT
he a
lloca
tion
of fu
nds
unde
r thi
s su
bsec
tion
ism
ade
in a
ccor
danc
e w
ith a
n eq
uita
ble
form
ula
cons
istin
g of
the
follo
win
g el
emen
ts
spac
e defi c
it fa
cilit
ies
cond
ition
ins
titut
iona
l com
plex
ity
and
a se
para
te a
lloca
tion
for
the
Texa
s S
tate
Te
chni
cal C
olle
ge S
yste
m
THE
CB
adm
inis
ters
the
HE
F fo
rmul
a re
allo
catio
nad
viso
ry p
roce
ss
Edu
catio
n C
ode
(Sec
tion
620
21) p
rovi
des
a by
-in
stitu
tion
brea
kout
of a
nnua
l HE
F ap
prop
riatio
ns
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 39
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Nat
iona
l $1
24
mill
ion
Res
earc
hU
nive
rsity
(E
stim
ated
)Fu
nd
Res
earc
h $6
53
mill
ion
Dev
elop
men
tFu
nd
Texa
s $9
35
mill
ion
Com
petit
ive
Kno
wle
dge
Fund
Arti
cle
VII
Sec
tion
20(a
)
for t
he p
urpo
se o
f pr
ovid
ing
a de
dica
ted
inde
pend
ent
and
equi
tabl
eso
urce
of f
undi
ng to
enab
le e
mer
ging
rese
arch
univ
ersi
ties
in th
is s
tate
to a
chie
ve n
atio
nal
prom
inen
ce a
s m
ajor
rese
arch
uni
vers
ities
Arti
cle
VII
Sec
tion
20 (h
)
onl
y fo
r the
sup
port
and
mai
nten
ance
of
educ
atio
nal a
nd g
ener
alac
tiviti
es th
at p
rom
ote
incr
ease
d re
sear
chca
paci
ty a
t the
uni
vers
ity
Edu
catio
n C
ode
Sec
tion
hellipto
pro
mot
e62
091
in
crea
sed
rese
arch
capa
city
at e
ligib
le g
ener
alac
adem
ic te
achi
ngin
stitu
tions
Sec
tion
56 o
f Hig
her
Edu
catio
n S
peci
alP
rovi
sion
s G
AA
201
2ndash13
bi
enni
um
hellipto
sup
port
facu
lty fo
r the
pur
pose
of
inst
ruct
iona
l exc
elle
nce
and
rese
arch
Des
igna
ted
an e
mer
ging
rese
arch
uni
vers
ity b
yTe
xas
Hig
her E
duca
tion
Coo
rdin
atin
g B
oard
R
epor
ts a
t lea
st $
45 m
illio
nin
rest
ricte
d re
sear
chex
pend
iture
s in
eac
h of
the
last
2 y
ears
P
lus
four
of t
he fo
llow
ing
addi
tiona
l crit
eria
1)
End
owm
ents
gt $
400
mill
ion
2) P
rodu
ces
gt 20
0 P
hDs
per y
ear
3) S
elec
tive
ente
ring
Fres
hmen
cla
ss
4) M
embe
r of P
hi B
eta
Kap
pa o
r equ
ival
ent
5) P
osse
sses
hig
h qu
ality
facu
lty a
nd6)
Dem
onst
rate
dco
mm
itmen
t to
high
-qua
lity
grad
uate
edu
catio
n
Edu
catio
n C
ode
Sec
tion
Elig
ible
inst
itutio
n62
092
m
eans
a g
ener
al a
cade
mic
teac
hing
inst
itutio
n a
sdefi n
ed b
y S
ectio
n 61
003
ot
her t
han
The
Uni
vers
ity o
f Te
xas
at A
ustin
Tex
as A
ampM
U
nive
rsity
or P
rairi
e Vi
ew
Aamp
M U
nive
rsity
Uni
vers
ity o
f Tex
as a
t A
ustin
Uni
vers
ity o
f Tex
as
at D
alla
s T
exas
Aamp
M
Uni
vers
ity T
exas
Tec
h U
nive
rsity
Uni
vers
ity o
f H
oust
on
Arti
cle
VII
Sec
tion
20 (a
-h)
of th
e Te
xas
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
621
41
Gen
eral
App
ropr
iatio
nA
ct
Edu
catio
n C
ode
Sec
tion
Not
e th
e62
091
RD
F as
a s
tand
-alo
neap
prop
riatio
n ite
m h
asno
t bee
n fu
nded
sin
ceth
e 20
06ndash0
7 bi
enni
um
How
ever
fun
ds c
alle
d th
e R
DF
have
bee
nap
prop
riate
d di
rect
lyin
to th
e bi
ll pa
ttern
s of
each
elig
ible
Gen
eral
Aca
dem
ic In
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Edu
catio
n C
ode
Sec
tion
621
46 (c
)
o
fth
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for
dist
ribut
ion
in a
sta
tefi s
cal y
ear
each
elig
ible
in
stitu
tion
is e
ntitl
ed to
a d
istri
butio
n in
an
amou
nteq
ual t
o th
e su
m o
fon
e-se
vent
h of
the
tota
l am
ount
app
ropr
iate
d(1
)an
dan
equ
al s
hare
of a
ny a
mou
nt re
mai
ning
afte
r(2
)di
strib
utio
ns a
re c
alcu
late
d un
der S
ubdi
visi
on (1
)no
t to
exce
ed a
n am
ount
equ
al to
one
-four
th o
fth
at re
mai
ning
am
ount
Edu
catio
n C
ode
Sec
tion
621
46 (e
)If
the
num
ber o
f ins
titut
ions
that
are
elig
ible
for
dist
ribut
ions
in a
sta
tefi s
cal y
ear i
s m
ore
than
four
eac
h el
igib
le in
stitu
tion
is e
ntitl
ed to
an
equa
l sh
are
of th
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for d
istri
butio
n in
thatfi s
cal y
ear
Edu
catio
n C
ode
Sec
tion
620
95
The
am
ount
shal
l be
appo
rtion
ed a
mon
g th
e el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of
rest
ricte
d re
sear
ch fu
nds
expe
nded
by
each
inst
itutio
n pe
r yea
r for
the
thre
e pr
eced
ing
stat
efi s
cal y
ears
The
2012
ndash13
appr
opria
tion
prov
ided
abo
ut $
07
mill
ion
to e
ach
elig
ible
inst
itutio
n fo
r eve
ry $
100
mill
ion
in u
nres
trict
ed re
sear
ch e
xpen
ditu
res
asav
erag
ed o
ver a
3-y
ear p
erio
d
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 40
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Res
earc
h N
one
U
nive
rsity
D
evel
opm
ent
Fund
Texa
s $3
56
mill
ion
Res
earc
hIn
cent
ive
Pro
gram
SO
UR
CE L
egis
lativ
e B
udge
t Boa
rd
Texa
s E
duca
tion
Cod
e S
ectio
n 62
051
to
pro
vide
fund
ing
tore
sear
ch u
nive
rsiti
esan
d em
ergi
ng re
sear
chun
iver
sitie
s fo
r the
recr
uitm
ent a
nd re
tent
ion
of h
ighl
y qu
alifi
ed fa
culty
an
d th
e en
hanc
emen
t of
rese
arch
pro
duct
ivity
at
thos
e un
iver
sitie
s
Edu
catio
n C
ode
Sec
tion
hellipto
pro
vide
621
22
mat
chin
g fu
nds
to a
ssis
tel
igib
le in
stitu
tions
inle
vera
ging
priv
ate
gifts
for t
he e
nhan
cem
ent o
fre
sear
ch p
rodu
ctiv
ity a
ndfa
culty
recr
uitm
ent
Edu
catio
n C
ode
Sec
tion
620
51
Elig
ible
inst
itutio
nm
eans
an
inst
itutio
nof
hig
her e
duca
tion
desi
gnat
ed a
s a
rese
arch
univ
ersi
ty o
r em
ergi
ngre
sear
ch u
nive
rsity
und
erth
e co
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
E
ligib
le62
121
in
stitu
tion
mea
ns a
nin
stitu
tion
of h
ighe
red
ucat
ion
desi
gnat
ed a
san
em
ergi
ng re
sear
chun
iver
sity
und
er th
eco
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
620
51
Edu
catio
n C
ode
Sec
tion
(Hou
se B
ill 5
162
121
Eig
hty-fi r
st R
egul
ar
Ses
sion
)
Edu
catio
n C
ode
Sec
tion
620
53
t
o el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of t
otal
rese
arch
fund
s ex
pend
ed b
y ea
ch in
stitu
tion
annu
ally
dur
ing
the
thre
e m
ost r
ecen
t sta
tefi s
cal
year
s a
ccor
ding
to th
e fo
llow
ing
rate
s
at le
ast $
1 m
illio
n fo
r eve
ry $
10 m
illio
n of
(1)
the
aver
age
annu
al a
mou
nt o
f tho
se re
sear
chfu
nds
expe
nded
by
the
inst
itutio
n if
that
ave
rage
amou
nt fo
r the
inst
itutio
n is
$50
mill
ion
or m
ore
and
at le
ast $
500
000
for e
very
$10
mill
ion
of(2
)th
e av
erag
e an
nual
am
ount
of t
hose
rese
arch
fund
s ex
pend
ed b
y th
e in
stitu
tion
if th
at a
vera
geam
ount
for t
he in
stitu
tion
is le
ss th
an $
50 m
illio
n
Edu
catio
n C
ode
Sec
tion
621
23
hellipis
ent
itled
to re
ceiv
e o
ut o
f fun
ds a
ppro
pria
ted
for t
hepu
rpos
es o
f the
pro
gram
for t
hatfi
sca
l yea
r a
mat
chin
g gr
ant i
n an
am
ount
det
erm
ined
acco
rdin
g to
the
follo
win
g ra
tes
50 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(1)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$10
000
0 or
mor
e bu
t not
mor
eth
an $
999
999
75 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(2)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$1
mill
ion
or m
ore
but n
ot m
ore
than
$1
999
999
or
100
perc
ent o
f the
am
ount
of t
he g
ifts
and
(3)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$2
mill
ion
or m
ore
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 41
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 42
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $50119391873 $47339213388 ($2780178485) (55)
School for the Blind and Visually Impaired 93388870 41245345 (52143525) (558)
School for the Deaf 53083657 52695245 (388412) (07)
SUBTOTAL PUBLIC EDUCATION $50265864400 $47433153978 ($2832710422) (56)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1745695460 $1749380723 $3685263 02
Lamar Institute of Technology 27568721 28708990 1140269 41
Lamar University ndash Orange 18484576 19164769 680193 37
Lamar University ndash Port Arthur 23780405 22119709 (1660696) (70)
SUBTOTAL LAMAR STATE COLLEGES $69833702 $69993468 $159766 02
Texas State Technical College System $16493826 $5351461 ($11142365) (676) Administration
Texas State Technical College ndash Harlingen 50980986 49093510 (1887476) (37)
Texas State Technical College ndash West Texas 27965791 24970291 (2995500) (107)
Texas State Technical College ndash Marshall 11434368 10995468 (438900) (38)
Texas State Technical College ndash Waco 68111562 73596786 5485224 81
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$174986533 $164007516 ($10979017) (63)
SUBTOTAL TWO-YEAR INSTITUTIONS $1990515695 $1983381707 ($7133988) (04)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $19099360 $18147200 ($952160) (50)
The University of Texas at Arlington 275081581 288654156 13572575 49
The University of Texas at Austin 749518863 702739665 (46779198) (62)
The University of Texas at Dallas 230535884 223513862 (7022022) (30)
The University of Texas at El Paso 202195230 195511098 (6684132) (33)
The University of Texas ndash Pan American 169039177 162830092 (6209085) (37)
The University of Texas at Brownsville 61910963 57628718 (4282245) (69)
The University of Texas of the Permian Basin 58194080 59145561 951481 16
The University of Texas at San Antonio 273182023 260495772 (12686251) (46)
The University of Texas at Tyler 71137295 66147545 (4989750) (70)
Texas AampM University System Administrative and 20701573 4501868 (16199705) (783) General Offices
Texas AampM University 700537434 651599219 (48938215) (70)
Texas AampM University at Galveston 43799673 37773622 (6026051) (138)
Prairie View AampM University 134247361 122639379 (11607982) (86)
Tarleton State University 87292499 83950084 (3342415) (38)
Texas AampM University ndash Central Texas 29460313 30599703 1139390 39
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 43
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Corpus Christi $121534331 $110283074 ($11251257) (93)
Texas AampM University ndash Kingsville 82466491 75368253 (7098238) (86)
Texas AampM University ndash San Antonio 27154411 37125363 9970952 367
Texas AampM International University 83231209 73816324 (9414885) (113)
West Texas AampM University 79410486 72847023 (6563463) (83)
Texas AampM University ndash Commerce 99558312 89920628 (9637684) (97)
Texas AampM University ndash Texarkana 41409091 34754968 (6654123) (161)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 450003385 394815403 (55187982) (123)
University of Houston ndash Clear Lake 83394543 71849633 (11544910) (138)
University of Houston ndash Downtown 88104670 67926822 (20177848) (229)
University of Houston ndash Victoria 42631672 39786959 (2844713) (67)
Midwestern State University 54249721 48828454 (5421267) (100)
University of North Texas System Administration 9789067 6732226 (3056841) (312)
University of North Texas 302350602 296355351 (5995251) (20)
University of North Texas at Dallas 35156605 30478388 (4678217) (133)
Stephen F Austin State University 121843336 108728674 (13114662) (108)
Texas Southern University 174127907 150903873 (23224034) (133)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 368026094 357056343 (10969751) (30)
Angelo State University 68450875 64053866 (4397009) (64)
Texas Womans University 146639127 135140923 (11498204) (78)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 121909453 111926905 (9982548) (82)
Sam Houston State University 162684291 145338873 (17345418) (107)
Texas State University ndash San Marcos 261940220 254492644 (7447576) (28)
Sul Ross State University 34008142 37804020 3795878 112
Sul Ross State University Rio Grande College 13112804 12127383 (985421) (75)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$6217659551 $5853308379 ($364351172) (59)
HEALTH-RELATED INSTITUTIONS -
The University of Texas Southwestern Medical $339025963 $278284511 ($60741452) (179) Center
The University of Texas Medical Branch at 1252556677 1214546039 (38010638) (30) Galveston
The University of Texas Health Science Center at 356632008 347880533 (8751475) (25) Houston
The University of Texas Health Science Center at 357022348 319153560 (37868788) (106) San Antonio
The University of Texas MD Anderson Cancer 4614023153 5043439860 429416707 93 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 44
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center at $170568794 $176002869 $5434075 32 Tyler
Texas AampM University System Health Science 252705800 241434175 (11271625) (45) Center
University of North Texas Health Science Center 141974215 140131956 (1842259) (13) at Fort Worth
Texas Tech University Health Sciences Center 361096839 333314809 (27782030) (77)
SUBTOTAL HEALTH-RELATED INSTITUTIONS $7845605797 $8094188312 $248582515 32
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $137560226 $130327148 ($7233078) (53)
Texas AgriLife Extension Service 137837443 128253897 (9583546) (70)
Texas Engineering Experiment Station 249008314 268154320 19146006 77
Texas Transportation Institute 96056916 99288013 3231097 34
Texas Engineering Extension Service 164895453 161748713 (3146740) (19)
Texas Forest Service 108765979 196355520 87589541 805
Texas Veterinary Medical Diagnostic Laboratory 32693561 29601103 (3092458) (95)
SUBTOTAL TEXAS AampM UNIVERSITY $926817892 $1013728714 $86910822 94 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 1755022519 1301687813 (453334706) (258)
SUBTOTAL OTHER HIGHER EDUCATION $3339042471 $2900537481 ($438504990) (131)
SUBTOTAL HIGHER EDUCATION $20319641406 $19845144593 ($474496813) (23)
EMPLOYEE BENEFITS
Teacher Retirement System $4038146148 $3797393090 ($240753058) (60)
Optional Retirement Program 294169521 247905975 (46263546) (157)
Higher Education Employees Group Insurance 1068235618 968961950 (99273668) (93) Contributions
Retirement and Group Insurance 61823656 63645693 1822037 29
Social Security and Benefits Replacement Pay 560373470 577908771 17535301 31
SUBTOTAL EMPLOYEE BENEFITS $6022748413 $5655815479 ($366932934) (61)
DEBT SERVICE
Bond Debt Service Payments $7579835 $14567314 $6987479 922
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13483869 $19862644 $6378775 473
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION $76416008567 $72871348360 ($3544660207) (46) 1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 45
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $30322901124 $30476707526 $153806402 05
School for the Blind and Visually Impaired 28830574 29152947 322373 11
School for the Deaf 36111132 36216478 105346 03
SUBTOTAL PUBLIC EDUCATION $30387842830 $30542076951 $154234121 05
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1728790460 $1749380723 $20590263 12
Lamar Institute of Technology 20141881 21363652 1221771 61
Lamar University ndash Orange 13379584 13438359 58775 04
Lamar University ndash Port Arthur 18247526 16676606 (1570920) (86)
SUBTOTAL LAMAR STATE COLLEGES $51768991 $51478617 ($290374) (06)
Texas State Technical College System $16122329 $4603444 ($11518885) (714) Administration
Texas State Technical College ndash Harlingen 35862333 35177742 (684591) (19)
Texas State Technical College ndash West Texas 22972902 20195085 (2777817) (121)
Texas State Technical College ndash Marshall 8795246 8519429 (275817) (31)
Texas State Technical College ndash Waco 48458059 55190076 6732017 139
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$132210869 $123685776 ($8525093) (64)
SUBTOTAL TWO-YEAR INSTITUTIONS $1912770320 $1924545116 $11774796 06
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $16827250 $15931200 ($896050) (53)
The University of Texas at Arlington 171697428 183867794 12170366 71
The University of Texas at Austin 536034384 492544731 (43489653) (81)
The University of Texas at Dallas 142108554 148778381 6669827 47
The University of Texas at El Paso 142521273 137781712 (4739561) (33)
The University of Texas ndash Pan American 115707790 110889522 (4818268) (42)
The University of Texas at Brownsville 51100517 47424781 (3675736) (72)
The University of Texas of the Permian Basin 47639722 48816240 1176518 25
The University of Texas at San Antonio 186961792 178547264 (8414528) (45)
The University of Texas at Tyler 56673893 51804728 (4869165) (86)
Texas AampM University System Administrative 11478504 4473868 (7004636) (610) and General Offices
Texas AampM University 487991523 458011060 (29980463) (61)
Texas AampM University at Galveston 36736318 30964674 (5771644) (157)
Prairie View AampM University 102383638 90923868 (11459770) (112)
Tarleton State University 62999263 59464473 (3534790) (56)
Texas AampM University ndash Central Texas 24007601 25352928 1345327 56
Texas AampM University ndash Corpus Christi 93966271 81624416 (12341855) (131)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 46
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $60610859 $54030202 ($6580657) (109)
Texas AampM University ndash San Antonio 21438200 29287597 7849397 366
Texas AampM International University 67735925 58009521 (9726404) (144)
West Texas AampM University 57622391 53282160 (4340231) (75)
Texas AampM University ndash Commerce 67888967 66581226 (1307741) (19)
Texas AampM University ndash Texarkana 31084147 30370655 (713492) (23)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 311616152 257331674 (54284478) (174)
University of Houston ndash Clear Lake 58807555 46454050 (12353505) (210)
University of Houston ndash Downtown 56441987 39973395 (16468592) (292)
University of Houston ndash Victoria 32315073 27651821 (4663252) (144)
Midwestern State University 37434162 33382015 (4052147) (108)
University of North Texas System Administration 4789067 6732226 1943159 406
University of North Texas 194672599 191274119 (3398480) (17)
University of North Texas at Dallas 30330149 28165402 (2164747) (71)
Stephen F Austin State University 84817662 75640135 (9177527) (108)
Texas Southern University 125878414 104685201 (21193213) (168)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 261015662 253976808 (7038854) (27)
Angelo State University 48095474 45861337 (2234137) (46)
Texas Womans University 104666337 92467100 (12199237) (117)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 77990428 70849905 (7140523) (92)
Sam Houston State University 85061409 79609576 (5451833) (64)
Texas State University ndash San Marcos 168720167 164894925 (3825242) (23)
Sul Ross State University 28832045 32758471 3926426 136
Sul Ross State University Rio Grande College 10662338 9364932 (1297406) (122)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$4333902287 $4078804555 ($255097732) (59)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $286599806 $249279177 ($37320629) (130) Center
The University of Texas Medical Branch at 586704245 472189151 (114515094) (195) Galveston
The University of Texas Health Science Center 278466261 294281302 15815041 57 at Houston
The University of Texas Health Science Center 285919332 260615042 (25304290) (89) at San Antonio
The University of Texas MD Anderson Cancer 316274242 298435072 (17839170) (56) Center
The University of Texas Health Science Center 68656721 71856579 3199858 47 at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 47
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $205234148 $194402799 ($10831349) (53) Center
University of North Texas Health Science Center 120369543 113121832 (7247711) (60) at Fort Worth
Texas Tech University Health Sciences Center 308265168 291713120 (16552048) (54)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$2456489466 $2245894074 ($210595392) (86)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $108442641 $101233060 ($7209581) (66)
Texas AgriLife Extension Service 93421095 84437039 (8984056) (96)
Texas Engineering Experiment Station 27420670 27791758 371088 14
Texas Transportation Institute 1786250 1282500 (503750) (282)
Texas Engineering Extension Service 13423471 12388837 (1034634) (77)
Texas Forest Service 38994278 158979948 119985670 3077
Texas Veterinary Medical Diagnostic Laboratory 12326913 11519113 (807800) (66)
SUBTOTAL TEXAS AampM UNIVERSITY $295815318 $397632255 $101816937 344 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 1324025818 1053522035 (270503783) (204)
SUBTOTAL OTHER HIGHER EDUCATION $1849025818 $1578522035 ($270503783) (146)
SUBTOTAL HIGHER EDUCATION $10848003209 $10225398035 ($622605174) (57)
EMPLOYEE BENEFITS
Teacher Retirement System $3721648969 $3431139479 ($290509490) (78)
Optional Retirement Program 249841016 205341297 (44499719) (178)
Higher Education Employees Group Insurance 1066913010 967556924 (99356086) (93) Contributions
Retirement and Group Insurance 51589368 54070178 2480810 48
Social Security and Benefits Replacement Pay 456936472 471706602 14770130 32
SUBTOTAL EMPLOYEE BENEFITS $5546928835 $5129814480 ($417114355) (75)
DEBT SERVICE
Bond Debt Service Payments $7325020 $14248830 $6923810 945
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13229054 $19544160 $6315106 477
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$46796003928 $45916833626 ($879170302) (19)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 48
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $418569 $649000 $230431 551
School for the Blind and Visually Impaired 0 0 0 NA
School for the Deaf 0 0 0 NA
SUBTOTAL PUBLIC EDUCATION $418569 $649000 $230431 551
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 7026644 7345338 318694 45
Lamar University ndash Orange 4875929 5726410 850481 174
Lamar University ndash Port Arthur 4747409 5443103 695694 147
SUBTOTAL LAMAR STATE COLLEGES $16649982 $18514851 $1864869 112
Texas State Technical College System $371497 $748017 $376520 1014 Administration
Texas State Technical College ndash Harlingen 14268123 13915768 (352355) (25)
Texas State Technical College ndash West Texas 4573311 4775206 201895 44
Texas State Technical College ndash Marshall 2486999 2476039 (10960) (04)
Texas State Technical College ndash Waco 18496312 18406710 (89602) (05)
SUBTOTAL TEXAS STATE TECHNICAL $40196242 $40321740 $125498 03 COLLEGES
SUBTOTAL TWO-YEAR INSTITUTIONS $56846224 $58836591 $1990367 35
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 99544565 104786362 5241797 53
The University of Texas at Austin 203175074 210194934 7019860 35
The University of Texas at Dallas 73902392 74735481 833089 11
The University of Texas at El Paso 54257081 54959386 702305 13
The University of Texas ndash Pan American 50448111 51483144 1035033 21
The University of Texas at Brownsville 10270338 10203937 (66401) (06)
The University of Texas of the Permian Basin 10153771 10329321 175550 17
The University of Texas at San Antonio 78194498 81948508 3754010 48
The University of Texas at Tyler 13686400 14342817 656417 48
Texas AampM University System Administrative 9223069 28000 (9195069) (997) and General Offices
Texas AampM University 194931245 184789626 (10141619) (52)
Texas AampM University at Galveston 6714220 6808948 94728 14
Prairie View AampM University 31863723 31715511 (148212) (05)
Tarleton State University 23018364 24485611 1467247 64
Texas AampM University ndash Central Texas 5452712 5246775 (205937) (38)
Texas AampM University ndash Corpus Christi 26308558 28658658 2350100 89
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 49
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $20743629 $21338051 $594422 29
Texas AampM University ndash San Antonio 5716211 7837766 2121555 371
Texas AampM International University 14449349 15531029 1081680 75
West Texas AampM University 20857129 19564863 (1292266) (62)
Texas AampM University ndash Commerce 29344128 23339402 (6004726) (205)
Texas AampM University ndash Texarkana 4114223 4384313 270090 66
University of Houston System Administration 0 0 0 NA
University of Houston 129680228 137483729 7803501 60
University of Houston ndash Clear Lake 23417549 25395583 1978034 84
University of Houston ndash Downtown 30264387 27953427 (2310960) (76)
University of Houston ndash Victoria 9883366 12135138 2251772 228
Midwestern State University 15912994 15446439 (466555) (29)
University of North Texas System 0 0 0 NA Administration
University of North Texas 100805298 105081232 4275934 42
University of North Texas at Dallas 4826456 2312986 (2513470) (521)
Stephen F Austin State University 35525799 33088539 (2437260) (69)
Texas Southern University 47027769 46218672 (809097) (17)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 98116061 103079535 4963474 51
Angelo State University 17654127 18192529 538402 30
Texas Womans University 40098242 42673823 2575581 64
Texas State University System 0 0 0 NA
Lamar University 37445892 41077000 3631108 97
Sam Houston State University 71500172 65729297 (5770875) (81)
Texas State University ndash San Marcos 88567369 89597719 1030350 12
Sul Ross State University 4941096 5045549 104453 21
Sul Ross State University Rio Grande College 2342952 2762451 419499 179
SUBTOTAL GENERAL ACADEMIC $1744378547 $1759986091 $15607544 09 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $22514152 $18054614 ($4459538) (198) Center
The University of Texas Medical Branch at 23120930 24797153 1676223 72 Galveston
The University of Texas Health Science Center 35777999 35483172 (294827) (08) at Houston
The University of Texas Health Science Center 16488403 17234857 746454 45 at San Antonio
The University of Texas MD Anderson Cancer 48597071 55476185 6879114 142 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 50
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center $512055 $569200 $57145 112 at Tyler
Texas AampM University System Health Science 13306322 24908409 11602087 872 Center
University of North Texas Health Science 12596783 16295862 3699079 294 Center at Fort Worth
Texas Tech University Health Sciences Center 23553492 27695220 4141728 176
SUBTOTAL HEALTH-RELATED $196467207 $220514672 $24047465 122 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $950000 $950000 $0 NA
Texas AgriLife Extension Service 46992 18000 (28992) (617)
Texas Engineering Experiment Station 1785036 904418 (880618) (493)
Texas Transportation Institute 0 0 0 NA
Texas Engineering Extension Service 0 0 0 NA
Texas Forest Service 61388596 28912000 (32476596) (529)
Texas Veterinary Medical Diagnostic Laboratory 0 0 0 NA
SUBTOTAL TEXAS AampM UNIVERSITY SERVICES
$64170624 $30784418 ($33386206) (520)
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 111572621 87256791 (24315830) (218)
SUBTOTAL OTHER HIGHER EDUCATION $111572621 $87256791 ($24315830) (218)
SUBTOTAL HIGHER EDUCATION $2173435223 $2157378563 ($16056660) (07)
EMPLOYEE BENEFITS
Teacher Retirement System $188794770 $209600575 $20805805 110
Optional Retirement Program 44328505 42564678 (1763827) (40)
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 0 0 0 NA
Social Security and Benefits Replacement Pay 82274010 85153600 2879590 35
SUBTOTAL EMPLOYEE BENEFITS $315397285 $337318853 $21921568 70
DEBT SERVICE
Bond Debt Service Payments $0 $0 $0 NA
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $0 $0 $0 NA
TOTAL ARTICLE III ndash AGENCIES OF $2489251077 $2495346416 $6095339 02 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 51
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $13298491946 $10520619770 ($2777872176) (209)
School for the Blind and Visually Impaired 5430126 5855880 425754 78
School for the Deaf 4233990 2921862 (1312128) (310)
SUBTOTAL PUBLIC EDUCATION $13308156062 $10529397512 ($2778758550) (209)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $16905000 $0 ($16905000) (1000)
Lamar Institute of Technology 400196 0 (400196) (1000)
Lamar University ndash Orange 229063 0 (229063) (1000)
Lamar University ndash Port Arthur 785470 0 (785470) (1000)
SUBTOTAL LAMAR STATE COLLEGES $1414729 $0 ($1414729) (1000)
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 850530 0 (850530) (1000)
Texas State Technical College ndash West Texas 419578 0 (419578) (1000)
Texas State Technical College ndash Marshall 152123 0 (152123) (1000)
Texas State Technical College ndash Waco 1157191 0 (1157191) (1000)
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$2579422 $0 ($2579422) (1000)
SUBTOTAL TWO-YEAR INSTITUTIONS $20899151 $0 ($20899151) (1000)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 3839588 0 (3839588) (1000)
The University of Texas at Austin 10309405 0 (10309405) (1000)
The University of Texas at Dallas 14524938 0 (14524938) (1000)
The University of Texas at El Paso 2681876 0 (2681876) (1000)
The University of Texas ndash Pan American 2241274 0 (2241274) (1000)
The University of Texas at Brownsville 540108 0 (540108) (1000)
The University of Texas of the Permian Basin 400587 0 (400587) (1000)
The University of Texas at San Antonio 8025733 0 (8025733) (1000)
The University of Texas at Tyler 777002 0 (777002) (1000)
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 10292036 0 (10292036) (1000)
Texas AampM University at Galveston 349135 0 (349135) (1000)
Prairie View AampM University 0 0 0 NA
Tarleton State University 1274872 0 (1274872) (1000)
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 1259502 0 (1259502) (1000)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 52
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville 1112003 0 (1112003) (1000)
Texas AampM University ndash San Antonio $0 $0 $0 NA
Texas AampM International University 658885 0 (658885) (1000)
West Texas AampM University 930966 0 (930966) (1000)
Texas AampM University ndash Commerce 2325217 0 (2325217) (1000)
Texas AampM University ndash Texarkana 6210721 0 (6210721) (1000)
University of Houston System Administration 0 0 0 NA
University of Houston 8707005 0 (8707005) (1000)
University of Houston ndash Clear Lake 1169439 0 (1169439) (1000)
University of Houston ndash Downtown 1398296 0 (1398296) (1000)
University of Houston ndash Victoria 433233 0 (433233) (1000)
Midwestern State University 902565 0 (902565) (1000)
University of North Texas System Administration 5000000 0 (5000000) (1000)
University of North Texas 6872705 0 (6872705) (1000)
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 1499875 0 (1499875) (1000)
Texas Southern University 1221724 0 (1221724) (1000)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 8894371 0 (8894371) (1000)
Angelo State University 2701274 0 (2701274) (1000)
Texas Womans University 1874548 0 (1874548) (1000)
Texas State University System 0 0 0 NA
Lamar University 6473133 0 (6473133) (1000)
Sam Houston State University 6122710 0 (6122710) (1000)
Texas State University ndash San Marcos 4652684 0 (4652684) (1000)
Sul Ross State University 235001 0 (235001) (1000)
Sul Ross State University Rio Grande College 107514 0 (107514) (1000)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$126019925 $0 ($126019925) (1000)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $16614303 $0 ($16614303) (1000) Center
The University of Texas Medical Branch at 6745161 0 (6745161) (1000) Galveston
The University of Texas Health Science Center at 24173646 0 (24173646) (1000) Houston
The University of Texas Health Science Center at 19224332 0 (19224332) (1000) San Antonio
The University of Texas MD Anderson Cancer 634206 0 (634206) (1000) Center
The University of Texas Health Science Center 80210 0 (80210) (1000) at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 53
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $15014608 $0 ($15014608) (1000) Center
University of North Texas Health Science Center 3438054 0 (3438054) (1000) at Fort Worth
Texas Tech University Health Sciences Center 11075479 0 (11075479) (1000)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$96999999 $0 ($96999999) (1000)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $15933582 $15933582 $0 NA
Texas AgriLife Extension Service 25302708 25302708 0 NA
Texas Engineering Experiment Station 137281801 153857672 16575871 121
Texas Transportation Institute 17405197 18757193 1351996 78
Texas Engineering Extension Service 48387893 48387894 1 00
Texas Forest Service 7349101 7429568 80467 11
Texas Veterinary Medical Diagnostic Laboratory 594001 594000 (1) (00)
SUBTOTAL TEXAS AampM UNIVERSITY $252254283 $270262617 $18008334 71 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 197332508 123636426 (73696082) (373)
SUBTOTAL OTHER HIGHER EDUCATION $197332508 $123636426 ($73696082) (373)
SUBTOTAL HIGHER EDUCATION $693505866 $393899043 ($299606823) (432)
EMPLOYEE BENEFITS
Teacher Retirement System $0 $0 $0 NA
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 8832085 8286741 (545344) (62)
Social Security and Benefits Replacement Pay 3888441 3428099 (460342) (118)
SUBTOTAL EMPLOYEE BENEFITS $12720526 $11714840 ($1005686) (79)
DEBT SERVICE
Bond Debt Service Payments $253903 $318484 $64581 254
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $253903 $318484 $64581 254
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$14014636357 $10935329879 ($3079306478) (220)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 54
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $6497580234 $6341237092 ($156343142) (24)
School for the Blind and Visually Impaired 59128170 6236518 (52891652) (895)
School for the Deaf 12738535 13556905 818370 64
SUBTOTAL PUBLIC EDUCATION $6569446939 $6361030515 ($208416424) (32)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 0 0 0 NA
Lamar University ndash Orange 0 0 0 NA
Lamar University ndash Port Arthur 0 0 0 NA
SUBTOTAL LAMAR STATE COLLEGES $0 $0 $0 NA
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 0 0 0 NA
Texas State Technical College ndash West Texas 0 0 0 NA
Texas State Technical College ndash Marshall 0 0 0 NA
Texas State Technical College ndash Waco 0 0 0 NA
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$0 $0 $0 NA
SUBTOTAL TWO-YEAR INSTITUTIONS $0 $0 $0 NA
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $2272110 $2216000 ($56110) (25)
The University of Texas at Arlington 0 0 0 NA
The University of Texas at Austin 0 0 0 NA
The University of Texas at Dallas 0 0 0 NA
The University of Texas at El Paso 2735000 2770000 35000 13
The University of Texas ndash Pan American 642002 457426 (184576) (288)
The University of Texas at Brownsville 0 0 0 NA
The University of Texas of the Permian Basin 0 0 0 NA
The University of Texas at San Antonio 0 0 0 NA
The University of Texas at Tyler 0 0 0 NA
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 7322630 8798533 1475903 202
Texas AampM University at Galveston 0 0 0 NA
Prairie View AampM University 0 0 0 NA
Tarleton State University 0 0 0 NA
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 0 0 0 NA
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 55
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $0 $0 $0 NA
Texas AampM University ndash San Antonio 0 0 0 NA
Texas AampM International University 387050 275774 (111276) (287)
West Texas AampM University 0 0 0 NA
Texas AampM University ndash Commerce 0 0 0 NA
Texas AampM University ndash Texarkana 0 0 0 NA
University of Houston System Administration 0 0 0 NA
University of Houston 0 0 0 NA
University of Houston ndash Clear Lake 0 0 0 NA
University of Houston ndash Downtown 0 0 0 NA
University of Houston ndash Victoria 0 0 0 NA
Midwestern State University 0 0 0 NA
University of North Texas System Administration 0 0 0 NA
University of North Texas 0 0 0 NA
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 0 0 0 NA
Texas Southern University 0 0 0 NA
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 0 0 0 NA
Angelo State University 0 0 0 NA
Texas Womans University 0 0 0 NA
Texas State University System 0 0 0 NA
Lamar University 0 0 0 NA
Sam Houston State University 0 0 0 NA
Texas State University ndash San Marcos 0 0 0 NA
Sul Ross State University 0 0 0 NA
Sul Ross State University Rio Grande College 0 0 0 NA
SUBTOTAL GENERAL ACADEMIC $13358792 $14517733 $1158941 87 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $13297702 $10950720 ($2346982) (176) Center
The University of Texas Medical Branch at 635986341 717559735 81573394 128 Galveston
The University of Texas Health Science Center at 18214102 18116059 (98043) (05) Houston
The University of Texas Health Science Center at 35390281 41303661 5913380 167 San Antonio
The University of Texas MD Anderson Cancer 4248517634 4689528603 441010969 104 Center
The University of Texas Health Science Center 101319808 103577090 2257282 22 at Tyler
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 56
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $19150722 $22122967 $2972245 155 Center
University of North Texas Health Science Center 5569835 10714262 5144427 924 at Fort Worth
Texas Tech University Health Sciences Center 18202700 13906469 (4296231) (236)
SUBTOTAL HEALTH-RELATED $5095649125 $5627779566 $532130441 104 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $12234003 $12210506 ($23497) (02)
Texas AgriLife Extension Service 19066648 18496150 (570498) (30)
Texas Engineering Experiment Station 82520807 85600472 3079665 37
Texas Transportation Institute 76865469 79248320 2382851 31
Texas Engineering Extension Service 103084089 100971982 (2112107) (20)
Texas Forest Service 1034004 1034004 0 NA
Texas Veterinary Medical Diagnostic Laboratory 19772647 17487990 (2284657) (116)
SUBTOTAL TEXAS AampM UNIVERSITY $314577667 $315049424 $471757 01 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 122091572 37272561 (84819011) (695)
SUBTOTAL OTHER HIGHER EDUCATION $1181111524 $1111122229 ($69989295) (59)
SUBTOTAL HIGHER EDUCATION $6604697108 $7068468952 $463771844 70
EMPLOYEE BENEFITS
Teacher Retirement System $127702409 $156653036 $28950627 227
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 1322608 1405026 82418 62 Contributions
Retirement and Group Insurance 1402203 1288774 (113429) (81)
Social Security and Benefits Replacement Pay 17274547 17620470 345923 20
SUBTOTAL EMPLOYEE BENEFITS $147701767 $176967306 $29265539 198
DEBT SERVICE
Bond Debt Service Payments $912 $0 ($912) (1000)
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $912 $0 ($912) (1000)
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF $13116117205 $13523838439 $407721234 31 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 57
- INTRODUCTION
- FUNDING GENERAL ACADEMICS INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
- OTHER NON-FORMULA FUNDING
-
- FUNDING HEALTH-RELATED INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
-
- FUNDING COMMUNITY AND TECHNICAL COLLEGES
-
- OVERVIEW
- COMMUNITY COLLEGES
- TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES
-
- FUNDING TEXAS AampM SYSTEM AGENCIES
- APPENDIX A FREQUENTLY ASKED QUESTIONS
- APPENDIX B TUITION AND FEE PROVISIONS
- APPENDIX C GLOSSARY
- APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
- APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
-
FUNDING GENERAL ACADEMIC INSTITUTIONS
OVERVIEW General academic institutions are listed in the Texas Education Code (61003) Figure 4 lists the institutions and their enrollments All of the institutions have common goals of instruction research and public service however each has a unique set of academic offerings and a unique regional or statewide mission
General academic institutions receive direct appropriations via funding formulas and non-formula appropriations Direct appropriations are identified in the informational strategies of each institutionrsquos bill pattern in the General Appropriations Act (GAA) As mentioned earlier appropriations are made to institutions as a lump sum Th e informational strategies reflect how state funds are ldquoallocatedrdquo not how they must be spent This means that with a few exceptions higher education entities unlike other state agencies are not required to spend appropriations within a specified funding strategy
The appropriation levels in each strategy refl ect diff erent revenue sources such as General Revenue Funds General RevenuendashDedicated Funds (mostly tuition and fee revenue) and Other Funds These revenue sources are referred to as the ldquomethod of fi nancerdquo Figure 5 illustrates the method of finance for $74 billion in appropriations for general academic institutions including a number of the indirect appropriations referenced in the next paragraph but does not include appropriations for employee retirement benefi ts
There are also appropriations that benefit institutions that are not reflected in the bill pattern of individual institutions including the Higher Education Fund the Available National Research University Fund Available University Fund certain employee benefits and funds trusteed to the Texas Higher Education Coordinating Board (THECB)
Figure 6 presents the percentage of funding related to each of these direct and indirect appropriations All of these appropriations are further described in the following pages
In addition general academic institutions have access to funds not reflected in the state appropriations process Examples of this include indirect cost recovery certain tuition and fees such as ldquodesignated tuitionrdquo and ldquoincidental feesrdquo (both are described in Appendix B) auxiliary operations (ie revenue from athletics student services fees bookstore and parking) and grants and gifts
FIGURE 4 PUBLIC GENERAL ACADEMIC INSTITUTIONS CERTIFIED FALL 2011 HEADCOUNT
INSTITUTION HEADCOUNT
Angelo State University 7077
Lamar University 14021
Midwestern State University 5811
Prairie View AampM University 8425
Sam Houston State University 17527
Stephen F Austin State University 12702
Sul Ross State University 1985
Sul Ross State University Rio Grande College 971
Tarleton State University 9893
Texas AampM International University 7037
Texas AampM University 49861
Texas AampM University ndash Central Texas 2096
Texas AampM University at Galveston 2035
Texas AampM University ndash Commerce 10726
Texas AampM University ndash Corpus Christi 10162
Texas AampM University ndash Kingsville 6731
Texas AampM University ndash San Antonio 3554
Texas AampM University ndash Texarkana 1907
Texas Southern University 9730
Texas State University ndash San Marcos 34087
Texas Tech University 32149
Texas Womanrsquos University 14503
The University of Texas at Arlington 33439
The University of Texas at Austin 51112
The University of Texas at Brownsville 8625
The University of Texas at Dallas 18864
The University of Texas at El Paso 22582
The University of Texas at San Antonio 30968
The University of Texas at Tyler 6628
The University of Texas of the Permian Basin 3831
The University of Texas ndash Pan American 19034
University of Houston 39820
University of Houston ndash Clear Lake 8185
University of Houston ndash Downtown 12918
University of Houston ndash Victoria 4330
University of North Texas 35694
University of North Texas at Dallas 2032
West Texas AampM University 7886
STATEWIDE TOTALS 568938 SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 5
FUNDING GENERAL ACADEMIC INSTITUTIONS
HQHUDO5HYHQXH)XQGV
FIGURE 5 METHOD OF FINANCE FOR GENERAL ACADEMICS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV
2WKHU)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING Nearly 573 percent of state appropriations for general academic institutions are allocated via two funding formulas and two supplements Instruction and Operations Formula Teaching Experience Supplement Infrastructure Formula
and Small Institution Supplement The formulas and supplements are direct appropriations and are primarily based on enrollment
The formula appropriations consist of General Revenue Funds and some Other Educational and General Income (Other EampG) Other EampG includes specific tuition and fee revenue (see Appendix B for a listing of tuition and fee provisions) The inclusion of certain tuition and fee revenue in the formula funding calculation is referred to as an ldquoAll Funds methodologyrdquo to formula funding Th e most significant tuition revenue included in the formula calculation is tuition charged in accordance with Texas Education Code Section 54051 Interim Tuition Rates (referred to as statutory tuition) The statutory tuition rate for the 2012ndash13 academic year is $50 per semester credit hour for Texas residents Th e corresponding tuition rate for a nonresident student is the average nonresident tuition charged to a Texas resident at a public university in each of the five most populous states
Of the $40 billion allocated by the general academic formulas and supplements nearly 728 percent consists of General Revenue Funds with the remainder consisting of General RevenuendashDedicated Funds (Other EampG)
A portion of Other EampG income is set aside for specifi c purposes or allocated to non-formula based strategies in the
FIGURE 6 APPROPRIATIONS FOR GENERAL ACADEMIC INSTITUTIONS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
QIUDVWUXFWXUH)RUPXOD +ROG+DUPOHVV 727$ 021 )RUPXODDQG
1RQ)RUPXOD7HDFKLQJ([SHULHQFH
QVWUXFWLRQamp 2SHUDWLRQV)RUPXOD
ampDSLWDO)XQGV
QVWLWXWLRQDO
(QKDQFHPHQW
6SHFLDOWHPV
ampRQVWLWXWLRQDO)XQGV
5HVHDUFKHYHORSPHQW)XQG
+LJKHU(GXFDWLRQURXSQVXUDQFH2WKHU1RQIRUPXODWHPV
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 6
FUNDING GENERAL ACADEMIC INSTITUTIONS
institutionrsquos bill pattern For example institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) TPEG are grants designed to help students cover their tuition fees and textbook costs when these expenses exceed a certain portion of their familiesrsquo contributions to their educations This set-aside revenue is not part of the tuition and fee revenue used to calculate the funding formulas
INSTRUCTION AND OPERATIONS FORMULA
About 815 percent of formula funds flow through the Instruction and Operations Formula ($32716 million for the 2012ndash13 biennium) and Teaching Experience Supplement ($957 million for the 2012ndash13 biennium) Th e Instruction and Operations formula is calculated as follows
Semester Credit Hours X ProgramLevel Weight X Rate (5371)
Semester credit hours (SCH) are a measurement of how many classes (and the number of students enrolled in those classes) an institution delivers The formula calculation for a biennium uses a ldquobase periodrdquo of SCH The ldquobase periodrdquo used for the 2012ndash13 biennium was the combination of summer 2010 fall 2010 and spring 2011
SCH is weighted by discipline (eg nursing is weighted more than liberal arts) and by level (ie lower and upper division masters doctoral and professional) For instance a lower division liberal arts course receives a weight of 10 A doctoral level liberal arts course receives a weight of 923 A nursing lower division course receives a weight of 203 A doctoral nursing course receives a weight of 925 Beginning with the 2006ndash07 GAA the basis for the weights per discipline was shifted to an aggregation of actual costs based on institutions Annual Financial Reports Currently THECB uses a rolling three year average to adjust the weights each biennium
THECB recommends a rate based on its recommended weights and program enhancements The legislature sets the weights and the rate in the Higher Education Special Provisions of the GAA (page III-238) In practice the legislature has set the rate based on available funding including consideration of enrollment changes and other factors Figure 7 illustrates the Instruction and Operations Formula allocation to institutions
FIGURE 7 DISTRIBUTION OF INSTRUCTION AND OPERATIONS FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
7H[DV$ amp 08QLYHUVLW
2WKHUHQHUDO$FDGHPLFV
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
TEACHING EXPERIENCE SUPPLEMENT
For the 2012ndash13 biennium an additional weight of ten percent is added to lower-division and upper-division semester credit hours taught by tenured and tenure-track faculty The 2012ndash13 GAA includes the following language ldquoFurthermore it is the intent of the Legislature that the weight shall increase by 10 percent per biennium up to 50 percentrdquo (Special Provisions Relating Only to State Agencies of Higher Education Sec 28 page III-238 2012ndash13 GAA)
The Teaching Experience Supplement is calculated as follows
Semester Credit Hours X ProgramLevel Weight Supplement (10) X Rate (5371)
The Teaching Experience Supplement was 5 percent during the 1998ndash99 and 2000ndash01 biennia Th e Seventy-seventh Legislature 2001 increased the supplement to the current 10 percent in 2002ndash03 biennium
INFRASTRUCTURE FORMULA
Almost 16 percent of formula funds flow through the Infrastructure Formula and Small Institution Supplement ($6768 million for the 2012ndash13 biennium) In addition to
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 7
FUNDING GENERAL ACADEMIC INSTITUTIONS
the universities the State Colleges and components of Texas State Technical College also receive infrastructure formula appropriations This formula uses a statewide infrastructure rate which is set in the GAA The statewide infrastructure rate is divided into two rates an Adjusted Utility Rate and an All Other Rate As with the SCH rate the legislature has set the rate based on available funding including consideration of changes in institutional space and other factors
The Infrastructure Formula is calculated as follows
(Adjusted Utility Rate + All Other Rates) X Predicted Square Feet
The Adjusted Utility Rate is 52 percent of the statewide infrastructure rate The 52 percent reflects the percentage of infrastructure formula funds that institutions historically spent on utilities A statewide utility rate is determined and then adjusted for each institution to reflect utility costs relative to other institutions
The All Other Rate is 48 percent of the statewide infrastructure rate and remains constant among institutions It accounts for physical plant grounds maintenance and custodial services
THECBrsquos Space Projection Model for Higher Education Institutions in Texas (space model) estimates square footage for each institution The objective of the space model projection is to calculate the amount of space an institution needs based on the following
bull number program and level of semester credit hours
bull number of faculty non-faculty students programs and library holdings and
bull research and current EampG expenditures
Figure 8 illustrates the Infrastructure Formula allocation to institutions The similarity of the allocation to the Instruction and Operations Formula allocation demonstrates the influence of enrollment on both formula allocations
SMALL INSTITUTION SUPPLEMENT
Prior to the Eighty-fi rst Legislature (2009) general academic institutions with enrollments of less than 5000 received a $750000 annual Small Institution Supplement However the Eighty-first Legislature increased the enrollment threshold to 10000 students and implemented a phase-out
FIGURE 8 DISTRIBUTION OF INFRASTRUCTURE FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
2WKHUHQHUDO$FDGHPLFV
7H[DV$ amp M 8QLYHUVLW
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
(based on the number of students) of the supplement between 5000 and 10000 students for the 2012ndash13 biennium (see Figure 9) This supplement recognizes that institutions have a minimum cost of operation that may not be covered by funds generated through the formulas
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $414 million in General Revenue hold harmless funding for aff ected institutions to minimize the effect of reduced formula funding as a result of overall enrollment declines or declines in upper-division or graduate enrollment Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment than other institutions or a change in utility costs Th e Eighty-second Legislature 2011 provided $444 million in a hold harmless based on total General Revenue Funds (formula and non-formula) for the 2012ndash13 biennium
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 8
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 9 SMALL INSTITUTION SUPPLEMENT RECIPIENTS
The University of Texas at Brownsville
The University of Texas of the Permian Basin
The University of Texas at Tyler
Texas AampM University at Galveston
Prairie View AampM University
Tarleton State University
Texas AampM University ndash Central Texas
Texas AampM University ndash Kingsville
Texas AampM University ndash San Antonio
Texas AampM International University
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston ndash Clear Lake
University of Houston ndash Victoria
Midwestern State University
University of North Texas at Dallas
Texas Southern University
Angelo State University
Sul Ross State University
Sul Ross State University ndash Rio Grande College
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Waco
Texas State Technical College ndash Marshall
Lamar Institute of Technology
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
SOURCE Legislative Budget Board
NON-FORMULA FUNDING
SPECIAL ITEMS
Special Item appropriations to the institutions total $4836 million for the 2012ndash13 biennium In 2012ndash13 $69 million was appropriated to system offices for special items These are direct appropriations to institutions for projects that are not funded by formula but are specifi cally identifi ed by the legislature as needing support An institution is not required to spend the amount identified in a Special Item strategy for that particular project but expenditure reports indicate that institutions often use an entire appropriation along with additional funding for the related project
The majority of special item funding is through the Institutional Enhancement strategy Institutional Enhancement is a $2204 million appropriation for the 2012ndash13 biennium This is a direct appropriation to institutions and was established by the Seventy-sixth Legislature 1999 for the 2000ndash01 biennium Th e fi rst Institutional Enhancement appropriation was based on a consolidation of certain Special Item appropriations in 1999 and an additional $1 million per year was appropriated for each institution Examples of consolidated special items are items that could be funded through the formulas such as general institutional academic and research support
For the 2002ndash03 biennium there was an additional $1 million increase in appropriations for most institutions and a $15 million increase for selected institutions in South Texas and the border region Institutions that benefi ted signifi cantly from the Seventy-seventh Legislaturersquos new University Research and Texas Excellence Funds (House Bill 1839 Seventy-seventh Legislature 2001) or from the Permanent University Fund (PUF) ldquoexcellence fundingrdquo did not receive an increase in Institutional Enhancement funds for the 2002ndash03 biennium
Other Special Items total $2632 million in appropriations for the 2012ndash13 biennium and include the following institutional and instructional support public service items research items other than general research support funding for separate campuses and accreditation program items
TEXAS COMPETITIVE KNOWLEDGE FUND
The Texas Competitive Knowledge Fund (TCKF) is authorized by the General Appropriations Act (GAA) (2012ndash13 Biennium) Article III Higher Education Special Provisions Section 56 The GAA prescribes that this funding will be used to support faculty for the purpose of instructional excellence and research Funding was first allocated in these strategies by the Legislature for the 2008ndash09 biennium
Current institutions receiving TCKF appropriations include The University of Texas at Austin Texas AampM University University of Houston Texas Tech University and Th e University of Texas at Dallas Institutions are allocated funding appropriated to the TCKF based on average research expenditures for the previous three-year period Th e Eighty-second Legislature Regular Session 2011 appropriated $935 million in Texas Competitive Knowledge Fund strategies directly to the institutions This funding level provides approximately $07 million to each institution for every $100 million in research expenditures In practice
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 9
FUNDING GENERAL ACADEMIC INSTITUTIONS
when institutions have first received distributions from the fund appropriations have been reduced from the institutionrsquos special item strategies In subsequent biennia the institution continues to receive appropriations from the TCKF and the reduction in special items is not specifi cally restored
RESEARCH DEVELOPMENT FUND
The Research Development Fund was created by House Bill 3526 Seventy-eighth Legislature Regular Session 2003 and replaced the Texas Excellence and University Research Funds effective September 1 2005 The intent was to combine the Texas Excellence Fund and University Research Fund into a new fund applying a uniform allocation methodology based on a three-year average of each institutionrsquos restricted research expenditures Th e Eighty-fi rst Legislature allocated $653 million (Figure 10) in the 2012ndash13 biennium to individual institutions to fund objectives identical to the Research Development Fund (Section 62091)
TEXAS RESEARCH INCENTIVE PROGRAM
Th e Eighty-first Legislature Regular Session 2009 established the Texas Research Incentive Program (TRIP) at THECB to match state appropriations with certain gifts and endowments received by emerging research universities Th e goal of this $178 million a year program is to create more Tier One universities in Texas
PERFORMANCE INCENTIVE INITIATIVE
The Eightieth Legislature 2007 appropriated $100 million in fiscal year 2009 to THECB to establish a Higher Education Performance Incentive Initiative The funding was for ldquoimprovement in teaching and educational excellence at Texas public general academic institutionsrdquo THECB distributed $80 million for increases in degrees awarded with special weights given to critical fields and at-risk students The remaining $20 million was used to fund scholarships for students graduating in the top 10 percent of their high school class
Th e Eighty-first Legislature Regular Session 2009 maintained the $80 million for the higher education performance incentive initiative (funded by the American Recovery and Reinvestment Act) and increased funding for the Top Ten Percent scholarship program by $34 million bringing total appropriations for the program to $54 million
There were no performance funding incentives for the 2012ndash13 biennium For the 2012ndash13 biennium $396
FIGURE 10 RESEARCH DEVELOPMENT FUND ALLOCATIONS
2012ndash13 BIENNIAL RDF
INSTITUTION ALLOCATION
The University of Texas at Arlington $6032754
The University of Texas at Dallas 8425486
The University of Texas at El Paso 6925040
The University of Texas at Pan American 1147838
The University of Texas at Brownsville 902512
The University of Texas of the Permian Basin 306408
The University of Texas at San Antonio 5491296
The University of Texas at Tyler 434072
Texas AampM University at Galveston 600342
Tarleton State University 1586396
Texas AampM University ndash Corpus Christi 2212356
Texas AampM University ndash Kingsville 1846206
Texas AampM International University 253246
West Texas AampM University 681752
Texas AampM Commerce 436752
Texas AampM Texarkana 9008
University of Houston 10705472
University of Houston ndash Clear Lake 10392
University of Houston ndash Downtown 10248
University of Houston ndash Victoria 2254
Midwestern State University 30066
University of North Texas 2495448
Stephen F Austin University 895696
Texas Southern University 338580
Texas Tech University 8327602
Texas Womanrsquos University 266152
Angelo State University 123176
Lamar University 820010
Sam Houston State University 362574
Texas State University ndash San Marcos 3121164
Sul Ross State University 304040
TOTAL $65296738
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 10
FUNDING GENERAL ACADEMIC INSTITUTIONS
million is appropriated to the Top Ten Percent Scholarship Program
HOLD HARMLESS FUNDING
The Eighty-second Legislature 2011 provided $444 million in General Revenue Funds hold harmless funding for aff ected institutions to minimize the effect of reduced formula and special item funding Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment that other institutions or a change in utility costs
CAPITAL FUNDS
In addition to the constitutional funds discussed in the next subsection there are three types of state appropriation for capital funds tuition revenue bonds Skiles Act revenue bonds and lease payments Almost all of the direct appropriations to institutions related to capital funds are for debt service on tuition revenue bonds
A $5931 million General Revenue Funds appropriation was made for tuition revenue bond debt service for the 2012ndash13 biennium
Tuition revenue bonds must be authorized in statute Once an authorization is made institutions issue bonds and make related debt payments with tuition revenue Th e Texas Public Finance Authority issues tuition revenue bonds for Midwestern State University Stephen F Austin University Texas Southern University and the Texas State Technical Colleges Legislative practice has been to use General Revenue Funds to reimburse institutions for the costs related to this debt service
The legislature first authorized tuition revenue bonds in 1971 In some instances the authorization was a lump sum for the benefit of specific institutions During the Seventy-eighth Legislature 2003 $2689 million in tuition revenue bonds was authorized for specific projects at various higher education institutions The Seventy-ninth Legislature Th ird Called Session 2005 adopted House Bill 153 which authorized the issuance of $1858 billion in tuition revenue bonds for forty-four different institutions Only one tuition revenue bond (House Bill 1775) was adopted by the Eightieth Legislature 2007 for a $13 million nursing building at Stephen F Austin University Th e Eighty-fi rst Legislature 2009 authorized one tuition revenue bond for Texas AampM University at Galveston The Eighty-second Legislature 2011 did not authorize any new tuition revenue bonds
The authority for Skiles Act Revenue Bonds was repealed in 1997 It had allowed institutions to pledge up to $5 from each enrolled student for each regular semester to the payment of bonds authorized under the governing boardrsquos general authority to sell revenue bonds Institutions use their Other Educational and General Income (General Revenuendash Dedicated Funds) to pay the debt service on these previously authorized bonds This is a $10 million appropriation for the 2012ndash13 biennium
Three general academic institutions receive a $3 million General Revenue Fund appropriation for lease payments to community colleges for facilities
CONSTITUTIONAL FUNDS
These funds are appropriated separately in the GAA and not directly appropriated to the institutions (see Appendix D)
The Available University Fund (AUF) established in Section 18 Article VII Texas Constitution consists of the surface income and investment proceeds from the Permanent University Fund (PUF) a state endowment with land grants totaling 21 million acres
Distributions to the AUF consist of investment returns from PUF assets surface income from PUF lands and interest earned on AUF balances For the 2012ndash13 biennium investment returns were $12200 million surface income was $398 million and interest income was $59 million Income from the sale of PUF lands and the lease of mineral interest is retained in the PUF and invested
The total 2012ndash13 estimated appropriation for the AUF is $12660 million The Constitution appropriates two-thirds of the AUF to The University of Texas System and one-third to the Texas AampM University System The two systems may use the AUF for capital purposes (debt service on PUF bonds) for most of their institutions and ldquofor the support and maintenancerdquo of other institutions listed Entities authorized to receive funding for ldquosupport and maintenancerdquo which is now commonly referred to as ldquoAUF Excellence Fundingrdquo are the two system offi ces The University of Texas at Austin Texas AampM University and Prairie View AampM University The systemsrsquo boards of regents determine allocations to individual institutions including health-related institutions and the amounts for ldquoExcellencerdquo Figure 11 lists the recipients and the type of support they received
The Higher Education Fund (HEF) as authorized in Section 17 Article VII Texas Constitution benefits institutions of higher education not eligible for the AUF (see Figure 12)
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 11
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 11 PARTICIPANTS IN THE AVAILABLE UNIVERSITY FUND
EXCELLENCE AND DEBT SERVICE FUNDS
The University of Texas System
The Texas AampM University System
The University of Texas at Austin
Texas AampM University
Prairie View AampM University
DEBT SERVICE ONLY
The University of Texas System Components
The University of Texas at Arlington
The University of Texas at Dallas
The University of Texas at El Paso
The University of Texas of Permian Basin
The University of Texas at San Antonio
The University of Texas at Tyler
The University of Texas Southwestern Medical Center
The University of Texas Medical Branch at Galveston
The University of Texas Health Science Center at Houston
The University of Texas Health Science Center at San Antonio
The University of Texas Health Science Center at Tyler
The University of Texas MD Anderson Cancer Center
Texas AampM University System Components
Texas AampM University at Galveston
Texas AampM University at Tarleton
Texas AampM University ndash San Antonio
Texas AampM University ndash Central Texas
Texas AampM University System Health Science Center
Texas AgriLife Research
Texas AgriLife Extension Service
Texas Engineering Experiment Station
Texas Engineering Extension Service
Texas Transportation Institute
Texas Forest Service
SOURCE Legislative Budget Board
FIGURE 12 PARTICIPANTS IN THE HIGHER EDUCATION FUND
The University of Texas System Components
The University of Texas ndash Pan American
Texas AampM University System Components
Texas AampM University ndash Corpus Christi
Texas AampM International University
Texas AampM University ndash Kingsville
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston System Components
University of Houston
University of Houston ndash Clearlake
University of Houston ndash Downtown
University of Houston ndash Victoria
Independent Institutions
Midwestern State University
Stephen F Austin State University
Texas Southern University
Texas Womanrsquos University
University of North Texas System Components
University of North Texas Health Science Center at Fort Worth
University of North Texas
Texas Tech University System Components
Texas Tech University Health Sciences Center
Angelo State University
Texas State University System Components
Lamar University
Sam Houston State University
Texas State University ndash San Marcos
Sul Ross State University
Sul Ross State Rio Grande College
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
Lamar Institute of Technology
Texas State Technical College System Components
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Marshall
Texas State Technical College ndash Waco
The University of North Texas at Dallas receives its allocation through the University of North Texas SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 12
FUNDING GENERAL ACADEMIC INSTITUTIONS
The HEF is supported by General Revenue Fund appropriations
The distribution of the $525 million HEF appropriation for 2012ndash13 is provided for in statute (Texas Education Code Section 62021) The Constitution calls for a re-allocation of HEF funds every ten years The Seventy-ninth Legislature Regular Session fulfilled this requirement with the enactment of House Bill 3001
The Constitution also allows the legislature to adjust the decennial allocations every five years Th e Eighty-fi rst Legislature Regular Session 2011 exercised this authority by enacting House Bill 51 which adjusted the formula allocation for the HEF funds for fiscal years 2009 through 2015
To maintain the equitable distribution of the HEF appropriation House Bill 51 also corrected the distribution of fiscal year 2009 and 2010 HEF allocations by using revised formula calculations Using these revised formula calculations House Bill 51 factored in updated data elements to generate the annual HEF allocations for the fi ve-year period starting in fiscal year 2011
HEF funds must be used for capital purposes Institutions may use HEF allocations for debt service on HEF bonds or as cash
In 1995 the Texas Constitution was amended to authorize the creation and funding of a dedicated HEF corpus known as the Permanent Higher Education Fund (PHEF) Th is corpus was separate from the annual HEF allocation of General Revenue Funds The PHEF was intended to become a permanent endowment to support non-PUF eligible institutions but never reached its targeted value of $2 billion
The PHEF corpus of $5159 million was rededicated with the enactment of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) The balance of the PHEF was transferred to the NRUF on January 1 2010 and the authorization for the PHEF expired Proposition 4 also allowed the legislature to appropriate some or all of the total returns from the NRUF to provide a source of funding to enable emerging research universities to achieve national prominence
The Eighty-second Legislature 2011 appropriated $124 million in estimated NRUF proceeds to eligible institutions in the 2012ndash13 biennium
House Bill 1000 Eighty-second Legislature Regular Session 2011 established the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution in designated as an emerging research university within the Higher Education Coordinating Boardrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fi scal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of the institutions research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs Texas Tech University and the University of Houston are the only two institutions that received funding through this program in 2012
HIGHER EDUCATION GROUP INSURANCE (HEGI)
The $4631 million General Revenue Fund appropriation for higher education group insurance (HEGI) is not a direct appropriation in the institutionsrsquo bill patterns It is appropriated in a separate section of the GAA entitled ldquoHigher Education Employees Group Insurance Contributionsrdquo This appropriation is intended to help institutions cover the cost of health insurance premiums for institution employees whose salaries are paid from the General Revenue Fund Because The University of Texas and Texas AampM University Systems operate their own health insurance programs they each receive separate appropriations The remaining institutions are included in the program operated by the Employees Retirement System (ERS)
The HEGI appropriation is sum-certain That is the Statersquos General Revenue Fund contributions are limited to each institutionrsquos number of employees enrolled in the health insurance program as of December 1 2012 However the GAA allows ERS The University of Texas and Texas AampM University Systems to transfer HEGI appropriations among institutions within their respective group insurance programs to address shortfalls in General Revenue Funds related to group insurance premiums
SOCIAL SECURITY BENEFITS
An appropriation for social security is included in the GAA at the end of Article III It is an estimated General Revenue
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 13
FUNDING GENERAL ACADEMIC INSTITUTIONS
Fund appropriation to provide the employer matching funds for employees of institutions of higher education (Th is appropriation amount is not included in Figure 3 on page 2)
STAFF GROUP INSURANCE
Staff group insurance is for staff whose salaries are not paid with General Revenue Funds (GR) The appropriation is based on an estimation of the number of non-GR funded employees at an institution as of December 1 2010 Th e total appropriation for all general academic institutions is $1766 million for the 2012ndash13 biennium The method of finance is Other Educational and General Income (which is classified as General RevenuendashDedicated Funds)
RETIREMENT CONTRIBUTIONS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and top administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees participate in TRS a defi ned benefit plan The state funds retirement contributions for TRS equal to 60 percent of an employeersquos salary in fiscal year 2012 and 64 percent in 2013 State contributions for ORP are equal to 60 percent of an employeersquos salary in fiscal years 2012 and 2013 (Th ese appropriation amounts are not included in Figure 3 on page 2)
OTHER NON-FORMULA FUNDING
WORKERSrsquo COMPENSATION
Changes in the structure of the statewide workersrsquo compensation system resulted in most institutions receiving General Revenue Fund appropriations for Workersrsquo Compensation starting in 2006ndash07 However Th e University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool
UNEMPLOYMENT COMPENSATION
Most components of The University of Texas and Texas AampM University Systems have this strategy because they operate their own risk pools Th ese institutions receive General Revenue Fund appropriations for unemployment compensation insurance The appropriation for the 2012ndash13 biennium is $05 million in General Revenue Funds Th e Texas Workforce Commission receives an appropriation to
cover unemployment benefi ts for former state employees for all other higher education institutions
TEXAS PUBLIC EDUCATION GRANTS
According to statute (Texas Education Code Chapter 56 Subchapter C and Texas Education Code Section 54051 [Statutory Tuition]) institutions must set aside a portion of tuition revenue for Texas Public Education Grants (TPEG) Fifteen percent of each resident studentrsquos tuition and 3 percent of each nonresident studentrsquos tuition are set aside for financial aid to students at the institution Texas Education Code Section 56033 provides guidelines on the allocation of TPEG revenue The GAA includes an estimate of the amount of TPEG revenue each institution will generate Th is $2111 million estimated appropriation is considered Other Educational and General Income which are classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
Indirect costs as defined by The Comptroller of Public Accounts are ldquoincurred for a common or joint purpose benefiting more than one cost objectiverdquo Institutions negotiate a percentage of a federal grant for indirect costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
The Seventy-eighth Legislature 2003 allowed universities to retain 100 percent of indirect costs income from research grants and contracts to encourage further research projects conducted by universities
ORGANIZED ACTIVITIES
Organized Activities are activities or enterprises connected with instructional departments whose primary function is training for students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training Revenue from Organized Activities is classified as General RevenuendashDedicated Funds Other EampG Income For the 2012ndash13 biennium $503 million is appropriated for Organized Activities
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 14
FUNDING HEALTH-RELATED INSTITUTIONS
OVERVIEW Appropriations for the nine health-related institutions are similar in structure to the appropriations for general academic institutions There are formula and non-formula funding appropriations made directly to the institutions as well as appropriations that benefit the institutions but are not included in the institutionsrsquo bill patterns such as the Available University Fund certain staff benefi ts and funds trusteed at the Texas Higher Education Coordinating Board (THECB) While health-related institutions do not receive appropriations from the Research Development Fund they share many other types of appropriations similar to general academic institution appropriations Th ose appropriations will be briefly restated in this section of the report Figure 13 lists the institutions and their enrollment
FIGURE 13 PUBLIC HEALTH-RELATED INSTITUTIONS CERTIFIED HEADCOUNT FALL 2011
INSTITUTION HEADCOUNT
UT Southwestern Medical Center 2467
UT Medical Branch at Galveston 2660
UT Health Science Center at Houston 4485
UT Health Science Center at San Antonio 3273
UT M D Anderson Cancer Center 248
UT Health Science Center at Tyler NA
Texas AampM University System Health Science 1958 Center
University of North Texas Health Science 1567 Center at Fort Worth
Texas Tech University Health Sciences Center 3590
Statewide Totals 20248
SOURCE Higher Education Coordinating Board
Like other higher education institutions the appropriations for health-related institutions are a lump sum and funding strategies are presented for informational purposes in the General Appropriations Act (GAA) The funding strategies in a health-related institutionrsquos bill pattern represent how state funds are allocated but not how they must be spent Also certain methods of finance in the appropriation are estimated This means that if for example patient income for an institution is above the amount included in the GAA
the institution can spend more than the amount listed in the GAA
Also health-related institutions have access to an estimated $109 billion outside the appropriations process in 2012ndash13 Examples of this include certain tuition revenue indirect lost recovery grants and gifts
Figure 14 illustrates the 2012ndash13 method of finance for $85 billion in appropriations for health-related institutions including a number of the indirect appropriations but it does not include appropriations for retirement benefi ts
FIGURE 14 METHOD OF FINANCE FOR HEALTH-RELATED INSTITUTIONS 2012ndash13 BIENNIUM
727$ 021
HQHUDO
2WKHU)XQGV3DWLHQWQFRPH
5HYHQXH)XQGV
HQHUDO5HYHQXHsup2HGLFDWHG)XQGV13
Including some tuition and fees SOURCE Legislative Budget Board
FORMULA FUNDING The three primary funding formulas for health-related institutions are Instruction and Operations support Infrastructure support and Research Enhancement Th e University of Texas MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler have additional formula allocations to accommodate their unique missions Each health-related institution also receives formula funding for graduate medical education
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 15
FUNDING HEALTH-RELATED INSTITUTIONS
General Revenue funding and some Other Educational and General Income (Other EampG is classified as General RevenuendashDedicated) fund the formulas Like general academic institutions certain tuition revenue is used in the calculation of the Instruction and Operation support and Infrastructure support formulas Of the $15 billion that is allocated by the health-related institutionsrsquo primary formulas 939 percent is from the General Revenue Fund and the remaining 61 percent is from General RevenuendashDedicated Funds (tuition and fee revenue)
Some tuition and fee income is set aside for specifi c purposes Some specific amounts are unavailable for formula purposes and consequently are not a formula method of fi nance For example health-related institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) and Medical Loans
INSTRUCTION AND OPERATIONS SUPPORT FORMULA
The Instruction and Operations (IampO) support formula represents nearly 755 percent of the primary formula funds for health-related institutions ($9282 million for the 2012ndash13 biennium) It is intended to fund items such as faculty salaries departmental operating expenses instructional administration and libraries It is allocated on a per full-time student equivalent (FTSE) basis with a funding weight predicated on the instructional program of the student This formula applies to all health-related
institutions except The University of Texas Health Science Center at Tyler which did not offer education instruction during the base period for the 2012ndash13 biennium
Figure 15 illustrates the Instruction and Operations support formula among the eight health-related institutions
The Instruction and Operations support formula is calculated as follows
(FTSE X Program Weight X $8874) + SmallMultiple Campus Supplement
FTSE is weighted by discipline For example medicine (4753) is weighted more than pharmacy (1670) Allied Health is assigned a weight of 1000
The Legislature sets the weights and the rate ($8874 adjusted for the 2012ndash13 biennium) in the Higher Education Special Provisions of the GAA (Sec 29 page III-239 and 240) The rate is calculated based on the available revenue for the formula and the number of FTSEs
Programs with enrollments less than 200 receive a Small Campus Supplement (see Figure 16)
FIGURE 15 DISTRIBUTION OF INSTRUCTION AND OPERATIONS SUPPORT FORMULA 2012ndash13 BIENNIUM
727$ 021870$QGHUVRQ 7H[DV$ amp 0+HDOWKampDQFHUampHQWHU 6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV 87+HDOWK6FLHQFHampHQWHUDW6DQ
DW)WRUWK
+HDOWK6FLHQFHampHQWHU$QWRQLR
87+HDOWK6FLHQFH 7H[DV7HFK8QLYHUVLW+HDOWKampHQWHUDW+RXVWRQ 6FLHQFHVampHQWHU
876RXWKZHVWHUQ0HGLFDOampHQWHU
870HGLFDOUDQFK DWDOYHVWRQ
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 16
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 16 SMALL CAMPUS SUPPLEMENT RECIPIENTS
The University of Texas Southwestern Medical Center
No
The University of Texas Medical Branch at Galveston
Yes
The University of Texas Health Science Center at Houston
Yes
The University of Texas Health Science Center at San Antonio
Yes
The University of Texas MD Anderson Cancer Center
No
The University of Texas Health Science Center at Tyler
NA
Texas AampM Health Science Center Yes
University of North Texas Health Science Center at Fort Worth
No
Texas Tech University Health Sciences Center Yes
SOURCE Legislative Budget Board
INFRASTRUCTURE SUPPORT FORMULA
The Infrastructure support formula is 194 percent of the primary formula funding and is intended for utilities and physical plant support ($2383 million for the 2012ndash13 biennium) This formula calculation is similar to that for general academic institutions but includes only one rate ($655) for all institutions except The University of Texas
FIGURE 17 DISTRIBUTION OF INFRASTRUCTURE SUPPORT FORMULA 2012ndash13 BIENNIUM
MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler which have another rate ($625)
THECBrsquos space model predicts square footage for each institution The space model projection is based on the following
bull number and level of FTE students
bull number of faculty
bull single or multiple programs and campuses
bull actual clinical space and
bull research and current EampG expenditures
Because the space projection model does not account for hospital space separate infrastructure funding for hospital space is included in the total funding for hospital and patient-care activities at The University of Texas Medical Branch at Galveston The University of Texas MD Anderson Cancer Center and The University of Texas Health Science Center at Tyler
Figure 17 illustrates the Infrastructure Support Formula allocation to institutions among the nine health-related institutions
727$ 021
87+HDOWK6FLHQFHampHQWHUDW6DQ 870$QGHUVRQampDQFHUampHQWHU$QWRQLR
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW
+RXVWRQ 7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK6FLHQFHVampHQWHU
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 17
FUNDING HEALTH-RELATED INSTITUTIONS
RESEARCH FORMULA
Health-related institutions generate state appropriations to support research through General Revenue Funds in the Research Enhancement formula ($629 million for the 2012ndash13 biennium) The Research Enhancement formula accounts for 51 percent of the primary formula funds and is funded entirely from the General Revenue Fund
The allocation is based on the amount of research generated by each institution
$1412500 + (110 X Research
Expenditures)
This provides a base Institutions report for all institutions current research
regardless of research expenditures to volume THECB
Figure 18 illustrates the Research Enhancement formula allocation to the institutions among the nine health-related institutions
GRADUATE MEDICAL EDUCATION
The Seventy-ninth Legislature 2005 established a new formula for funding graduate medical education in the 2006ndash07 GAA For 2012ndash13 the funding totals $46 million
FIGURE 18 DISTRIBUTION OF RESEARCH ENHANCEMENT FORMULA 2012ndash13 BIENNIUM
727$ 021
870$QGHUVRQampDQFHUampHQWHU
(an additional $109 million is appropriated to the Baylor College of Medicine through the THECB) and provides $4436 per medical resident each year
Figure 19 illustrates the Graduate Medical Education formula allocation to institutions among the nine health related institutions and Baylor College of Medicine
CHEST DISEASE CENTER FORMULA
The Chest Disease Center operations formula which was established during the 2010ndash11 biennium applies only to The University of Texas Health Science Center at Tyler Th e University of Texas Health Science Center at Tyler has a statutory mission to conduct research develop diagnostic and treatment techniques provide training and teaching programs and provide diagnosis and treatment of inpatients and outpatients with respiratory diseases The Chest Disease Center formula is based on the number of primary chest disease patients the institution served Approximately $472 million in General Revenue Funds are appropriated for the 2012ndash13 biennium
CANCER CENTER OPERATIONS FORMULA
The Eightieth Legislature 2007 established in the GAA an Operations formula for funding The University of Texas MD Anderson Cancer Center The University of Texas MD Anderson Cancer Center has a statutory mission to eliminate cancer through patient care research education
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR
7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ 8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
870HGLFDOUDQFKDWDOYHVWRQ 7H[DV7HFK8QLYHUVLW+HDOWK876RXWKZHVWHUQ0HGLFDOampHQWHU
6FLHQFHVampHQWHU
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 18
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 19 DISTRIBUTION OF GRADUATE MEDICAL EDUCATION FORMULA 2012ndash13 BIENNIUM
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
727$ 02187+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR 870$QGHUVRQampDQFHUampHQWHU
87+HDOWK6FLHQFHampHQWHUDW7OHU
7H[DV$ amp 08QLYHULVW6VWHP +HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK 6FLHQFHVampHQWHU
DORUampROOHJHRI0HGLFLQH
and prevention The Operations formula funding is based on the total number of Texas cancer patients the institution served The Operations formula growth in funding may not exceed the average growth in funding for health-related institutions in the Instruction and Operations support formula for the current biennium For the 2012ndash13 biennium this funding formula provided $2125 million in General Revenue Funds
NON-FORMULA FUNDING
PATIENT CARE ACTIVITIES
Some institutions conduct patient care activities generally medical or dental For the 2012ndash13 biennium the estimated appropriation for Patient Income was $56 billion Th e hospital and clinic revenues earned through patient care activities are considered Other Funds which are part of Educational and General Income (not to be confused with Other Educational and General Income which is another subset of Educational and General Income) General Revenue funding supplements patient-care income to varying degrees at each institution Patient Income is an estimated appropriation and is spread across an institutionrsquos funding strategies however it is not used in the calculation of the formulas
INSTITUTIONAL ENHANCEMENT
Institutional Enhancement is a General Revenue Fund appropriation that started in the 2000ndash01 biennium It is designed to allow each institution to address its unique needs and diseconomies of scale at institutions with smaller campuses The total institutional enhancement appropriation for the 2012ndash13 biennium was $42 million which includes $407 million in General Revenue Funds and $16 million in Patient Income
SPECIAL ITEMS
Special items are activities that are not generally funded through the formulas and typically represent an institutionrsquos special needs or areas of expertise The $3107 million in General Revenue Funds for the 2012ndash13 biennium funds items such as residency programs academic outreach programs public service items and research items other than general research support Institutions propose and justify special items and request an amount for each on an ad hoc basis Special items generally remain constant from biennium to biennium unless the item was a one-time expense (eg tornado damage repairs) or the institution has not used the funding for the intended purpose
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 19
FUNDING HEALTH-RELATED INSTITUTIONS
CONSTITUTIONAL FUNDS
These funds are not directly appropriated to institutions in the GAA In other words these funds are not found in a strategy within an institutionrsquos bill pattern
Health-related institutions are eligible for funding from the Available University Fund ($146 million in Other Funds allocated to these institutions by system offices for the 2012ndash 13 biennium) and the Higher Education Fund ($257 million in General Revenue Funds appropriated for the 2012ndash13 biennium) which are presented in detail in the ldquoFunding General Academic Institutionsrdquo section of this report
CAPITAL FUNDS
Just like general academic institutions tuition revenue bonds ($1665 million in General Revenue Funds for related debt service in the 2012ndash13 biennium) are also used to fund capital projects at health-related institutions A detailed presentation of tuition revenue bonds is in the ldquoFunding General Academic Institutionsrdquo section The University of Texas Medical Branch at Galveston and The University of Texas MD Anderson Cancer Center also have separate appropriations for capital projects that are funded primarily with Patient Income
EMPLOYEE BENEFITS
Like general academic institutions health-related institutions benefit from direct and indirect state appropriations related to employee benefi ts The indirect appropriations include Higher Education Group Insurance ($2339 million in General Revenue Funds for the 2012ndash13 biennium) Retirement Contributions and Social Security Benefi ts (all presented in the ldquoFunding General Academic Institutionsrdquo section) The direct appropriations include Staff Group Insurance
For the 2012ndash13 biennium the Workersrsquo Compensation and Unemployment Compensation strategies (all presented in the ldquoFunding General Academic Institutionsrdquo section) are funded directly with General Revenue Funds and General RevenuendashDedicated Funds However The University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool The University of Texas and Texas AampM Systems also manage their own unemployment compensation coverage while all other institutions receive coverage from
the Texas Workforce Commission which receives an appropriation to cover unemployment benefi ts
TEXAS PUBLIC EDUCATION GRANTS
Health-related institutions similar to general academic institutions are subject to the Texas Education Code (sect56031 et al) provision requiring a portion of tuition revenue be set aside to fund Texas Public Education Grants (TPEG) For the 2012ndash13 biennium the estimated TPEG appropriation is $188 million This revenue is considered Other Education and General Income which is classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
As mentioned earlier in this section Indirect Cost Recovery was removed from the GAA for the 2010ndash11 biennium however the individual institution still receives the funds
TOBACCO SETTLEMENT
House Bill 1945 Seventy-sixth Legislature 1999 established the Permanent Health Fund for health-related institutions of Higher Education the Permanent Fund for Minority Health Research and Education the Permanent Fund for Higher Education Nursing Allied Health and Other Health Related Programs and 13 permanent endowments for individual institutions of higher education The $769 million in estimated interest earnings from the endowments for 2012ndash13 (based on estimated interest earnings of 45 percent each year) were appropriated to the health-related institutions
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 20
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW Public two-year lower-level institutions include 50 community and junior college districts four Texas State Technical College (TSTC) campuses and three Lamar State Colleges These institutions were appropriated $22 billion in state funding for the 2012ndash13 biennium Preliminary fall FIGURE 20 TWO-YEAR INSTITUTION FUNDING MECHANISMS 2012ndash13 BIENNIUM
2011 enrollment at these institutions totaled 789713 Figure 20 illustrates the funding mechanisms for these institutions Community colleges accounted for 983 percent of this enrollment total while the Texas State Technical and Lamar State Colleges composed the remaining portion
COMMUNITY COLLEGES
Instruction and Administration General Revenue Funds from the state are based on contact hour driven formulas for two-year institutions Tuition and fee revenues and local tax revenues augment state General Revenue Funds for these costs
Academic Courses Approximately 82 percent of the total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 18 percent of the total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant The state provides no funding for physical plant operations and maintenance Local taxing districts are expected to provide support for physical plant needs Community colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011
Facilities Local communities must provide facilities Community colleges are not eligible to receive Higher Education Fund (HEF) allocations Available University Fund allocations or state tuition revenue bonds
Employee Benefits While community college employees are locally-employed community colleges participate in the Employee Retirement System (ERS) Group Benefits Program for health benefi ts and the Teacher Retirement System(TRS) and Optional Retirement Program (ORP) for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits
Tuition Fee Revenues Tuition and fee revenues are considered institutional funds and are not appropriated by the state Tuition rates vary by institution In 2012 the statewide tuition rates plus fees averaged $73 per semester credit hour but varied from $34 to $208 per semester credit hour
Local Tax Revenue Community Colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011 Local tax revenues are expected to provide support for physical plant needs and augment state General Revenue Funds for instruction and administration costs
SOURCE Legislative Budget Board
TSTCLAMAR COLLEGES
Instruction and Administration General Revenue Funds from the state are based on formulas for two-year institutions Tuition and fee revenues augment General Revenue Funds for these costs
Academic Courses Approximately 39 percent at the Lamar colleges and 28 percent at Texas State Technical College (TSTC) of total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 61 percent at the Lamar colleges and 72 percent at TSTC of total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant State funding based on the formula for general academic institutions The Lamar colleges will receive approximately $71 million and TSTC will receive $157 million in General Revenue Funds for physical plant and utilities in the 2012ndash13 biennium
Facilities The Lamar colleges receive approximately $42 million annually from HEF funds and TSTC receives almost $58 million annually The HEF monies are used to acquire land construct and equip buildings provide major building repair or rehabilitation and acquire capital equipment and library materials
Employee Benefits Both the Lamar colleges and TSTC institutions participate in ERSrsquo Group Benefits Program for health benefits and the TRS and ORP programs for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits of those employees having their salaries paid with General Revenue Funds
Tuition Fee Revenues Certain tuition revenue is appropriated by the state In 2012 for resident students average tuition plus fees was $139 per semester credit hour at the Lamar colleges and $150 per semester credit hour at TSTC
FINANCING HIGHER EDUCATION IN TEXAS ndash ID690 LEGISLATIVE BUDGET BOARD 21
FUNDING COMMUNITY AND TECHNICAL COLLEGES
These institutions are primarily funded based on student contact hours A contact hour is a standard unit of measure that represents an hour of scheduled academic and technical instruction given to students during a semester Community and junior college districts generate almost 958 percent of the state-funded contact hours at two-year institutions TSTC components generate approximately 29 percent of the contact hours and the three Lamar State Colleges account for the 13 percent
COMMUNITY COLLEGES Over 99 percent of the direct appropriations to community colleges are from the General Revenue Fund and are generated through a funding formula The remaining direct appropriations are for isolated ldquospecial itemsrdquo including appropriations for the Southwest Collegiate Institute for the Deaf which is part of the appropriation for Howard College The Texas Education Code Section 130003(a) calls for state appropriations to public community colleges to ldquosupplement local funds for the proper support maintenance operation and improvement of those public junior colleges of Texas that meet the standards prescribed by the chapterrdquo Further Education Code Section 130003(c) indicates that state funds must be used ldquoexclusively for the purpose of paying salaries of instructional and administrative forceshellip and the purchase of supplies and materials for instructional purposesrdquo
Consistent with statute community colleges have their own Instruction and Administration Formula which is funded by General Revenue Funds and based on ldquostudent contact hoursrdquo Unlike general academic institution formulas this formula does not include tuition and fee revenue as part of the method of fi nance
The Eighty-second Legislature 2011 also provided $45 million to certain districts through a new small institution supplemental formula A district is eligible for the supplement if it makes a significantly above-average effort to generate tax income while at the same time experiencing below-average tax revenue and does not have a number of contact hours that exceeds the statewide median Th e Eighty-second Legislature appropriated each eligible district $05 million for the 2012ndash13 biennium
No state funding is provided for physical plant operations and maintenance or for facilities that is supported by local tax eff ort
Three community colleges receive weighted semester credit hour formula funding for a Bachelor of Applied Technology degree program
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $153 million in General Revenue formula hold harmless funding for aff ected community colleges to minimize the effect of reduced formula funding as a result of overall contact hour declines The Eighty-second Legislature 2011 did not provide any hold harmless funding in the 2012ndash13 biennium
Property taxes tuition and fees are other major sources of revenue for community colleges Figure 21 illustrates the estimated sources of funding for community colleges Th e state appropriations in Figure 21 include all formula special item Higher Education Group Insurance appropriations and retirement benefi t appropriations
FIGURE 21 MAJOR SOURCES OF COMMUNITY COLLEGESrsquo OPERATING REVENUE IN BILLIONS FISCAL YEAR 2011
727$ 21
6WDWHampRQWULEXWLRQV
URVV7XLWLRQDQG)HHV
3URSHUW7D[HV
)HGHUDO)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING
The basis of the formula starts with the Texas Higher Education Coordinating Board (THECB) Report of Fundable Operating Expenses (RFOE) (formally called the All Funds Expenditure Report) The study includes all expenditures for instruction and administration (facilities costs are not included) in 26 program areas THECB uses the expenditure data to determine the median cost in the 26 program areasmdashthe ldquoratesrdquo for contact hours in those disciplines THECB then makes a recommendation for
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 22
FUNDING COMMUNITY AND TECHNICAL COLLEGES
funding based on the rates Over the years THECB has used various methodologies as the basis for its funding recommendations Because the RFOE takes into account all funds (state appropriations plus tuition and tax revenue which are not appropriated) THECBrsquos recommendation for state funding has generally not equaled 100 percent of the rates
The amount of the appropriation is a legislative decision based on funds available The appropriation is allocated to the colleges according to each districtrsquos pro-rata share of THECB recommendations
HIGHER EDUCATION GROUP INSURANCE (HEGI)
Like state institutions of higher education community colleges receive General Revenue Fund contributions for group insurance However since community college employees are local not state employees state contributions for health benefits are fully discretionary Other agencies and institutions of higher education report employee eligibility for General Revenue-funded group health insurance benefi ts only if the employeersquos salary is directly paid with General Revenue Funds However in the past community colleges tended to base eligibility for General Revenue-funded benefits if the employeersquos job function fell under an approved ldquoelement of costrdquo This practice caused community colleges to report eligibility for state funded health benefits in a manner that did not always match the source of the employeersquos salary
This practice led to the Governorrsquos veto of the Group Health Insurance appropriation for fiscal year 2009 ($154 million) at the end of the Eightieth Legislative session However an agreement to restore the vetoed funds was reached and returned directly to the districts in House Bill 4586 Eighty-first Legislature Regular Session 2009
The Eight-Second Legislature 2011 allowed community colleges to receive General Revenue Fund contributions for employees whose job function fell under an approved ldquoelement of costrdquo However the Legislature only funded 42 percent of the premium costs for these employees
OTHER STAFF BENEFITS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and certain administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees
participate in TRS a defi ned benefit plan In both instances the state funds retirement contributions equal 60 and 64 percent of an employeersquos salary in fiscal year 2012 and fi scal year 2013 respectively (These appropriation amounts are not included in Figure 2 on page 3)
DRAMATIC ENROLLMENT GROWTH
Since the 1996ndash97 biennium public community colleges have received ldquoDramatic Enrollment Growth Fundingrdquo For the 2000ndash01 biennium this was expanded to include Texas State Technical Colleges and Lamar State Colleges (Lamars) The appropriation was made to THECB Rider 13 page IIIshy53 General Appropriations Act (2010ndash11 Biennium) provided guidelines for distributing this funding
For the 2010ndash11 biennium THECB is authorized to allocate up to $175 million per year to schools experiencing a growth rate of five percent or greater in 2010 and eight percent or greater in 2011 The Eighty-second Legislature 2011 did not provide any dramatic enrollment growth funding in the 2012-13 biennium
OTHER TRUSTEED FUNDS
Students at community colleges also benefi t from Texas Educational Opportunity Grants the student fi nancial aid program appropriation that is allocated by THECB
TEXAS STATE TECHNICAL COLLEGE LAMAR STATE COLLEGES The Texas State Technical Colleges (TSTC) and Lamar State Colleges are allocated a majority of their appropriation via two formulas the Instruction and Administration Formula for two-year institutions and the Infrastructure Formula for general academic institutions Similar to general academic institutions the tuition revenue for these colleges is included in the appropriations bill
Contact hours for vocationaltechnical courses represent approximately 61 percent of total contact hours at the Lamar State Colleges and 72 percent at TSTC institutions Th e remaining contact hours are generated from academic and continuing education courses
Facilities funding is available from the Higher Education Fund for both TSTC and the Lamars State Colleges and both have received Tuition Revenue Bond authorizations
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 23
FUNDING COMMUNITY AND TECHNICAL COLLEGES
The Community Colleges section of this report includes subsections on Higher Education Group Insurance Other Staff Benefits and Dramatic Enrollment Growth Th ese three subsections apply to appropriations for Texas State Technical Colleges and the Lamar State Colleges as well
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 24
FUNDING TEXAS AampM SYSTEM AGENCIES
There are seven research and service agencies that are administered by the Texas AampM University System Th e system agenciesrsquo missions differ from other institutions of higher education in that each system agency focuses on one or two of the three traditional missions of higher education institutions research extension and service (Figure 22)
FIGURE 22 TEXAS AampM SYSTEM AGENCIES MISSIONS AND FUNCTIONS
STATUTORY AUTHORITY MISSIONFUNCTIONS
For the 2012ndash13 biennium the total direct appropriations for Texas AampM System (System) agencies are $8897 million In addition to state appropriations the System agencies receive some Federal Funds that are not included in the General Appropriations Act and have access to private funds While System agencies have significant portions of their Other Funds and Federal Funds appropriated the appropriations are estimated and actual income from these funding sources is subject to signifi cant variation
Texas AampM AgriLife Education Conducts research in the agricultural environmental and life sciences Goals include Research Code Title III enhancing the competitiveness of agricultural industries and natural resource conservation
Chapter 88 Research highlights bioenergy irrigation efficiency and the use of distillerrsquos grain in feedlots Administers the honey bee regulation and feed and fertilizer programs
Texas AampM AgriLife Education Provides training and educational programs including 4-H through extension agents Extension Service Code Title III serving every county in Texas and supported by federal state and county funds Provides
Chapter 88 wildlife and insect management services including feral hog abatement and boll weevil eradication
Texas AampM Education Conducts engineering and technology research with a focus on interdisciplinary research Engineering Code Title III based on statewide priorities Research highlights energy independence effi ciency and Experiment Station Chapter 88 conservation alternative energy and national security
Texas AampM Education Conducts transportation related research and develops technology Approximately 50 Transportation Code Title III percent of research expenditures from interagency contracts are contracted from the Texas Institute Chapter 88 Department of Transportation
Texas AampM Education Provides training technical assistance and emergency response to enhance public Engineering Code Title III safety security and economic growth Operates the Brayden Fire Training Field and the Extension Service Chapter 88 Emergency Operations Training Center Texas Task Force 1 is deployed for emergency
response and search and rescue operations
Texas AampM Forest Education Provides incident management teams and emergency response as well as wildfire Service Code Title III prevention detection and suppression services The Texas Wildfire Protection Plan is
Chapter 88 the agencyrsquos wildfire response model Administers the Rural Volunteer Fire Department Assistance Program which gives grants to local fire departments for equipment and training
Texas AampM Veterinary Education Provides fee-based veterinary medical diagnostic services which contribute to an animal Medical Diagnostic Code Title III and zoonotic disease surveillance system Responds to potential high consequence andor Laboratory Chapter 88 emerging disease events Develops new diagnostic testing technologies
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 25
FUNDING TEXAS AampM SYSTEM AGENCIES
FIGURE 23 TEXAS AampM SYSTEM AGENCIES COMPARED TO INSTITUTIONS OF HIGHER EDUCATION
SIMILARITIES
FUNDING
Both Texas AampM System (System) agencies and institutions of higher education have considerable flexibility in their budgeting and financial operations (ldquolump sumrdquo appropriations)
Both are eligible to receive proceeds from the Permanent University Fund
Both are considered to be institutions of higher education for purposes of employee group health insurance
Both System agencies and institutions of higher education generate and keep 100 percent of indirect cost recovery from research and other grants
PERFORMANCE MEASURES
OPERATIONS
Like other institutions of higher education System agencies are not required to submit operating budgets or strategic plans
Both are statutorily embedded within the Texas AampM Systemrsquos institutional framework
SOURCE Legislative Budget Board
DIFFERENCES
General academic health-related and two-year institutions receive formula funding while System agencies do not
Texas AampM System agencies do not generate revenue in the same manner or amount of other higher education institutions
Performance measures for the System agencies are agency-specific while performance measures for other higher education institutions are standardized
In several ways state funding for System agencies is similar to funding for higher education institutions System agencies have considerable flexibility in their budgeting and fi nancial operations because they receive lump-sum appropriations in the same manner as other institutions of higher education They are eligible to receive funds from the Permanent University Fund (PUF) (They were allocated $153 million from the PUF for debt service in the 2012ndash13 biennium) System agencies are also funded in the same manner as other institutions of higher education with regard to staff benefi ts including employee group health insurance contributions
However there are several funding diff erences between System agencies and other higher education institutions Most significantly System agencies do not receive formula-based funding Also while some System agencies may charge fees for their services they do not generate tuition and fees in the same manner or quantity as other institutions of higher education
As is the case with all institutions the System agencies keep 100 percent of their respective indirect cost recovery income
because this income is derived from earnings on federal grants and is held outside the treasury
For the 2012ndash13 biennium funding associated with infrastructure expenses and utilities for System agencies inside Brazos County is equal to the infrastructure rate (as determined by the General Academic formulas on page 6) for Texas AampM University
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 26
APPENDIX A FREQUENTLY ASKED QUESTIONS
Q What are the limitations on how institutions spend state appropriations
A Generally speaking institutions have great fl exibility in spending appropriated funds however some limitations do exist depending on the source of revenue Appropriated revenue includes General Revenue Funds General Revenuendash Dedicated Funds (mostly tuition and fee income) Other Funds (including Patient Income) and Federal Funds (for certain Texas AampM System Agencies) Th e Texas Constitution (Article VII Section 18(i) and 17(j)) prohibits with limited exceptions the use of General Revenue Funds for acquiring land or for construction projects An exception occurs when the legislature by two-thirds vote in each house expressly determines that there is a demonstrated need for the project
Various provisions in the 2012ndash13 General Appropriations Act (GAA) Higher Education Special Provisions restrict state appropriations These restrictions include the following
bull Section 6 (Rider 8b) which prohibits the use of appropriated funds for auxiliary enterprises
bull Section 6 (Rider 9) which limits the use of these funds to pay debt service for statutorily authorized tuition revenue bonds Any such appropriation not spent must be returned to the General Revenue Fund at the end of the year
bull Section 9 which prohibits the use of appropriated funds for intercollegiate athletics purposes and
bull Section 54 which limits the use of the Research Development Fund to those defined in Education Code Section 62091
Q Would an increase in tuition revenue replace a corresponding amount in General Revenue Funds or would the revenue remain within the institution
A The result depends on how the Legislature responds
For instance assume that the Eight-second Legislature 2011 changed the statute to require institutions to charge nonresident tuition in circumstances where they had previously waived the nonresident tuition rate For the 2012ndash13 biennium institutions would benefit fully from the
increase in tuition revenue (This assumes the formula calculation would not include a projected increase in tuition)
However institutional appropriations in the 2014ndash15 biennium now depend on that legislation passed in the Eighty-third Legislature 2013 Assuming the same number of students (semester credit hours) enroll regardless of changes in tuition policy and that the result of charging nonresident tuition generated $100 million in additional tuition revenue there are three options
1 Reduce General Revenue Funds (GR) in the formulas by $100 million In this scenario the formula rate stays the same and every dollar increase in tuition revenue results in a dollar decrease in GRmdashinstitutional funding does not increase
2 Keep GR the same and run the additional tuition revenue through the formulas Th e formula funding rate would increase and every institution would receive more funds including those institutions that generated no additional tuition revenue
3 Keep GR formula appropriations at the same level and let individual institutions keep the additional tuition revenue they generated outside the formula allocation
Q Are all tuition and fee revenues collected by institutions of higher education included in the appropriations bill
A No None of the tuition and fee revenues collected by community colleges are appropriated
For general academic institutions an estimate of the revenue from certain tuitions and fees such as statutory tuition (Education Code 54051 Tuition Rates) board authorized tuition (Education Code 54008 Tuition Rate Set by Governing Board) Laboratory Fees (Education Code 54501) and certain other fees are appropriated in the GAA as General Revenue FundsndashDedicated Estimated Other Educational and General Income There are a number of other tuitions and fees that are not included in the GAA and therefore not referred to as state funding Such tuitions and fees include but are not limited to designated tuition (Education Code 540513 Redesignation of Building Use Fee) and Incidental Fees (Education Code 54504) Federal
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 27
APPENDIX A FREQUENTLY ASKED QUESTIONS
Funds are also not appropriated to the general academic and health-related institutions
Q Is a decrease in enrollment the only reason an institution would be eligible for formula funding hold harmless
A No Each session the Legislature makes a determination of whether it will make an appropriation for formula hold harmless A decrease in total enrollment is one reason an institution could be eligible for the funding Because the semester credit hours (general academic institutions) full-time student equivalents (health-related institutions) used in the formulas are based on weights (discipline program and course level) a change in the type of student enrollment regardless of total enrollment could also make an institution eligible for hold harmless funding
Q What are Educational and General Funds
A ldquoOther Educational and General Incomerdquo is a subset of ldquoEducational and General Incomerdquo The following are included in the Education Code (51009(c)) defi nition for ldquoEducational and General Fundsrdquo net tuition special course fees charged under Education Code 54051(e) and (l) lab fees student teaching fees hospital and clinic fees organized activity fees and proceeds from the sale of educational and general equipment
Q What does it mean to be a Tier One institution
A The Tier One reference is often derived from the Carnegie Foundation for the Advancement of Teachingrsquos prior system for classifying institutions of higher education As part of the 1994 version of the Carnegie Classification there were four categories for doctorate granting institutions Research Universities I Research Universities II Doctoral Universities I and Doctoral Universities II ldquoTier Onerdquo was synonymous with Research Universities I Such institutions had to off er a full range of baccalaureate programs award 50 or more doctoral degrees each year and receive annually at least $40 million or more in federal research funds Two institutions in Texas (The University of Texas at Austin and Texas AampM University) met these criteria The 2000 version of the Carnegie Classification collapsed the categories for doctorate granting institutions from four to two Doctoral Research UniversitiesmdashExtensive and DoctoralResearch UniversitiesmdashIntensive Six public institutions in Texas (Texas AampM University Texas Tech University University of Houston University of North Texas The University of Texas at Arlington and The University of Texas at Austin) meet the criteria for DoctoralResearch Universitiesmdash
Extensive In 2005 however the classifi cation structure returned to a more restricted top tier of institutions classifi ed as ldquoResearch Universities (very high research activity)rdquo Both The University of Texas at Austin and Texas AampM University are now counted in this category but any reference to Tier One usually refers to the 1994 Carnegie Classifi cation
Q What is the space model What is the base number of square feet needed
A In 1992 the Texas Higher Education Coordinating Board approved the Space Projection Model for Higher Education Institutions in Texas for public universities to assess the net assignable square feet (NASF) of educational and general space an institution needs There are fi ve categories incorporated into the model teaching library research offi ce and support space Space needs for auxiliary purposes such as dormitories or athletics are not included in the model Square footage amounts are assigned based on a number of elements within each category including the number of students and their program levels and the amount of research expenditures The space model was fi rst incorporated into the funding formulas for general academic institutions in 1997
Q What are ldquoOrganized Activitiesrdquo
A General academic institutions have a funding strategy titled ldquoOrganized Activitiesrdquo These are activities or enterprises that are connected with instructional departments Th ey are intended primarily to give training to students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training
Q What are tuition revenue bonds
A Established in 1971 under Education Code 5513 tuition revenue bonds are bonds (not to exceed 50 years) issued by institutions of higher education for the purpose of ldquoproviding funds to acquire purchase construct improve enlarge andor equip any property buildings structures activities services operations or other facilities for and on behalf of its institution or institutions or any branch of branches thereofrdquo Each institutionsystem is authorized and required to pay debt service on its bonds Although the authorization and issuance of the bonds is not contingent on an appropriation by the state for related debt service the Legislature has provided General Revenue Funds to reimburse institutions for costs related to debt service However in the 2004ndash05 GAA the legislature changed this practice and only provided General Revenue Fund reimbursements for interest
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 28
APPENDIX A FREQUENTLY ASKED QUESTIONS
on bonds issued after March 31 2003 The 2006ndash07 GAA renewed the practice of reimbursing institutions for the costs related to debt service The 2008ndash09 GAA and 2010-11 GAA continues this practice
Q What Is Proportionality
A Pursuant to Section 608 of Article IX of the 2012ndash13 GAA the legislative intent of proportionality is to ldquomaximize balances in the General Revenue Fundrdquo by harmonizing salary funding source with benefits funding source Th is effectively means the Legislature limits its General Revenue Fund contributions for benefits only to those employees having salaries paid with General Revenue Funds As such proportionality requires employee health and retirement benefits be paid in ldquoproportionrdquo to the funding source of salaries To this end institutions are obligated to submit the Accounting Policy Statement 011 Benefits Proportional by Fund (APS 011) report to the Comptroller Th is document provides a structure by which state and local contributions are ldquosettled uprdquo in light of the fiscal years fund proportionality
Q What Is the National Research University Fund
A In 1995 the Texas Constitution was amended to authorize the creation and funding of the Permanent Higher Education Fund (PHEF) The PHEF was intended eventually to become a permanent endowment to support non-Permanent University Fund eligible institutions However the PHEF corpus was rededicated with the voter passage of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) In 2009 Proposition 4 transferred the balance of the PHEF to the credit of the NRUF as of January 1 2010 and repealed the constitutional authorization for the PHEF
The NRUF is intended to provide a source of funding to enable emerging research universities in Texas to achieve national prominence as major research universities Article VII of the Texas Constitution authorizes the Legislature to appropriate some or all of the total return on all investment assets of the NRUF for the purposes of the fund except for two caveats (1) the Legislature may not increase distributions from the fund if the purchasing power of investment assets for any rolling 10-year period is not preserved and (2) the amount appropriated from the proceeds of the NRUF corpus in any fiscal year must be capped at 7 percent of the investment assetsrsquo average net fair market value Until the NRUF has been invested long enough to determine its purchasing power over a 10-year period the Legislature is
authorized to use other means of preserving the purchasing power of the fund
House Bill 1000 Eighty-second Legislature Regular Session 2011 establishes the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution is designated as an emerging research university within the THECBrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fiscal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of institutionrsquos research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 29
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 30
APPENDIX B TUITION AND FEE PROVISIONS
VTCA Texas Education Code Section 54003 states No institution of higher education may collect from students attending the institution any tuition fee or charge of any kind except as permitted by lawhellip
The laws governing tuition and fees at institutions of higher education are found in Education Code Section 54 including a limited number of rules that relate to tuition and fees charged by junior and community colleges Education Code Section 54 includes statutes regarding statewide tuition and fee authority rules regarding residency for tuition and fee purposes and various exemptions for tuition and fees from nonresidency status Also it includes specific fee authority for individual institutions Figure B1 provides a listing of tuition and fee authorizations in Education Code Section 54 but does not include the items presented below or the various exemption and waiver provisions (Details about each provision can be found at httpwwwcapitolstate txus) Th ere are isolated instances outside Chapter 54 whereby the boards of regents are authorized to charge for specific services provided to students
This appendix highlights some of the more prominent tuition and fee provisions and indicates whether the related revenue is or is not included in the General Appropriations Act (GAA)
INCLUDED IN THE GENERAL APPROPRIATIONS ACT Tuition and fee revenue included in the GAA as General Revenue DedicatedndashFunds is referenced as ldquoOther Education and General Incomerdquo The amounts are ldquoEstimatedrdquo so whatever amount of revenue generated is the actual amount available to the institution to spend
54051 Tuition Rates (statutory tuition) In conjunction with Section 540512 Interim Tuition Rates resident tuition for undergraduate students reached $50 per semester credit hour in the 2005ndash06 academic year (the 2006 state fi scal year) Tuition for nonresident students at general academic medical and dental institutions is based on the average of nonresident tuition rates in the five most populous states other than Texas The Texas Higher Education Coordinating Board must make this computation each academic year
54008 Tuition Rate Set by Governing Board (also known as board authorized tuition) Applies to graduate programs Subsection (d) specifies that it is not to be used in the GAA as an offset to General Revenue Funds It is distributed across formula strategies after the formula calculation
54501 Laboratory Fees The fee amount must be sufficient to cover the general costs of laboratory materials and supplies used by a student It is not to be less than $2 or more than $30 per semester and it must not exceed the actual cost of materials and supplies
NOT INCLUDED IN THE GENERAL APPROPRIATIONS ACT 540513 Designated Tuition Statute defi nes designated tuition as an institutional fund which means the revenue is not considered part of ldquoeducational and general fundsrdquo Th e governing board can waive designated tuition for a student (see 54261) Statute specifies that this revenue not be used in the GAA as a way to offset General Revenue
54503 Student Services Fees This is intended for activities which are separate from the regularly scheduled academic functions of the institution and directly involve or benefi t students Except for The University of Texas at Austin (see 54513) and components of the University of Houston System (see 545061) the maximum of all compulsory student services cannot exceed $250 per semester It is kept separate from educational and general funds
54504 Incidental Fees The governing board sets the fee which must reasonably reflect the actual cost of the materials or services for which the fee is collected Examples of unearned fees include late registration library fi nes microfilming fees thesis or doctoral manuscript reproduction or filing fees and bad check charges
5516 Board Responsibility The governing board is authorized to ldquofix and collect rentals rates and chargesrdquo
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 31
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54006 Refund or Adjustment of Tuition and Mandatory Fees for Dropped Courses and Student Withdrawals
540065 Tuition Rebate for Certain Undergraduates
54007 Option to Pay Tuition by Installment
540071 Authority of Institution to Provide Payment Options for Student with Delayed Financial Aid
54009 Increase in Tuition Rate or Fees
54010 Reduction in Tuition
54011 Tuition Limit in Cases of Concurrent Enrollment
54012 Tuition Rates for Certain Doctoral Students
54014 Tuition for Repeated or Excessive Undergraduate Hours
54015 Billing and Notifi cation for Tuition
54016 Fixed Tuition Rate Program for Certain Transfer Students at General Academic Teaching Institutions
54052ndash54057 Residency Provisions
542031 Dependent Children of Residents Who are Members of Armed Forces Deployed on Combat Duty
54204 Children of Disabled Firefighters and Law Enforcement Officers
542041 Disabled Peace Officers
54205 Blind Deaf Students
54206 Foreign Service Officers
54208 Firefighters Enrolled in Fire Science Courses
542081 Peace Officers Enrolled in Certain Courses
54211 Faculty and Dependents
54212 Teaching and Research Assistant
54213 Scholarship Student
54214 Biomedical Research Program Scholarship Student
54221 The University of Texas System Science and Technology Development Management and Transfer
54222 Economic Development and Diversification
54223 Tuition Rates for Olympic Athletes
54231 Resident of Boarding State or Nation or Participant in Student Exchange Program Tuition
54232 NATO Agreement
54233 Academic Common Market
54241 Military Personnel and Dependents
54331 Students from other Nations of the American Hemisphere
54341 Veterans and Other Military Personnel Dependents
54342 Prisoners of War
54343 Children of Prisoners of War or Persons Missing in Action
54344 Participants in Military Funerals
54345 Assistance for Tuition and Fees for Members of State Military Forces
54351 Children of Disabled Firefighters and Law Enforcement Officers
54352 Disabled Peace Officers Optional Exemption
54353 Firefighters and Peace Officers Enrolled in Certain Courses
543531 Firefighters Enrolled in Fire Science Courses
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 32
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54354 Education Benefits for Certain Survivors
54355 Children of Professional Nursing Program Faculty
54356 Preceptors for Professional Nursing Education Programs
54363 Educational Aids
54364 Blind Deaf Students
54365 Senior Citizens Optional Benefit
545011 Charges and Fees for Certain Payments
54502 General Deposits
545021 Student Deposit Fund Composition and Uses
545025 Proration of Fees
545031 Student Fee Advisory Committee
545032 Student Fee Advisory Committee the Texas AampM University System
545041 Environmental Service Fee
54505 Vehicle Registration Fees and Other Fees Related to Parking and Traffic
54506 Fees and Charges for Services to the Public the University of Houston System
545061 Student Services Fees the University of Houston System
545062 Student Fees Advisory Committee the University of Houston System
54507 Group Hospital and Medical Services Fees Texas AampM University System
54508 Medical Services Fee Texas Tech University System Components
545081 Medical Services Fee University of North Texas System Institutions
545082 Medical Services Fee Midwestern State University
545085 Medical Services Fee Texas Womanrsquos University
545089 Medical Services Fee Texas State University System Components
5450891 Medical Services Fee The University of Texas System Components
54509 Student Recreation Fee Texas Tech University System Components
545091 Student Recreational Facility Fee University of North Texas
54510 Student Recreational Sports Fee The University of Texas at Austin
54511 Student Fees for Bus Service Texas State University
545111 Environmental Service Fee Southwest Texas State University
54512 Shuttle Bus Fee The University of Texas at Arlington
545121 Intercollegiate Athletic Fee The University of Texas at Arlington
545122 Recreational Facility Fee The University of Texas at Arlington
54513 Student Service Fees The University of Texas at Austin
545131 International Education Fee The University of Texas at Austin
545132 International Education Fee
545133 Martin Luther King Jr Statue Fee The University of Texas at Austin
545134 Washington DC Internship Education Fee
545135 Barbara Jordan and Cesar Chavez Statues Fee The University of Texas at Austin
54515 Student Union Fee
54518 University Center Fee Midwestern State University
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 33
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54519 Student Union Fee North Texas State University
545191 Intercollegiate Athletic Fee University of North Texas
54520 University Center Student Fee Stephen F Austin State University
545201 Recreational Sports Fee Stephen F Austin State University
54521 Student Center Facility Fees Texas AampM University System
54522 Student Center Fees Texas Southern University
545221 Recreational Facility Fee Texas Southern University
545222 Medical Services Fee Texas Southern University
545223 Intercollegiate Athletics Fee Texas Southern University
54523 Student Center Fees Texas State University System
545241 Student Union Fees Texas Tech University System
54525 Fees for Student Centers Texas Womanrsquos University
545251 Student Fitness and Recreational Fee Texas Womanrsquos University
54526 Student Fees for University Centers the University of Houston
54527 Student Fees for University Center Facilities the University of Houston-Downtown College
54528 Recreational Facility Fee the University of Houston
54529 Student Union Fee The University of Texas at Arlington
54530 Student Union Fees The University of Texas at Austin
54531 Student Union Building Fees The University of Texas at Dallas
545311 Transportation Fee The University of Texas at Dallas
545312 Student Services Building Fee The University of Texas at Dallas
545313 Intramural and Intercollegiate Athletics Fee The University of Texas at Dallas
54532 Student Union Building Fees The University of Texas at San Antonio
545321 Transportation Fee The University of Texas at San Antonio
545322 Intercollegiate Athletics Fee The University of Texas at San Antonio
54533 Student Union Fees The University of Texas of the Permian Basin
545331 Intercollegiate Athletic Fee The University of Texas of the Permian Basin
545332 Fees for Student Services Building The University of Texas of the Permian Basin
54534 Arts and Performance Center Fee The University of Texas at Tyler
545341 Student Recreational Facility Fee The University of Texas at Tyler
545342 Intercollegiate Athletics Fee The University of Texas at Tyler
545343 Student Union Fee The University of Texas at Tyler
54535 Student Union Fee The University of Texas at El Paso
54536 Fees for Student Health Services Building The University of Texas at Austin
54537 Fees for Student Services Building The University of Texas at Austin
545371 Gregory Gymnasium Renovation Fee The University of Texas at Austin
545372 Aquatics Center Fee The University of Texas at Austin
54538 Recreational Sports Fee Texas State University System
545381 Intercollegiate Athletics Fee Certain Institutions in Texas State University System
545382 Intercollegiate Athletics Fee Texas State University ndash San Marcos
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 34
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54539 Recreational Sports Fee the Texas AampM University System
545391 Intercollegiate Athletics Fee Texas AampM University ndash Corpus Christi
545392 Intercollegiate Athletics Fee Texas AampM University ndash Kingsville
545393 Intercollegiate Athletics Fee Prairie View AampM University
545394 Intercollegiate Athletics Fee Tarleton State University
545395 Intercollegiate Athletics Fee Texas AampM International University
545396 Intercollegiate Athletics Fees West Texas AampM University
545397 Intercollegiate Athletics Fees Texas AampM University ndash Commerce
545398 Student Endowment Fund Fee Texas AampM University ndash Corpus Christi
54540 Student Center Fee University of Houston ndash Clear Lake
54541 Recreational Facility Fee The University of Texas at El Paso
54542 Student Union Building Fee The University of Texas ndash Pan American
545421 Sports Recreation and Wellness Facility Fee The University of Texas ndash Pan American
54543 Recreational Facility Fee The University of Texas at San Antonio
54544 Recreational Facility Fee The University of Texas at Dallas
545441 Student Recreational and Health Facilities Fee Midwestern State University
545442 Intercollegiate Athletics Fee Midwestern State University
54545 Fees for Continuing Education Courses
54546 Student Union Fees The University of Texas at Brownsville
54550 Wellness Recreational and Fitness Complex Fee The University of Texas at Brownsville
54551 Intercollegiate Athletics Fee The University of Texas at Brownsville
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 35
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 36
APPENDIX C GLOSSARY
APPROPRIATION METHODOLOGIES Direct Appropriation The actual appropriation either estimated or sum certain listed in that institutionrsquos portion of the General Appropriations Act (GAA)
Indirect Appropriation An appropriation made on behalf of an institution but not listed in that institutionrsquos portion of the GAA Examples include appropriations to the Available University Fund the Higher Education Fund and the Higher Education Coordinating Board all of which are ultimately allocated to institutions
Estimated Appropriation An estimated appropriation is a figure in the GAA that best reflects the information available about the revenue source but the amount available for an institution to spend is contingent on the amount of revenue actually generated If the actual amount of revenue is less than the estimated amount the institution is limited to the lower amount If more revenue is generated than the estimated amount the institution can spend the higher amount
Sum Certain Appropriation A sum certain appropriation in the GAA means that an institution is limited to spend no more than the level of appropriation noted in the institutionrsquos bill pattern in the GAA
Lump Sum Appropriation Texas Education Code Section 61059(k) calls for flexibility in funds appropriated to higher education institutions A lump sum appropriation is a single amount that is unrestricted which means that it can be used for any variety of strategies The GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Higher education institutions are not required to spend their appropriation within specified strategies One exception to this is the Tuition Revenue Bond strategy which represents the appropriation related to debt service on related bonds and must be spent as appropriated or it is reverted to the treasury
METHODS OF FINANCE General Revenue (GR) The non-dedicated portion of the General Revenue Fund is the statersquos primary operating fund Most state tax revenue many state fees and various other sources of revenue are deposited as non-dedicated General Revenue Funds
General RevenuendashDedicated (GRndashD) This is the dedicated portion of General Revenue Funds For higher education institutions the bulk of General RevenuendashDedicated Fund appropriations consist of tuition and fee revenue generated by the institutions These include the tuition and fee revenue included as ldquoOther Educational and General Incomerdquo (defined below) ldquoboard authorized tuitionrdquo (Texas Education Code Section 54008)
Other Funds State funds not included in General Revenue Funds or General RevenuendashDedicated Funds For institutions of higher education these include the Available University Fund and Patient Income generated by health-related institutions
FUND TYPES Educational and General Income Th e Texas Education Code (51009(c)) definition for ldquoEducational and General Fundsrdquo includes (a) net tuition (b) special course fees charged under Education Code Section 54051(e) and (l) (c) lab fees (d) student teaching fees (e) hospital and clinic fees (f ) organized activity fees and (g) proceeds from the sale of educational and general equipment
Institutional Funds Texas Education Code Section 51009(b) defines institutional funds as those that are not ldquoeducational and general fundsrdquo An example of an institutional fund is ldquodesignated tuitionrdquo (Texas Education Code Section 540513) These funds are not included in the GAA
Local Funds Texas Education Code Section 51009(a) defines local funds as net tuition certain special course fees lab fees student teaching fees hospital and clinic fees organized activity fees proceeds from the sale of educational and general equipment and indirect cost recovery fees Th is revenue is accounted for as ldquoeducational and general fundsrdquo and is included in the GAA
Other Educational and General Income The GAA includes some tuition and fees collected by institutions of higher education (General RevenuendashDedicated Funds) Th e revenue from tuition and fees such as statutory tuition (see texas Education Code Section 54051 Tuition Rates) board authorized tuition (see Texas Education Code Section 54008 Tuition Rate Set by Governing Board) Laboratory
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 37
APPENDIX C GLOSSARY
Fees (Texas Education Code Section 54501) and certain other fees are considered Other Educational and General Income (Other EampG) and are appropriated in the GAA as General RevenuendashDedicated Funds Other Educational and General Income is a subset of Educational and General Income (EampG Income)
Patient Income Health-related institutions that operate hospitals or dental clinics generate patient income from services rendered It is allocated as a method of finance to the related institution across a range of strategies in the institutionrsquos bill pattern (Other Funds) For the 2010ndash11 biennium more than $48 billion in patient income was appropriated making it the largest method of fi nance for health-related institutions
OTHER ITEMS Indirect Cost Recovery Institutions negotiate a percentage of a grant with the federal government for Indirect Costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 38
FI
GU
RE
D1
CO
MPA
RIS
ON
OF
CO
NST
ITU
TIO
NA
L A
ND
RES
EARC
H F
UN
DS
201
2ndash13
BIE
NN
IUM
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Avai
labl
e $1
061
4 m
illio
nTe
xas
Con
stitu
tion
hellip
for
Texa
s C
onst
itutio
nU
nive
rsity
the
purp
ose
of a
cqui
ring
Fund
(E
stim
ated
) la
nd
con
stru
ctin
g an
dFo
r su
ppor
t and
equi
ppin
g bu
ildin
gsm
aint
enan
ce
UT
Aus
tin
or o
ther
per
man
ent
Texa
s A
ampM
Uni
vers
ity
impr
ovem
ents
maj
orP
rairi
e Vi
ew U
nive
rsity
UT
repa
ir an
d re
habi
litat
ion
Sys
tem
Aamp
M S
yste
mof
bui
ldin
gs a
nd o
ther
perm
anen
t im
prov
emen
ts
For d
ebt s
ervi
ce
All
acqu
iring
cap
ital
com
pone
nts
incl
udin
g th
eeq
uipm
ent a
nd li
brar
yTA
MU
Sys
tem
Age
ncie
s bo
oks
and
libra
ryex
cept
Tex
as V
eter
inar
y m
ater
ials
and
refu
ndin
gM
edic
al D
iagn
ostic
bond
s or
not
es is
sued
Labo
rato
ry (w
hich
per
unde
r thi
s S
ectio
n
Edu
catio
n C
ode
Sec
tion
887
01 i
s a
stat
e ag
ency
Als
o
for
the
purp
ose
unde
r the
juris
dict
ion
of th
e su
ppor
t and
and
supe
rvis
ion
of th
em
aint
enan
ce o
f The
Tex
as
boar
d)
and
excl
udin
gA
ampM
Uni
vers
ity S
yste
mU
T P
an A
mer
ican
and
UT
adm
inis
tratio
n T
exas
Aamp
M
Bro
wns
ville
(bec
ause
they
Uni
vers
ity a
nd P
rairi
e re
ceiv
e H
EF
allo
catio
ns -
View
Aamp
M U
nive
rsity
and
an
inst
itutio
n ca
nnot
rece
ive
The
Uni
vers
ity o
f Tex
as a
t bo
th A
UF
and
HE
F do
llars
) A
ustin
and
The
Uni
vers
ity
of T
exas
Sys
tem
Hig
her
$525
0 m
illio
nTo
sup
port
inst
itutio
ns
Arti
cle
VII
Sec
tion
17(c
)E
duca
tion
inel
igib
le fo
r AU
F su
ppor
t pr
ovid
es a
n al
low
ance
toFu
nd
add
a ne
w in
stitu
tion
by a
Arti
cle
VII
Sec
tion
23
vote
of b
oth
hous
es o
f17
(a)
fo
r the
pur
pose
the
Legi
slat
ure
if th
e ne
wof
acq
uirin
g la
nd
inst
itutio
n is
out
side
the
UT
cons
truct
ing
and
equi
ppin
gan
d A
ampM
Sys
tem
s
build
ings
m
ajor
repa
ir
acq
uisi
tion
of c
apita
leq
uipm
ent
oth
erpe
rman
ent i
mpr
ovem
ents
or
cap
ital e
quip
men
t use
djo
intly
for e
duca
tiona
l and
gene
ral a
ctiv
ities
Arti
cle
VII
Sec
tion
18(a
-j) o
f the
Tex
as
Con
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Arti
cle
VII
Sec
tion
17(a
-l) o
f the
Tex
as
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
620
02
Gen
eral
App
ropr
iatio
nsA
ct
Texa
s C
onst
itutio
n re
quire
s 1
3 of
the
annu
al
AU
F pr
ocee
ds b
e tra
nsfe
rred
to th
e Te
xas
Aamp
M U
nive
rsity
Sys
tem
E
ach
Sys
tem
offi
cede
term
ines
how
to a
ppor
tion
its s
hare
of t
heA
UF
betw
een
debt
ser
vice
and
sup
port
and
mai
nten
ance
w
ithin
gui
delin
es s
pecifi e
d by
the
Texa
s C
onst
itutio
n
Arti
cle
VII
Sec
tion
17(a
) req
uire
s th
e H
EF
beal
loca
ted
usin
g an
equ
itabl
e fo
rmul
a d
efi n
edin
the
Edu
catio
n C
ode
(Sec
tion
620
21) a
sT
he a
lloca
tion
of fu
nds
unde
r thi
s su
bsec
tion
ism
ade
in a
ccor
danc
e w
ith a
n eq
uita
ble
form
ula
cons
istin
g of
the
follo
win
g el
emen
ts
spac
e defi c
it fa
cilit
ies
cond
ition
ins
titut
iona
l com
plex
ity
and
a se
para
te a
lloca
tion
for
the
Texa
s S
tate
Te
chni
cal C
olle
ge S
yste
m
THE
CB
adm
inis
ters
the
HE
F fo
rmul
a re
allo
catio
nad
viso
ry p
roce
ss
Edu
catio
n C
ode
(Sec
tion
620
21) p
rovi
des
a by
-in
stitu
tion
brea
kout
of a
nnua
l HE
F ap
prop
riatio
ns
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 39
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Nat
iona
l $1
24
mill
ion
Res
earc
hU
nive
rsity
(E
stim
ated
)Fu
nd
Res
earc
h $6
53
mill
ion
Dev
elop
men
tFu
nd
Texa
s $9
35
mill
ion
Com
petit
ive
Kno
wle
dge
Fund
Arti
cle
VII
Sec
tion
20(a
)
for t
he p
urpo
se o
f pr
ovid
ing
a de
dica
ted
inde
pend
ent
and
equi
tabl
eso
urce
of f
undi
ng to
enab
le e
mer
ging
rese
arch
univ
ersi
ties
in th
is s
tate
to a
chie
ve n
atio
nal
prom
inen
ce a
s m
ajor
rese
arch
uni
vers
ities
Arti
cle
VII
Sec
tion
20 (h
)
onl
y fo
r the
sup
port
and
mai
nten
ance
of
educ
atio
nal a
nd g
ener
alac
tiviti
es th
at p
rom
ote
incr
ease
d re
sear
chca
paci
ty a
t the
uni
vers
ity
Edu
catio
n C
ode
Sec
tion
hellipto
pro
mot
e62
091
in
crea
sed
rese
arch
capa
city
at e
ligib
le g
ener
alac
adem
ic te
achi
ngin
stitu
tions
Sec
tion
56 o
f Hig
her
Edu
catio
n S
peci
alP
rovi
sion
s G
AA
201
2ndash13
bi
enni
um
hellipto
sup
port
facu
lty fo
r the
pur
pose
of
inst
ruct
iona
l exc
elle
nce
and
rese
arch
Des
igna
ted
an e
mer
ging
rese
arch
uni
vers
ity b
yTe
xas
Hig
her E
duca
tion
Coo
rdin
atin
g B
oard
R
epor
ts a
t lea
st $
45 m
illio
nin
rest
ricte
d re
sear
chex
pend
iture
s in
eac
h of
the
last
2 y
ears
P
lus
four
of t
he fo
llow
ing
addi
tiona
l crit
eria
1)
End
owm
ents
gt $
400
mill
ion
2) P
rodu
ces
gt 20
0 P
hDs
per y
ear
3) S
elec
tive
ente
ring
Fres
hmen
cla
ss
4) M
embe
r of P
hi B
eta
Kap
pa o
r equ
ival
ent
5) P
osse
sses
hig
h qu
ality
facu
lty a
nd6)
Dem
onst
rate
dco
mm
itmen
t to
high
-qua
lity
grad
uate
edu
catio
n
Edu
catio
n C
ode
Sec
tion
Elig
ible
inst
itutio
n62
092
m
eans
a g
ener
al a
cade
mic
teac
hing
inst
itutio
n a
sdefi n
ed b
y S
ectio
n 61
003
ot
her t
han
The
Uni
vers
ity o
f Te
xas
at A
ustin
Tex
as A
ampM
U
nive
rsity
or P
rairi
e Vi
ew
Aamp
M U
nive
rsity
Uni
vers
ity o
f Tex
as a
t A
ustin
Uni
vers
ity o
f Tex
as
at D
alla
s T
exas
Aamp
M
Uni
vers
ity T
exas
Tec
h U
nive
rsity
Uni
vers
ity o
f H
oust
on
Arti
cle
VII
Sec
tion
20 (a
-h)
of th
e Te
xas
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
621
41
Gen
eral
App
ropr
iatio
nA
ct
Edu
catio
n C
ode
Sec
tion
Not
e th
e62
091
RD
F as
a s
tand
-alo
neap
prop
riatio
n ite
m h
asno
t bee
n fu
nded
sin
ceth
e 20
06ndash0
7 bi
enni
um
How
ever
fun
ds c
alle
d th
e R
DF
have
bee
nap
prop
riate
d di
rect
lyin
to th
e bi
ll pa
ttern
s of
each
elig
ible
Gen
eral
Aca
dem
ic In
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Edu
catio
n C
ode
Sec
tion
621
46 (c
)
o
fth
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for
dist
ribut
ion
in a
sta
tefi s
cal y
ear
each
elig
ible
in
stitu
tion
is e
ntitl
ed to
a d
istri
butio
n in
an
amou
nteq
ual t
o th
e su
m o
fon
e-se
vent
h of
the
tota
l am
ount
app
ropr
iate
d(1
)an
dan
equ
al s
hare
of a
ny a
mou
nt re
mai
ning
afte
r(2
)di
strib
utio
ns a
re c
alcu
late
d un
der S
ubdi
visi
on (1
)no
t to
exce
ed a
n am
ount
equ
al to
one
-four
th o
fth
at re
mai
ning
am
ount
Edu
catio
n C
ode
Sec
tion
621
46 (e
)If
the
num
ber o
f ins
titut
ions
that
are
elig
ible
for
dist
ribut
ions
in a
sta
tefi s
cal y
ear i
s m
ore
than
four
eac
h el
igib
le in
stitu
tion
is e
ntitl
ed to
an
equa
l sh
are
of th
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for d
istri
butio
n in
thatfi s
cal y
ear
Edu
catio
n C
ode
Sec
tion
620
95
The
am
ount
shal
l be
appo
rtion
ed a
mon
g th
e el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of
rest
ricte
d re
sear
ch fu
nds
expe
nded
by
each
inst
itutio
n pe
r yea
r for
the
thre
e pr
eced
ing
stat
efi s
cal y
ears
The
2012
ndash13
appr
opria
tion
prov
ided
abo
ut $
07
mill
ion
to e
ach
elig
ible
inst
itutio
n fo
r eve
ry $
100
mill
ion
in u
nres
trict
ed re
sear
ch e
xpen
ditu
res
asav
erag
ed o
ver a
3-y
ear p
erio
d
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 40
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Res
earc
h N
one
U
nive
rsity
D
evel
opm
ent
Fund
Texa
s $3
56
mill
ion
Res
earc
hIn
cent
ive
Pro
gram
SO
UR
CE L
egis
lativ
e B
udge
t Boa
rd
Texa
s E
duca
tion
Cod
e S
ectio
n 62
051
to
pro
vide
fund
ing
tore
sear
ch u
nive
rsiti
esan
d em
ergi
ng re
sear
chun
iver
sitie
s fo
r the
recr
uitm
ent a
nd re
tent
ion
of h
ighl
y qu
alifi
ed fa
culty
an
d th
e en
hanc
emen
t of
rese
arch
pro
duct
ivity
at
thos
e un
iver
sitie
s
Edu
catio
n C
ode
Sec
tion
hellipto
pro
vide
621
22
mat
chin
g fu
nds
to a
ssis
tel
igib
le in
stitu
tions
inle
vera
ging
priv
ate
gifts
for t
he e
nhan
cem
ent o
fre
sear
ch p
rodu
ctiv
ity a
ndfa
culty
recr
uitm
ent
Edu
catio
n C
ode
Sec
tion
620
51
Elig
ible
inst
itutio
nm
eans
an
inst
itutio
nof
hig
her e
duca
tion
desi
gnat
ed a
s a
rese
arch
univ
ersi
ty o
r em
ergi
ngre
sear
ch u
nive
rsity
und
erth
e co
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
E
ligib
le62
121
in
stitu
tion
mea
ns a
nin
stitu
tion
of h
ighe
red
ucat
ion
desi
gnat
ed a
san
em
ergi
ng re
sear
chun
iver
sity
und
er th
eco
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
620
51
Edu
catio
n C
ode
Sec
tion
(Hou
se B
ill 5
162
121
Eig
hty-fi r
st R
egul
ar
Ses
sion
)
Edu
catio
n C
ode
Sec
tion
620
53
t
o el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of t
otal
rese
arch
fund
s ex
pend
ed b
y ea
ch in
stitu
tion
annu
ally
dur
ing
the
thre
e m
ost r
ecen
t sta
tefi s
cal
year
s a
ccor
ding
to th
e fo
llow
ing
rate
s
at le
ast $
1 m
illio
n fo
r eve
ry $
10 m
illio
n of
(1)
the
aver
age
annu
al a
mou
nt o
f tho
se re
sear
chfu
nds
expe
nded
by
the
inst
itutio
n if
that
ave
rage
amou
nt fo
r the
inst
itutio
n is
$50
mill
ion
or m
ore
and
at le
ast $
500
000
for e
very
$10
mill
ion
of(2
)th
e av
erag
e an
nual
am
ount
of t
hose
rese
arch
fund
s ex
pend
ed b
y th
e in
stitu
tion
if th
at a
vera
geam
ount
for t
he in
stitu
tion
is le
ss th
an $
50 m
illio
n
Edu
catio
n C
ode
Sec
tion
621
23
hellipis
ent
itled
to re
ceiv
e o
ut o
f fun
ds a
ppro
pria
ted
for t
hepu
rpos
es o
f the
pro
gram
for t
hatfi
sca
l yea
r a
mat
chin
g gr
ant i
n an
am
ount
det
erm
ined
acco
rdin
g to
the
follo
win
g ra
tes
50 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(1)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$10
000
0 or
mor
e bu
t not
mor
eth
an $
999
999
75 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(2)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$1
mill
ion
or m
ore
but n
ot m
ore
than
$1
999
999
or
100
perc
ent o
f the
am
ount
of t
he g
ifts
and
(3)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$2
mill
ion
or m
ore
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 41
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 42
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $50119391873 $47339213388 ($2780178485) (55)
School for the Blind and Visually Impaired 93388870 41245345 (52143525) (558)
School for the Deaf 53083657 52695245 (388412) (07)
SUBTOTAL PUBLIC EDUCATION $50265864400 $47433153978 ($2832710422) (56)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1745695460 $1749380723 $3685263 02
Lamar Institute of Technology 27568721 28708990 1140269 41
Lamar University ndash Orange 18484576 19164769 680193 37
Lamar University ndash Port Arthur 23780405 22119709 (1660696) (70)
SUBTOTAL LAMAR STATE COLLEGES $69833702 $69993468 $159766 02
Texas State Technical College System $16493826 $5351461 ($11142365) (676) Administration
Texas State Technical College ndash Harlingen 50980986 49093510 (1887476) (37)
Texas State Technical College ndash West Texas 27965791 24970291 (2995500) (107)
Texas State Technical College ndash Marshall 11434368 10995468 (438900) (38)
Texas State Technical College ndash Waco 68111562 73596786 5485224 81
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$174986533 $164007516 ($10979017) (63)
SUBTOTAL TWO-YEAR INSTITUTIONS $1990515695 $1983381707 ($7133988) (04)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $19099360 $18147200 ($952160) (50)
The University of Texas at Arlington 275081581 288654156 13572575 49
The University of Texas at Austin 749518863 702739665 (46779198) (62)
The University of Texas at Dallas 230535884 223513862 (7022022) (30)
The University of Texas at El Paso 202195230 195511098 (6684132) (33)
The University of Texas ndash Pan American 169039177 162830092 (6209085) (37)
The University of Texas at Brownsville 61910963 57628718 (4282245) (69)
The University of Texas of the Permian Basin 58194080 59145561 951481 16
The University of Texas at San Antonio 273182023 260495772 (12686251) (46)
The University of Texas at Tyler 71137295 66147545 (4989750) (70)
Texas AampM University System Administrative and 20701573 4501868 (16199705) (783) General Offices
Texas AampM University 700537434 651599219 (48938215) (70)
Texas AampM University at Galveston 43799673 37773622 (6026051) (138)
Prairie View AampM University 134247361 122639379 (11607982) (86)
Tarleton State University 87292499 83950084 (3342415) (38)
Texas AampM University ndash Central Texas 29460313 30599703 1139390 39
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 43
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Corpus Christi $121534331 $110283074 ($11251257) (93)
Texas AampM University ndash Kingsville 82466491 75368253 (7098238) (86)
Texas AampM University ndash San Antonio 27154411 37125363 9970952 367
Texas AampM International University 83231209 73816324 (9414885) (113)
West Texas AampM University 79410486 72847023 (6563463) (83)
Texas AampM University ndash Commerce 99558312 89920628 (9637684) (97)
Texas AampM University ndash Texarkana 41409091 34754968 (6654123) (161)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 450003385 394815403 (55187982) (123)
University of Houston ndash Clear Lake 83394543 71849633 (11544910) (138)
University of Houston ndash Downtown 88104670 67926822 (20177848) (229)
University of Houston ndash Victoria 42631672 39786959 (2844713) (67)
Midwestern State University 54249721 48828454 (5421267) (100)
University of North Texas System Administration 9789067 6732226 (3056841) (312)
University of North Texas 302350602 296355351 (5995251) (20)
University of North Texas at Dallas 35156605 30478388 (4678217) (133)
Stephen F Austin State University 121843336 108728674 (13114662) (108)
Texas Southern University 174127907 150903873 (23224034) (133)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 368026094 357056343 (10969751) (30)
Angelo State University 68450875 64053866 (4397009) (64)
Texas Womans University 146639127 135140923 (11498204) (78)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 121909453 111926905 (9982548) (82)
Sam Houston State University 162684291 145338873 (17345418) (107)
Texas State University ndash San Marcos 261940220 254492644 (7447576) (28)
Sul Ross State University 34008142 37804020 3795878 112
Sul Ross State University Rio Grande College 13112804 12127383 (985421) (75)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$6217659551 $5853308379 ($364351172) (59)
HEALTH-RELATED INSTITUTIONS -
The University of Texas Southwestern Medical $339025963 $278284511 ($60741452) (179) Center
The University of Texas Medical Branch at 1252556677 1214546039 (38010638) (30) Galveston
The University of Texas Health Science Center at 356632008 347880533 (8751475) (25) Houston
The University of Texas Health Science Center at 357022348 319153560 (37868788) (106) San Antonio
The University of Texas MD Anderson Cancer 4614023153 5043439860 429416707 93 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 44
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center at $170568794 $176002869 $5434075 32 Tyler
Texas AampM University System Health Science 252705800 241434175 (11271625) (45) Center
University of North Texas Health Science Center 141974215 140131956 (1842259) (13) at Fort Worth
Texas Tech University Health Sciences Center 361096839 333314809 (27782030) (77)
SUBTOTAL HEALTH-RELATED INSTITUTIONS $7845605797 $8094188312 $248582515 32
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $137560226 $130327148 ($7233078) (53)
Texas AgriLife Extension Service 137837443 128253897 (9583546) (70)
Texas Engineering Experiment Station 249008314 268154320 19146006 77
Texas Transportation Institute 96056916 99288013 3231097 34
Texas Engineering Extension Service 164895453 161748713 (3146740) (19)
Texas Forest Service 108765979 196355520 87589541 805
Texas Veterinary Medical Diagnostic Laboratory 32693561 29601103 (3092458) (95)
SUBTOTAL TEXAS AampM UNIVERSITY $926817892 $1013728714 $86910822 94 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 1755022519 1301687813 (453334706) (258)
SUBTOTAL OTHER HIGHER EDUCATION $3339042471 $2900537481 ($438504990) (131)
SUBTOTAL HIGHER EDUCATION $20319641406 $19845144593 ($474496813) (23)
EMPLOYEE BENEFITS
Teacher Retirement System $4038146148 $3797393090 ($240753058) (60)
Optional Retirement Program 294169521 247905975 (46263546) (157)
Higher Education Employees Group Insurance 1068235618 968961950 (99273668) (93) Contributions
Retirement and Group Insurance 61823656 63645693 1822037 29
Social Security and Benefits Replacement Pay 560373470 577908771 17535301 31
SUBTOTAL EMPLOYEE BENEFITS $6022748413 $5655815479 ($366932934) (61)
DEBT SERVICE
Bond Debt Service Payments $7579835 $14567314 $6987479 922
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13483869 $19862644 $6378775 473
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION $76416008567 $72871348360 ($3544660207) (46) 1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 45
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $30322901124 $30476707526 $153806402 05
School for the Blind and Visually Impaired 28830574 29152947 322373 11
School for the Deaf 36111132 36216478 105346 03
SUBTOTAL PUBLIC EDUCATION $30387842830 $30542076951 $154234121 05
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1728790460 $1749380723 $20590263 12
Lamar Institute of Technology 20141881 21363652 1221771 61
Lamar University ndash Orange 13379584 13438359 58775 04
Lamar University ndash Port Arthur 18247526 16676606 (1570920) (86)
SUBTOTAL LAMAR STATE COLLEGES $51768991 $51478617 ($290374) (06)
Texas State Technical College System $16122329 $4603444 ($11518885) (714) Administration
Texas State Technical College ndash Harlingen 35862333 35177742 (684591) (19)
Texas State Technical College ndash West Texas 22972902 20195085 (2777817) (121)
Texas State Technical College ndash Marshall 8795246 8519429 (275817) (31)
Texas State Technical College ndash Waco 48458059 55190076 6732017 139
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$132210869 $123685776 ($8525093) (64)
SUBTOTAL TWO-YEAR INSTITUTIONS $1912770320 $1924545116 $11774796 06
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $16827250 $15931200 ($896050) (53)
The University of Texas at Arlington 171697428 183867794 12170366 71
The University of Texas at Austin 536034384 492544731 (43489653) (81)
The University of Texas at Dallas 142108554 148778381 6669827 47
The University of Texas at El Paso 142521273 137781712 (4739561) (33)
The University of Texas ndash Pan American 115707790 110889522 (4818268) (42)
The University of Texas at Brownsville 51100517 47424781 (3675736) (72)
The University of Texas of the Permian Basin 47639722 48816240 1176518 25
The University of Texas at San Antonio 186961792 178547264 (8414528) (45)
The University of Texas at Tyler 56673893 51804728 (4869165) (86)
Texas AampM University System Administrative 11478504 4473868 (7004636) (610) and General Offices
Texas AampM University 487991523 458011060 (29980463) (61)
Texas AampM University at Galveston 36736318 30964674 (5771644) (157)
Prairie View AampM University 102383638 90923868 (11459770) (112)
Tarleton State University 62999263 59464473 (3534790) (56)
Texas AampM University ndash Central Texas 24007601 25352928 1345327 56
Texas AampM University ndash Corpus Christi 93966271 81624416 (12341855) (131)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 46
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $60610859 $54030202 ($6580657) (109)
Texas AampM University ndash San Antonio 21438200 29287597 7849397 366
Texas AampM International University 67735925 58009521 (9726404) (144)
West Texas AampM University 57622391 53282160 (4340231) (75)
Texas AampM University ndash Commerce 67888967 66581226 (1307741) (19)
Texas AampM University ndash Texarkana 31084147 30370655 (713492) (23)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 311616152 257331674 (54284478) (174)
University of Houston ndash Clear Lake 58807555 46454050 (12353505) (210)
University of Houston ndash Downtown 56441987 39973395 (16468592) (292)
University of Houston ndash Victoria 32315073 27651821 (4663252) (144)
Midwestern State University 37434162 33382015 (4052147) (108)
University of North Texas System Administration 4789067 6732226 1943159 406
University of North Texas 194672599 191274119 (3398480) (17)
University of North Texas at Dallas 30330149 28165402 (2164747) (71)
Stephen F Austin State University 84817662 75640135 (9177527) (108)
Texas Southern University 125878414 104685201 (21193213) (168)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 261015662 253976808 (7038854) (27)
Angelo State University 48095474 45861337 (2234137) (46)
Texas Womans University 104666337 92467100 (12199237) (117)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 77990428 70849905 (7140523) (92)
Sam Houston State University 85061409 79609576 (5451833) (64)
Texas State University ndash San Marcos 168720167 164894925 (3825242) (23)
Sul Ross State University 28832045 32758471 3926426 136
Sul Ross State University Rio Grande College 10662338 9364932 (1297406) (122)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$4333902287 $4078804555 ($255097732) (59)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $286599806 $249279177 ($37320629) (130) Center
The University of Texas Medical Branch at 586704245 472189151 (114515094) (195) Galveston
The University of Texas Health Science Center 278466261 294281302 15815041 57 at Houston
The University of Texas Health Science Center 285919332 260615042 (25304290) (89) at San Antonio
The University of Texas MD Anderson Cancer 316274242 298435072 (17839170) (56) Center
The University of Texas Health Science Center 68656721 71856579 3199858 47 at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 47
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $205234148 $194402799 ($10831349) (53) Center
University of North Texas Health Science Center 120369543 113121832 (7247711) (60) at Fort Worth
Texas Tech University Health Sciences Center 308265168 291713120 (16552048) (54)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$2456489466 $2245894074 ($210595392) (86)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $108442641 $101233060 ($7209581) (66)
Texas AgriLife Extension Service 93421095 84437039 (8984056) (96)
Texas Engineering Experiment Station 27420670 27791758 371088 14
Texas Transportation Institute 1786250 1282500 (503750) (282)
Texas Engineering Extension Service 13423471 12388837 (1034634) (77)
Texas Forest Service 38994278 158979948 119985670 3077
Texas Veterinary Medical Diagnostic Laboratory 12326913 11519113 (807800) (66)
SUBTOTAL TEXAS AampM UNIVERSITY $295815318 $397632255 $101816937 344 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 1324025818 1053522035 (270503783) (204)
SUBTOTAL OTHER HIGHER EDUCATION $1849025818 $1578522035 ($270503783) (146)
SUBTOTAL HIGHER EDUCATION $10848003209 $10225398035 ($622605174) (57)
EMPLOYEE BENEFITS
Teacher Retirement System $3721648969 $3431139479 ($290509490) (78)
Optional Retirement Program 249841016 205341297 (44499719) (178)
Higher Education Employees Group Insurance 1066913010 967556924 (99356086) (93) Contributions
Retirement and Group Insurance 51589368 54070178 2480810 48
Social Security and Benefits Replacement Pay 456936472 471706602 14770130 32
SUBTOTAL EMPLOYEE BENEFITS $5546928835 $5129814480 ($417114355) (75)
DEBT SERVICE
Bond Debt Service Payments $7325020 $14248830 $6923810 945
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13229054 $19544160 $6315106 477
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$46796003928 $45916833626 ($879170302) (19)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 48
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $418569 $649000 $230431 551
School for the Blind and Visually Impaired 0 0 0 NA
School for the Deaf 0 0 0 NA
SUBTOTAL PUBLIC EDUCATION $418569 $649000 $230431 551
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 7026644 7345338 318694 45
Lamar University ndash Orange 4875929 5726410 850481 174
Lamar University ndash Port Arthur 4747409 5443103 695694 147
SUBTOTAL LAMAR STATE COLLEGES $16649982 $18514851 $1864869 112
Texas State Technical College System $371497 $748017 $376520 1014 Administration
Texas State Technical College ndash Harlingen 14268123 13915768 (352355) (25)
Texas State Technical College ndash West Texas 4573311 4775206 201895 44
Texas State Technical College ndash Marshall 2486999 2476039 (10960) (04)
Texas State Technical College ndash Waco 18496312 18406710 (89602) (05)
SUBTOTAL TEXAS STATE TECHNICAL $40196242 $40321740 $125498 03 COLLEGES
SUBTOTAL TWO-YEAR INSTITUTIONS $56846224 $58836591 $1990367 35
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 99544565 104786362 5241797 53
The University of Texas at Austin 203175074 210194934 7019860 35
The University of Texas at Dallas 73902392 74735481 833089 11
The University of Texas at El Paso 54257081 54959386 702305 13
The University of Texas ndash Pan American 50448111 51483144 1035033 21
The University of Texas at Brownsville 10270338 10203937 (66401) (06)
The University of Texas of the Permian Basin 10153771 10329321 175550 17
The University of Texas at San Antonio 78194498 81948508 3754010 48
The University of Texas at Tyler 13686400 14342817 656417 48
Texas AampM University System Administrative 9223069 28000 (9195069) (997) and General Offices
Texas AampM University 194931245 184789626 (10141619) (52)
Texas AampM University at Galveston 6714220 6808948 94728 14
Prairie View AampM University 31863723 31715511 (148212) (05)
Tarleton State University 23018364 24485611 1467247 64
Texas AampM University ndash Central Texas 5452712 5246775 (205937) (38)
Texas AampM University ndash Corpus Christi 26308558 28658658 2350100 89
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 49
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $20743629 $21338051 $594422 29
Texas AampM University ndash San Antonio 5716211 7837766 2121555 371
Texas AampM International University 14449349 15531029 1081680 75
West Texas AampM University 20857129 19564863 (1292266) (62)
Texas AampM University ndash Commerce 29344128 23339402 (6004726) (205)
Texas AampM University ndash Texarkana 4114223 4384313 270090 66
University of Houston System Administration 0 0 0 NA
University of Houston 129680228 137483729 7803501 60
University of Houston ndash Clear Lake 23417549 25395583 1978034 84
University of Houston ndash Downtown 30264387 27953427 (2310960) (76)
University of Houston ndash Victoria 9883366 12135138 2251772 228
Midwestern State University 15912994 15446439 (466555) (29)
University of North Texas System 0 0 0 NA Administration
University of North Texas 100805298 105081232 4275934 42
University of North Texas at Dallas 4826456 2312986 (2513470) (521)
Stephen F Austin State University 35525799 33088539 (2437260) (69)
Texas Southern University 47027769 46218672 (809097) (17)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 98116061 103079535 4963474 51
Angelo State University 17654127 18192529 538402 30
Texas Womans University 40098242 42673823 2575581 64
Texas State University System 0 0 0 NA
Lamar University 37445892 41077000 3631108 97
Sam Houston State University 71500172 65729297 (5770875) (81)
Texas State University ndash San Marcos 88567369 89597719 1030350 12
Sul Ross State University 4941096 5045549 104453 21
Sul Ross State University Rio Grande College 2342952 2762451 419499 179
SUBTOTAL GENERAL ACADEMIC $1744378547 $1759986091 $15607544 09 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $22514152 $18054614 ($4459538) (198) Center
The University of Texas Medical Branch at 23120930 24797153 1676223 72 Galveston
The University of Texas Health Science Center 35777999 35483172 (294827) (08) at Houston
The University of Texas Health Science Center 16488403 17234857 746454 45 at San Antonio
The University of Texas MD Anderson Cancer 48597071 55476185 6879114 142 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 50
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center $512055 $569200 $57145 112 at Tyler
Texas AampM University System Health Science 13306322 24908409 11602087 872 Center
University of North Texas Health Science 12596783 16295862 3699079 294 Center at Fort Worth
Texas Tech University Health Sciences Center 23553492 27695220 4141728 176
SUBTOTAL HEALTH-RELATED $196467207 $220514672 $24047465 122 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $950000 $950000 $0 NA
Texas AgriLife Extension Service 46992 18000 (28992) (617)
Texas Engineering Experiment Station 1785036 904418 (880618) (493)
Texas Transportation Institute 0 0 0 NA
Texas Engineering Extension Service 0 0 0 NA
Texas Forest Service 61388596 28912000 (32476596) (529)
Texas Veterinary Medical Diagnostic Laboratory 0 0 0 NA
SUBTOTAL TEXAS AampM UNIVERSITY SERVICES
$64170624 $30784418 ($33386206) (520)
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 111572621 87256791 (24315830) (218)
SUBTOTAL OTHER HIGHER EDUCATION $111572621 $87256791 ($24315830) (218)
SUBTOTAL HIGHER EDUCATION $2173435223 $2157378563 ($16056660) (07)
EMPLOYEE BENEFITS
Teacher Retirement System $188794770 $209600575 $20805805 110
Optional Retirement Program 44328505 42564678 (1763827) (40)
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 0 0 0 NA
Social Security and Benefits Replacement Pay 82274010 85153600 2879590 35
SUBTOTAL EMPLOYEE BENEFITS $315397285 $337318853 $21921568 70
DEBT SERVICE
Bond Debt Service Payments $0 $0 $0 NA
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $0 $0 $0 NA
TOTAL ARTICLE III ndash AGENCIES OF $2489251077 $2495346416 $6095339 02 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 51
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $13298491946 $10520619770 ($2777872176) (209)
School for the Blind and Visually Impaired 5430126 5855880 425754 78
School for the Deaf 4233990 2921862 (1312128) (310)
SUBTOTAL PUBLIC EDUCATION $13308156062 $10529397512 ($2778758550) (209)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $16905000 $0 ($16905000) (1000)
Lamar Institute of Technology 400196 0 (400196) (1000)
Lamar University ndash Orange 229063 0 (229063) (1000)
Lamar University ndash Port Arthur 785470 0 (785470) (1000)
SUBTOTAL LAMAR STATE COLLEGES $1414729 $0 ($1414729) (1000)
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 850530 0 (850530) (1000)
Texas State Technical College ndash West Texas 419578 0 (419578) (1000)
Texas State Technical College ndash Marshall 152123 0 (152123) (1000)
Texas State Technical College ndash Waco 1157191 0 (1157191) (1000)
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$2579422 $0 ($2579422) (1000)
SUBTOTAL TWO-YEAR INSTITUTIONS $20899151 $0 ($20899151) (1000)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 3839588 0 (3839588) (1000)
The University of Texas at Austin 10309405 0 (10309405) (1000)
The University of Texas at Dallas 14524938 0 (14524938) (1000)
The University of Texas at El Paso 2681876 0 (2681876) (1000)
The University of Texas ndash Pan American 2241274 0 (2241274) (1000)
The University of Texas at Brownsville 540108 0 (540108) (1000)
The University of Texas of the Permian Basin 400587 0 (400587) (1000)
The University of Texas at San Antonio 8025733 0 (8025733) (1000)
The University of Texas at Tyler 777002 0 (777002) (1000)
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 10292036 0 (10292036) (1000)
Texas AampM University at Galveston 349135 0 (349135) (1000)
Prairie View AampM University 0 0 0 NA
Tarleton State University 1274872 0 (1274872) (1000)
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 1259502 0 (1259502) (1000)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 52
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville 1112003 0 (1112003) (1000)
Texas AampM University ndash San Antonio $0 $0 $0 NA
Texas AampM International University 658885 0 (658885) (1000)
West Texas AampM University 930966 0 (930966) (1000)
Texas AampM University ndash Commerce 2325217 0 (2325217) (1000)
Texas AampM University ndash Texarkana 6210721 0 (6210721) (1000)
University of Houston System Administration 0 0 0 NA
University of Houston 8707005 0 (8707005) (1000)
University of Houston ndash Clear Lake 1169439 0 (1169439) (1000)
University of Houston ndash Downtown 1398296 0 (1398296) (1000)
University of Houston ndash Victoria 433233 0 (433233) (1000)
Midwestern State University 902565 0 (902565) (1000)
University of North Texas System Administration 5000000 0 (5000000) (1000)
University of North Texas 6872705 0 (6872705) (1000)
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 1499875 0 (1499875) (1000)
Texas Southern University 1221724 0 (1221724) (1000)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 8894371 0 (8894371) (1000)
Angelo State University 2701274 0 (2701274) (1000)
Texas Womans University 1874548 0 (1874548) (1000)
Texas State University System 0 0 0 NA
Lamar University 6473133 0 (6473133) (1000)
Sam Houston State University 6122710 0 (6122710) (1000)
Texas State University ndash San Marcos 4652684 0 (4652684) (1000)
Sul Ross State University 235001 0 (235001) (1000)
Sul Ross State University Rio Grande College 107514 0 (107514) (1000)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$126019925 $0 ($126019925) (1000)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $16614303 $0 ($16614303) (1000) Center
The University of Texas Medical Branch at 6745161 0 (6745161) (1000) Galveston
The University of Texas Health Science Center at 24173646 0 (24173646) (1000) Houston
The University of Texas Health Science Center at 19224332 0 (19224332) (1000) San Antonio
The University of Texas MD Anderson Cancer 634206 0 (634206) (1000) Center
The University of Texas Health Science Center 80210 0 (80210) (1000) at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 53
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $15014608 $0 ($15014608) (1000) Center
University of North Texas Health Science Center 3438054 0 (3438054) (1000) at Fort Worth
Texas Tech University Health Sciences Center 11075479 0 (11075479) (1000)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$96999999 $0 ($96999999) (1000)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $15933582 $15933582 $0 NA
Texas AgriLife Extension Service 25302708 25302708 0 NA
Texas Engineering Experiment Station 137281801 153857672 16575871 121
Texas Transportation Institute 17405197 18757193 1351996 78
Texas Engineering Extension Service 48387893 48387894 1 00
Texas Forest Service 7349101 7429568 80467 11
Texas Veterinary Medical Diagnostic Laboratory 594001 594000 (1) (00)
SUBTOTAL TEXAS AampM UNIVERSITY $252254283 $270262617 $18008334 71 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 197332508 123636426 (73696082) (373)
SUBTOTAL OTHER HIGHER EDUCATION $197332508 $123636426 ($73696082) (373)
SUBTOTAL HIGHER EDUCATION $693505866 $393899043 ($299606823) (432)
EMPLOYEE BENEFITS
Teacher Retirement System $0 $0 $0 NA
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 8832085 8286741 (545344) (62)
Social Security and Benefits Replacement Pay 3888441 3428099 (460342) (118)
SUBTOTAL EMPLOYEE BENEFITS $12720526 $11714840 ($1005686) (79)
DEBT SERVICE
Bond Debt Service Payments $253903 $318484 $64581 254
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $253903 $318484 $64581 254
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$14014636357 $10935329879 ($3079306478) (220)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 54
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $6497580234 $6341237092 ($156343142) (24)
School for the Blind and Visually Impaired 59128170 6236518 (52891652) (895)
School for the Deaf 12738535 13556905 818370 64
SUBTOTAL PUBLIC EDUCATION $6569446939 $6361030515 ($208416424) (32)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 0 0 0 NA
Lamar University ndash Orange 0 0 0 NA
Lamar University ndash Port Arthur 0 0 0 NA
SUBTOTAL LAMAR STATE COLLEGES $0 $0 $0 NA
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 0 0 0 NA
Texas State Technical College ndash West Texas 0 0 0 NA
Texas State Technical College ndash Marshall 0 0 0 NA
Texas State Technical College ndash Waco 0 0 0 NA
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$0 $0 $0 NA
SUBTOTAL TWO-YEAR INSTITUTIONS $0 $0 $0 NA
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $2272110 $2216000 ($56110) (25)
The University of Texas at Arlington 0 0 0 NA
The University of Texas at Austin 0 0 0 NA
The University of Texas at Dallas 0 0 0 NA
The University of Texas at El Paso 2735000 2770000 35000 13
The University of Texas ndash Pan American 642002 457426 (184576) (288)
The University of Texas at Brownsville 0 0 0 NA
The University of Texas of the Permian Basin 0 0 0 NA
The University of Texas at San Antonio 0 0 0 NA
The University of Texas at Tyler 0 0 0 NA
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 7322630 8798533 1475903 202
Texas AampM University at Galveston 0 0 0 NA
Prairie View AampM University 0 0 0 NA
Tarleton State University 0 0 0 NA
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 0 0 0 NA
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 55
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $0 $0 $0 NA
Texas AampM University ndash San Antonio 0 0 0 NA
Texas AampM International University 387050 275774 (111276) (287)
West Texas AampM University 0 0 0 NA
Texas AampM University ndash Commerce 0 0 0 NA
Texas AampM University ndash Texarkana 0 0 0 NA
University of Houston System Administration 0 0 0 NA
University of Houston 0 0 0 NA
University of Houston ndash Clear Lake 0 0 0 NA
University of Houston ndash Downtown 0 0 0 NA
University of Houston ndash Victoria 0 0 0 NA
Midwestern State University 0 0 0 NA
University of North Texas System Administration 0 0 0 NA
University of North Texas 0 0 0 NA
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 0 0 0 NA
Texas Southern University 0 0 0 NA
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 0 0 0 NA
Angelo State University 0 0 0 NA
Texas Womans University 0 0 0 NA
Texas State University System 0 0 0 NA
Lamar University 0 0 0 NA
Sam Houston State University 0 0 0 NA
Texas State University ndash San Marcos 0 0 0 NA
Sul Ross State University 0 0 0 NA
Sul Ross State University Rio Grande College 0 0 0 NA
SUBTOTAL GENERAL ACADEMIC $13358792 $14517733 $1158941 87 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $13297702 $10950720 ($2346982) (176) Center
The University of Texas Medical Branch at 635986341 717559735 81573394 128 Galveston
The University of Texas Health Science Center at 18214102 18116059 (98043) (05) Houston
The University of Texas Health Science Center at 35390281 41303661 5913380 167 San Antonio
The University of Texas MD Anderson Cancer 4248517634 4689528603 441010969 104 Center
The University of Texas Health Science Center 101319808 103577090 2257282 22 at Tyler
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 56
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $19150722 $22122967 $2972245 155 Center
University of North Texas Health Science Center 5569835 10714262 5144427 924 at Fort Worth
Texas Tech University Health Sciences Center 18202700 13906469 (4296231) (236)
SUBTOTAL HEALTH-RELATED $5095649125 $5627779566 $532130441 104 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $12234003 $12210506 ($23497) (02)
Texas AgriLife Extension Service 19066648 18496150 (570498) (30)
Texas Engineering Experiment Station 82520807 85600472 3079665 37
Texas Transportation Institute 76865469 79248320 2382851 31
Texas Engineering Extension Service 103084089 100971982 (2112107) (20)
Texas Forest Service 1034004 1034004 0 NA
Texas Veterinary Medical Diagnostic Laboratory 19772647 17487990 (2284657) (116)
SUBTOTAL TEXAS AampM UNIVERSITY $314577667 $315049424 $471757 01 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 122091572 37272561 (84819011) (695)
SUBTOTAL OTHER HIGHER EDUCATION $1181111524 $1111122229 ($69989295) (59)
SUBTOTAL HIGHER EDUCATION $6604697108 $7068468952 $463771844 70
EMPLOYEE BENEFITS
Teacher Retirement System $127702409 $156653036 $28950627 227
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 1322608 1405026 82418 62 Contributions
Retirement and Group Insurance 1402203 1288774 (113429) (81)
Social Security and Benefits Replacement Pay 17274547 17620470 345923 20
SUBTOTAL EMPLOYEE BENEFITS $147701767 $176967306 $29265539 198
DEBT SERVICE
Bond Debt Service Payments $912 $0 ($912) (1000)
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $912 $0 ($912) (1000)
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF $13116117205 $13523838439 $407721234 31 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 57
- INTRODUCTION
- FUNDING GENERAL ACADEMICS INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
- OTHER NON-FORMULA FUNDING
-
- FUNDING HEALTH-RELATED INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
-
- FUNDING COMMUNITY AND TECHNICAL COLLEGES
-
- OVERVIEW
- COMMUNITY COLLEGES
- TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES
-
- FUNDING TEXAS AampM SYSTEM AGENCIES
- APPENDIX A FREQUENTLY ASKED QUESTIONS
- APPENDIX B TUITION AND FEE PROVISIONS
- APPENDIX C GLOSSARY
- APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
- APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
-
FUNDING GENERAL ACADEMIC INSTITUTIONS
HQHUDO5HYHQXH)XQGV
FIGURE 5 METHOD OF FINANCE FOR GENERAL ACADEMICS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
727$ 021
HQHUDO5HYHQXHsup2
HGLFDWHG)XQGV
2WKHU)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING Nearly 573 percent of state appropriations for general academic institutions are allocated via two funding formulas and two supplements Instruction and Operations Formula Teaching Experience Supplement Infrastructure Formula
and Small Institution Supplement The formulas and supplements are direct appropriations and are primarily based on enrollment
The formula appropriations consist of General Revenue Funds and some Other Educational and General Income (Other EampG) Other EampG includes specific tuition and fee revenue (see Appendix B for a listing of tuition and fee provisions) The inclusion of certain tuition and fee revenue in the formula funding calculation is referred to as an ldquoAll Funds methodologyrdquo to formula funding Th e most significant tuition revenue included in the formula calculation is tuition charged in accordance with Texas Education Code Section 54051 Interim Tuition Rates (referred to as statutory tuition) The statutory tuition rate for the 2012ndash13 academic year is $50 per semester credit hour for Texas residents Th e corresponding tuition rate for a nonresident student is the average nonresident tuition charged to a Texas resident at a public university in each of the five most populous states
Of the $40 billion allocated by the general academic formulas and supplements nearly 728 percent consists of General Revenue Funds with the remainder consisting of General RevenuendashDedicated Funds (Other EampG)
A portion of Other EampG income is set aside for specifi c purposes or allocated to non-formula based strategies in the
FIGURE 6 APPROPRIATIONS FOR GENERAL ACADEMIC INSTITUTIONS (DIRECT AND INDIRECT) 2012ndash13 BIENNIUM
QIUDVWUXFWXUH)RUPXOD +ROG+DUPOHVV 727$ 021 )RUPXODDQG
1RQ)RUPXOD7HDFKLQJ([SHULHQFH
QVWUXFWLRQamp 2SHUDWLRQV)RUPXOD
ampDSLWDO)XQGV
QVWLWXWLRQDO
(QKDQFHPHQW
6SHFLDOWHPV
ampRQVWLWXWLRQDO)XQGV
5HVHDUFKHYHORSPHQW)XQG
+LJKHU(GXFDWLRQURXSQVXUDQFH2WKHU1RQIRUPXODWHPV
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 6
FUNDING GENERAL ACADEMIC INSTITUTIONS
institutionrsquos bill pattern For example institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) TPEG are grants designed to help students cover their tuition fees and textbook costs when these expenses exceed a certain portion of their familiesrsquo contributions to their educations This set-aside revenue is not part of the tuition and fee revenue used to calculate the funding formulas
INSTRUCTION AND OPERATIONS FORMULA
About 815 percent of formula funds flow through the Instruction and Operations Formula ($32716 million for the 2012ndash13 biennium) and Teaching Experience Supplement ($957 million for the 2012ndash13 biennium) Th e Instruction and Operations formula is calculated as follows
Semester Credit Hours X ProgramLevel Weight X Rate (5371)
Semester credit hours (SCH) are a measurement of how many classes (and the number of students enrolled in those classes) an institution delivers The formula calculation for a biennium uses a ldquobase periodrdquo of SCH The ldquobase periodrdquo used for the 2012ndash13 biennium was the combination of summer 2010 fall 2010 and spring 2011
SCH is weighted by discipline (eg nursing is weighted more than liberal arts) and by level (ie lower and upper division masters doctoral and professional) For instance a lower division liberal arts course receives a weight of 10 A doctoral level liberal arts course receives a weight of 923 A nursing lower division course receives a weight of 203 A doctoral nursing course receives a weight of 925 Beginning with the 2006ndash07 GAA the basis for the weights per discipline was shifted to an aggregation of actual costs based on institutions Annual Financial Reports Currently THECB uses a rolling three year average to adjust the weights each biennium
THECB recommends a rate based on its recommended weights and program enhancements The legislature sets the weights and the rate in the Higher Education Special Provisions of the GAA (page III-238) In practice the legislature has set the rate based on available funding including consideration of enrollment changes and other factors Figure 7 illustrates the Instruction and Operations Formula allocation to institutions
FIGURE 7 DISTRIBUTION OF INSTRUCTION AND OPERATIONS FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
7H[DV$ amp 08QLYHUVLW
2WKHUHQHUDO$FDGHPLFV
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
TEACHING EXPERIENCE SUPPLEMENT
For the 2012ndash13 biennium an additional weight of ten percent is added to lower-division and upper-division semester credit hours taught by tenured and tenure-track faculty The 2012ndash13 GAA includes the following language ldquoFurthermore it is the intent of the Legislature that the weight shall increase by 10 percent per biennium up to 50 percentrdquo (Special Provisions Relating Only to State Agencies of Higher Education Sec 28 page III-238 2012ndash13 GAA)
The Teaching Experience Supplement is calculated as follows
Semester Credit Hours X ProgramLevel Weight Supplement (10) X Rate (5371)
The Teaching Experience Supplement was 5 percent during the 1998ndash99 and 2000ndash01 biennia Th e Seventy-seventh Legislature 2001 increased the supplement to the current 10 percent in 2002ndash03 biennium
INFRASTRUCTURE FORMULA
Almost 16 percent of formula funds flow through the Infrastructure Formula and Small Institution Supplement ($6768 million for the 2012ndash13 biennium) In addition to
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 7
FUNDING GENERAL ACADEMIC INSTITUTIONS
the universities the State Colleges and components of Texas State Technical College also receive infrastructure formula appropriations This formula uses a statewide infrastructure rate which is set in the GAA The statewide infrastructure rate is divided into two rates an Adjusted Utility Rate and an All Other Rate As with the SCH rate the legislature has set the rate based on available funding including consideration of changes in institutional space and other factors
The Infrastructure Formula is calculated as follows
(Adjusted Utility Rate + All Other Rates) X Predicted Square Feet
The Adjusted Utility Rate is 52 percent of the statewide infrastructure rate The 52 percent reflects the percentage of infrastructure formula funds that institutions historically spent on utilities A statewide utility rate is determined and then adjusted for each institution to reflect utility costs relative to other institutions
The All Other Rate is 48 percent of the statewide infrastructure rate and remains constant among institutions It accounts for physical plant grounds maintenance and custodial services
THECBrsquos Space Projection Model for Higher Education Institutions in Texas (space model) estimates square footage for each institution The objective of the space model projection is to calculate the amount of space an institution needs based on the following
bull number program and level of semester credit hours
bull number of faculty non-faculty students programs and library holdings and
bull research and current EampG expenditures
Figure 8 illustrates the Infrastructure Formula allocation to institutions The similarity of the allocation to the Instruction and Operations Formula allocation demonstrates the influence of enrollment on both formula allocations
SMALL INSTITUTION SUPPLEMENT
Prior to the Eighty-fi rst Legislature (2009) general academic institutions with enrollments of less than 5000 received a $750000 annual Small Institution Supplement However the Eighty-first Legislature increased the enrollment threshold to 10000 students and implemented a phase-out
FIGURE 8 DISTRIBUTION OF INFRASTRUCTURE FORMULA 2012ndash13 BIENNIUM
727$ 021
8QLYHUVLWRI7H[DVDW$XVWLQ
2WKHUHQHUDO$FDGHPLFV
7H[DV$ amp M 8QLYHUVLW
8QLYHUVLWRI+RXVWRQ
7H[DV7HFK8QLYHUVLW
8QLYHUVLWRI1RUWK7H[DV
SOURCE Legislative Budget Board
(based on the number of students) of the supplement between 5000 and 10000 students for the 2012ndash13 biennium (see Figure 9) This supplement recognizes that institutions have a minimum cost of operation that may not be covered by funds generated through the formulas
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $414 million in General Revenue hold harmless funding for aff ected institutions to minimize the effect of reduced formula funding as a result of overall enrollment declines or declines in upper-division or graduate enrollment Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment than other institutions or a change in utility costs Th e Eighty-second Legislature 2011 provided $444 million in a hold harmless based on total General Revenue Funds (formula and non-formula) for the 2012ndash13 biennium
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 8
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 9 SMALL INSTITUTION SUPPLEMENT RECIPIENTS
The University of Texas at Brownsville
The University of Texas of the Permian Basin
The University of Texas at Tyler
Texas AampM University at Galveston
Prairie View AampM University
Tarleton State University
Texas AampM University ndash Central Texas
Texas AampM University ndash Kingsville
Texas AampM University ndash San Antonio
Texas AampM International University
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston ndash Clear Lake
University of Houston ndash Victoria
Midwestern State University
University of North Texas at Dallas
Texas Southern University
Angelo State University
Sul Ross State University
Sul Ross State University ndash Rio Grande College
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Waco
Texas State Technical College ndash Marshall
Lamar Institute of Technology
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
SOURCE Legislative Budget Board
NON-FORMULA FUNDING
SPECIAL ITEMS
Special Item appropriations to the institutions total $4836 million for the 2012ndash13 biennium In 2012ndash13 $69 million was appropriated to system offices for special items These are direct appropriations to institutions for projects that are not funded by formula but are specifi cally identifi ed by the legislature as needing support An institution is not required to spend the amount identified in a Special Item strategy for that particular project but expenditure reports indicate that institutions often use an entire appropriation along with additional funding for the related project
The majority of special item funding is through the Institutional Enhancement strategy Institutional Enhancement is a $2204 million appropriation for the 2012ndash13 biennium This is a direct appropriation to institutions and was established by the Seventy-sixth Legislature 1999 for the 2000ndash01 biennium Th e fi rst Institutional Enhancement appropriation was based on a consolidation of certain Special Item appropriations in 1999 and an additional $1 million per year was appropriated for each institution Examples of consolidated special items are items that could be funded through the formulas such as general institutional academic and research support
For the 2002ndash03 biennium there was an additional $1 million increase in appropriations for most institutions and a $15 million increase for selected institutions in South Texas and the border region Institutions that benefi ted signifi cantly from the Seventy-seventh Legislaturersquos new University Research and Texas Excellence Funds (House Bill 1839 Seventy-seventh Legislature 2001) or from the Permanent University Fund (PUF) ldquoexcellence fundingrdquo did not receive an increase in Institutional Enhancement funds for the 2002ndash03 biennium
Other Special Items total $2632 million in appropriations for the 2012ndash13 biennium and include the following institutional and instructional support public service items research items other than general research support funding for separate campuses and accreditation program items
TEXAS COMPETITIVE KNOWLEDGE FUND
The Texas Competitive Knowledge Fund (TCKF) is authorized by the General Appropriations Act (GAA) (2012ndash13 Biennium) Article III Higher Education Special Provisions Section 56 The GAA prescribes that this funding will be used to support faculty for the purpose of instructional excellence and research Funding was first allocated in these strategies by the Legislature for the 2008ndash09 biennium
Current institutions receiving TCKF appropriations include The University of Texas at Austin Texas AampM University University of Houston Texas Tech University and Th e University of Texas at Dallas Institutions are allocated funding appropriated to the TCKF based on average research expenditures for the previous three-year period Th e Eighty-second Legislature Regular Session 2011 appropriated $935 million in Texas Competitive Knowledge Fund strategies directly to the institutions This funding level provides approximately $07 million to each institution for every $100 million in research expenditures In practice
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 9
FUNDING GENERAL ACADEMIC INSTITUTIONS
when institutions have first received distributions from the fund appropriations have been reduced from the institutionrsquos special item strategies In subsequent biennia the institution continues to receive appropriations from the TCKF and the reduction in special items is not specifi cally restored
RESEARCH DEVELOPMENT FUND
The Research Development Fund was created by House Bill 3526 Seventy-eighth Legislature Regular Session 2003 and replaced the Texas Excellence and University Research Funds effective September 1 2005 The intent was to combine the Texas Excellence Fund and University Research Fund into a new fund applying a uniform allocation methodology based on a three-year average of each institutionrsquos restricted research expenditures Th e Eighty-fi rst Legislature allocated $653 million (Figure 10) in the 2012ndash13 biennium to individual institutions to fund objectives identical to the Research Development Fund (Section 62091)
TEXAS RESEARCH INCENTIVE PROGRAM
Th e Eighty-first Legislature Regular Session 2009 established the Texas Research Incentive Program (TRIP) at THECB to match state appropriations with certain gifts and endowments received by emerging research universities Th e goal of this $178 million a year program is to create more Tier One universities in Texas
PERFORMANCE INCENTIVE INITIATIVE
The Eightieth Legislature 2007 appropriated $100 million in fiscal year 2009 to THECB to establish a Higher Education Performance Incentive Initiative The funding was for ldquoimprovement in teaching and educational excellence at Texas public general academic institutionsrdquo THECB distributed $80 million for increases in degrees awarded with special weights given to critical fields and at-risk students The remaining $20 million was used to fund scholarships for students graduating in the top 10 percent of their high school class
Th e Eighty-first Legislature Regular Session 2009 maintained the $80 million for the higher education performance incentive initiative (funded by the American Recovery and Reinvestment Act) and increased funding for the Top Ten Percent scholarship program by $34 million bringing total appropriations for the program to $54 million
There were no performance funding incentives for the 2012ndash13 biennium For the 2012ndash13 biennium $396
FIGURE 10 RESEARCH DEVELOPMENT FUND ALLOCATIONS
2012ndash13 BIENNIAL RDF
INSTITUTION ALLOCATION
The University of Texas at Arlington $6032754
The University of Texas at Dallas 8425486
The University of Texas at El Paso 6925040
The University of Texas at Pan American 1147838
The University of Texas at Brownsville 902512
The University of Texas of the Permian Basin 306408
The University of Texas at San Antonio 5491296
The University of Texas at Tyler 434072
Texas AampM University at Galveston 600342
Tarleton State University 1586396
Texas AampM University ndash Corpus Christi 2212356
Texas AampM University ndash Kingsville 1846206
Texas AampM International University 253246
West Texas AampM University 681752
Texas AampM Commerce 436752
Texas AampM Texarkana 9008
University of Houston 10705472
University of Houston ndash Clear Lake 10392
University of Houston ndash Downtown 10248
University of Houston ndash Victoria 2254
Midwestern State University 30066
University of North Texas 2495448
Stephen F Austin University 895696
Texas Southern University 338580
Texas Tech University 8327602
Texas Womanrsquos University 266152
Angelo State University 123176
Lamar University 820010
Sam Houston State University 362574
Texas State University ndash San Marcos 3121164
Sul Ross State University 304040
TOTAL $65296738
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 10
FUNDING GENERAL ACADEMIC INSTITUTIONS
million is appropriated to the Top Ten Percent Scholarship Program
HOLD HARMLESS FUNDING
The Eighty-second Legislature 2011 provided $444 million in General Revenue Funds hold harmless funding for aff ected institutions to minimize the effect of reduced formula and special item funding Decreases in formula funding could be caused by declining enrollment a shift from upper level or graduate semester credit hours to lower level hours a much smaller increase in enrollment that other institutions or a change in utility costs
CAPITAL FUNDS
In addition to the constitutional funds discussed in the next subsection there are three types of state appropriation for capital funds tuition revenue bonds Skiles Act revenue bonds and lease payments Almost all of the direct appropriations to institutions related to capital funds are for debt service on tuition revenue bonds
A $5931 million General Revenue Funds appropriation was made for tuition revenue bond debt service for the 2012ndash13 biennium
Tuition revenue bonds must be authorized in statute Once an authorization is made institutions issue bonds and make related debt payments with tuition revenue Th e Texas Public Finance Authority issues tuition revenue bonds for Midwestern State University Stephen F Austin University Texas Southern University and the Texas State Technical Colleges Legislative practice has been to use General Revenue Funds to reimburse institutions for the costs related to this debt service
The legislature first authorized tuition revenue bonds in 1971 In some instances the authorization was a lump sum for the benefit of specific institutions During the Seventy-eighth Legislature 2003 $2689 million in tuition revenue bonds was authorized for specific projects at various higher education institutions The Seventy-ninth Legislature Th ird Called Session 2005 adopted House Bill 153 which authorized the issuance of $1858 billion in tuition revenue bonds for forty-four different institutions Only one tuition revenue bond (House Bill 1775) was adopted by the Eightieth Legislature 2007 for a $13 million nursing building at Stephen F Austin University Th e Eighty-fi rst Legislature 2009 authorized one tuition revenue bond for Texas AampM University at Galveston The Eighty-second Legislature 2011 did not authorize any new tuition revenue bonds
The authority for Skiles Act Revenue Bonds was repealed in 1997 It had allowed institutions to pledge up to $5 from each enrolled student for each regular semester to the payment of bonds authorized under the governing boardrsquos general authority to sell revenue bonds Institutions use their Other Educational and General Income (General Revenuendash Dedicated Funds) to pay the debt service on these previously authorized bonds This is a $10 million appropriation for the 2012ndash13 biennium
Three general academic institutions receive a $3 million General Revenue Fund appropriation for lease payments to community colleges for facilities
CONSTITUTIONAL FUNDS
These funds are appropriated separately in the GAA and not directly appropriated to the institutions (see Appendix D)
The Available University Fund (AUF) established in Section 18 Article VII Texas Constitution consists of the surface income and investment proceeds from the Permanent University Fund (PUF) a state endowment with land grants totaling 21 million acres
Distributions to the AUF consist of investment returns from PUF assets surface income from PUF lands and interest earned on AUF balances For the 2012ndash13 biennium investment returns were $12200 million surface income was $398 million and interest income was $59 million Income from the sale of PUF lands and the lease of mineral interest is retained in the PUF and invested
The total 2012ndash13 estimated appropriation for the AUF is $12660 million The Constitution appropriates two-thirds of the AUF to The University of Texas System and one-third to the Texas AampM University System The two systems may use the AUF for capital purposes (debt service on PUF bonds) for most of their institutions and ldquofor the support and maintenancerdquo of other institutions listed Entities authorized to receive funding for ldquosupport and maintenancerdquo which is now commonly referred to as ldquoAUF Excellence Fundingrdquo are the two system offi ces The University of Texas at Austin Texas AampM University and Prairie View AampM University The systemsrsquo boards of regents determine allocations to individual institutions including health-related institutions and the amounts for ldquoExcellencerdquo Figure 11 lists the recipients and the type of support they received
The Higher Education Fund (HEF) as authorized in Section 17 Article VII Texas Constitution benefits institutions of higher education not eligible for the AUF (see Figure 12)
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 11
FUNDING GENERAL ACADEMIC INSTITUTIONS
FIGURE 11 PARTICIPANTS IN THE AVAILABLE UNIVERSITY FUND
EXCELLENCE AND DEBT SERVICE FUNDS
The University of Texas System
The Texas AampM University System
The University of Texas at Austin
Texas AampM University
Prairie View AampM University
DEBT SERVICE ONLY
The University of Texas System Components
The University of Texas at Arlington
The University of Texas at Dallas
The University of Texas at El Paso
The University of Texas of Permian Basin
The University of Texas at San Antonio
The University of Texas at Tyler
The University of Texas Southwestern Medical Center
The University of Texas Medical Branch at Galveston
The University of Texas Health Science Center at Houston
The University of Texas Health Science Center at San Antonio
The University of Texas Health Science Center at Tyler
The University of Texas MD Anderson Cancer Center
Texas AampM University System Components
Texas AampM University at Galveston
Texas AampM University at Tarleton
Texas AampM University ndash San Antonio
Texas AampM University ndash Central Texas
Texas AampM University System Health Science Center
Texas AgriLife Research
Texas AgriLife Extension Service
Texas Engineering Experiment Station
Texas Engineering Extension Service
Texas Transportation Institute
Texas Forest Service
SOURCE Legislative Budget Board
FIGURE 12 PARTICIPANTS IN THE HIGHER EDUCATION FUND
The University of Texas System Components
The University of Texas ndash Pan American
Texas AampM University System Components
Texas AampM University ndash Corpus Christi
Texas AampM International University
Texas AampM University ndash Kingsville
West Texas AampM University
Texas AampM University ndash Texarkana
University of Houston System Components
University of Houston
University of Houston ndash Clearlake
University of Houston ndash Downtown
University of Houston ndash Victoria
Independent Institutions
Midwestern State University
Stephen F Austin State University
Texas Southern University
Texas Womanrsquos University
University of North Texas System Components
University of North Texas Health Science Center at Fort Worth
University of North Texas
Texas Tech University System Components
Texas Tech University Health Sciences Center
Angelo State University
Texas State University System Components
Lamar University
Sam Houston State University
Texas State University ndash San Marcos
Sul Ross State University
Sul Ross State Rio Grande College
Lamar State College ndash Orange
Lamar State College ndash Port Arthur
Lamar Institute of Technology
Texas State Technical College System Components
Texas State Technical College ndash Harlingen
Texas State Technical College ndash West Texas
Texas State Technical College ndash Marshall
Texas State Technical College ndash Waco
The University of North Texas at Dallas receives its allocation through the University of North Texas SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 12
FUNDING GENERAL ACADEMIC INSTITUTIONS
The HEF is supported by General Revenue Fund appropriations
The distribution of the $525 million HEF appropriation for 2012ndash13 is provided for in statute (Texas Education Code Section 62021) The Constitution calls for a re-allocation of HEF funds every ten years The Seventy-ninth Legislature Regular Session fulfilled this requirement with the enactment of House Bill 3001
The Constitution also allows the legislature to adjust the decennial allocations every five years Th e Eighty-fi rst Legislature Regular Session 2011 exercised this authority by enacting House Bill 51 which adjusted the formula allocation for the HEF funds for fiscal years 2009 through 2015
To maintain the equitable distribution of the HEF appropriation House Bill 51 also corrected the distribution of fiscal year 2009 and 2010 HEF allocations by using revised formula calculations Using these revised formula calculations House Bill 51 factored in updated data elements to generate the annual HEF allocations for the fi ve-year period starting in fiscal year 2011
HEF funds must be used for capital purposes Institutions may use HEF allocations for debt service on HEF bonds or as cash
In 1995 the Texas Constitution was amended to authorize the creation and funding of a dedicated HEF corpus known as the Permanent Higher Education Fund (PHEF) Th is corpus was separate from the annual HEF allocation of General Revenue Funds The PHEF was intended to become a permanent endowment to support non-PUF eligible institutions but never reached its targeted value of $2 billion
The PHEF corpus of $5159 million was rededicated with the enactment of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) The balance of the PHEF was transferred to the NRUF on January 1 2010 and the authorization for the PHEF expired Proposition 4 also allowed the legislature to appropriate some or all of the total returns from the NRUF to provide a source of funding to enable emerging research universities to achieve national prominence
The Eighty-second Legislature 2011 appropriated $124 million in estimated NRUF proceeds to eligible institutions in the 2012ndash13 biennium
House Bill 1000 Eighty-second Legislature Regular Session 2011 established the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution in designated as an emerging research university within the Higher Education Coordinating Boardrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fi scal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of the institutions research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs Texas Tech University and the University of Houston are the only two institutions that received funding through this program in 2012
HIGHER EDUCATION GROUP INSURANCE (HEGI)
The $4631 million General Revenue Fund appropriation for higher education group insurance (HEGI) is not a direct appropriation in the institutionsrsquo bill patterns It is appropriated in a separate section of the GAA entitled ldquoHigher Education Employees Group Insurance Contributionsrdquo This appropriation is intended to help institutions cover the cost of health insurance premiums for institution employees whose salaries are paid from the General Revenue Fund Because The University of Texas and Texas AampM University Systems operate their own health insurance programs they each receive separate appropriations The remaining institutions are included in the program operated by the Employees Retirement System (ERS)
The HEGI appropriation is sum-certain That is the Statersquos General Revenue Fund contributions are limited to each institutionrsquos number of employees enrolled in the health insurance program as of December 1 2012 However the GAA allows ERS The University of Texas and Texas AampM University Systems to transfer HEGI appropriations among institutions within their respective group insurance programs to address shortfalls in General Revenue Funds related to group insurance premiums
SOCIAL SECURITY BENEFITS
An appropriation for social security is included in the GAA at the end of Article III It is an estimated General Revenue
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 13
FUNDING GENERAL ACADEMIC INSTITUTIONS
Fund appropriation to provide the employer matching funds for employees of institutions of higher education (Th is appropriation amount is not included in Figure 3 on page 2)
STAFF GROUP INSURANCE
Staff group insurance is for staff whose salaries are not paid with General Revenue Funds (GR) The appropriation is based on an estimation of the number of non-GR funded employees at an institution as of December 1 2010 Th e total appropriation for all general academic institutions is $1766 million for the 2012ndash13 biennium The method of finance is Other Educational and General Income (which is classified as General RevenuendashDedicated Funds)
RETIREMENT CONTRIBUTIONS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and top administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees participate in TRS a defi ned benefit plan The state funds retirement contributions for TRS equal to 60 percent of an employeersquos salary in fiscal year 2012 and 64 percent in 2013 State contributions for ORP are equal to 60 percent of an employeersquos salary in fiscal years 2012 and 2013 (Th ese appropriation amounts are not included in Figure 3 on page 2)
OTHER NON-FORMULA FUNDING
WORKERSrsquo COMPENSATION
Changes in the structure of the statewide workersrsquo compensation system resulted in most institutions receiving General Revenue Fund appropriations for Workersrsquo Compensation starting in 2006ndash07 However Th e University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool
UNEMPLOYMENT COMPENSATION
Most components of The University of Texas and Texas AampM University Systems have this strategy because they operate their own risk pools Th ese institutions receive General Revenue Fund appropriations for unemployment compensation insurance The appropriation for the 2012ndash13 biennium is $05 million in General Revenue Funds Th e Texas Workforce Commission receives an appropriation to
cover unemployment benefi ts for former state employees for all other higher education institutions
TEXAS PUBLIC EDUCATION GRANTS
According to statute (Texas Education Code Chapter 56 Subchapter C and Texas Education Code Section 54051 [Statutory Tuition]) institutions must set aside a portion of tuition revenue for Texas Public Education Grants (TPEG) Fifteen percent of each resident studentrsquos tuition and 3 percent of each nonresident studentrsquos tuition are set aside for financial aid to students at the institution Texas Education Code Section 56033 provides guidelines on the allocation of TPEG revenue The GAA includes an estimate of the amount of TPEG revenue each institution will generate Th is $2111 million estimated appropriation is considered Other Educational and General Income which are classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
Indirect costs as defined by The Comptroller of Public Accounts are ldquoincurred for a common or joint purpose benefiting more than one cost objectiverdquo Institutions negotiate a percentage of a federal grant for indirect costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
The Seventy-eighth Legislature 2003 allowed universities to retain 100 percent of indirect costs income from research grants and contracts to encourage further research projects conducted by universities
ORGANIZED ACTIVITIES
Organized Activities are activities or enterprises connected with instructional departments whose primary function is training for students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training Revenue from Organized Activities is classified as General RevenuendashDedicated Funds Other EampG Income For the 2012ndash13 biennium $503 million is appropriated for Organized Activities
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 14
FUNDING HEALTH-RELATED INSTITUTIONS
OVERVIEW Appropriations for the nine health-related institutions are similar in structure to the appropriations for general academic institutions There are formula and non-formula funding appropriations made directly to the institutions as well as appropriations that benefit the institutions but are not included in the institutionsrsquo bill patterns such as the Available University Fund certain staff benefi ts and funds trusteed at the Texas Higher Education Coordinating Board (THECB) While health-related institutions do not receive appropriations from the Research Development Fund they share many other types of appropriations similar to general academic institution appropriations Th ose appropriations will be briefly restated in this section of the report Figure 13 lists the institutions and their enrollment
FIGURE 13 PUBLIC HEALTH-RELATED INSTITUTIONS CERTIFIED HEADCOUNT FALL 2011
INSTITUTION HEADCOUNT
UT Southwestern Medical Center 2467
UT Medical Branch at Galveston 2660
UT Health Science Center at Houston 4485
UT Health Science Center at San Antonio 3273
UT M D Anderson Cancer Center 248
UT Health Science Center at Tyler NA
Texas AampM University System Health Science 1958 Center
University of North Texas Health Science 1567 Center at Fort Worth
Texas Tech University Health Sciences Center 3590
Statewide Totals 20248
SOURCE Higher Education Coordinating Board
Like other higher education institutions the appropriations for health-related institutions are a lump sum and funding strategies are presented for informational purposes in the General Appropriations Act (GAA) The funding strategies in a health-related institutionrsquos bill pattern represent how state funds are allocated but not how they must be spent Also certain methods of finance in the appropriation are estimated This means that if for example patient income for an institution is above the amount included in the GAA
the institution can spend more than the amount listed in the GAA
Also health-related institutions have access to an estimated $109 billion outside the appropriations process in 2012ndash13 Examples of this include certain tuition revenue indirect lost recovery grants and gifts
Figure 14 illustrates the 2012ndash13 method of finance for $85 billion in appropriations for health-related institutions including a number of the indirect appropriations but it does not include appropriations for retirement benefi ts
FIGURE 14 METHOD OF FINANCE FOR HEALTH-RELATED INSTITUTIONS 2012ndash13 BIENNIUM
727$ 021
HQHUDO
2WKHU)XQGV3DWLHQWQFRPH
5HYHQXH)XQGV
HQHUDO5HYHQXHsup2HGLFDWHG)XQGV13
Including some tuition and fees SOURCE Legislative Budget Board
FORMULA FUNDING The three primary funding formulas for health-related institutions are Instruction and Operations support Infrastructure support and Research Enhancement Th e University of Texas MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler have additional formula allocations to accommodate their unique missions Each health-related institution also receives formula funding for graduate medical education
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 15
FUNDING HEALTH-RELATED INSTITUTIONS
General Revenue funding and some Other Educational and General Income (Other EampG is classified as General RevenuendashDedicated) fund the formulas Like general academic institutions certain tuition revenue is used in the calculation of the Instruction and Operation support and Infrastructure support formulas Of the $15 billion that is allocated by the health-related institutionsrsquo primary formulas 939 percent is from the General Revenue Fund and the remaining 61 percent is from General RevenuendashDedicated Funds (tuition and fee revenue)
Some tuition and fee income is set aside for specifi c purposes Some specific amounts are unavailable for formula purposes and consequently are not a formula method of fi nance For example health-related institutions set aside a portion of their tuition to provide Texas Public Education Grants (TPEG) and Medical Loans
INSTRUCTION AND OPERATIONS SUPPORT FORMULA
The Instruction and Operations (IampO) support formula represents nearly 755 percent of the primary formula funds for health-related institutions ($9282 million for the 2012ndash13 biennium) It is intended to fund items such as faculty salaries departmental operating expenses instructional administration and libraries It is allocated on a per full-time student equivalent (FTSE) basis with a funding weight predicated on the instructional program of the student This formula applies to all health-related
institutions except The University of Texas Health Science Center at Tyler which did not offer education instruction during the base period for the 2012ndash13 biennium
Figure 15 illustrates the Instruction and Operations support formula among the eight health-related institutions
The Instruction and Operations support formula is calculated as follows
(FTSE X Program Weight X $8874) + SmallMultiple Campus Supplement
FTSE is weighted by discipline For example medicine (4753) is weighted more than pharmacy (1670) Allied Health is assigned a weight of 1000
The Legislature sets the weights and the rate ($8874 adjusted for the 2012ndash13 biennium) in the Higher Education Special Provisions of the GAA (Sec 29 page III-239 and 240) The rate is calculated based on the available revenue for the formula and the number of FTSEs
Programs with enrollments less than 200 receive a Small Campus Supplement (see Figure 16)
FIGURE 15 DISTRIBUTION OF INSTRUCTION AND OPERATIONS SUPPORT FORMULA 2012ndash13 BIENNIUM
727$ 021870$QGHUVRQ 7H[DV$ amp 0+HDOWKampDQFHUampHQWHU 6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV 87+HDOWK6FLHQFHampHQWHUDW6DQ
DW)WRUWK
+HDOWK6FLHQFHampHQWHU$QWRQLR
87+HDOWK6FLHQFH 7H[DV7HFK8QLYHUVLW+HDOWKampHQWHUDW+RXVWRQ 6FLHQFHVampHQWHU
876RXWKZHVWHUQ0HGLFDOampHQWHU
870HGLFDOUDQFK DWDOYHVWRQ
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 16
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 16 SMALL CAMPUS SUPPLEMENT RECIPIENTS
The University of Texas Southwestern Medical Center
No
The University of Texas Medical Branch at Galveston
Yes
The University of Texas Health Science Center at Houston
Yes
The University of Texas Health Science Center at San Antonio
Yes
The University of Texas MD Anderson Cancer Center
No
The University of Texas Health Science Center at Tyler
NA
Texas AampM Health Science Center Yes
University of North Texas Health Science Center at Fort Worth
No
Texas Tech University Health Sciences Center Yes
SOURCE Legislative Budget Board
INFRASTRUCTURE SUPPORT FORMULA
The Infrastructure support formula is 194 percent of the primary formula funding and is intended for utilities and physical plant support ($2383 million for the 2012ndash13 biennium) This formula calculation is similar to that for general academic institutions but includes only one rate ($655) for all institutions except The University of Texas
FIGURE 17 DISTRIBUTION OF INFRASTRUCTURE SUPPORT FORMULA 2012ndash13 BIENNIUM
MD Anderson Cancer Center and Th e University of Texas Health Science Center at Tyler which have another rate ($625)
THECBrsquos space model predicts square footage for each institution The space model projection is based on the following
bull number and level of FTE students
bull number of faculty
bull single or multiple programs and campuses
bull actual clinical space and
bull research and current EampG expenditures
Because the space projection model does not account for hospital space separate infrastructure funding for hospital space is included in the total funding for hospital and patient-care activities at The University of Texas Medical Branch at Galveston The University of Texas MD Anderson Cancer Center and The University of Texas Health Science Center at Tyler
Figure 17 illustrates the Infrastructure Support Formula allocation to institutions among the nine health-related institutions
727$ 021
87+HDOWK6FLHQFHampHQWHUDW6DQ 870$QGHUVRQampDQFHUampHQWHU$QWRQLR
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW
+RXVWRQ 7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK6FLHQFHVampHQWHU
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 17
FUNDING HEALTH-RELATED INSTITUTIONS
RESEARCH FORMULA
Health-related institutions generate state appropriations to support research through General Revenue Funds in the Research Enhancement formula ($629 million for the 2012ndash13 biennium) The Research Enhancement formula accounts for 51 percent of the primary formula funds and is funded entirely from the General Revenue Fund
The allocation is based on the amount of research generated by each institution
$1412500 + (110 X Research
Expenditures)
This provides a base Institutions report for all institutions current research
regardless of research expenditures to volume THECB
Figure 18 illustrates the Research Enhancement formula allocation to the institutions among the nine health-related institutions
GRADUATE MEDICAL EDUCATION
The Seventy-ninth Legislature 2005 established a new formula for funding graduate medical education in the 2006ndash07 GAA For 2012ndash13 the funding totals $46 million
FIGURE 18 DISTRIBUTION OF RESEARCH ENHANCEMENT FORMULA 2012ndash13 BIENNIUM
727$ 021
870$QGHUVRQampDQFHUampHQWHU
(an additional $109 million is appropriated to the Baylor College of Medicine through the THECB) and provides $4436 per medical resident each year
Figure 19 illustrates the Graduate Medical Education formula allocation to institutions among the nine health related institutions and Baylor College of Medicine
CHEST DISEASE CENTER FORMULA
The Chest Disease Center operations formula which was established during the 2010ndash11 biennium applies only to The University of Texas Health Science Center at Tyler Th e University of Texas Health Science Center at Tyler has a statutory mission to conduct research develop diagnostic and treatment techniques provide training and teaching programs and provide diagnosis and treatment of inpatients and outpatients with respiratory diseases The Chest Disease Center formula is based on the number of primary chest disease patients the institution served Approximately $472 million in General Revenue Funds are appropriated for the 2012ndash13 biennium
CANCER CENTER OPERATIONS FORMULA
The Eightieth Legislature 2007 established in the GAA an Operations formula for funding The University of Texas MD Anderson Cancer Center The University of Texas MD Anderson Cancer Center has a statutory mission to eliminate cancer through patient care research education
87+HDOWK6FLHQFHampHQWHUDW7OHU87+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR
7H[DV$ amp 0+HDOWK6FLHQFHampHQWHU
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ 8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
870HGLFDOUDQFKDWDOYHVWRQ 7H[DV7HFK8QLYHUVLW+HDOWK876RXWKZHVWHUQ0HGLFDOampHQWHU
6FLHQFHVampHQWHU
SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 18
FUNDING HEALTH-RELATED INSTITUTIONS
FIGURE 19 DISTRIBUTION OF GRADUATE MEDICAL EDUCATION FORMULA 2012ndash13 BIENNIUM
87+HDOWK6FLHQFHampHQWHUDW+RXVWRQ
870HGLFDOUDQFKDWDOYHVWRQ
876RXWKZHVWHUQ0HGLFDOampHQWHU
SOURCE Legislative Budget Board
727$ 02187+HDOWK6FLHQFHampHQWHUDW6DQ
$QWRQLR 870$QGHUVRQampDQFHUampHQWHU
87+HDOWK6FLHQFHampHQWHUDW7OHU
7H[DV$ amp 08QLYHULVW6VWHP +HDOWK6FLHQFHampHQWHU
8QLYHUVLWRI1RUWK7H[DV+HDOWK 6FLHQFHampHQWHUDW)WRUWK
7H[DV7HFK8QLYHUVLW+HDOWK 6FLHQFHVampHQWHU
DORUampROOHJHRI0HGLFLQH
and prevention The Operations formula funding is based on the total number of Texas cancer patients the institution served The Operations formula growth in funding may not exceed the average growth in funding for health-related institutions in the Instruction and Operations support formula for the current biennium For the 2012ndash13 biennium this funding formula provided $2125 million in General Revenue Funds
NON-FORMULA FUNDING
PATIENT CARE ACTIVITIES
Some institutions conduct patient care activities generally medical or dental For the 2012ndash13 biennium the estimated appropriation for Patient Income was $56 billion Th e hospital and clinic revenues earned through patient care activities are considered Other Funds which are part of Educational and General Income (not to be confused with Other Educational and General Income which is another subset of Educational and General Income) General Revenue funding supplements patient-care income to varying degrees at each institution Patient Income is an estimated appropriation and is spread across an institutionrsquos funding strategies however it is not used in the calculation of the formulas
INSTITUTIONAL ENHANCEMENT
Institutional Enhancement is a General Revenue Fund appropriation that started in the 2000ndash01 biennium It is designed to allow each institution to address its unique needs and diseconomies of scale at institutions with smaller campuses The total institutional enhancement appropriation for the 2012ndash13 biennium was $42 million which includes $407 million in General Revenue Funds and $16 million in Patient Income
SPECIAL ITEMS
Special items are activities that are not generally funded through the formulas and typically represent an institutionrsquos special needs or areas of expertise The $3107 million in General Revenue Funds for the 2012ndash13 biennium funds items such as residency programs academic outreach programs public service items and research items other than general research support Institutions propose and justify special items and request an amount for each on an ad hoc basis Special items generally remain constant from biennium to biennium unless the item was a one-time expense (eg tornado damage repairs) or the institution has not used the funding for the intended purpose
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 19
FUNDING HEALTH-RELATED INSTITUTIONS
CONSTITUTIONAL FUNDS
These funds are not directly appropriated to institutions in the GAA In other words these funds are not found in a strategy within an institutionrsquos bill pattern
Health-related institutions are eligible for funding from the Available University Fund ($146 million in Other Funds allocated to these institutions by system offices for the 2012ndash 13 biennium) and the Higher Education Fund ($257 million in General Revenue Funds appropriated for the 2012ndash13 biennium) which are presented in detail in the ldquoFunding General Academic Institutionsrdquo section of this report
CAPITAL FUNDS
Just like general academic institutions tuition revenue bonds ($1665 million in General Revenue Funds for related debt service in the 2012ndash13 biennium) are also used to fund capital projects at health-related institutions A detailed presentation of tuition revenue bonds is in the ldquoFunding General Academic Institutionsrdquo section The University of Texas Medical Branch at Galveston and The University of Texas MD Anderson Cancer Center also have separate appropriations for capital projects that are funded primarily with Patient Income
EMPLOYEE BENEFITS
Like general academic institutions health-related institutions benefit from direct and indirect state appropriations related to employee benefi ts The indirect appropriations include Higher Education Group Insurance ($2339 million in General Revenue Funds for the 2012ndash13 biennium) Retirement Contributions and Social Security Benefi ts (all presented in the ldquoFunding General Academic Institutionsrdquo section) The direct appropriations include Staff Group Insurance
For the 2012ndash13 biennium the Workersrsquo Compensation and Unemployment Compensation strategies (all presented in the ldquoFunding General Academic Institutionsrdquo section) are funded directly with General Revenue Funds and General RevenuendashDedicated Funds However The University of Texas and Texas AampM University Systems operate their own workersrsquo compensation pools while all other institutions are part of the State Office of Risk Managementrsquos workersrsquo compensation pool The University of Texas and Texas AampM Systems also manage their own unemployment compensation coverage while all other institutions receive coverage from
the Texas Workforce Commission which receives an appropriation to cover unemployment benefi ts
TEXAS PUBLIC EDUCATION GRANTS
Health-related institutions similar to general academic institutions are subject to the Texas Education Code (sect56031 et al) provision requiring a portion of tuition revenue be set aside to fund Texas Public Education Grants (TPEG) For the 2012ndash13 biennium the estimated TPEG appropriation is $188 million This revenue is considered Other Education and General Income which is classifi ed as General RevenuendashDedicated Funds
INDIRECT COST RECOVERY
As mentioned earlier in this section Indirect Cost Recovery was removed from the GAA for the 2010ndash11 biennium however the individual institution still receives the funds
TOBACCO SETTLEMENT
House Bill 1945 Seventy-sixth Legislature 1999 established the Permanent Health Fund for health-related institutions of Higher Education the Permanent Fund for Minority Health Research and Education the Permanent Fund for Higher Education Nursing Allied Health and Other Health Related Programs and 13 permanent endowments for individual institutions of higher education The $769 million in estimated interest earnings from the endowments for 2012ndash13 (based on estimated interest earnings of 45 percent each year) were appropriated to the health-related institutions
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 20
FUNDING COMMUNITY AND TECHNICAL COLLEGES
OVERVIEW Public two-year lower-level institutions include 50 community and junior college districts four Texas State Technical College (TSTC) campuses and three Lamar State Colleges These institutions were appropriated $22 billion in state funding for the 2012ndash13 biennium Preliminary fall FIGURE 20 TWO-YEAR INSTITUTION FUNDING MECHANISMS 2012ndash13 BIENNIUM
2011 enrollment at these institutions totaled 789713 Figure 20 illustrates the funding mechanisms for these institutions Community colleges accounted for 983 percent of this enrollment total while the Texas State Technical and Lamar State Colleges composed the remaining portion
COMMUNITY COLLEGES
Instruction and Administration General Revenue Funds from the state are based on contact hour driven formulas for two-year institutions Tuition and fee revenues and local tax revenues augment state General Revenue Funds for these costs
Academic Courses Approximately 82 percent of the total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 18 percent of the total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant The state provides no funding for physical plant operations and maintenance Local taxing districts are expected to provide support for physical plant needs Community colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011
Facilities Local communities must provide facilities Community colleges are not eligible to receive Higher Education Fund (HEF) allocations Available University Fund allocations or state tuition revenue bonds
Employee Benefits While community college employees are locally-employed community colleges participate in the Employee Retirement System (ERS) Group Benefits Program for health benefi ts and the Teacher Retirement System(TRS) and Optional Retirement Program (ORP) for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits
Tuition Fee Revenues Tuition and fee revenues are considered institutional funds and are not appropriated by the state Tuition rates vary by institution In 2012 the statewide tuition rates plus fees averaged $73 per semester credit hour but varied from $34 to $208 per semester credit hour
Local Tax Revenue Community Colleges are projected to receive approximately $12 billion in tax income in fiscal year 2011 Local tax revenues are expected to provide support for physical plant needs and augment state General Revenue Funds for instruction and administration costs
SOURCE Legislative Budget Board
TSTCLAMAR COLLEGES
Instruction and Administration General Revenue Funds from the state are based on formulas for two-year institutions Tuition and fee revenues augment General Revenue Funds for these costs
Academic Courses Approximately 39 percent at the Lamar colleges and 28 percent at Texas State Technical College (TSTC) of total contact hours funded by General Revenue Funds are academic courses
Technical Courses Approximately 61 percent at the Lamar colleges and 72 percent at TSTC of total contact hours funded by General Revenue Funds are vocationaltechnical courses
Physical Plant State funding based on the formula for general academic institutions The Lamar colleges will receive approximately $71 million and TSTC will receive $157 million in General Revenue Funds for physical plant and utilities in the 2012ndash13 biennium
Facilities The Lamar colleges receive approximately $42 million annually from HEF funds and TSTC receives almost $58 million annually The HEF monies are used to acquire land construct and equip buildings provide major building repair or rehabilitation and acquire capital equipment and library materials
Employee Benefits Both the Lamar colleges and TSTC institutions participate in ERSrsquo Group Benefits Program for health benefits and the TRS and ORP programs for retirement benefits The state makes General Revenue Fund contributions for the health and retirement benefits of those employees having their salaries paid with General Revenue Funds
Tuition Fee Revenues Certain tuition revenue is appropriated by the state In 2012 for resident students average tuition plus fees was $139 per semester credit hour at the Lamar colleges and $150 per semester credit hour at TSTC
FINANCING HIGHER EDUCATION IN TEXAS ndash ID690 LEGISLATIVE BUDGET BOARD 21
FUNDING COMMUNITY AND TECHNICAL COLLEGES
These institutions are primarily funded based on student contact hours A contact hour is a standard unit of measure that represents an hour of scheduled academic and technical instruction given to students during a semester Community and junior college districts generate almost 958 percent of the state-funded contact hours at two-year institutions TSTC components generate approximately 29 percent of the contact hours and the three Lamar State Colleges account for the 13 percent
COMMUNITY COLLEGES Over 99 percent of the direct appropriations to community colleges are from the General Revenue Fund and are generated through a funding formula The remaining direct appropriations are for isolated ldquospecial itemsrdquo including appropriations for the Southwest Collegiate Institute for the Deaf which is part of the appropriation for Howard College The Texas Education Code Section 130003(a) calls for state appropriations to public community colleges to ldquosupplement local funds for the proper support maintenance operation and improvement of those public junior colleges of Texas that meet the standards prescribed by the chapterrdquo Further Education Code Section 130003(c) indicates that state funds must be used ldquoexclusively for the purpose of paying salaries of instructional and administrative forceshellip and the purchase of supplies and materials for instructional purposesrdquo
Consistent with statute community colleges have their own Instruction and Administration Formula which is funded by General Revenue Funds and based on ldquostudent contact hoursrdquo Unlike general academic institution formulas this formula does not include tuition and fee revenue as part of the method of fi nance
The Eighty-second Legislature 2011 also provided $45 million to certain districts through a new small institution supplemental formula A district is eligible for the supplement if it makes a significantly above-average effort to generate tax income while at the same time experiencing below-average tax revenue and does not have a number of contact hours that exceeds the statewide median Th e Eighty-second Legislature appropriated each eligible district $05 million for the 2012ndash13 biennium
No state funding is provided for physical plant operations and maintenance or for facilities that is supported by local tax eff ort
Three community colleges receive weighted semester credit hour formula funding for a Bachelor of Applied Technology degree program
HOLD HARMLESS FUNDING
Th e Eighty-first Legislature 2009 provided $153 million in General Revenue formula hold harmless funding for aff ected community colleges to minimize the effect of reduced formula funding as a result of overall contact hour declines The Eighty-second Legislature 2011 did not provide any hold harmless funding in the 2012ndash13 biennium
Property taxes tuition and fees are other major sources of revenue for community colleges Figure 21 illustrates the estimated sources of funding for community colleges Th e state appropriations in Figure 21 include all formula special item Higher Education Group Insurance appropriations and retirement benefi t appropriations
FIGURE 21 MAJOR SOURCES OF COMMUNITY COLLEGESrsquo OPERATING REVENUE IN BILLIONS FISCAL YEAR 2011
727$ 21
6WDWHampRQWULEXWLRQV
URVV7XLWLRQDQG)HHV
3URSHUW7D[HV
)HGHUDO)XQGV
SOURCE Legislative Budget Board
FORMULA FUNDING
The basis of the formula starts with the Texas Higher Education Coordinating Board (THECB) Report of Fundable Operating Expenses (RFOE) (formally called the All Funds Expenditure Report) The study includes all expenditures for instruction and administration (facilities costs are not included) in 26 program areas THECB uses the expenditure data to determine the median cost in the 26 program areasmdashthe ldquoratesrdquo for contact hours in those disciplines THECB then makes a recommendation for
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 22
FUNDING COMMUNITY AND TECHNICAL COLLEGES
funding based on the rates Over the years THECB has used various methodologies as the basis for its funding recommendations Because the RFOE takes into account all funds (state appropriations plus tuition and tax revenue which are not appropriated) THECBrsquos recommendation for state funding has generally not equaled 100 percent of the rates
The amount of the appropriation is a legislative decision based on funds available The appropriation is allocated to the colleges according to each districtrsquos pro-rata share of THECB recommendations
HIGHER EDUCATION GROUP INSURANCE (HEGI)
Like state institutions of higher education community colleges receive General Revenue Fund contributions for group insurance However since community college employees are local not state employees state contributions for health benefits are fully discretionary Other agencies and institutions of higher education report employee eligibility for General Revenue-funded group health insurance benefi ts only if the employeersquos salary is directly paid with General Revenue Funds However in the past community colleges tended to base eligibility for General Revenue-funded benefits if the employeersquos job function fell under an approved ldquoelement of costrdquo This practice caused community colleges to report eligibility for state funded health benefits in a manner that did not always match the source of the employeersquos salary
This practice led to the Governorrsquos veto of the Group Health Insurance appropriation for fiscal year 2009 ($154 million) at the end of the Eightieth Legislative session However an agreement to restore the vetoed funds was reached and returned directly to the districts in House Bill 4586 Eighty-first Legislature Regular Session 2009
The Eight-Second Legislature 2011 allowed community colleges to receive General Revenue Fund contributions for employees whose job function fell under an approved ldquoelement of costrdquo However the Legislature only funded 42 percent of the premium costs for these employees
OTHER STAFF BENEFITS
Appropriations for retirement contributions are included under the Teacher Retirement System (TRS) and Optional Retirement Program (ORP) bill patterns Some higher education employees primarily faculty and certain administrators are eligible for ORP a defi ned contribution plan similar to a 401k Other higher education employees
participate in TRS a defi ned benefit plan In both instances the state funds retirement contributions equal 60 and 64 percent of an employeersquos salary in fiscal year 2012 and fi scal year 2013 respectively (These appropriation amounts are not included in Figure 2 on page 3)
DRAMATIC ENROLLMENT GROWTH
Since the 1996ndash97 biennium public community colleges have received ldquoDramatic Enrollment Growth Fundingrdquo For the 2000ndash01 biennium this was expanded to include Texas State Technical Colleges and Lamar State Colleges (Lamars) The appropriation was made to THECB Rider 13 page IIIshy53 General Appropriations Act (2010ndash11 Biennium) provided guidelines for distributing this funding
For the 2010ndash11 biennium THECB is authorized to allocate up to $175 million per year to schools experiencing a growth rate of five percent or greater in 2010 and eight percent or greater in 2011 The Eighty-second Legislature 2011 did not provide any dramatic enrollment growth funding in the 2012-13 biennium
OTHER TRUSTEED FUNDS
Students at community colleges also benefi t from Texas Educational Opportunity Grants the student fi nancial aid program appropriation that is allocated by THECB
TEXAS STATE TECHNICAL COLLEGE LAMAR STATE COLLEGES The Texas State Technical Colleges (TSTC) and Lamar State Colleges are allocated a majority of their appropriation via two formulas the Instruction and Administration Formula for two-year institutions and the Infrastructure Formula for general academic institutions Similar to general academic institutions the tuition revenue for these colleges is included in the appropriations bill
Contact hours for vocationaltechnical courses represent approximately 61 percent of total contact hours at the Lamar State Colleges and 72 percent at TSTC institutions Th e remaining contact hours are generated from academic and continuing education courses
Facilities funding is available from the Higher Education Fund for both TSTC and the Lamars State Colleges and both have received Tuition Revenue Bond authorizations
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 23
FUNDING COMMUNITY AND TECHNICAL COLLEGES
The Community Colleges section of this report includes subsections on Higher Education Group Insurance Other Staff Benefits and Dramatic Enrollment Growth Th ese three subsections apply to appropriations for Texas State Technical Colleges and the Lamar State Colleges as well
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 24
FUNDING TEXAS AampM SYSTEM AGENCIES
There are seven research and service agencies that are administered by the Texas AampM University System Th e system agenciesrsquo missions differ from other institutions of higher education in that each system agency focuses on one or two of the three traditional missions of higher education institutions research extension and service (Figure 22)
FIGURE 22 TEXAS AampM SYSTEM AGENCIES MISSIONS AND FUNCTIONS
STATUTORY AUTHORITY MISSIONFUNCTIONS
For the 2012ndash13 biennium the total direct appropriations for Texas AampM System (System) agencies are $8897 million In addition to state appropriations the System agencies receive some Federal Funds that are not included in the General Appropriations Act and have access to private funds While System agencies have significant portions of their Other Funds and Federal Funds appropriated the appropriations are estimated and actual income from these funding sources is subject to signifi cant variation
Texas AampM AgriLife Education Conducts research in the agricultural environmental and life sciences Goals include Research Code Title III enhancing the competitiveness of agricultural industries and natural resource conservation
Chapter 88 Research highlights bioenergy irrigation efficiency and the use of distillerrsquos grain in feedlots Administers the honey bee regulation and feed and fertilizer programs
Texas AampM AgriLife Education Provides training and educational programs including 4-H through extension agents Extension Service Code Title III serving every county in Texas and supported by federal state and county funds Provides
Chapter 88 wildlife and insect management services including feral hog abatement and boll weevil eradication
Texas AampM Education Conducts engineering and technology research with a focus on interdisciplinary research Engineering Code Title III based on statewide priorities Research highlights energy independence effi ciency and Experiment Station Chapter 88 conservation alternative energy and national security
Texas AampM Education Conducts transportation related research and develops technology Approximately 50 Transportation Code Title III percent of research expenditures from interagency contracts are contracted from the Texas Institute Chapter 88 Department of Transportation
Texas AampM Education Provides training technical assistance and emergency response to enhance public Engineering Code Title III safety security and economic growth Operates the Brayden Fire Training Field and the Extension Service Chapter 88 Emergency Operations Training Center Texas Task Force 1 is deployed for emergency
response and search and rescue operations
Texas AampM Forest Education Provides incident management teams and emergency response as well as wildfire Service Code Title III prevention detection and suppression services The Texas Wildfire Protection Plan is
Chapter 88 the agencyrsquos wildfire response model Administers the Rural Volunteer Fire Department Assistance Program which gives grants to local fire departments for equipment and training
Texas AampM Veterinary Education Provides fee-based veterinary medical diagnostic services which contribute to an animal Medical Diagnostic Code Title III and zoonotic disease surveillance system Responds to potential high consequence andor Laboratory Chapter 88 emerging disease events Develops new diagnostic testing technologies
SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 25
FUNDING TEXAS AampM SYSTEM AGENCIES
FIGURE 23 TEXAS AampM SYSTEM AGENCIES COMPARED TO INSTITUTIONS OF HIGHER EDUCATION
SIMILARITIES
FUNDING
Both Texas AampM System (System) agencies and institutions of higher education have considerable flexibility in their budgeting and financial operations (ldquolump sumrdquo appropriations)
Both are eligible to receive proceeds from the Permanent University Fund
Both are considered to be institutions of higher education for purposes of employee group health insurance
Both System agencies and institutions of higher education generate and keep 100 percent of indirect cost recovery from research and other grants
PERFORMANCE MEASURES
OPERATIONS
Like other institutions of higher education System agencies are not required to submit operating budgets or strategic plans
Both are statutorily embedded within the Texas AampM Systemrsquos institutional framework
SOURCE Legislative Budget Board
DIFFERENCES
General academic health-related and two-year institutions receive formula funding while System agencies do not
Texas AampM System agencies do not generate revenue in the same manner or amount of other higher education institutions
Performance measures for the System agencies are agency-specific while performance measures for other higher education institutions are standardized
In several ways state funding for System agencies is similar to funding for higher education institutions System agencies have considerable flexibility in their budgeting and fi nancial operations because they receive lump-sum appropriations in the same manner as other institutions of higher education They are eligible to receive funds from the Permanent University Fund (PUF) (They were allocated $153 million from the PUF for debt service in the 2012ndash13 biennium) System agencies are also funded in the same manner as other institutions of higher education with regard to staff benefi ts including employee group health insurance contributions
However there are several funding diff erences between System agencies and other higher education institutions Most significantly System agencies do not receive formula-based funding Also while some System agencies may charge fees for their services they do not generate tuition and fees in the same manner or quantity as other institutions of higher education
As is the case with all institutions the System agencies keep 100 percent of their respective indirect cost recovery income
because this income is derived from earnings on federal grants and is held outside the treasury
For the 2012ndash13 biennium funding associated with infrastructure expenses and utilities for System agencies inside Brazos County is equal to the infrastructure rate (as determined by the General Academic formulas on page 6) for Texas AampM University
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 26
APPENDIX A FREQUENTLY ASKED QUESTIONS
Q What are the limitations on how institutions spend state appropriations
A Generally speaking institutions have great fl exibility in spending appropriated funds however some limitations do exist depending on the source of revenue Appropriated revenue includes General Revenue Funds General Revenuendash Dedicated Funds (mostly tuition and fee income) Other Funds (including Patient Income) and Federal Funds (for certain Texas AampM System Agencies) Th e Texas Constitution (Article VII Section 18(i) and 17(j)) prohibits with limited exceptions the use of General Revenue Funds for acquiring land or for construction projects An exception occurs when the legislature by two-thirds vote in each house expressly determines that there is a demonstrated need for the project
Various provisions in the 2012ndash13 General Appropriations Act (GAA) Higher Education Special Provisions restrict state appropriations These restrictions include the following
bull Section 6 (Rider 8b) which prohibits the use of appropriated funds for auxiliary enterprises
bull Section 6 (Rider 9) which limits the use of these funds to pay debt service for statutorily authorized tuition revenue bonds Any such appropriation not spent must be returned to the General Revenue Fund at the end of the year
bull Section 9 which prohibits the use of appropriated funds for intercollegiate athletics purposes and
bull Section 54 which limits the use of the Research Development Fund to those defined in Education Code Section 62091
Q Would an increase in tuition revenue replace a corresponding amount in General Revenue Funds or would the revenue remain within the institution
A The result depends on how the Legislature responds
For instance assume that the Eight-second Legislature 2011 changed the statute to require institutions to charge nonresident tuition in circumstances where they had previously waived the nonresident tuition rate For the 2012ndash13 biennium institutions would benefit fully from the
increase in tuition revenue (This assumes the formula calculation would not include a projected increase in tuition)
However institutional appropriations in the 2014ndash15 biennium now depend on that legislation passed in the Eighty-third Legislature 2013 Assuming the same number of students (semester credit hours) enroll regardless of changes in tuition policy and that the result of charging nonresident tuition generated $100 million in additional tuition revenue there are three options
1 Reduce General Revenue Funds (GR) in the formulas by $100 million In this scenario the formula rate stays the same and every dollar increase in tuition revenue results in a dollar decrease in GRmdashinstitutional funding does not increase
2 Keep GR the same and run the additional tuition revenue through the formulas Th e formula funding rate would increase and every institution would receive more funds including those institutions that generated no additional tuition revenue
3 Keep GR formula appropriations at the same level and let individual institutions keep the additional tuition revenue they generated outside the formula allocation
Q Are all tuition and fee revenues collected by institutions of higher education included in the appropriations bill
A No None of the tuition and fee revenues collected by community colleges are appropriated
For general academic institutions an estimate of the revenue from certain tuitions and fees such as statutory tuition (Education Code 54051 Tuition Rates) board authorized tuition (Education Code 54008 Tuition Rate Set by Governing Board) Laboratory Fees (Education Code 54501) and certain other fees are appropriated in the GAA as General Revenue FundsndashDedicated Estimated Other Educational and General Income There are a number of other tuitions and fees that are not included in the GAA and therefore not referred to as state funding Such tuitions and fees include but are not limited to designated tuition (Education Code 540513 Redesignation of Building Use Fee) and Incidental Fees (Education Code 54504) Federal
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 27
APPENDIX A FREQUENTLY ASKED QUESTIONS
Funds are also not appropriated to the general academic and health-related institutions
Q Is a decrease in enrollment the only reason an institution would be eligible for formula funding hold harmless
A No Each session the Legislature makes a determination of whether it will make an appropriation for formula hold harmless A decrease in total enrollment is one reason an institution could be eligible for the funding Because the semester credit hours (general academic institutions) full-time student equivalents (health-related institutions) used in the formulas are based on weights (discipline program and course level) a change in the type of student enrollment regardless of total enrollment could also make an institution eligible for hold harmless funding
Q What are Educational and General Funds
A ldquoOther Educational and General Incomerdquo is a subset of ldquoEducational and General Incomerdquo The following are included in the Education Code (51009(c)) defi nition for ldquoEducational and General Fundsrdquo net tuition special course fees charged under Education Code 54051(e) and (l) lab fees student teaching fees hospital and clinic fees organized activity fees and proceeds from the sale of educational and general equipment
Q What does it mean to be a Tier One institution
A The Tier One reference is often derived from the Carnegie Foundation for the Advancement of Teachingrsquos prior system for classifying institutions of higher education As part of the 1994 version of the Carnegie Classification there were four categories for doctorate granting institutions Research Universities I Research Universities II Doctoral Universities I and Doctoral Universities II ldquoTier Onerdquo was synonymous with Research Universities I Such institutions had to off er a full range of baccalaureate programs award 50 or more doctoral degrees each year and receive annually at least $40 million or more in federal research funds Two institutions in Texas (The University of Texas at Austin and Texas AampM University) met these criteria The 2000 version of the Carnegie Classification collapsed the categories for doctorate granting institutions from four to two Doctoral Research UniversitiesmdashExtensive and DoctoralResearch UniversitiesmdashIntensive Six public institutions in Texas (Texas AampM University Texas Tech University University of Houston University of North Texas The University of Texas at Arlington and The University of Texas at Austin) meet the criteria for DoctoralResearch Universitiesmdash
Extensive In 2005 however the classifi cation structure returned to a more restricted top tier of institutions classifi ed as ldquoResearch Universities (very high research activity)rdquo Both The University of Texas at Austin and Texas AampM University are now counted in this category but any reference to Tier One usually refers to the 1994 Carnegie Classifi cation
Q What is the space model What is the base number of square feet needed
A In 1992 the Texas Higher Education Coordinating Board approved the Space Projection Model for Higher Education Institutions in Texas for public universities to assess the net assignable square feet (NASF) of educational and general space an institution needs There are fi ve categories incorporated into the model teaching library research offi ce and support space Space needs for auxiliary purposes such as dormitories or athletics are not included in the model Square footage amounts are assigned based on a number of elements within each category including the number of students and their program levels and the amount of research expenditures The space model was fi rst incorporated into the funding formulas for general academic institutions in 1997
Q What are ldquoOrganized Activitiesrdquo
A General academic institutions have a funding strategy titled ldquoOrganized Activitiesrdquo These are activities or enterprises that are connected with instructional departments Th ey are intended primarily to give training to students Examples include a university farm nurserypreschool programs an optometry clinic and lifeguard training
Q What are tuition revenue bonds
A Established in 1971 under Education Code 5513 tuition revenue bonds are bonds (not to exceed 50 years) issued by institutions of higher education for the purpose of ldquoproviding funds to acquire purchase construct improve enlarge andor equip any property buildings structures activities services operations or other facilities for and on behalf of its institution or institutions or any branch of branches thereofrdquo Each institutionsystem is authorized and required to pay debt service on its bonds Although the authorization and issuance of the bonds is not contingent on an appropriation by the state for related debt service the Legislature has provided General Revenue Funds to reimburse institutions for costs related to debt service However in the 2004ndash05 GAA the legislature changed this practice and only provided General Revenue Fund reimbursements for interest
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 28
APPENDIX A FREQUENTLY ASKED QUESTIONS
on bonds issued after March 31 2003 The 2006ndash07 GAA renewed the practice of reimbursing institutions for the costs related to debt service The 2008ndash09 GAA and 2010-11 GAA continues this practice
Q What Is Proportionality
A Pursuant to Section 608 of Article IX of the 2012ndash13 GAA the legislative intent of proportionality is to ldquomaximize balances in the General Revenue Fundrdquo by harmonizing salary funding source with benefits funding source Th is effectively means the Legislature limits its General Revenue Fund contributions for benefits only to those employees having salaries paid with General Revenue Funds As such proportionality requires employee health and retirement benefits be paid in ldquoproportionrdquo to the funding source of salaries To this end institutions are obligated to submit the Accounting Policy Statement 011 Benefits Proportional by Fund (APS 011) report to the Comptroller Th is document provides a structure by which state and local contributions are ldquosettled uprdquo in light of the fiscal years fund proportionality
Q What Is the National Research University Fund
A In 1995 the Texas Constitution was amended to authorize the creation and funding of the Permanent Higher Education Fund (PHEF) The PHEF was intended eventually to become a permanent endowment to support non-Permanent University Fund eligible institutions However the PHEF corpus was rededicated with the voter passage of Proposition 4 which amended Article 7 of the Texas Constitution by establishing the National Research University Fund (NRUF) In 2009 Proposition 4 transferred the balance of the PHEF to the credit of the NRUF as of January 1 2010 and repealed the constitutional authorization for the PHEF
The NRUF is intended to provide a source of funding to enable emerging research universities in Texas to achieve national prominence as major research universities Article VII of the Texas Constitution authorizes the Legislature to appropriate some or all of the total return on all investment assets of the NRUF for the purposes of the fund except for two caveats (1) the Legislature may not increase distributions from the fund if the purchasing power of investment assets for any rolling 10-year period is not preserved and (2) the amount appropriated from the proceeds of the NRUF corpus in any fiscal year must be capped at 7 percent of the investment assetsrsquo average net fair market value Until the NRUF has been invested long enough to determine its purchasing power over a 10-year period the Legislature is
authorized to use other means of preserving the purchasing power of the fund
House Bill 1000 Eighty-second Legislature Regular Session 2011 establishes the specific eligibility and distribution criteria for the 2012ndash13 NRUF appropriations To be eligible to receive NRUF appropriations an institution must meet two mandatory criteria and four out of six optional criteria The mandatory criteria are that the institution is designated as an emerging research university within the THECBrsquos Accountability System and that the institution reported at least $45 million in restricted research expenditures in each of the preceding two fiscal years Optional criteria include the following possession of an endowment fund values in excess of $400 million awarding over 200 Doctor of Philosophy degrees per year having an entering freshman class of high academic achievement recognition of institutionrsquos research capability and scholarly attainment possession of a high-quality faculty and possession of high-quality graduate education programs
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 29
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 30
APPENDIX B TUITION AND FEE PROVISIONS
VTCA Texas Education Code Section 54003 states No institution of higher education may collect from students attending the institution any tuition fee or charge of any kind except as permitted by lawhellip
The laws governing tuition and fees at institutions of higher education are found in Education Code Section 54 including a limited number of rules that relate to tuition and fees charged by junior and community colleges Education Code Section 54 includes statutes regarding statewide tuition and fee authority rules regarding residency for tuition and fee purposes and various exemptions for tuition and fees from nonresidency status Also it includes specific fee authority for individual institutions Figure B1 provides a listing of tuition and fee authorizations in Education Code Section 54 but does not include the items presented below or the various exemption and waiver provisions (Details about each provision can be found at httpwwwcapitolstate txus) Th ere are isolated instances outside Chapter 54 whereby the boards of regents are authorized to charge for specific services provided to students
This appendix highlights some of the more prominent tuition and fee provisions and indicates whether the related revenue is or is not included in the General Appropriations Act (GAA)
INCLUDED IN THE GENERAL APPROPRIATIONS ACT Tuition and fee revenue included in the GAA as General Revenue DedicatedndashFunds is referenced as ldquoOther Education and General Incomerdquo The amounts are ldquoEstimatedrdquo so whatever amount of revenue generated is the actual amount available to the institution to spend
54051 Tuition Rates (statutory tuition) In conjunction with Section 540512 Interim Tuition Rates resident tuition for undergraduate students reached $50 per semester credit hour in the 2005ndash06 academic year (the 2006 state fi scal year) Tuition for nonresident students at general academic medical and dental institutions is based on the average of nonresident tuition rates in the five most populous states other than Texas The Texas Higher Education Coordinating Board must make this computation each academic year
54008 Tuition Rate Set by Governing Board (also known as board authorized tuition) Applies to graduate programs Subsection (d) specifies that it is not to be used in the GAA as an offset to General Revenue Funds It is distributed across formula strategies after the formula calculation
54501 Laboratory Fees The fee amount must be sufficient to cover the general costs of laboratory materials and supplies used by a student It is not to be less than $2 or more than $30 per semester and it must not exceed the actual cost of materials and supplies
NOT INCLUDED IN THE GENERAL APPROPRIATIONS ACT 540513 Designated Tuition Statute defi nes designated tuition as an institutional fund which means the revenue is not considered part of ldquoeducational and general fundsrdquo Th e governing board can waive designated tuition for a student (see 54261) Statute specifies that this revenue not be used in the GAA as a way to offset General Revenue
54503 Student Services Fees This is intended for activities which are separate from the regularly scheduled academic functions of the institution and directly involve or benefi t students Except for The University of Texas at Austin (see 54513) and components of the University of Houston System (see 545061) the maximum of all compulsory student services cannot exceed $250 per semester It is kept separate from educational and general funds
54504 Incidental Fees The governing board sets the fee which must reasonably reflect the actual cost of the materials or services for which the fee is collected Examples of unearned fees include late registration library fi nes microfilming fees thesis or doctoral manuscript reproduction or filing fees and bad check charges
5516 Board Responsibility The governing board is authorized to ldquofix and collect rentals rates and chargesrdquo
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 31
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54006 Refund or Adjustment of Tuition and Mandatory Fees for Dropped Courses and Student Withdrawals
540065 Tuition Rebate for Certain Undergraduates
54007 Option to Pay Tuition by Installment
540071 Authority of Institution to Provide Payment Options for Student with Delayed Financial Aid
54009 Increase in Tuition Rate or Fees
54010 Reduction in Tuition
54011 Tuition Limit in Cases of Concurrent Enrollment
54012 Tuition Rates for Certain Doctoral Students
54014 Tuition for Repeated or Excessive Undergraduate Hours
54015 Billing and Notifi cation for Tuition
54016 Fixed Tuition Rate Program for Certain Transfer Students at General Academic Teaching Institutions
54052ndash54057 Residency Provisions
542031 Dependent Children of Residents Who are Members of Armed Forces Deployed on Combat Duty
54204 Children of Disabled Firefighters and Law Enforcement Officers
542041 Disabled Peace Officers
54205 Blind Deaf Students
54206 Foreign Service Officers
54208 Firefighters Enrolled in Fire Science Courses
542081 Peace Officers Enrolled in Certain Courses
54211 Faculty and Dependents
54212 Teaching and Research Assistant
54213 Scholarship Student
54214 Biomedical Research Program Scholarship Student
54221 The University of Texas System Science and Technology Development Management and Transfer
54222 Economic Development and Diversification
54223 Tuition Rates for Olympic Athletes
54231 Resident of Boarding State or Nation or Participant in Student Exchange Program Tuition
54232 NATO Agreement
54233 Academic Common Market
54241 Military Personnel and Dependents
54331 Students from other Nations of the American Hemisphere
54341 Veterans and Other Military Personnel Dependents
54342 Prisoners of War
54343 Children of Prisoners of War or Persons Missing in Action
54344 Participants in Military Funerals
54345 Assistance for Tuition and Fees for Members of State Military Forces
54351 Children of Disabled Firefighters and Law Enforcement Officers
54352 Disabled Peace Officers Optional Exemption
54353 Firefighters and Peace Officers Enrolled in Certain Courses
543531 Firefighters Enrolled in Fire Science Courses
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 32
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54354 Education Benefits for Certain Survivors
54355 Children of Professional Nursing Program Faculty
54356 Preceptors for Professional Nursing Education Programs
54363 Educational Aids
54364 Blind Deaf Students
54365 Senior Citizens Optional Benefit
545011 Charges and Fees for Certain Payments
54502 General Deposits
545021 Student Deposit Fund Composition and Uses
545025 Proration of Fees
545031 Student Fee Advisory Committee
545032 Student Fee Advisory Committee the Texas AampM University System
545041 Environmental Service Fee
54505 Vehicle Registration Fees and Other Fees Related to Parking and Traffic
54506 Fees and Charges for Services to the Public the University of Houston System
545061 Student Services Fees the University of Houston System
545062 Student Fees Advisory Committee the University of Houston System
54507 Group Hospital and Medical Services Fees Texas AampM University System
54508 Medical Services Fee Texas Tech University System Components
545081 Medical Services Fee University of North Texas System Institutions
545082 Medical Services Fee Midwestern State University
545085 Medical Services Fee Texas Womanrsquos University
545089 Medical Services Fee Texas State University System Components
5450891 Medical Services Fee The University of Texas System Components
54509 Student Recreation Fee Texas Tech University System Components
545091 Student Recreational Facility Fee University of North Texas
54510 Student Recreational Sports Fee The University of Texas at Austin
54511 Student Fees for Bus Service Texas State University
545111 Environmental Service Fee Southwest Texas State University
54512 Shuttle Bus Fee The University of Texas at Arlington
545121 Intercollegiate Athletic Fee The University of Texas at Arlington
545122 Recreational Facility Fee The University of Texas at Arlington
54513 Student Service Fees The University of Texas at Austin
545131 International Education Fee The University of Texas at Austin
545132 International Education Fee
545133 Martin Luther King Jr Statue Fee The University of Texas at Austin
545134 Washington DC Internship Education Fee
545135 Barbara Jordan and Cesar Chavez Statues Fee The University of Texas at Austin
54515 Student Union Fee
54518 University Center Fee Midwestern State University
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 33
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54519 Student Union Fee North Texas State University
545191 Intercollegiate Athletic Fee University of North Texas
54520 University Center Student Fee Stephen F Austin State University
545201 Recreational Sports Fee Stephen F Austin State University
54521 Student Center Facility Fees Texas AampM University System
54522 Student Center Fees Texas Southern University
545221 Recreational Facility Fee Texas Southern University
545222 Medical Services Fee Texas Southern University
545223 Intercollegiate Athletics Fee Texas Southern University
54523 Student Center Fees Texas State University System
545241 Student Union Fees Texas Tech University System
54525 Fees for Student Centers Texas Womanrsquos University
545251 Student Fitness and Recreational Fee Texas Womanrsquos University
54526 Student Fees for University Centers the University of Houston
54527 Student Fees for University Center Facilities the University of Houston-Downtown College
54528 Recreational Facility Fee the University of Houston
54529 Student Union Fee The University of Texas at Arlington
54530 Student Union Fees The University of Texas at Austin
54531 Student Union Building Fees The University of Texas at Dallas
545311 Transportation Fee The University of Texas at Dallas
545312 Student Services Building Fee The University of Texas at Dallas
545313 Intramural and Intercollegiate Athletics Fee The University of Texas at Dallas
54532 Student Union Building Fees The University of Texas at San Antonio
545321 Transportation Fee The University of Texas at San Antonio
545322 Intercollegiate Athletics Fee The University of Texas at San Antonio
54533 Student Union Fees The University of Texas of the Permian Basin
545331 Intercollegiate Athletic Fee The University of Texas of the Permian Basin
545332 Fees for Student Services Building The University of Texas of the Permian Basin
54534 Arts and Performance Center Fee The University of Texas at Tyler
545341 Student Recreational Facility Fee The University of Texas at Tyler
545342 Intercollegiate Athletics Fee The University of Texas at Tyler
545343 Student Union Fee The University of Texas at Tyler
54535 Student Union Fee The University of Texas at El Paso
54536 Fees for Student Health Services Building The University of Texas at Austin
54537 Fees for Student Services Building The University of Texas at Austin
545371 Gregory Gymnasium Renovation Fee The University of Texas at Austin
545372 Aquatics Center Fee The University of Texas at Austin
54538 Recreational Sports Fee Texas State University System
545381 Intercollegiate Athletics Fee Certain Institutions in Texas State University System
545382 Intercollegiate Athletics Fee Texas State University ndash San Marcos
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 34
APPENDIX BTUITION AND FEE PROVISIONS
FIGURE B1 (CONTINUED) TEXAS EDUCATION CODE CHAPTER 54 TUITION AND FEE PROVISIONS
54539 Recreational Sports Fee the Texas AampM University System
545391 Intercollegiate Athletics Fee Texas AampM University ndash Corpus Christi
545392 Intercollegiate Athletics Fee Texas AampM University ndash Kingsville
545393 Intercollegiate Athletics Fee Prairie View AampM University
545394 Intercollegiate Athletics Fee Tarleton State University
545395 Intercollegiate Athletics Fee Texas AampM International University
545396 Intercollegiate Athletics Fees West Texas AampM University
545397 Intercollegiate Athletics Fees Texas AampM University ndash Commerce
545398 Student Endowment Fund Fee Texas AampM University ndash Corpus Christi
54540 Student Center Fee University of Houston ndash Clear Lake
54541 Recreational Facility Fee The University of Texas at El Paso
54542 Student Union Building Fee The University of Texas ndash Pan American
545421 Sports Recreation and Wellness Facility Fee The University of Texas ndash Pan American
54543 Recreational Facility Fee The University of Texas at San Antonio
54544 Recreational Facility Fee The University of Texas at Dallas
545441 Student Recreational and Health Facilities Fee Midwestern State University
545442 Intercollegiate Athletics Fee Midwestern State University
54545 Fees for Continuing Education Courses
54546 Student Union Fees The University of Texas at Brownsville
54550 Wellness Recreational and Fitness Complex Fee The University of Texas at Brownsville
54551 Intercollegiate Athletics Fee The University of Texas at Brownsville
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 35
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 36
APPENDIX C GLOSSARY
APPROPRIATION METHODOLOGIES Direct Appropriation The actual appropriation either estimated or sum certain listed in that institutionrsquos portion of the General Appropriations Act (GAA)
Indirect Appropriation An appropriation made on behalf of an institution but not listed in that institutionrsquos portion of the GAA Examples include appropriations to the Available University Fund the Higher Education Fund and the Higher Education Coordinating Board all of which are ultimately allocated to institutions
Estimated Appropriation An estimated appropriation is a figure in the GAA that best reflects the information available about the revenue source but the amount available for an institution to spend is contingent on the amount of revenue actually generated If the actual amount of revenue is less than the estimated amount the institution is limited to the lower amount If more revenue is generated than the estimated amount the institution can spend the higher amount
Sum Certain Appropriation A sum certain appropriation in the GAA means that an institution is limited to spend no more than the level of appropriation noted in the institutionrsquos bill pattern in the GAA
Lump Sum Appropriation Texas Education Code Section 61059(k) calls for flexibility in funds appropriated to higher education institutions A lump sum appropriation is a single amount that is unrestricted which means that it can be used for any variety of strategies The GAA provides an ldquoInformational Listing of Appropriated Fundsrdquo below each institutionrsquos lump sum appropriation Higher education institutions are not required to spend their appropriation within specified strategies One exception to this is the Tuition Revenue Bond strategy which represents the appropriation related to debt service on related bonds and must be spent as appropriated or it is reverted to the treasury
METHODS OF FINANCE General Revenue (GR) The non-dedicated portion of the General Revenue Fund is the statersquos primary operating fund Most state tax revenue many state fees and various other sources of revenue are deposited as non-dedicated General Revenue Funds
General RevenuendashDedicated (GRndashD) This is the dedicated portion of General Revenue Funds For higher education institutions the bulk of General RevenuendashDedicated Fund appropriations consist of tuition and fee revenue generated by the institutions These include the tuition and fee revenue included as ldquoOther Educational and General Incomerdquo (defined below) ldquoboard authorized tuitionrdquo (Texas Education Code Section 54008)
Other Funds State funds not included in General Revenue Funds or General RevenuendashDedicated Funds For institutions of higher education these include the Available University Fund and Patient Income generated by health-related institutions
FUND TYPES Educational and General Income Th e Texas Education Code (51009(c)) definition for ldquoEducational and General Fundsrdquo includes (a) net tuition (b) special course fees charged under Education Code Section 54051(e) and (l) (c) lab fees (d) student teaching fees (e) hospital and clinic fees (f ) organized activity fees and (g) proceeds from the sale of educational and general equipment
Institutional Funds Texas Education Code Section 51009(b) defines institutional funds as those that are not ldquoeducational and general fundsrdquo An example of an institutional fund is ldquodesignated tuitionrdquo (Texas Education Code Section 540513) These funds are not included in the GAA
Local Funds Texas Education Code Section 51009(a) defines local funds as net tuition certain special course fees lab fees student teaching fees hospital and clinic fees organized activity fees proceeds from the sale of educational and general equipment and indirect cost recovery fees Th is revenue is accounted for as ldquoeducational and general fundsrdquo and is included in the GAA
Other Educational and General Income The GAA includes some tuition and fees collected by institutions of higher education (General RevenuendashDedicated Funds) Th e revenue from tuition and fees such as statutory tuition (see texas Education Code Section 54051 Tuition Rates) board authorized tuition (see Texas Education Code Section 54008 Tuition Rate Set by Governing Board) Laboratory
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 37
APPENDIX C GLOSSARY
Fees (Texas Education Code Section 54501) and certain other fees are considered Other Educational and General Income (Other EampG) and are appropriated in the GAA as General RevenuendashDedicated Funds Other Educational and General Income is a subset of Educational and General Income (EampG Income)
Patient Income Health-related institutions that operate hospitals or dental clinics generate patient income from services rendered It is allocated as a method of finance to the related institution across a range of strategies in the institutionrsquos bill pattern (Other Funds) For the 2010ndash11 biennium more than $48 billion in patient income was appropriated making it the largest method of fi nance for health-related institutions
OTHER ITEMS Indirect Cost Recovery Institutions negotiate a percentage of a grant with the federal government for Indirect Costs There are a number of factors included in the calculation including building and equipment use allowance operations and maintenance general departmental and sponsored projects administration and library costs
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 38
FI
GU
RE
D1
CO
MPA
RIS
ON
OF
CO
NST
ITU
TIO
NA
L A
ND
RES
EARC
H F
UN
DS
201
2ndash13
BIE
NN
IUM
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Avai
labl
e $1
061
4 m
illio
nTe
xas
Con
stitu
tion
hellip
for
Texa
s C
onst
itutio
nU
nive
rsity
the
purp
ose
of a
cqui
ring
Fund
(E
stim
ated
) la
nd
con
stru
ctin
g an
dFo
r su
ppor
t and
equi
ppin
g bu
ildin
gsm
aint
enan
ce
UT
Aus
tin
or o
ther
per
man
ent
Texa
s A
ampM
Uni
vers
ity
impr
ovem
ents
maj
orP
rairi
e Vi
ew U
nive
rsity
UT
repa
ir an
d re
habi
litat
ion
Sys
tem
Aamp
M S
yste
mof
bui
ldin
gs a
nd o
ther
perm
anen
t im
prov
emen
ts
For d
ebt s
ervi
ce
All
acqu
iring
cap
ital
com
pone
nts
incl
udin
g th
eeq
uipm
ent a
nd li
brar
yTA
MU
Sys
tem
Age
ncie
s bo
oks
and
libra
ryex
cept
Tex
as V
eter
inar
y m
ater
ials
and
refu
ndin
gM
edic
al D
iagn
ostic
bond
s or
not
es is
sued
Labo
rato
ry (w
hich
per
unde
r thi
s S
ectio
n
Edu
catio
n C
ode
Sec
tion
887
01 i
s a
stat
e ag
ency
Als
o
for
the
purp
ose
unde
r the
juris
dict
ion
of th
e su
ppor
t and
and
supe
rvis
ion
of th
em
aint
enan
ce o
f The
Tex
as
boar
d)
and
excl
udin
gA
ampM
Uni
vers
ity S
yste
mU
T P
an A
mer
ican
and
UT
adm
inis
tratio
n T
exas
Aamp
M
Bro
wns
ville
(bec
ause
they
Uni
vers
ity a
nd P
rairi
e re
ceiv
e H
EF
allo
catio
ns -
View
Aamp
M U
nive
rsity
and
an
inst
itutio
n ca
nnot
rece
ive
The
Uni
vers
ity o
f Tex
as a
t bo
th A
UF
and
HE
F do
llars
) A
ustin
and
The
Uni
vers
ity
of T
exas
Sys
tem
Hig
her
$525
0 m
illio
nTo
sup
port
inst
itutio
ns
Arti
cle
VII
Sec
tion
17(c
)E
duca
tion
inel
igib
le fo
r AU
F su
ppor
t pr
ovid
es a
n al
low
ance
toFu
nd
add
a ne
w in
stitu
tion
by a
Arti
cle
VII
Sec
tion
23
vote
of b
oth
hous
es o
f17
(a)
fo
r the
pur
pose
the
Legi
slat
ure
if th
e ne
wof
acq
uirin
g la
nd
inst
itutio
n is
out
side
the
UT
cons
truct
ing
and
equi
ppin
gan
d A
ampM
Sys
tem
s
build
ings
m
ajor
repa
ir
acq
uisi
tion
of c
apita
leq
uipm
ent
oth
erpe
rman
ent i
mpr
ovem
ents
or
cap
ital e
quip
men
t use
djo
intly
for e
duca
tiona
l and
gene
ral a
ctiv
ities
Arti
cle
VII
Sec
tion
18(a
-j) o
f the
Tex
as
Con
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Arti
cle
VII
Sec
tion
17(a
-l) o
f the
Tex
as
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
620
02
Gen
eral
App
ropr
iatio
nsA
ct
Texa
s C
onst
itutio
n re
quire
s 1
3 of
the
annu
al
AU
F pr
ocee
ds b
e tra
nsfe
rred
to th
e Te
xas
Aamp
M U
nive
rsity
Sys
tem
E
ach
Sys
tem
offi
cede
term
ines
how
to a
ppor
tion
its s
hare
of t
heA
UF
betw
een
debt
ser
vice
and
sup
port
and
mai
nten
ance
w
ithin
gui
delin
es s
pecifi e
d by
the
Texa
s C
onst
itutio
n
Arti
cle
VII
Sec
tion
17(a
) req
uire
s th
e H
EF
beal
loca
ted
usin
g an
equ
itabl
e fo
rmul
a d
efi n
edin
the
Edu
catio
n C
ode
(Sec
tion
620
21) a
sT
he a
lloca
tion
of fu
nds
unde
r thi
s su
bsec
tion
ism
ade
in a
ccor
danc
e w
ith a
n eq
uita
ble
form
ula
cons
istin
g of
the
follo
win
g el
emen
ts
spac
e defi c
it fa
cilit
ies
cond
ition
ins
titut
iona
l com
plex
ity
and
a se
para
te a
lloca
tion
for
the
Texa
s S
tate
Te
chni
cal C
olle
ge S
yste
m
THE
CB
adm
inis
ters
the
HE
F fo
rmul
a re
allo
catio
nad
viso
ry p
roce
ss
Edu
catio
n C
ode
(Sec
tion
620
21) p
rovi
des
a by
-in
stitu
tion
brea
kout
of a
nnua
l HE
F ap
prop
riatio
ns
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 39
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Nat
iona
l $1
24
mill
ion
Res
earc
hU
nive
rsity
(E
stim
ated
)Fu
nd
Res
earc
h $6
53
mill
ion
Dev
elop
men
tFu
nd
Texa
s $9
35
mill
ion
Com
petit
ive
Kno
wle
dge
Fund
Arti
cle
VII
Sec
tion
20(a
)
for t
he p
urpo
se o
f pr
ovid
ing
a de
dica
ted
inde
pend
ent
and
equi
tabl
eso
urce
of f
undi
ng to
enab
le e
mer
ging
rese
arch
univ
ersi
ties
in th
is s
tate
to a
chie
ve n
atio
nal
prom
inen
ce a
s m
ajor
rese
arch
uni
vers
ities
Arti
cle
VII
Sec
tion
20 (h
)
onl
y fo
r the
sup
port
and
mai
nten
ance
of
educ
atio
nal a
nd g
ener
alac
tiviti
es th
at p
rom
ote
incr
ease
d re
sear
chca
paci
ty a
t the
uni
vers
ity
Edu
catio
n C
ode
Sec
tion
hellipto
pro
mot
e62
091
in
crea
sed
rese
arch
capa
city
at e
ligib
le g
ener
alac
adem
ic te
achi
ngin
stitu
tions
Sec
tion
56 o
f Hig
her
Edu
catio
n S
peci
alP
rovi
sion
s G
AA
201
2ndash13
bi
enni
um
hellipto
sup
port
facu
lty fo
r the
pur
pose
of
inst
ruct
iona
l exc
elle
nce
and
rese
arch
Des
igna
ted
an e
mer
ging
rese
arch
uni
vers
ity b
yTe
xas
Hig
her E
duca
tion
Coo
rdin
atin
g B
oard
R
epor
ts a
t lea
st $
45 m
illio
nin
rest
ricte
d re
sear
chex
pend
iture
s in
eac
h of
the
last
2 y
ears
P
lus
four
of t
he fo
llow
ing
addi
tiona
l crit
eria
1)
End
owm
ents
gt $
400
mill
ion
2) P
rodu
ces
gt 20
0 P
hDs
per y
ear
3) S
elec
tive
ente
ring
Fres
hmen
cla
ss
4) M
embe
r of P
hi B
eta
Kap
pa o
r equ
ival
ent
5) P
osse
sses
hig
h qu
ality
facu
lty a
nd6)
Dem
onst
rate
dco
mm
itmen
t to
high
-qua
lity
grad
uate
edu
catio
n
Edu
catio
n C
ode
Sec
tion
Elig
ible
inst
itutio
n62
092
m
eans
a g
ener
al a
cade
mic
teac
hing
inst
itutio
n a
sdefi n
ed b
y S
ectio
n 61
003
ot
her t
han
The
Uni
vers
ity o
f Te
xas
at A
ustin
Tex
as A
ampM
U
nive
rsity
or P
rairi
e Vi
ew
Aamp
M U
nive
rsity
Uni
vers
ity o
f Tex
as a
t A
ustin
Uni
vers
ity o
f Tex
as
at D
alla
s T
exas
Aamp
M
Uni
vers
ity T
exas
Tec
h U
nive
rsity
Uni
vers
ity o
f H
oust
on
Arti
cle
VII
Sec
tion
20 (a
-h)
of th
e Te
xas
Con
stitu
tion
Edu
catio
n C
ode
Sec
tion
621
41
Gen
eral
App
ropr
iatio
nA
ct
Edu
catio
n C
ode
Sec
tion
Not
e th
e62
091
RD
F as
a s
tand
-alo
neap
prop
riatio
n ite
m h
asno
t bee
n fu
nded
sin
ceth
e 20
06ndash0
7 bi
enni
um
How
ever
fun
ds c
alle
d th
e R
DF
have
bee
nap
prop
riate
d di
rect
lyin
to th
e bi
ll pa
ttern
s of
each
elig
ible
Gen
eral
Aca
dem
ic In
stitu
tion
Gen
eral
App
ropr
iatio
nsA
ct
Edu
catio
n C
ode
Sec
tion
621
46 (c
)
o
fth
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for
dist
ribut
ion
in a
sta
tefi s
cal y
ear
each
elig
ible
in
stitu
tion
is e
ntitl
ed to
a d
istri
butio
n in
an
amou
nteq
ual t
o th
e su
m o
fon
e-se
vent
h of
the
tota
l am
ount
app
ropr
iate
d(1
)an
dan
equ
al s
hare
of a
ny a
mou
nt re
mai
ning
afte
r(2
)di
strib
utio
ns a
re c
alcu
late
d un
der S
ubdi
visi
on (1
)no
t to
exce
ed a
n am
ount
equ
al to
one
-four
th o
fth
at re
mai
ning
am
ount
Edu
catio
n C
ode
Sec
tion
621
46 (e
)If
the
num
ber o
f ins
titut
ions
that
are
elig
ible
for
dist
ribut
ions
in a
sta
tefi s
cal y
ear i
s m
ore
than
four
eac
h el
igib
le in
stitu
tion
is e
ntitl
ed to
an
equa
l sh
are
of th
e to
tal a
mou
nt a
ppro
pria
ted
from
the
fund
for d
istri
butio
n in
thatfi s
cal y
ear
Edu
catio
n C
ode
Sec
tion
620
95
The
am
ount
shal
l be
appo
rtion
ed a
mon
g th
e el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of
rest
ricte
d re
sear
ch fu
nds
expe
nded
by
each
inst
itutio
n pe
r yea
r for
the
thre
e pr
eced
ing
stat
efi s
cal y
ears
The
2012
ndash13
appr
opria
tion
prov
ided
abo
ut $
07
mill
ion
to e
ach
elig
ible
inst
itutio
n fo
r eve
ry $
100
mill
ion
in u
nres
trict
ed re
sear
ch e
xpen
ditu
res
asav
erag
ed o
ver a
3-y
ear p
erio
d
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 40
FIG
UR
E D
1 (C
ON
TIN
UED
)C
OM
PAR
ISO
N O
F C
ON
STIT
UTI
ON
AL
AN
D R
ESEA
RCH
FU
ND
S 2
012ndash
13 B
IEN
NIU
M
2012
ndash13
FUN
D
APP
ROPR
IATI
ON
S FU
NC
TIO
NP
UR
POSE
EL
IGIB
ILIT
Y
LEG
AL
BASI
S A
LLO
CA
TIO
N M
ETH
OD
OLO
GY
Res
earc
h N
one
U
nive
rsity
D
evel
opm
ent
Fund
Texa
s $3
56
mill
ion
Res
earc
hIn
cent
ive
Pro
gram
SO
UR
CE L
egis
lativ
e B
udge
t Boa
rd
Texa
s E
duca
tion
Cod
e S
ectio
n 62
051
to
pro
vide
fund
ing
tore
sear
ch u
nive
rsiti
esan
d em
ergi
ng re
sear
chun
iver
sitie
s fo
r the
recr
uitm
ent a
nd re
tent
ion
of h
ighl
y qu
alifi
ed fa
culty
an
d th
e en
hanc
emen
t of
rese
arch
pro
duct
ivity
at
thos
e un
iver
sitie
s
Edu
catio
n C
ode
Sec
tion
hellipto
pro
vide
621
22
mat
chin
g fu
nds
to a
ssis
tel
igib
le in
stitu
tions
inle
vera
ging
priv
ate
gifts
for t
he e
nhan
cem
ent o
fre
sear
ch p
rodu
ctiv
ity a
ndfa
culty
recr
uitm
ent
Edu
catio
n C
ode
Sec
tion
620
51
Elig
ible
inst
itutio
nm
eans
an
inst
itutio
nof
hig
her e
duca
tion
desi
gnat
ed a
s a
rese
arch
univ
ersi
ty o
r em
ergi
ngre
sear
ch u
nive
rsity
und
erth
e co
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
E
ligib
le62
121
in
stitu
tion
mea
ns a
nin
stitu
tion
of h
ighe
red
ucat
ion
desi
gnat
ed a
san
em
ergi
ng re
sear
chun
iver
sity
und
er th
eco
ordi
natin
g bo
ard
sac
coun
tabi
lity
syst
em
Edu
catio
n C
ode
Sec
tion
620
51
Edu
catio
n C
ode
Sec
tion
(Hou
se B
ill 5
162
121
Eig
hty-fi r
st R
egul
ar
Ses
sion
)
Edu
catio
n C
ode
Sec
tion
620
53
t
o el
igib
lein
stitu
tions
bas
ed o
n th
e av
erag
e am
ount
of t
otal
rese
arch
fund
s ex
pend
ed b
y ea
ch in
stitu
tion
annu
ally
dur
ing
the
thre
e m
ost r
ecen
t sta
tefi s
cal
year
s a
ccor
ding
to th
e fo
llow
ing
rate
s
at le
ast $
1 m
illio
n fo
r eve
ry $
10 m
illio
n of
(1)
the
aver
age
annu
al a
mou
nt o
f tho
se re
sear
chfu
nds
expe
nded
by
the
inst
itutio
n if
that
ave
rage
amou
nt fo
r the
inst
itutio
n is
$50
mill
ion
or m
ore
and
at le
ast $
500
000
for e
very
$10
mill
ion
of(2
)th
e av
erag
e an
nual
am
ount
of t
hose
rese
arch
fund
s ex
pend
ed b
y th
e in
stitu
tion
if th
at a
vera
geam
ount
for t
he in
stitu
tion
is le
ss th
an $
50 m
illio
n
Edu
catio
n C
ode
Sec
tion
621
23
hellipis
ent
itled
to re
ceiv
e o
ut o
f fun
ds a
ppro
pria
ted
for t
hepu
rpos
es o
f the
pro
gram
for t
hatfi
sca
l yea
r a
mat
chin
g gr
ant i
n an
am
ount
det
erm
ined
acco
rdin
g to
the
follo
win
g ra
tes
50 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(1)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$10
000
0 or
mor
e bu
t not
mor
eth
an $
999
999
75 p
erce
nt o
f the
am
ount
of t
he g
ifts
and
(2)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$1
mill
ion
or m
ore
but n
ot m
ore
than
$1
999
999
or
100
perc
ent o
f the
am
ount
of t
he g
ifts
and
(3)
endo
wm
ents
if t
he to
tal a
mou
nt o
f gift
s an
den
dow
men
ts is
$2
mill
ion
or m
ore
APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS 2012ndash13 BIENNIUM
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 41
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 42
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $50119391873 $47339213388 ($2780178485) (55)
School for the Blind and Visually Impaired 93388870 41245345 (52143525) (558)
School for the Deaf 53083657 52695245 (388412) (07)
SUBTOTAL PUBLIC EDUCATION $50265864400 $47433153978 ($2832710422) (56)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1745695460 $1749380723 $3685263 02
Lamar Institute of Technology 27568721 28708990 1140269 41
Lamar University ndash Orange 18484576 19164769 680193 37
Lamar University ndash Port Arthur 23780405 22119709 (1660696) (70)
SUBTOTAL LAMAR STATE COLLEGES $69833702 $69993468 $159766 02
Texas State Technical College System $16493826 $5351461 ($11142365) (676) Administration
Texas State Technical College ndash Harlingen 50980986 49093510 (1887476) (37)
Texas State Technical College ndash West Texas 27965791 24970291 (2995500) (107)
Texas State Technical College ndash Marshall 11434368 10995468 (438900) (38)
Texas State Technical College ndash Waco 68111562 73596786 5485224 81
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$174986533 $164007516 ($10979017) (63)
SUBTOTAL TWO-YEAR INSTITUTIONS $1990515695 $1983381707 ($7133988) (04)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $19099360 $18147200 ($952160) (50)
The University of Texas at Arlington 275081581 288654156 13572575 49
The University of Texas at Austin 749518863 702739665 (46779198) (62)
The University of Texas at Dallas 230535884 223513862 (7022022) (30)
The University of Texas at El Paso 202195230 195511098 (6684132) (33)
The University of Texas ndash Pan American 169039177 162830092 (6209085) (37)
The University of Texas at Brownsville 61910963 57628718 (4282245) (69)
The University of Texas of the Permian Basin 58194080 59145561 951481 16
The University of Texas at San Antonio 273182023 260495772 (12686251) (46)
The University of Texas at Tyler 71137295 66147545 (4989750) (70)
Texas AampM University System Administrative and 20701573 4501868 (16199705) (783) General Offices
Texas AampM University 700537434 651599219 (48938215) (70)
Texas AampM University at Galveston 43799673 37773622 (6026051) (138)
Prairie View AampM University 134247361 122639379 (11607982) (86)
Tarleton State University 87292499 83950084 (3342415) (38)
Texas AampM University ndash Central Texas 29460313 30599703 1139390 39
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 43
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Corpus Christi $121534331 $110283074 ($11251257) (93)
Texas AampM University ndash Kingsville 82466491 75368253 (7098238) (86)
Texas AampM University ndash San Antonio 27154411 37125363 9970952 367
Texas AampM International University 83231209 73816324 (9414885) (113)
West Texas AampM University 79410486 72847023 (6563463) (83)
Texas AampM University ndash Commerce 99558312 89920628 (9637684) (97)
Texas AampM University ndash Texarkana 41409091 34754968 (6654123) (161)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 450003385 394815403 (55187982) (123)
University of Houston ndash Clear Lake 83394543 71849633 (11544910) (138)
University of Houston ndash Downtown 88104670 67926822 (20177848) (229)
University of Houston ndash Victoria 42631672 39786959 (2844713) (67)
Midwestern State University 54249721 48828454 (5421267) (100)
University of North Texas System Administration 9789067 6732226 (3056841) (312)
University of North Texas 302350602 296355351 (5995251) (20)
University of North Texas at Dallas 35156605 30478388 (4678217) (133)
Stephen F Austin State University 121843336 108728674 (13114662) (108)
Texas Southern University 174127907 150903873 (23224034) (133)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 368026094 357056343 (10969751) (30)
Angelo State University 68450875 64053866 (4397009) (64)
Texas Womans University 146639127 135140923 (11498204) (78)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 121909453 111926905 (9982548) (82)
Sam Houston State University 162684291 145338873 (17345418) (107)
Texas State University ndash San Marcos 261940220 254492644 (7447576) (28)
Sul Ross State University 34008142 37804020 3795878 112
Sul Ross State University Rio Grande College 13112804 12127383 (985421) (75)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$6217659551 $5853308379 ($364351172) (59)
HEALTH-RELATED INSTITUTIONS -
The University of Texas Southwestern Medical $339025963 $278284511 ($60741452) (179) Center
The University of Texas Medical Branch at 1252556677 1214546039 (38010638) (30) Galveston
The University of Texas Health Science Center at 356632008 347880533 (8751475) (25) Houston
The University of Texas Health Science Center at 357022348 319153560 (37868788) (106) San Antonio
The University of Texas MD Anderson Cancer 4614023153 5043439860 429416707 93 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 44
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E1 (CONTINUED) ALL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center at $170568794 $176002869 $5434075 32 Tyler
Texas AampM University System Health Science 252705800 241434175 (11271625) (45) Center
University of North Texas Health Science Center 141974215 140131956 (1842259) (13) at Fort Worth
Texas Tech University Health Sciences Center 361096839 333314809 (27782030) (77)
SUBTOTAL HEALTH-RELATED INSTITUTIONS $7845605797 $8094188312 $248582515 32
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $137560226 $130327148 ($7233078) (53)
Texas AgriLife Extension Service 137837443 128253897 (9583546) (70)
Texas Engineering Experiment Station 249008314 268154320 19146006 77
Texas Transportation Institute 96056916 99288013 3231097 34
Texas Engineering Extension Service 164895453 161748713 (3146740) (19)
Texas Forest Service 108765979 196355520 87589541 805
Texas Veterinary Medical Diagnostic Laboratory 32693561 29601103 (3092458) (95)
SUBTOTAL TEXAS AampM UNIVERSITY $926817892 $1013728714 $86910822 94 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 1755022519 1301687813 (453334706) (258)
SUBTOTAL OTHER HIGHER EDUCATION $3339042471 $2900537481 ($438504990) (131)
SUBTOTAL HIGHER EDUCATION $20319641406 $19845144593 ($474496813) (23)
EMPLOYEE BENEFITS
Teacher Retirement System $4038146148 $3797393090 ($240753058) (60)
Optional Retirement Program 294169521 247905975 (46263546) (157)
Higher Education Employees Group Insurance 1068235618 968961950 (99273668) (93) Contributions
Retirement and Group Insurance 61823656 63645693 1822037 29
Social Security and Benefits Replacement Pay 560373470 577908771 17535301 31
SUBTOTAL EMPLOYEE BENEFITS $6022748413 $5655815479 ($366932934) (61)
DEBT SERVICE
Bond Debt Service Payments $7579835 $14567314 $6987479 922
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13483869 $19862644 $6378775 473
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION $76416008567 $72871348360 ($3544660207) (46) 1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 45
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $30322901124 $30476707526 $153806402 05
School for the Blind and Visually Impaired 28830574 29152947 322373 11
School for the Deaf 36111132 36216478 105346 03
SUBTOTAL PUBLIC EDUCATION $30387842830 $30542076951 $154234121 05
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $1728790460 $1749380723 $20590263 12
Lamar Institute of Technology 20141881 21363652 1221771 61
Lamar University ndash Orange 13379584 13438359 58775 04
Lamar University ndash Port Arthur 18247526 16676606 (1570920) (86)
SUBTOTAL LAMAR STATE COLLEGES $51768991 $51478617 ($290374) (06)
Texas State Technical College System $16122329 $4603444 ($11518885) (714) Administration
Texas State Technical College ndash Harlingen 35862333 35177742 (684591) (19)
Texas State Technical College ndash West Texas 22972902 20195085 (2777817) (121)
Texas State Technical College ndash Marshall 8795246 8519429 (275817) (31)
Texas State Technical College ndash Waco 48458059 55190076 6732017 139
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$132210869 $123685776 ($8525093) (64)
SUBTOTAL TWO-YEAR INSTITUTIONS $1912770320 $1924545116 $11774796 06
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $16827250 $15931200 ($896050) (53)
The University of Texas at Arlington 171697428 183867794 12170366 71
The University of Texas at Austin 536034384 492544731 (43489653) (81)
The University of Texas at Dallas 142108554 148778381 6669827 47
The University of Texas at El Paso 142521273 137781712 (4739561) (33)
The University of Texas ndash Pan American 115707790 110889522 (4818268) (42)
The University of Texas at Brownsville 51100517 47424781 (3675736) (72)
The University of Texas of the Permian Basin 47639722 48816240 1176518 25
The University of Texas at San Antonio 186961792 178547264 (8414528) (45)
The University of Texas at Tyler 56673893 51804728 (4869165) (86)
Texas AampM University System Administrative 11478504 4473868 (7004636) (610) and General Offices
Texas AampM University 487991523 458011060 (29980463) (61)
Texas AampM University at Galveston 36736318 30964674 (5771644) (157)
Prairie View AampM University 102383638 90923868 (11459770) (112)
Tarleton State University 62999263 59464473 (3534790) (56)
Texas AampM University ndash Central Texas 24007601 25352928 1345327 56
Texas AampM University ndash Corpus Christi 93966271 81624416 (12341855) (131)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 46
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $60610859 $54030202 ($6580657) (109)
Texas AampM University ndash San Antonio 21438200 29287597 7849397 366
Texas AampM International University 67735925 58009521 (9726404) (144)
West Texas AampM University 57622391 53282160 (4340231) (75)
Texas AampM University ndash Commerce 67888967 66581226 (1307741) (19)
Texas AampM University ndash Texarkana 31084147 30370655 (713492) (23)
University of Houston System Administration 12665157 51668462 39003305 3080
University of Houston 311616152 257331674 (54284478) (174)
University of Houston ndash Clear Lake 58807555 46454050 (12353505) (210)
University of Houston ndash Downtown 56441987 39973395 (16468592) (292)
University of Houston ndash Victoria 32315073 27651821 (4663252) (144)
Midwestern State University 37434162 33382015 (4052147) (108)
University of North Texas System Administration 4789067 6732226 1943159 406
University of North Texas 194672599 191274119 (3398480) (17)
University of North Texas at Dallas 30330149 28165402 (2164747) (71)
Stephen F Austin State University 84817662 75640135 (9177527) (108)
Texas Southern University 125878414 104685201 (21193213) (168)
Texas Tech University System Administration 3750000 2850000 (900000) (240)
Texas Tech University 261015662 253976808 (7038854) (27)
Angelo State University 48095474 45861337 (2234137) (46)
Texas Womans University 104666337 92467100 (12199237) (117)
Texas State University System 2124240 4450000 2325760 1095
Lamar University 77990428 70849905 (7140523) (92)
Sam Houston State University 85061409 79609576 (5451833) (64)
Texas State University ndash San Marcos 168720167 164894925 (3825242) (23)
Sul Ross State University 28832045 32758471 3926426 136
Sul Ross State University Rio Grande College 10662338 9364932 (1297406) (122)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$4333902287 $4078804555 ($255097732) (59)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $286599806 $249279177 ($37320629) (130) Center
The University of Texas Medical Branch at 586704245 472189151 (114515094) (195) Galveston
The University of Texas Health Science Center 278466261 294281302 15815041 57 at Houston
The University of Texas Health Science Center 285919332 260615042 (25304290) (89) at San Antonio
The University of Texas MD Anderson Cancer 316274242 298435072 (17839170) (56) Center
The University of Texas Health Science Center 68656721 71856579 3199858 47 at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 47
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E2 (CONTINUED) GENERAL REVENUE FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $205234148 $194402799 ($10831349) (53) Center
University of North Texas Health Science Center 120369543 113121832 (7247711) (60) at Fort Worth
Texas Tech University Health Sciences Center 308265168 291713120 (16552048) (54)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$2456489466 $2245894074 ($210595392) (86)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $108442641 $101233060 ($7209581) (66)
Texas AgriLife Extension Service 93421095 84437039 (8984056) (96)
Texas Engineering Experiment Station 27420670 27791758 371088 14
Texas Transportation Institute 1786250 1282500 (503750) (282)
Texas Engineering Extension Service 13423471 12388837 (1034634) (77)
Texas Forest Service 38994278 158979948 119985670 3077
Texas Veterinary Medical Diagnostic Laboratory 12326913 11519113 (807800) (66)
SUBTOTAL TEXAS AampM UNIVERSITY $295815318 $397632255 $101816937 344 SERVICES
Higher Education Fund $525000000 $525000000 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 1324025818 1053522035 (270503783) (204)
SUBTOTAL OTHER HIGHER EDUCATION $1849025818 $1578522035 ($270503783) (146)
SUBTOTAL HIGHER EDUCATION $10848003209 $10225398035 ($622605174) (57)
EMPLOYEE BENEFITS
Teacher Retirement System $3721648969 $3431139479 ($290509490) (78)
Optional Retirement Program 249841016 205341297 (44499719) (178)
Higher Education Employees Group Insurance 1066913010 967556924 (99356086) (93) Contributions
Retirement and Group Insurance 51589368 54070178 2480810 48
Social Security and Benefits Replacement Pay 456936472 471706602 14770130 32
SUBTOTAL EMPLOYEE BENEFITS $5546928835 $5129814480 ($417114355) (75)
DEBT SERVICE
Bond Debt Service Payments $7325020 $14248830 $6923810 945
Lease Payments 5904034 5295330 (608704) (103)
SUBTOTAL DEBT SERVICE $13229054 $19544160 $6315106 477
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$46796003928 $45916833626 ($879170302) (19)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 48
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $418569 $649000 $230431 551
School for the Blind and Visually Impaired 0 0 0 NA
School for the Deaf 0 0 0 NA
SUBTOTAL PUBLIC EDUCATION $418569 $649000 $230431 551
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 7026644 7345338 318694 45
Lamar University ndash Orange 4875929 5726410 850481 174
Lamar University ndash Port Arthur 4747409 5443103 695694 147
SUBTOTAL LAMAR STATE COLLEGES $16649982 $18514851 $1864869 112
Texas State Technical College System $371497 $748017 $376520 1014 Administration
Texas State Technical College ndash Harlingen 14268123 13915768 (352355) (25)
Texas State Technical College ndash West Texas 4573311 4775206 201895 44
Texas State Technical College ndash Marshall 2486999 2476039 (10960) (04)
Texas State Technical College ndash Waco 18496312 18406710 (89602) (05)
SUBTOTAL TEXAS STATE TECHNICAL $40196242 $40321740 $125498 03 COLLEGES
SUBTOTAL TWO-YEAR INSTITUTIONS $56846224 $58836591 $1990367 35
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 99544565 104786362 5241797 53
The University of Texas at Austin 203175074 210194934 7019860 35
The University of Texas at Dallas 73902392 74735481 833089 11
The University of Texas at El Paso 54257081 54959386 702305 13
The University of Texas ndash Pan American 50448111 51483144 1035033 21
The University of Texas at Brownsville 10270338 10203937 (66401) (06)
The University of Texas of the Permian Basin 10153771 10329321 175550 17
The University of Texas at San Antonio 78194498 81948508 3754010 48
The University of Texas at Tyler 13686400 14342817 656417 48
Texas AampM University System Administrative 9223069 28000 (9195069) (997) and General Offices
Texas AampM University 194931245 184789626 (10141619) (52)
Texas AampM University at Galveston 6714220 6808948 94728 14
Prairie View AampM University 31863723 31715511 (148212) (05)
Tarleton State University 23018364 24485611 1467247 64
Texas AampM University ndash Central Texas 5452712 5246775 (205937) (38)
Texas AampM University ndash Corpus Christi 26308558 28658658 2350100 89
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 49
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $20743629 $21338051 $594422 29
Texas AampM University ndash San Antonio 5716211 7837766 2121555 371
Texas AampM International University 14449349 15531029 1081680 75
West Texas AampM University 20857129 19564863 (1292266) (62)
Texas AampM University ndash Commerce 29344128 23339402 (6004726) (205)
Texas AampM University ndash Texarkana 4114223 4384313 270090 66
University of Houston System Administration 0 0 0 NA
University of Houston 129680228 137483729 7803501 60
University of Houston ndash Clear Lake 23417549 25395583 1978034 84
University of Houston ndash Downtown 30264387 27953427 (2310960) (76)
University of Houston ndash Victoria 9883366 12135138 2251772 228
Midwestern State University 15912994 15446439 (466555) (29)
University of North Texas System 0 0 0 NA Administration
University of North Texas 100805298 105081232 4275934 42
University of North Texas at Dallas 4826456 2312986 (2513470) (521)
Stephen F Austin State University 35525799 33088539 (2437260) (69)
Texas Southern University 47027769 46218672 (809097) (17)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 98116061 103079535 4963474 51
Angelo State University 17654127 18192529 538402 30
Texas Womans University 40098242 42673823 2575581 64
Texas State University System 0 0 0 NA
Lamar University 37445892 41077000 3631108 97
Sam Houston State University 71500172 65729297 (5770875) (81)
Texas State University ndash San Marcos 88567369 89597719 1030350 12
Sul Ross State University 4941096 5045549 104453 21
Sul Ross State University Rio Grande College 2342952 2762451 419499 179
SUBTOTAL GENERAL ACADEMIC $1744378547 $1759986091 $15607544 09 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $22514152 $18054614 ($4459538) (198) Center
The University of Texas Medical Branch at 23120930 24797153 1676223 72 Galveston
The University of Texas Health Science Center 35777999 35483172 (294827) (08) at Houston
The University of Texas Health Science Center 16488403 17234857 746454 45 at San Antonio
The University of Texas MD Anderson Cancer 48597071 55476185 6879114 142 Center
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 50
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E3 (CONTINUED) GENERAL REVENUEndashDEDICATED FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
The University of Texas Health Science Center $512055 $569200 $57145 112 at Tyler
Texas AampM University System Health Science 13306322 24908409 11602087 872 Center
University of North Texas Health Science 12596783 16295862 3699079 294 Center at Fort Worth
Texas Tech University Health Sciences Center 23553492 27695220 4141728 176
SUBTOTAL HEALTH-RELATED $196467207 $220514672 $24047465 122 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $950000 $950000 $0 NA
Texas AgriLife Extension Service 46992 18000 (28992) (617)
Texas Engineering Experiment Station 1785036 904418 (880618) (493)
Texas Transportation Institute 0 0 0 NA
Texas Engineering Extension Service 0 0 0 NA
Texas Forest Service 61388596 28912000 (32476596) (529)
Texas Veterinary Medical Diagnostic Laboratory 0 0 0 NA
SUBTOTAL TEXAS AampM UNIVERSITY SERVICES
$64170624 $30784418 ($33386206) (520)
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 111572621 87256791 (24315830) (218)
SUBTOTAL OTHER HIGHER EDUCATION $111572621 $87256791 ($24315830) (218)
SUBTOTAL HIGHER EDUCATION $2173435223 $2157378563 ($16056660) (07)
EMPLOYEE BENEFITS
Teacher Retirement System $188794770 $209600575 $20805805 110
Optional Retirement Program 44328505 42564678 (1763827) (40)
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 0 0 0 NA
Social Security and Benefits Replacement Pay 82274010 85153600 2879590 35
SUBTOTAL EMPLOYEE BENEFITS $315397285 $337318853 $21921568 70
DEBT SERVICE
Bond Debt Service Payments $0 $0 $0 NA
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $0 $0 $0 NA
TOTAL ARTICLE III ndash AGENCIES OF $2489251077 $2495346416 $6095339 02 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 51
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $13298491946 $10520619770 ($2777872176) (209)
School for the Blind and Visually Impaired 5430126 5855880 425754 78
School for the Deaf 4233990 2921862 (1312128) (310)
SUBTOTAL PUBLIC EDUCATION $13308156062 $10529397512 ($2778758550) (209)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $16905000 $0 ($16905000) (1000)
Lamar Institute of Technology 400196 0 (400196) (1000)
Lamar University ndash Orange 229063 0 (229063) (1000)
Lamar University ndash Port Arthur 785470 0 (785470) (1000)
SUBTOTAL LAMAR STATE COLLEGES $1414729 $0 ($1414729) (1000)
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 850530 0 (850530) (1000)
Texas State Technical College ndash West Texas 419578 0 (419578) (1000)
Texas State Technical College ndash Marshall 152123 0 (152123) (1000)
Texas State Technical College ndash Waco 1157191 0 (1157191) (1000)
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$2579422 $0 ($2579422) (1000)
SUBTOTAL TWO-YEAR INSTITUTIONS $20899151 $0 ($20899151) (1000)
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $0 $0 $0 NA
The University of Texas at Arlington 3839588 0 (3839588) (1000)
The University of Texas at Austin 10309405 0 (10309405) (1000)
The University of Texas at Dallas 14524938 0 (14524938) (1000)
The University of Texas at El Paso 2681876 0 (2681876) (1000)
The University of Texas ndash Pan American 2241274 0 (2241274) (1000)
The University of Texas at Brownsville 540108 0 (540108) (1000)
The University of Texas of the Permian Basin 400587 0 (400587) (1000)
The University of Texas at San Antonio 8025733 0 (8025733) (1000)
The University of Texas at Tyler 777002 0 (777002) (1000)
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 10292036 0 (10292036) (1000)
Texas AampM University at Galveston 349135 0 (349135) (1000)
Prairie View AampM University 0 0 0 NA
Tarleton State University 1274872 0 (1274872) (1000)
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 1259502 0 (1259502) (1000)
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 52
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville 1112003 0 (1112003) (1000)
Texas AampM University ndash San Antonio $0 $0 $0 NA
Texas AampM International University 658885 0 (658885) (1000)
West Texas AampM University 930966 0 (930966) (1000)
Texas AampM University ndash Commerce 2325217 0 (2325217) (1000)
Texas AampM University ndash Texarkana 6210721 0 (6210721) (1000)
University of Houston System Administration 0 0 0 NA
University of Houston 8707005 0 (8707005) (1000)
University of Houston ndash Clear Lake 1169439 0 (1169439) (1000)
University of Houston ndash Downtown 1398296 0 (1398296) (1000)
University of Houston ndash Victoria 433233 0 (433233) (1000)
Midwestern State University 902565 0 (902565) (1000)
University of North Texas System Administration 5000000 0 (5000000) (1000)
University of North Texas 6872705 0 (6872705) (1000)
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 1499875 0 (1499875) (1000)
Texas Southern University 1221724 0 (1221724) (1000)
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 8894371 0 (8894371) (1000)
Angelo State University 2701274 0 (2701274) (1000)
Texas Womans University 1874548 0 (1874548) (1000)
Texas State University System 0 0 0 NA
Lamar University 6473133 0 (6473133) (1000)
Sam Houston State University 6122710 0 (6122710) (1000)
Texas State University ndash San Marcos 4652684 0 (4652684) (1000)
Sul Ross State University 235001 0 (235001) (1000)
Sul Ross State University Rio Grande College 107514 0 (107514) (1000)
SUBTOTAL GENERAL ACADEMIC INSTITUTIONS
$126019925 $0 ($126019925) (1000)
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $16614303 $0 ($16614303) (1000) Center
The University of Texas Medical Branch at 6745161 0 (6745161) (1000) Galveston
The University of Texas Health Science Center at 24173646 0 (24173646) (1000) Houston
The University of Texas Health Science Center at 19224332 0 (19224332) (1000) San Antonio
The University of Texas MD Anderson Cancer 634206 0 (634206) (1000) Center
The University of Texas Health Science Center 80210 0 (80210) (1000) at Tyler
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 53
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E4 (CONTINUED) FEDERAL FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $15014608 $0 ($15014608) (1000) Center
University of North Texas Health Science Center 3438054 0 (3438054) (1000) at Fort Worth
Texas Tech University Health Sciences Center 11075479 0 (11075479) (1000)
SUBTOTAL HEALTH-RELATED INSTITUTIONS
$96999999 $0 ($96999999) (1000)
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $15933582 $15933582 $0 NA
Texas AgriLife Extension Service 25302708 25302708 0 NA
Texas Engineering Experiment Station 137281801 153857672 16575871 121
Texas Transportation Institute 17405197 18757193 1351996 78
Texas Engineering Extension Service 48387893 48387894 1 00
Texas Forest Service 7349101 7429568 80467 11
Texas Veterinary Medical Diagnostic Laboratory 594001 594000 (1) (00)
SUBTOTAL TEXAS AampM UNIVERSITY $252254283 $270262617 $18008334 71 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 0 0 0 NA
National Research University Fund Earnings 0 0 0 NA
Higher Education Coordinating Board 197332508 123636426 (73696082) (373)
SUBTOTAL OTHER HIGHER EDUCATION $197332508 $123636426 ($73696082) (373)
SUBTOTAL HIGHER EDUCATION $693505866 $393899043 ($299606823) (432)
EMPLOYEE BENEFITS
Teacher Retirement System $0 $0 $0 NA
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 0 0 0 NA Contributions
Retirement and Group Insurance 8832085 8286741 (545344) (62)
Social Security and Benefits Replacement Pay 3888441 3428099 (460342) (118)
SUBTOTAL EMPLOYEE BENEFITS $12720526 $11714840 ($1005686) (79)
DEBT SERVICE
Bond Debt Service Payments $253903 $318484 $64581 254
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $253903 $318484 $64581 254
TOTAL ARTICLE III ndash AGENCIES OF EDUCATION
$14014636357 $10935329879 ($3079306478) (220)
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations SOURCE Legislative Budget Board
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 54
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
PUBLIC EDUCATION
Texas Education Agency $6497580234 $6341237092 ($156343142) (24)
School for the Blind and Visually Impaired 59128170 6236518 (52891652) (895)
School for the Deaf 12738535 13556905 818370 64
SUBTOTAL PUBLIC EDUCATION $6569446939 $6361030515 ($208416424) (32)
PUBLIC HIGHER EDUCATION
TWO-YEAR INSTITUTIONS
Public CommunityJunior Colleges $0 $0 $0 NA
Lamar Institute of Technology 0 0 0 NA
Lamar University ndash Orange 0 0 0 NA
Lamar University ndash Port Arthur 0 0 0 NA
SUBTOTAL LAMAR STATE COLLEGES $0 $0 $0 NA
Texas State Technical College System $0 $0 $0 NA Administration
Texas State Technical College ndash Harlingen 0 0 0 NA
Texas State Technical College ndash West Texas 0 0 0 NA
Texas State Technical College ndash Marshall 0 0 0 NA
Texas State Technical College ndash Waco 0 0 0 NA
SUBTOTAL TEXAS STATE TECHNICAL COLLEGES
$0 $0 $0 NA
SUBTOTAL TWO-YEAR INSTITUTIONS $0 $0 $0 NA
GENERAL ACADEMIC INSTITUTIONS
The University of Texas System Administration $2272110 $2216000 ($56110) (25)
The University of Texas at Arlington 0 0 0 NA
The University of Texas at Austin 0 0 0 NA
The University of Texas at Dallas 0 0 0 NA
The University of Texas at El Paso 2735000 2770000 35000 13
The University of Texas ndash Pan American 642002 457426 (184576) (288)
The University of Texas at Brownsville 0 0 0 NA
The University of Texas of the Permian Basin 0 0 0 NA
The University of Texas at San Antonio 0 0 0 NA
The University of Texas at Tyler 0 0 0 NA
Texas AampM University System Administrative and 0 0 0 NA General Offices
Texas AampM University 7322630 8798533 1475903 202
Texas AampM University at Galveston 0 0 0 NA
Prairie View AampM University 0 0 0 NA
Tarleton State University 0 0 0 NA
Texas AampM University ndash Central Texas 0 0 0 NA
Texas AampM University ndash Corpus Christi 0 0 0 NA
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 55
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University ndash Kingsville $0 $0 $0 NA
Texas AampM University ndash San Antonio 0 0 0 NA
Texas AampM International University 387050 275774 (111276) (287)
West Texas AampM University 0 0 0 NA
Texas AampM University ndash Commerce 0 0 0 NA
Texas AampM University ndash Texarkana 0 0 0 NA
University of Houston System Administration 0 0 0 NA
University of Houston 0 0 0 NA
University of Houston ndash Clear Lake 0 0 0 NA
University of Houston ndash Downtown 0 0 0 NA
University of Houston ndash Victoria 0 0 0 NA
Midwestern State University 0 0 0 NA
University of North Texas System Administration 0 0 0 NA
University of North Texas 0 0 0 NA
University of North Texas at Dallas 0 0 0 NA
Stephen F Austin State University 0 0 0 NA
Texas Southern University 0 0 0 NA
Texas Tech University System Administration 0 0 0 NA
Texas Tech University 0 0 0 NA
Angelo State University 0 0 0 NA
Texas Womans University 0 0 0 NA
Texas State University System 0 0 0 NA
Lamar University 0 0 0 NA
Sam Houston State University 0 0 0 NA
Texas State University ndash San Marcos 0 0 0 NA
Sul Ross State University 0 0 0 NA
Sul Ross State University Rio Grande College 0 0 0 NA
SUBTOTAL GENERAL ACADEMIC $13358792 $14517733 $1158941 87 INSTITUTIONS
HEALTH-RELATED INSTITUTIONS
The University of Texas Southwestern Medical $13297702 $10950720 ($2346982) (176) Center
The University of Texas Medical Branch at 635986341 717559735 81573394 128 Galveston
The University of Texas Health Science Center at 18214102 18116059 (98043) (05) Houston
The University of Texas Health Science Center at 35390281 41303661 5913380 167 San Antonio
The University of Texas MD Anderson Cancer 4248517634 4689528603 441010969 104 Center
The University of Texas Health Science Center 101319808 103577090 2257282 22 at Tyler
LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 56
APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
FIGURE E5 (CONTINUED) OTHER FUNDS mdash AGENCIES OF EDUCATION
ESTIMATEDBUDGETED APPROPRIATED BIENNIAL PERCENTAGE ARTICLE III ndash EDUCATION 2010ndash111 2012ndash132 CHANGE CHANGE
Texas AampM University System Health Science $19150722 $22122967 $2972245 155 Center
University of North Texas Health Science Center 5569835 10714262 5144427 924 at Fort Worth
Texas Tech University Health Sciences Center 18202700 13906469 (4296231) (236)
SUBTOTAL HEALTH-RELATED $5095649125 $5627779566 $532130441 104 INSTITUTIONS
TEXAS AampM UNIVERSITY SERVICES
Texas AgriLife Research $12234003 $12210506 ($23497) (02)
Texas AgriLife Extension Service 19066648 18496150 (570498) (30)
Texas Engineering Experiment Station 82520807 85600472 3079665 37
Texas Transportation Institute 76865469 79248320 2382851 31
Texas Engineering Extension Service 103084089 100971982 (2112107) (20)
Texas Forest Service 1034004 1034004 0 NA
Texas Veterinary Medical Diagnostic Laboratory 19772647 17487990 (2284657) (116)
SUBTOTAL TEXAS AampM UNIVERSITY $314577667 $315049424 $471757 01 SERVICES
Higher Education Fund $0 $0 $0 NA
Available University Fund 1059019952 1061449668 2429716 02
National Research University Fund Earnings 0 12400000 12400000 NA
Higher Education Coordinating Board 122091572 37272561 (84819011) (695)
SUBTOTAL OTHER HIGHER EDUCATION $1181111524 $1111122229 ($69989295) (59)
SUBTOTAL HIGHER EDUCATION $6604697108 $7068468952 $463771844 70
EMPLOYEE BENEFITS
Teacher Retirement System $127702409 $156653036 $28950627 227
Optional Retirement Program 0 0 0 NA
Higher Education Employees Group Insurance 1322608 1405026 82418 62 Contributions
Retirement and Group Insurance 1402203 1288774 (113429) (81)
Social Security and Benefits Replacement Pay 17274547 17620470 345923 20
SUBTOTAL EMPLOYEE BENEFITS $147701767 $176967306 $29265539 198
DEBT SERVICE
Bond Debt Service Payments $912 $0 ($912) (1000)
Lease Payments 0 0 0 NA
SUBTOTAL DEBT SERVICE $912 $0 ($912) (1000)
Less Interagency Contracts $205729521 $82628334 ($123101187) (598)
TOTAL ARTICLE III ndash AGENCIES OF $13116117205 $13523838439 $407721234 31 EDUCATION
1Reflects provisions in House Bill 4 Eighty-second Legislature Regular Session 2011 relating to appropriation changes made in fi scal year 2011 2Reflects certain appropriation adjustments made in Article IX of House Bill 1 Eighty-second Legislature Regular Session 2011 Governorrsquos vetoes House Bill 4 Eighty-second Legislature Regular Session 2011 Senate Bill 2 Eighty-second Legislature First Called Session 2011 and other legislation passed by the Eighty-second Legislature which make or change appropriations NOTE Article totals exclude interagency contracts SOURCE Legislative Budget Board
FINANCING HIGHER EDUCATION IN TEXAS ndash ID 690 LEGISLATIVE BUDGET BOARD 57
- INTRODUCTION
- FUNDING GENERAL ACADEMICS INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
- OTHER NON-FORMULA FUNDING
-
- FUNDING HEALTH-RELATED INSTITUTIONS
-
- OVERVIEW
- FORMULA FUNDING
- NON-FORMULA FUNDING
-
- FUNDING COMMUNITY AND TECHNICAL COLLEGES
-
- OVERVIEW
- COMMUNITY COLLEGES
- TEXAS STATE TECHNICAL COLLEGELAMAR STATE COLLEGES
-
- FUNDING TEXAS AampM SYSTEM AGENCIES
- APPENDIX A FREQUENTLY ASKED QUESTIONS
- APPENDIX B TUITION AND FEE PROVISIONS
- APPENDIX C GLOSSARY
- APPENDIX D CONSTITUTIONAL AND RESEARCH FUNDS
- APPENDIX E SUMMARY OF BIENNIAL STATE BUDGET
-