Tuesday marked the beginning of the 84th Texas Legislature. Mike Wintenute, associate vice chancellor for governmental relations at Texas State University System, spoke with The Houstonian about the goals which the system hopes the legislature will accomplish, which include benefits for TSUS as well as Sam Houston State University.
What is the Texas State University System asking of 2015 legislation regarding higher education?
“The chancellors of the six university systems met with editorial boards in Dallas and Houston to talk about the shared legislative priorities of higher education in Texas of all the systems. We all pretty much, within our systems, have some core funding issues that we’re asking the legislature to support.”
Four categories of funding
1) Formula funding:
“Formula funding is a primary source of funding for higher education by the state, and we’re asking that formula funding rates for higher education be restored to their 2011 levels.”
Formula funding breakdown:
“There is a formula that the legislature applies [before allocating money to institutions]. They have a pot of money, say it’s $2 billion (I’m just throwing that out there, that’s not an actual figure), that they want to spend on higher education. They will apply that money to the formula, and then the formula will determine how much individual institutions will get.”
What contributes to the formula:
“Institutions that have programs that are very expensive to run, for example science and engineering, that require a lot of lab time or hands-on experience will cost more, so the formula reflects that, and then institutions are allocated money by the state depending on how much it costs to run those programs. Another factor of that is their enrollment. Bigger institutions obviously get more money.”
Why TSUS wants the formula to be restored:
“In recent years, the formula’s rates have been reduced, as a result of declining state revenue, and so we’re asking that our formula rates be restored to the 2011 levels so they can address our growth and the growth of our institutions. This would also reduce pressure on student tuition and fees. Generally speaking, the more state funding you get, the less student tuition and fees have to make up for it.”
2) Tuition-revenue bonding:
“There is a belief out there that when a school has to rely on tuition revenue bonding to build a facility, that it is paid for by student tuition, and that is not the case. A tuition and revenue bond is just like any other bond, the difference is the banks or lenders, require you to secure a loan, like a mortgage, so because tuition is a primary source of revenue for a school, they use the expected tuition from students to collateralize the loan. That’s the only way tuition plays into tuition revenue bonds.”
Tuition-revenue breakdown:
“The legislature, in the process of passing tuition and revenue bonds, will allocate a certain number of debt service on an annual basis going forward. So, the legislature says ‘we’re going to support the construction of this program’, will pass a $60 million tuition revenue bond, and until that bond is paid off, will allocate $5.2 million dollars in state funds. We are asking legislature to consider and approve tuition revenue bonds for seven of our institutions.”
3) Area of Financial Aid:
“We’re asking that financial aid programs, such as Texas grants, be prioritized and that our institutions get greater flexibility to tailor financial aid awards to students’ individual needs so we can make the most of the dollars that we’re spending.”
Why it matters:
“The Texas Grant is important because if the goal of the state is to increase access to higher education, financial aid is one of the best tools to do that. You’re really sending state resources to where it’s needed most—to students who otherwise wouldn’t be able to attend college if those grants weren’t available.”
4) Relief with the Hazelwood Act :
“We’re asking the legislature to fund the Hazelwood Act and the Hazelwood Legacy Act so that that cost isn’t transferred to the students, many of whom are already facing challenges trying to pay their tuition.”
Hazelwood breakdown:
“There are two iterations of the Hazelwood Act. The first Hazelwood Act was passed many years ago to help veterans attend college. Several years ago, the legislature expanded that by passing The Hazelwood Legacy Act [which] expanded the benefit to dependents of veterans.”
Why it matters:
“Since passage of the Hazelwood Legacy Act, most institutions in the state have seen Hazelwood costs skyrocket. The cost of the institution is in the form of lost revenues, so it’s a student who is taking up space (and under the benefit of the bill have earned that space), but because of the waiver, the institutions like SHSU don’t get any tuition fees from that student. The concern that we’re hearing from a lot of fee-paying students is that they are having to cover the costs of this.”
Bills that target SHSU directly:
“Sam Houston State’s project that we hoped to see included in the PRB Bill is a biology and lab building. The price tag for that would be $60 million, so that was the facility that SHSU identified as its top priority to be included in the PRB bill. We’re hopeful the legislature will be able to do this year what it wasn’t able to do two years ago by approving a PRB bill and helping our institutions catch up with growth.”
How legislation will react:
“We’re hopeful. A number of state legislators and state leaders have been talking about these very issues. I believe Governor elect Abbott supports funding the Hazelwood Act as well as continuing the state’s investment in higher education. We’re hopeful the legislature will see the value of higher education in Texas and understand the importance of making that investment.”