TXEXplainer: 85th Legislative Budget Proposals

By Danielle Lopez in 40 Acres, Promote & Protect on March 28, 2017 at 1:30 pm | 1 Comment

As the 85th Texas legislative session picks up, the Senate has proposed a bill to cut funding to higher ed across the state. But what does that mean for UT-Austin? We’re here to breakdown what’s on the floor and how it could impact the university.

Update: On Wednesday night, the House Appropriations voted their version of the budget to the full House of Representatives. The House will vote on the proposal next week before it is reconciled with the Senate’s budget. Notably, the House budget opts to take some funding from the Rainy Day Fund. 

What are the Senate and the House of Representatives’ budget proposals?

Last week, the Senate Finance Committee proposed a budget that would dramatically reduce current funding levels for all General Academic Institutions across Texas by $332.7 million. The proposal, SB1, would cut 10 percent of UT-Austin’s budget, specifically, reducing funds by nearly $48 million. The Senate did not include funds for the Dell Medical School and also set a goal to eliminate all funding for special items across state universities, including the McDonald Observatory, Marine Science Institute in Port Aransas, and the Bureau of Economic Geology.

The House of Representatives’ budget proposal, HB1, is much more similar to the filed version of the bill, reducing all special items by 3-10 percent, research funding by around 15 percent, and 4 percent reductions submitted by state agencies. HB1 includes nearly $12 million for Dell Med.

How are state funds distributed?

When the state creates a budget, a specific amount of money is allocated to funding higher education. State higher-education institutions equitably distribute those available state funds through a method called formula funding, which calculates how much of the available funds each university should receive based on factors like student enrollment and credit hours.

Under the Senate proposal, $700 million would be appropriated to the higher education fund and worked into the formula by taking from the previous $1.1 billion budget for special items—a trick lawmakers use to insert money for particular university programs into the state budget outside the standard formulas. The legislature would issue funds in block style grants, meaning the state will not manage what each individual university does with their share. UT-Austin could potentially take from their share and fund its special items.

Is a 10 percent reduction really that major?

The 85th Texas legislative session is dealing with a state budget that is nearly 3 percent less than it was two years ago. By taking from higher ed, the Senate is trying to make a quick fix but in the process could be creating a much larger, long-term problem. Since 1984, the Texas legislature has been pulling more and more state funding. That year, 47 percent of the university’s funding was coming from the state but now, UT-Austin receives slightly more than 10 percent, accounting for inflation. Granted, today’s share is pulling from a larger budget than it was in 1984. So a 10 percent cut might not sound like the largest reduction, but if the state keeps chipping away each session and continues trying to freeze tuition, the university and Texas will suffer in the future.

What are legislators and educators saying about the budget proposals?

Sen. Kirk Watson, D-Austin, said he is weary of the Senate’s proposal. In an interview with the Texas Tribune, he said, “I worry that we are doing something very, very big without thinking of all the parameters.” The Tribune also reported that Sen. Larry Taylor, R-Friendswood, who chaired a working group focusing on education funding, said, “A lot of people are going to be unhappy. No one is going to be ecstatic. But given the numbers we are dealing with, I think we turned out pretty well.”

According to the Austin American-Statesman, Senate Finance Committee Chairwoman Jane Nelson, R-Flower Mound, said lawmakers have a flexibility with public colleges and universities that they do not have in other areas. “We knew we weren’t going to have as much money for any area of the budget, and so it forced us to look at how we were funding higher education, which in turn brought us to the place where we are now and doing things in a new manner,” she said, “and I think it’s a good thing.”

UT spokesman Gary Susswein told the American-Statesman that President Greg Fenves looks forward to discussing the needs of UT and higher education. “UT-Austin relies on state funding for its success,” he said.

On Wednesday, the Dallas Morning News reported that Speaker Joe Straus accused Senate budget writers of “cooking the books” and suggested a vote on the rainy day fund—a savings account established by a public vote in 1988 designed to fill budget holes and prevent shortfalls. “We have options,” Straus said. “We can take a relatively small amount, or small percentage, of the $12 billion that’s sitting in the rainy day fund today or we can make deeper cuts than we already have in a lean budget that currently spends less than our current budget.”

What’s next?

The Senate Finance Committee’s proposal is not yet final. The bill has been unanimously approved by the full Senate but still needs to be reconciled with the House’s budget proposal in the conference committee. Although there’s a chance the two will find a middle ground, either way, funds are getting cut.