Contact: Monty Jones, (512) 499-4363

Date: January 10, 2003

Statement by Mark G. Yudof, Chancellor

Comptroller Carole Keeton Strayhorn is to be congratulated on her E-Texas report released today. It clearly demonstrates her knowledge of state finance and government operations.

In the area of higher education, she has made several recommendations which will provide institutions of higher education greater flexibility to better manage their operations.

Among these, she has recommended that governing boards be permitted to establish appropriate tuition rates beginning with FY 2005 and to vary them as circumstances dictate. For non-resident tuition, she has recommended the same flexibility with the current statutory rates serving as a minimum.

Another recommendation to provide greater opportunities in the area of research involves the indirect cost recovery funds earned by universities. Comptroller Strayhorn recommends that universities be authorized to retain and utilize 100% of these funds. Texas is one of a handful of states which currently taxes the institutions earning these funds, funds that can be used to recruit top-notch professors and researchers, purchase research equipment, and facilitate the commercialization of new technologies.

Other recommendations include: a proposed change in funding based on non-resident students currently eligible for waivers of the non-resident portion of their tuition and a proposed reduction in the current funding of a portion of certain line item appropriations to Texas universities. We are examining the implications of these proposals.

The U.T. System is in total accord with the Comptroller's goals of promoting greater accountability and efficiency in state and university operations. We look forward to working with her, her staff and the state legislature throughout the upcoming session to achieve these goals.