Contact: Anthony de Bruyn, (512) 499-4363

Date: August 12, 2004

UT System News Release

$8.5 Billion Operating Budget Approved by Board of Regents

HOUSTON – An $8.5 billion operating budget for fiscal year 2005 for the 15-campus University of Texas System was approved Thursday (August 12) by the UT Board of Regents.

Expenditures in the new budget are projected to be 8.7 percent higher than in FY 2004, with most of the growth resulting from increases in student enrollment, instructional costs, health care services, and federally sponsored research. The new fiscal year begins September 1.

At $1.6 billion, general revenue appropriations are virtually unchanged from fiscal year 2004 and represent only 18.9 percent of income to the UT System. General revenue also decreased as a percent of total expenditures from 20.4 percent in FY 2004 to 18.9 percent in FY 2005.

Income from health care activities increased 11.4 percent, to $2.8 billion. Sponsored research and services (the majority of which is funded through federal grants and contracts) increased nearly 8.5 percent, to $1.9 billion.

For fiscal year 2005, designated tuition increases as a result of tuition flexibility granted under new legislative authority will generate approximately $117 million at UT System's nine academic institutions. This additional revenue will be allocated in the following areas:

• 28% will be distributed to existing faculty (benefits and merit increases)
• 27% will be allocated for scholarships, financial aid, and student services such as academic advising
• 16% will be distributed to existing staff (benefits and merit increases)
• 13% for hiring new faculty
• 9% for campus infrastructure repair and maintenance
• 7% for library and computer lab extensions

Of the total expenditures, $4.8 billion (56.8 percent) is for personnel costs (salaries and benefits); $3.2 billion (37.3 percent) is for maintenance, operations, and equipment; and $504 million (5.9 percent) is for capital outlay and debt service.

The System's six health institutions continue to account for the majority of the total operating budget (about 63 percent of the total of $8.5 billion). M. D. Anderson Cancer Center has the largest budget of the System's 15 institutions, followed by UT Austin and the UT Medical Branch at Galveston.

The portion of the budget for the UT System administration funded from state appropriations (mostly from public endowment income that goes into the Available University Fund) declined for the second consecutive year, from $28.9 million to $28.7 million. These expenditures represent 0.34 percent of the total budgeted System-wide expenditures, down from 0.37 percent in FY 2004.

The number of full-time-equivalent employees is down approximately 7.5 percent for that portion of the System administration budget, as a result of a hiring freeze implemented at the System in November 2002 as well as shifting some positions to self-supporting operations. The System is now 27.7 FTE employees below the statutory limit set by the Legislature.

The flexible hiring freeze will continue at the System Administration in the new fiscal year, but each campus will continue to decide what to do locally.

The University of Texas System has 15 campuses, including nine academic and six health institutions. Student enrollment is projected to exceed 185,000 students in the new fiscal year. The UT System currently employs more than 87,000 employees, making it one of the largest employers in the state. The UT System confers one-third of the state's undergraduate degrees and educates three-fourths of the state's health care professionals annually.

Budget Presentation

Other news and materials from the meeting of the board