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

Date: October 25, 2004

Testimony before the Senate Finance Committee

James R. Huffines, Chairman, The University of Texas System Board of Regents

AS PREPARED

Chairman Ogden, Members of the Committee:

I appreciate the opportunity to testify on behalf of The University of Texas System Board of Regents today.

The Board shares your interest in providing the sons and daughters of Texas access to colleges and universities that are both centers of excellence and models of efficiency.

The UT System enrolls one-third of Texas university undergraduate students and three-quarters of Texas health professions students.

The Board is profoundly aware of our responsibility to serve those students well from their first moment of contact with a UT institution.

We understand that – especially when resources are limited – our responsibility is to make the best use of those resources.

And we work hard never to lose sight of the fact that the research and teaching done at UT institutions is the foundation of Texas' economic prosperity.

As Texans compete in an increasingly complicated international economy, we have to make certain that universities are serving the state with education that prepares students for the future and with research that fuels business growth and creates new opportunities.

In many ways, we are living in a difficult time for higher education, with budgetary restrictions and heightened public demands. But what we do and the choices we make during difficult times may be more important than those in simpler times.

We have the opportunity to make a better future for the state by committing ourselves to excellence in higher education.

I am here today simply to underscore the Board's support and to briefly highlight some of our priorities for the upcoming legislative session.

First, we want to improve our ability to ensure student access and success. We are committed to meeting the goals established by Closing the Gaps.

Obviously, to achieve those goals, we will need to provide the faculty, advisors, recruiters and capital improvements to accommodate the growth of demand for higher education.

If Texas is going to accommodate 50,000 new students a year under the Closing the Gaps initiative …it will be like adding one UT Austin campus every year.

We understand that the difficult issue facing the Legislature in the decade ahead is how best to align its budgetary priorities with the stated objectives of Closing the Gaps.

This also is probably the appropriate point to mention that we are keenly aware that the affordability of higher education is an important issue for Texas families.

And the Board of Regents of the UT System is sensitive to those concerns.

Last week UT System Administration, with my approval, sent budget instructions to our academic institutions advising them that, for the next round of tuition proposals… [QUOTE] – "any increase greater than 5% for resident undergraduate tuition and mandatory fees requires special justification," – [END QUOTE].

If appropriations hold steady or increase in the coming legislative session, that will enable us to do a better job of maintaining services.

However, if we are faced with significant cuts, we will be looking at a choice between double digit increases in tuition or a reduction in quality – which means larger classes, reduced class access and hiring fewer professors…or some combination of the two.

But I want to emphasize that we are committed to keeping any increases in the immediate future at or below that 5% benchmark.

Our next priority is providing excellent health care, which involves, as always, adequate funding … including special concerns about Graduate Medical Education and the provision of uncompensated care to the uninsured and underinsured by UT institutions and staff – a critically important service to our state.

Third, we are eager to enhance the quality of our teaching and overall research capacity at all UT institutions.

We all know that these institutions are proven economic development generators, creating new businesses and jobs all across Texas.

Currently, there are 8 institutions in Texas that are among the top 100 recipients of federal research grants in the country – 6 are in the UT System. We believe that 4 additional UT institutions have the capacity to join the top 100 over the next 10-20 years.

If Texas is going to compete at a national and international level we must have more research institutions. We hope you will support our efforts to make that happen.

We also believe that we can always improve our efficiency and productivity.

For that reason, we are extremely proud of the continuing accountability program we have established. The Regents received our first report on Accountability and Performance in February and will receive the second annual report in February 2005.

UT System is a leader in the state and the nation in accountability in higher education. In fact, later this week we are hosting our first national symposium on accountability attended by university presidents, administrators, state and federal policymakers from all over the country.

Finally, we are committed to accountability not only in word, but in deed. As many of you already know, we have, for the first time in history retained an outside accounting firm – Deloitte & Touche – to perform a deep, system-wide financial audit. We fully intend to make the management report detailing its recommendations available to the State Auditor and the Legislative Audit Committee in January 2006. The audit will cover Fiscal Year 2005 (Sept '04 – August '05).

The UT System Legislative Appropriations Request will be discussed in more detail by Dr. Teresa Sullivan, System Administration staff and the institution presidents…and, of course, you have our written submissions.

We appreciate the hard work you are undertaking as the session approaches…and we congratulate you on the early start you have made with these hearings.

Mr. Chairman, members of the Committee, thank you for your time and your attention. I look forward to working with you as your efforts progress…