ISSUE 2: February 20, 2007

That Was Then...

Let's Talk, Shall We?

System officers and institution presidents spent hours at the Capitol early last week before the two budget-writing committees discussing their fiscal priorities and a variety of higher education policy issues. Board of Regents Chairman Huffines told the Senate Finance Committee (SFC) how encouraged he was to see higher ed at the forefront of the legislative agenda, which is partly a function of Gov. Rick Perry’s higher ed proposal (see “The Devil’s in the Details” below). System Chancellor Yudof noted how well UT schools are attracting and leveraging research dollars. He reiterated his support for incentive funding but urged senators to fine-tune the measurement aspect. He favors non-binding exit exams, which in themselves need to be tied to incentives for students to ensure compliance and performance.

In other highlights of the general academic institutions’ (GAIs) hearing:

• Tuition levels at Texas universities were reported to rank in the middle nationally.
• Students with lower Scholastic Aptitude Test scores are doing better at UT schools than the scores predict.
• The Permanent University Fund corpus has grown 95 percent during the past 10 years, according to LBB staff.
• The Higher Education Assistance Fund (HEAF), which benefits UT Brownsville and UT Pan Am, has yielded 8.1 percent growth during the past five years, and 9 percent in FY 06. The base bill allocates $525 million to the HEAF for the 2008-09 biennium.
• Deleting special items, as Gov. Perry has proposed would hurt both large and small schools.
  
  Watch archived SFC video:  Pt. 1 (beg. 1:00:45)  Pt. 2 (Note: the beeping sound you’ll hear is not your pager; it’s Sen. Judith Zaffirini’s [Laredo] timer for the length of witnesses’ testimony.)

The health-related institutions (HRIs) were up before the SFC last Wednesday. Dr. Kenneth Shine, executive vice chancellor for health affairs, described how the physician shortage and uncompensated care are worsening in Texas despite UT medical schools’ enrollment increasing and an overabundance of nursing school applicants. He said the best way to attract more doctors is to increase the number of residency slots for graduate medical education (GME), because residents tend to practice where they are trained. Doing so would also help relieve the burgeoning crisis in indigent care, much of which is provided by residents. Dr. Shine estimated that $10-$40 million in Medicaid reimbursement would help all Texas hospitals obtain more federal matching funds. He pointed out that three UT-run hospitals (UTMB, San Antonio and Tyler) receive no federal matching money for providing a disproportionate share of uncompensated care because they receive state general revenue.

Sen. Kyle Janek (Houston) noted that more HRI funding could help alleviate other hospitals’ indigent care problems, such as Parkland in Dallas which contracts with UT Southwestern. Sen. Ogden observed that there is considerable political pressure, given the uncommitted $2.5 billion in the budget, to throw money in many directions. “We need to find the smartest way to spend a lot of money,” he said.

Watch the archived video:  Pt. 1 (beg. 1:50:15)  Pt. 2

The HRI presidents and Dr. Shine also appeared before the HAC Education Subcommittee last Monday. He stated the case for more and better-paid nursing faculty as the key to reducing the state’s nursing shortage. The funding formulas underweight the costs of baccalaureate nursing education, he said, which studies show produces nurses whose hospital patients have lower mortality rates. Dr. Shine noted that Texas has more licensed vocational nurses per capita than the national average. One approach to the problem, offered by Chancellor Yudof, is some type of non-formula funding “with strings attached.”  Watch archived video (beg. 1:12:53)

From session to session, the two houses alternate writing the initial version of the appropriations bill. The starting point this session is HB 1, but both the SFC and HAC, or the HAC subcommittees, have met almost daily. The SFC workgroups, recently named by Chair Ogden, and the HAC Education Subcommittee are finalizing their work session schedules for this week. These are not formal hearings but informal meetings in which the workgroup/subcommittee members review and consider exceptional items – formula funding, equity for employee group insurance, student financial aid, etc.  The work sessions likely will occur for about two to three weeks; then the workgroup and subcommittee decisions will be taken to the full committees for mark-up. Once both the Senate and the House have approved spending plans, the legislative leadership will appoint a 10-member conference committee to reconcile the differences in the proposed budget and present a compromise bill to each house for approval.

Rep. Helen Giddings (Dallas) asked for data on free and discounted tuition by family income for entering freshmen, saying she is concerned about affordability in the face of 40 percent tuition hikes since rate-setting was partially deregulated in 2003. “A lot of students tell me they can’t afford college,” Giddings said.

Among the plan’s more controversial features are the abolition of lump-sum appropriations and special items; the consolidation of three major financial aid programs; and tying $216 million in incentive funding to performance measures, namely, the number of degrees awarded and scores on non-binding exit exams (either in the major field or for professional licensing). That would provide about $2,200 per graduate for four-year GAIs. Residencies completed would be an added criterion for HRIs, which would receive $48 million a year ($8,000 per degree/resident). The funding matrix would be weighted more heavily for at-risk students and reward schools proportionally when students graduate elsewhere after transferring.

Perry would combine tuition equalization grants (TEGs), TEXAS Grants and the Texas Educational Opportunity Grants into the Tuition Assistance Grant Program, and increase the B-on-time Loan Program. The total financial aid increase would be $363 million, or 60 percent. When Chair Lois Kolkhorst (Brenham) voiced how “partial” they are to TEGs, which help private college students, Roberts countered that they were created at a time when public colleges lacked sufficient space.

Roberts argued that special items are supposed to be for unique programs or start-up projects, and not used for ongoing operations, as is institutional enhancement. He said that type of spending should be formula-funded, claiming that special items have increased more than 1500 percent since FY 1986-87. Roberts noted that higher ed officials have said they would be willing to trade special items for full formula funding, implying that the Perry plan provides that opportunity. He challenged higher ed leaders to develop an alternative proposal showing how special items differentiate between those that advance the state’s Closing the Gaps plan and those that don’t.

Calling the plan ambitious and well-thought out, Kolkhorst conveyed her compliments to the Governor.
Watch archived video (beg. 1:28)   Read Quorum Report article.   Read the plan.

Meanwhile, Back at the Ranch

The Senate Higher Education Subcommittee also got under way last week. On February 12, Chair Zaffirini outlined the panel’s priorities, including tuition deregulation, the top 10 percent law, financial aid, affordability, graduation rates, accessibility and incentives to improve the efficiency and transparency of higher education institutions. Higher Education Commissioner Raymund Paredes summarized strategies associated with the state’s Closing the Gaps plan that seeks to increase enrollment significantly by 2015; graduate more students in science, technology, engineering and math; and emphasize the importance of early education in creating a "college-going culture." He also underscored the disproportionate representation of low-income students at community colleges and the need to improve transfer rates from two- to four-year institutions.

"Our priorities include improving access to and the affordability of higher education, especially for low- and middle-income families," said Zaffirini. "We must examine the state financial aid programs to see how we can make them more efficient and effective in achieving the goals of Closing the Gaps."

Miscellany

Not On Our Watch

An unlikely coalition of business and civil rights groups Thursday called for a halt to immigration legislation this session. While extolling the need for border security, they urged Congress to address immigration policy issues, not state or local governments. Rep. Veronica Gonzales (McAllen) said that includes bills filed this session that would do away with in-state (resident) college tuition for children of undocumented workers (see HB 28 by Berman, HB 39 by Zedler, HB 104 by Riddle).    Watch archived video

New Kid on the Block

On Feb. 5, Gov. Rick Perry appointed Randal Matthew Camarillo of Fort Worth as Student Regent for The University of Texas System.  He took the oath of office on February 9, and his term is scheduled to expire February 1, 2008.

Regent Camarillo is a third-year medical student at UT Health Science Center at Houston.  His biographical sketch is online at http://www.utsystem.edu/bor/regents/camarillo.htm.

The Chairman's statement on the appointment is available online at http://www.utsystem.edu/news/2007/BOR-StudentRegents02-05-07.html.

This is Now...

Emergency In Da House

The House took up school property tax relief measures Monday that are being fast-tracked so they can vote on busting the budget cap today and begin the appropriations process in earnest. All three bills have been declared emergencies.

Monday:
HJR 1 – senior citizens’ school property tax relief:
Constitutional Amendments Calendar

HB 2 – school property tax relief
Emergency Calendar - House Bills

Tuesday:
SCR 20 - spending limit
Emergency Calendar - Senate Bills

Other bills of interest being heard Monday include:

• HB 459 (Miller) dealing with removal or relocation of historical monuments on state property – House State Affairs

• HB 387 (Callegari) repealing the Texas National Research Laboratory Commission statute – House Government Reform

• HB 116 (F. Brown) limiting the number of college courses students may drop – House Higher Ed

Note: Next Monday, Feb. 26, the House Higher Education Committee is expected to hear all bills filed dealing with automatic college admission, the so-called “top 10 percent law.”

Gov. Rick Perry has designated eight matters as emergencies (see press releases on emergency issues and additional issues). This means that lawmakers may consider bills on these subjects during the session’s first 60 days, when they otherwise are precluded by the Texas Constitution from passing legislation.

House Committees’ permanent meeting schedules
Senate Committees’ permanent meeting schedules will be listed as soon as they are available.

Brimer: “Yesterday, the House parliamentarian ruled in the House Transportation Committee that, because one of our senators went over and sat on that panel, that all the bills would be dead in that committee. My inquiry is, is that all we have to do to go over and kill House bills?”

Dewhurst: (pausing to stifle a laugh) “The next order of business …”

Watch Williamson and Carona in House Transportation Tuesday (beg. 1:05:38).
Hear Krusee’s ruling explanation (beg. 1:44:00).