ISSUE 5: March 12, 2007

That Was Then …

 

Hurry Up and Wait

The House Appropriations Committee (HAC) began full markup of its version of the proposed budget, HB 1, on Friday, but higher education riders and exceptional item funding requests, along with many other items, were postponed at the last minute Thursday night until today. HAC Chair Warren Chisum (Pampa) previously announced his intent to vote out the General Appropriations Act (GAA) on March 19. Whether this remains the schedule is unclear. Nevertheless, some noteworthy decisions have been made.

The HAC tentatively approved an across-the-board (ATB) employee pay raise of 2.5 percent (with a $75 minimum) in each year of the 2008-09 fiscal biennium, including for non-faculty higher education employees. Rep. Sylvester Turner (Houston) suggested developing some kind of COLA index to equalize increases across various regions of the state. Longevity pay also would increase, from $20 to $30 every two years for the first ten years of employment. Both items were placed in Art. 11, aka the “wish list,” where they await available funding. A contingency appropriation rider for merit pay increases also was adopted.

Rep. Betty Brown (Terrell) offered a rider prohibiting spending state money for biomedical research that is prohibited by federal law as of Jan. 1, 2007. She said it would make state fiscal policy on cloning or stem cell research consistent with federal law and Bush administration policy. Turner questioned whether such a rider is permissible in the budget bill or makes general law. He asked Legislative Budget Board staff to review it, and Rep. Brown agreed to withdraw it.

HAC markup resumes at 8 a.m. today, or, as Chisum advised Turner, “Whenever you get your lively britches on and come on down.”

Meanwhile, the Senate Finance Committee (SFC) workgroups continue meeting. They are discussing an ATB pay raise similar to what was left pending by the HAC and increasing the Employee Retirement System (ERS) employer contribution rate to 6.75 percent. They have increased funding for higher ed employees’ group health insurance to 95 percent of the ERS contribution rate for UT and Texas A&M employees, and to 100 percent of the ERS contribution rate for ERS higher ed employees.

Sen. Florence Shapiro (Plano), who heads the academics workgroup, has indicated that her panel is proceeding with the special items as listed in the base budget bill and not considering funding them through formulas, as Gov. Rick Perry has recommended.

Senators also are increasing funding to the health-related institutions’ (HRIs) Instruction & Operations Formula: $34.5 million for weighted student enrollment growth and $66.35 million as a higher ed inflationary adjustment of 7.55 percent. They also added $3 million to increase the nursing graduate weight but left pending a $16.8 million increase for HRIs’ infrastructure and a $4.8 million increase for the research formulas.

Sen. Robert Duncan’s (Lubbock) special issues workgroup will meet today at 6 p.m. to consider correctional managed care and other issues, possibly including infrastructure, research, and graduate medical education formula funding for the HRIs.

On Tuesday, the full SFC is to consider workgroup recommendations on Higher Education Employees Group Insurance, Teacher Retirement System and the Optional Retirement Program. Full SFC mark-up currently is set for Wednesday, but Chair Steve Ogden (Bryan) said he doesn’t think they’ll finish this week. He noted that the only real target is to send the budget to the printer before Easter (April 8).

 

Fiscal Nuts and Budget Bolts

The budget-writing committees’ regular meeting times and places, clerks and phone numbers are:

>House Appropriations – 8 a.m. daily (usually, and upon House adjournment as needed) E1.030 (HAC Hearing Room, Capitol Extension 1st floor)
Cristina Self, 463-1091

>Senate Finance – 8 a.m. daily (usually, and upon Senate adjournment as needed) E1.036 (SFC Hearing Room, Capitol Extension 1st floor) Amy Jeter, 463-0370

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 SFC workgroups and HAC subcommittees, have met almost daily. The SFC work sessions likely will occur for another day or two, even as the HAC wraps up its work. 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.

Higher Ed Highlights

A Funny Thing Happened on the Way to the Soccer Field

During the House Higher Education Committee’s otherwise routine hearing last Monday on several rather innocuous tuition discount/exemption and student fee bills, an unusual situation occurred regarding HB 1505 by Rep. Eddie Lucio (Rancho Viejo). The bill authorizes an intercollegiate athletics fee at UT Brownsville, primarily for soccer, of up to $7 per semester credit hour, beginning in fall 2008. Although approved by the student body, the bill is opposed by Rep. Rene Oliveira (Brownsville), in whose district UTB is located.

The new fee would raise an estimated $1.2-$1.9 million for 2008-09 and free up almost $1 million in student services fee revenue currently being spent on athletics for other purposes, such as tutoring. But Oliveira characterized the cost, perhaps as much as an additional $200 per student per year, as a prohibitive 10 percent tax, referring to the total annual increase. Moreover, he claimed that the bill violates an agreement made a few years ago between himself and UTB administrators not to increase tuition and fees.

“I was stunned when the bill was brought up,” Oliveira said. “They need the money. We’ve failed to give them enough so they must resort to fees, but this is too high.”

Oliveira maintained that UTB could seek approval from the UT System to increase the student services fee unilaterally without legislation. He also asserted that the new fee would, in effect, siphon financial aid from students because about 40 percent of those enrolled would pay the fee with TEXAS Grant funds.

UTB officials and the student government president testified that the school has one of the lowest tuition rates in the System, pointing out that the new fee would not be paid by distance learning students. Students whose families earn less than $25,000 a year pay no tuition or fees at UTB, they noted.

Lucio, whose district includes part of the City of Brownsville, explained that his bill represents a difference in philosophy between getting students what they need and what they deserve. “We can’t just get by anymore,” he said, adding that he believes the new athletic facilities would make UTB even more attractive to prospective students.

Rep. Fred Brown (Bryan) asked if there is another funding mechanism that doesn’t use up student grant money. Brown also inquired why UTB charges fees for services that should be included in tuition.

Lucio responded that UTB receives no money from the Permanent University Fund. It does benefit, however, from the Higher Education Assistance Fund.

HB 1505 was left pending, as were:

• HB 868 (Haggerty) authorizing an increase in the recreational facility fee at UT El Paso from $12 per student to $70 per student for a term or semester of 10 weeks or more, or $50 for any other term or semester, to expand the Swimming and Fitness Center facility. Rep. Helen Giddings (Dallas) asked if the fee could be assessed on course load rather than on each student.

• HB 1157 (West) authorizing a student services building fee at UT Permian Basin up to $150 for each regular semester, $75 for each summer session of more than six weeks, or $50 for each summer session of six weeks or less. Giddings asked whether a sliding scale could be implemented for part-time students.

• HB 86 (Branch) offering tuition rebates to eligible undergraduate students who graduate within the time to qualify for forgiveness of a Texas B-on-Time Loan and who have attempted no more than three hours in excess of the minimum number of semester credit hours required to complete their degree program. The rebate is generally $1,000 and must be paid by the institution from local funds. The bill would exclude semester credit hours (SCH) earned to meet requirements of a Reserve Officers Training Corps program from counting toward the limitation of no more than three SCH above the minimum requirements of their degree program.

• HB 1187 (Morrison) requiring the Texas Veterans Commission to establish a tuition and fees exemption voucher program for students in grades 6-12 or at post-secondary educational institutions who play "Taps" during military honors funerals held in Texas for deceased veterans. The $25-per-occurrence, non-transferable vouchers could be used at any time.

• HB 741 (T. King) exempting students from tuition and fees whose parents are disabled volunteer municipal, county, or state peace officers or who died in the line of duty.

 

Less Talk, More Action

On the Senate side last Monday, the Higher Education Subcommittee unanimously reported two substitute bills favorably. SB 89 (Van de Putte) counters an Attorney General’s opinion that veterans must be both Texas residents and U.S. citizens prior to qualifying for tuition and fee exemptions under the federal Hazlewood Act. The committee substitute would remove the home of record declaration requirement in favor of location of point of entry into the armed forces. It grandfathers Texas residents (and their dependents) who joined the military in other states.

Also last Monday, the Subcommittee approved changing the student regent selection process to require disclosure of applicants’ names and schools before they are recommended to the governor. Sen. Jeff Wentworth (San Antonio) said SB 276 is designed to allow chancellors and presidents to interview applicants before making their recommendations. Under current law, the student government of each academic or medical institution in a university system solicits applications for the position, selects five applicants, and sends their applications to the chancellor after removing the applicants’ and institutions’ names. (Independent schools do the same, except the applications are sent to the president.) The governor may request to review the deleted information before making the appointment.

The bill also allows the Governor’s Office to request additional information about applicants; requires them to be in good academic standing; changes student regents’ terms to parallel the academic year; and requires student regents to maintain 2.5 grade point averages.

Both bills now go to the Senate Education Committee.

Let the Gaming Begin

Remember “Bowling for Dollars?” How about “Gambling for Colleges?”

At a Thursday press conference, Sens. Rodney Ellis (Houston) and John Carona (Dallas) announced their joint filing of SJR 45 and SB 1359, which would authorize video lotteries and casino gambling and allow (but not require) the Legislature to create a trust fund from the state’s take that would be dedicated to student financial aid, specifically for tuition and fees. (The proposed constitutional amendment states “all or part” of the revenue.) The fund would exist outside the state treasury under the comptroller’s management. The enabling legislation, however, allocates four-fifths of the new revenue to the General Revenue Fund. The mechanism for awarding students money is as yet undetermined; Ellis said it would be developed in conjunction with the Texas Higher Education Coordinating Board.

“There’s a big debate going on around here about how to fund college scholarships,” Ellis observed. He prefers TEXAS Grants, where the Legislature appropriates a dollar amount and then decides recipients’ income level eligibility. Ellis noted that Lt. Gov. David Dewhurst prefers B-on-Time Loans, but Ellis wants the new program to avoid loan penalties (e.g., if a student’s GPA drops to a B-).

Waco economist Ray Perryman estimated, under a “low-end” merit-based allocation scenario, that about $1 billion a year would be available for financial aid. He said that translates into paying for 65,000 new students annually to attend four-year public colleges and universities; alternatively, the state could fully fund the TEXAS Grants Program in its current format. Those outcomes presume a 75/25 split with community colleges, he said.

The rosy picture is based on estimated overall annual state revenue generation of $2.6-$4 billion, primarily from a new gaming tax (15% of gross revenues) on up to 12 destination resort casinos (seven urban, two on Gulf Coast islands, three at large to boost job creation and local economies); three Indian tribe-managed casinos; and racetrack video lottery terminals (VLTs, aka electronic slot machines). Local governments would get an estimated $500-700 million a year in new revenues, mostly from sales and property taxes.

Carona argued that Texans already gamble, just not much in Texas (though neither he nor Ellis do, not even the state lottery). Carona believes that creating Las Vegas-style casino complexes would not only compete for the national gaming dollar but encourage Texan gamblers to help subsidize, and benefit from, their home state’s programs and economy, not Texas’s neighbors. Ellis also apparently is intent on spreading the program’s anticipated wealth around, remarking, “Pigs get fat and hogs get slaughtered.”

Other key provisions:

• A statewide constitutional amendment election to require local option elections in each county for which a license application is sought.

• A new gaming commission – appointed by the governor, lt. governor, speaker, attorney general and the comptroller – initially funded with a $2.5 million interest-free Texas Enterprise Fund loan to be repaid from the first licensing fee revenues.

• Licenses awarded based both on competitive bidding and best practices.

• Texas-based ownership of at least 51 percent of each project.

Underlying premises/assumptions include:

• Texans spend $10 billion a year on gaming/gambling, much of it at out-of-state casinos.

• Casinos and VLTs would have a $50 billion annual economic impact, including 100,000 direct jobs and 400,000 indirect jobs.

• The Texas tourism industry would see an additional 50 million visits per year.

• Polling data show that more than 60 percent of surveyed voters favor casinos if state revenue is dedicated to pay for college education; casinos are preferred 3 to 1 over VLTs; and 85 percent, regardless of their personal opinion, favor letting voters decide.

• Texas would realize a $54 billion net gain by 2030 in additional college graduates’ extra earning capacity and decreased social costs.

Perryman and pollster Mike Baselice reportedly were hired by the Texas Gaming Association.

Similar bills to the enabling legislation include HB 1405,
HB 3326, HB 3335 and HB 3351 (all by Flores), legalizing VLTs; HB 653 (Chavez) authorizing charitable poker; and SB 1452 (Ellis), allowing gambling on day cruise casino ships. Two similar proposed constitutional amendments also have been filed (both by Flores): HJR 99 authorizes VLTs at racetracks and on Indian lands, as does HJR 100, which includes tourist destination casino gaming.

Watch archived news conference

Their Turn

House Democrats publicized their legislative policy agenda Thursday, including college portability, restoration of the Texas Tomorrow Fund, lowering the costs of college textbooks, and expanding the TEXAS Grant Program, according to Gallery Watch reports.

Freshmen members said the plan’s public education priorities include ending the practice of teaching to tests and securing teacher retirement. Other elements include restoring funding for eligibility in the Children’s Health Insurance Program and providing tax credits for small businesses that provide health insurance.

The plan, called “Moving Texas Forward,” is outlined (and will be regularly updated as bills are filed) on the website www.movingtexasforward.net.

Miscellany

Public/Private Sector

At a hearing Tuesday on a bill to reauthorize the Texas Emerging Technology Fund (TETF), Dean Lynda de la Vina of UTSA’s Business College touted the trifecta the fund engendered for the six-month-old Center for Innovation and Technology Entrepreneurship.

First, the fund awarded a grant for information assurance and security that is helping make the center “world-class” for research and commercialization in this emerging high-technology field (its new director is from the Massachusetts Institute of Technology). Second, the Business College is hiring professors to fill chairs with private sector funding attracted by the grant. Third, the Business and Engineering colleges are collaborating in new ways that should dovetail with related local business enterprises and military programs. Eventually, she believes these initiatives will become part of UTSA’s business incubator.

TETF officials disclosed that they expect to announce soon a deal to hire an expert on indoor air quality who would work at UT Tyler.

SB 486 (Shapiro) mainly tweaks the mechanisms through which the fund operates. The dollar amounts available for the next biennium have yet to be decided by the two budget-writing committees. The Senate Emerging Technology and Economic Development Subcommittee left the bill pending due to lack of a quorum to vote it out.

Private/Public Sector

Rep. Harvey Hilderbran (Kerrville) filed HB 3080 last week creating a special permanent fund for tuition equalization grants (TEGs), according to Gallery Watch reports. TEGs benefit financially needy students attending private, non-profit colleges or universities in Texas. In 2005-06, 29,412 students received TEGs.

Currently, TEG awards are capped at the amount appropriated by the Legislature. HB 3080 would bypass the appropriations process by authorizing a one-time appropriation of $2.5 billion into the TEG Fund, to be managed by the comptroller. The idea is to create a stabilizing fund not subject to appropriations each session, explained Hilderbran.

"By guaranteeing the amount of grant money we have available, this fund will ultimately help more students pursue higher education degrees who could not otherwise afford to do so," he said.

The fund, to be named after retired Rep. Bob Hunter (Abilene), would be composed of gifts and grant contributions and interest earnings, in addition to the appropriation of state revenues. The earnings could be appropriated to the Texas Higher Education Coordinating Board for the purpose of awarding TEGs.

Hear y’all! Hear y’all!

Gov. Rick Perry on Monday issued three new emergency proclamations relating to the Texas Youth Commission (TYC): a call for legislation pertaining to certain crimes at TYC; legislation to establish an Inspector General at TYC; and legislation allowing the attorney general to have concurrent jurisdiction with a local county or a district attorney for the prosecution of offenses involving TYC.

…This Is Now

Our Text(book) For Today …

The House Higher Education Committee leafed through several textbook bills today, most notably HB 956 (Hochberg). This bill imposes various requirements on public institutions of higher education (faculty and administrators), as well as university-affiliated bookstores, the Texas Higher Education Coordinating Board and the Texas Building and Procurement Commission (TBPC) concerning the selection and sale of textbooks and related educational materials.

Faculty members must consider cost when selecting required textbooks and may not require textbooks not expected to be used in the course. "Open access publications," which are peer-reviewed publications written by expert authors that are available free over the internet, must be considered by faculty for course use when they provide necessary content at less cost. An edition of a required textbook must be in print for at least three years after its initial release before being superseded by a subsequent edition, unless valid educational or cost considerations cause an exception approved by the department chair or other designated university official.

All public institutions of higher education must compile a list of required textbooks for each course and post them on a student-accessible website. The list must be posted as soon as practicable but not later than one week after the information is made available to a university-affiliated bookstore. (A university-affiliated bookstore is a store that sells textbooks, on or off campus, and that is operated by or with the approval of an institution through ownership, management, or lease or rental agreement, or otherwise.). Textbook sellers may not be prohibited from advertising or promoting on campus, except to the extent such activities are generally restricted. However, the bill does not require that competitive advertising be allowed inside a university-affiliated bookstore. To the extent the institutions work with university-affiliated bookstores to provide students with credit or payment options for the purchase of educational materials, the institution is to make similar arrangements with other textbook retailers. Any conditions set by the institution may not be used to provide a substantial advantage to a university-affiliated bookstore.

University-affiliated bookstores may not sell textbooks and instructional materials as a "bundle" unless all of the "bundled" items are required, or the "bundle" price is less than the total of the items if purchased separately. (A "bundle" is "a single package containing a textbook along with other materials.”) Faculty members may not require a "bundle" unless all such materials are intended to be used in the course, or the "bundle" price is less than the total of the items if purchased separately. University-affiliated bookstores that allow for textbook returns shall not penalize a student for opening a required "bundle," or the materials contained therein, as long as other terms of the store's return policy are met.

Subject to certain exceptions, it is a Class B misdemeanor for any trustee, administrator or faculty member to receive any commission or rebate on any textbooks used at an institution with which these persons are associated. It is also an offense for any of these persons to accept a gift, favor or service given to the person or their institution that might reasonably tend to influence the selection of textbooks. Royalties or other compensation from sales of a faculty member's own work, staff development, in-service or faculty training, sample copies, instructor's copies or instructional materials, such as maps or worksheets, are not considered gifts, favors or services prohibited by this bill.

The bill limits an institution's ability to grant by agreement certain advantageous rights to a wide range of bookstores that are affiliated with an institution in virtually any manner. The TBPC is granted rulemaking authority concerning the negotiation of textbook discounts and related agreements.

Read agenda ll Watch archived hearing

Tuition Breaks, Student Fees – Part Deux

Companions to the UT Brownsville student athletics fee and UT Permian Basin student services building fee bills were approved today by the Senate Higher Education Subcommittee (see “A Funny Thing …” above) along with the UT Dallas student fees bill. Committee substitutes for SB 612 (Lucio) and SB 523 (Seliger) were reported favorably to the Education Committee and recommended for the Local and Uncontested Calendar, as was SB 285 (Shapiro). That bill authorizes UT Dallas to collect a student transportation fee of up to $18 for each regular semester or $9 for each summer term. It also authorizes a student services building fee of $71 per student for each regular semester or summer term of 12 weeks or longer; $47.33 per student for each summer term of eight weeks or longer but less than 12 weeks; or $35 per student for each summer term of less than eight weeks. Finally, if a majority of students approve, an intramural and intercollegiate athletics fee is also authorized up to $45 per student for each semester or summer term of 12 weeks or longer; $30 per student for each summer term of eight weeks or longer but less than 12 weeks; or $22.50 per student for each summer term of less than eight weeks. The UTB athletics fee bill now requires student government approval for any increases of less than 10 percent. No testimony was taken on any of the bills.

Session Snapshot

 

Week	10
Days Remaining	78
Bills/Joint Resolutions Filed*	6,078
Bills/Joint Resolutions Passed**
>House	7
>Senate	13
Bills Enacted*	2
Legislation Tracked	1,604
High Priority Bills	358

*Incl. SCR 20 (const. spending limit)
**By each house

The bill filing deadline was Friday, March 9, the 60th day of the session (cue applause). Legislative deadlines and other important dates may be found at Key Legislative Dates.

Gov. Rick Perry designated 11 matters as emergencies (see press releases on emergency issues and additional issues). This meant that lawmakers could 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

Duly Noted

Last Monday, the House Higher Education Committee heard four student fee bills, prompting Rep. Fred Brown (Bryan) to observe that he’d like to see legislation allowing institutions to set those fees without legislative approval. Subsequently, in presenting UTEP’s recreational fee bill (HB 868), Rep. Pat Haggerty (El Paso) said, “Madam Chairwoman, just for Fred, this is a bill that does away with having to come to this committee ever again.”

“Especially at 8 o’clock, right? On Monday morning,” replied Chair Geanie Morrison (Victoria), with a laugh.

Upon introducing UTEP Student Government Association President Samuel Gonzalez, Haggerty remarked, “I haven’t met you yet [shaking his hand] – damn good to see you.”

When Gonzalez broke down the 1,287-student vote turnout (out of about 20,000 enrolled) approving the proposed fee increase as 799 for, 488 against, Haggerty observed, “That would make a typical state representative race.”