In spring 2009, the 81st Texas State Legislature passed HJR 14, which proposed Proposition 4, a constitutional amendment to repurpose the Higher Education Fund as the National Research University Fund. Texans voted to support higher education and the state by approving Prop. 4 on November 3. This amendment will provide the funding critical to creating and supporting additional Tier One Universities in Texas as outlined in HB 51.
Where Do We Stand Now?
Texas currently has three Tier One universities—UT Austin, Texas A&M, and Rice University—to serve a population of over 24 million. This is fewer than California, New York, and Pennsylvania and the same number as Virginia, which has a population one-third the size of Texas.
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The National Research University Fund would provide a dedicated, independent, and equitable funding source to enable the state's emerging research universities to achieve national prominence as major research universities. The Texas Higher Education Coordinating Board has designated seven institutions as emerging research universities: UT Arlington, UT Dallas, UT El Paso, UT San Antonio, University of Houston, Texas Tech, and University of North Texas.
What is a Tier One University?
Although there is no one specific definition for "tier one", the term refers to high-performing, nationally competitive research universities. One of the primary criteria for Tier One or National Research University status is the amount of research expenditures. Most acknowledged Tier One universities have more than $100 million in annual federal research expenditures.
The Texas Higher Education Coordinating Board (THECB) has established a tier system for the 35 Texas public universities:
- Research Universities (UT Austin, Texas A&M). Classification as a Research University requires research expenditures of at least $150 million per year and at least 100 doctorates awarded annually in at least 15 disciplines.
- Emerging Research Universities (UT Arlington, UT Dallas, UT El Paso, UT San Antonio, Texas Tech, University of Houston, University of North Texas)
- Comprehensive Universities (all other Texas universities)
A tier one university must also be recognized as a top university in the country. There are three important national organizations that rank research universities: The Carnegie Foundation for the Advancement of Teaching, The Center for Measuring University Performance, and The Association of American Universities. Although not official and often controversial, the university rankings by U.S. News & World Report can also be extremely influential on university reputations.
Why are Tier One Universities Important?
Eligibility for the National Research University Fund requires, among other criteria, $45 million in annual expenditures for specified research. The multiplier effect of these research expenditures is a significant economic plus for our communities.
Economists estimate that every $10 million in annual research spending by a university creates about 334 jobs, adding $8.6 million in wages to the regional economy. After drawing $500,000 in added state and tax revenue and generating $13.5 million in local sales, the total amount results in a 226 percent return on investment.
For example, alumni from the Massachusetts Institute of Technology have founded more than 4,000 companies which employ approximately 1.1 million people and generate $232 billion in sales, an amount roughly equal to the economic output of Houston or the Dallas-Fort Worth Metroplex.
Not only do tier one universities generate economic impact, but they are an important part of creating and recruiting a highly skilled workforce, particularly in the professional fields or the sciences and engineering. They produce far more of these high demand workers and are magnets that draw those living in other states. Highly skilled workers are critical for recruiting industry.
Furthermore, the availability of more Tier One universities will keep the state’s most academically talented students from leaving to attend out-of-state universities. Texas ships off more than 10,000 high school graduates per year who attend doctorate-granting universities in other states, while recruiting only about 4,000 per year from other states. This brain drain—a net loss of nearly 6,000 highly qualified students per year—has increased 54 percent in the last six years.
The Path to Tier One
For the seven emerging research universities HB 51, a companion measure to HJR 14 and Proposition 4, is a critical step in the right direction. Authored by State Rep. Dan Branch of Dallas and State Senators Judith Zaffirini of Laredo, Robert Duncan of Lubbock and Florence Shapiro of Plano—and voted for by nearly the entire Legislature—this law offers three funding streams for immediate support, as well as a long-term funding source in the National Research University Fund.
The three funding streams that will have immediate impact are:
Research University Development Fund will include money for the recruitment and retention of faculty and to enhance research productivity. The THECB will distribute appropriated funds in proportion to the total amount of restricted research funds in the two most recent fiscal years. UT Austin and Texas A&M are eligible for this fund in addition to the state's seven emerging research institutions.
Performance Incentive Funding will reward excellence based on degree production and considering factors such as at-risk students and critical fields.
Texas Research Incentive Program (TRIP) will reward research productivity and match private funding. Already campuses have seen gifts that will be eligible for TRIP matching grants equal to the $50 million appropriated by the Legislature for the 2010-11 biennium. The TRIP matching grants will be determined according to the following rates:
- 50 percent of amounts between $100,000 and $999,999
- 75 percent of amounts between $1 million and $1,999,999
- 100 percent of amounts between $2 million and $10 million. Gifts larger than $10 million will be matched up to $10 million
This commitment to excellence demonstrated by HB 51 will help propel the emerging research universities to national prominence over the coming years and make Texas known for its commitment to creating nationally competitive research universities.