Financing Higher Education in Texas Legislative Primer
Total Page：16
File Type：pdf, Size：1020Kb
cover3.ai 1 2/6/2013 1:02:33 PM LEGISLATIVE BUDGET BOARD Financing Higher Education in Texas Legislative Primer C M Y CM MY CY CMY K LEGISLATIVE BUDGET BOARD STAFF FIFTH EDITION SUBMITTED TO THE 83RD TEXAS LEGISLATURE FEBRUARY 2013 Financing Higher Education In Texas Legislative Primer LEGISLATIVE BUDGET BOARD STAFF FIFTH EDITION SUBMITTED TO THE 83RD TEXAS LEGISLATURE FEBRUARY 2013 Report Contributors: Higher Education Team Sarah Keyton, Manager Daniel Estrada, Senior Analyst Demetrio Hernandez, Analyst Emily Hoff man, Analyst Kris Kavanaugh, Analyst Greg Owens, Analyst Rick Travis, Senior Analyst This report can also be found on the Legislative Budget Board’s website. http://www.lbb.state.tx.us CONTENTS INTRODUCTION .....................................................................................................................1 FUNDING GENERAL ACADEMICS INSTITUTIONS OVERVIEW ......................................................................................................................5 FORMULA FUNDING ......................................................................................................6 NON-FORMULA FUNDING .............................................................................................9 OTHER NON-FORMULA FUNDING ..............................................................................13 FUNDING HEALTH-RELATED INSTITUTIONS OVERVIEW ....................................................................................................................15 FORMULA FUNDING ....................................................................................................15 NON-FORMULA FUNDING ...........................................................................................19 FUNDING COMMUNITY AND TECHNICAL COLLEGES OVERVIEW ....................................................................................................................21 COMMUNITY COLLEGES ..............................................................................................22 TEXAS STATE TECHNICAL COLLEGE/LAMAR STATE COLLEGES ...................................23 FUNDING TEXAS A&M SYSTEM AGENCIES ..................................................................25 APPENDIX A: FREQUENTLY ASKED QUESTIONS .......................................................27 APPENDIX B: TUITION AND FEE PROVISIONS ............................................................31 APPENDIX C: GLOSSARY..................................................................................................37 APPENDIX D: CONSTITUTIONAL AND RESEARCH FUNDS .................................39 APPENDIX E: SUMMARY OF BIENNIAL STATE BUDGET............................................43 LEGISLATIVE BUDGET BOARD FINANCING HIGHER EDUCATION IN TEXAS – ID: 690 i ii FINANCING HIGHER EDUCATION IN TEXAS – ID: 690 LEGISLATIVE BUDGET BOARD INTRODUCTION Th e Texas public higher education system encompasses 38 improvements to the Governor, the Legislature, and general academic teaching institutions (including law institutions. THECB reviews and recommends changes in schools); 50 community and junior college districts; one formulas regarding the allocation of state funds to public technical college system with four main campuses; three institutions to limit duplication of academic programs and lower-division state colleges; and nine health-related unnecessary construction projects. THECB also promotes institutions, which operate a total of eight state medical access to high quality programs at diff erent institutional schools, three dental schools, two pharmacy schools, and levels and oversees the state’s student financial aid programs. other allied health and nursing units. In addition, there are Th e Eighty-second Legislature, 2011, appropriated $22.1 seven agencies that are components of the Texas A&M billion in the General Appropriations Act (GAA) for the University System. 2012–13 biennium to support Texas higher education, a 2.5 Private institutions in Texas include 38 four year colleges and percent decrease from the 2010–11 biennium (Figure 1). universities, two junior colleges, one medical school, and one Figure 2 illustrates the sources of revenue, also referred to as accredited independent law school. methods of fi nance, for the $22.1 billion in state appropriations. Generally, only small portions of the Federal Public institutions serve about 91 percent of the approximately Funds received by institutions of higher education are 1.4 million students enrolled in higher education in Texas. refl ected in the General Appropriations Act (GAA). Th e Texas Higher Education Coordinating Board (THECB) State funds are allocated to public institutions and agencies was established in 1965 and is composed of nine members of higher education in a number of ways: appointed by the Governor for staggered six-year terms. • direct appropriations through funding formulas and THECB provides leadership and coordination for the Texas other direct appropriations based on identifi ed needs; higher education system to promote excellence in higher education. • indirect appropriations not made directly to an institution in its portion of the appropriations bill, THECB’s responsibilities include assessing Texas’ system of but used to cover costs related to the institution’s staff higher education and developing recommendations for FIGURE 1 HISTORICAL SPENDING FOR HIGHER EDUCATION 2002–03 TO 2012–13 BIENNIA ESTIMATED/ ESTIMATED/ ESTIMATED/ ESTIMATED/ ESTIMATED/ BUDGETED BUDGETED BUDGETED BUDGETED BUDGETED APPROPRIATED IN MILLIONS 2002–03 2004–05 2006–07 2008–09 2010–11 2012–13 General Revenue Funds $10,233.7 $10,194.4 $11,176.2 $12,721.6 $12,996.6 $12,172.3 General Revenue–Dedicated $2,067.5 $2,396.2 $2,146.7 $2,257.8 $2,488.9 $2,494.7 Funds Other Funds $3,249.4 $4,053.0 $5,002.3 $6,197.4 $6,467.4 $7,029.8 Federal Funds $267.4 $339.7 $333.1 $309.0 $694.1* $394.4 TOTAL, HIGHER $15,818.0 $16,983.3 $18,658.3 $21,485.8 $22,647.0 $22,091.2 EDUCATION Percentage of Statewide 13.7% 13.4% 12.9% 12.5% 12.0% 12.7% Total STATEWIDE TOTAL $115,678.6 $126,710.2 $145,059.4 $172,131.5 $187,516.5 $173,484.2 ALL ARTICLES *Includes $326.9 in ARRA funds. SOURCE: Legislative Budget Board. FINANCING HIGHER EDUCATION IN TEXAS – ID: 690 LEGISLATIVE BUDGET BOARD 1 INTRODUCTION FIGURE 2 FIGURE 3 METHODS OF FINANCE FOR HIGHER EDUCATION APPROPRIATION BY TYPE OF INSTITUTION – EXCLUDING INSTITUTIONS – INCLUDING BENEFITS BENEFITS 2012–13 BIENNIUM 2012–13 BIENNIUM ,10,//,216 727$/ 0,//,21 ,10,//,216 727$/ 0,//,21 *HQHUDO 5HYHQXH² &RPPXQLW\DQG 'HGLFDWHG)XQGV )HGHUDO)XQGV 7HFKQLFDO &ROOHJHV ) +HDOWKUHODWHG $ 06HUYLFHV 2WKHU)XQGV 2WKHU+LJKHU (GXFDWLRQ *HQHUDO *HQHUDO 5HYHQXH)XQGV $FDGHPLFV SOURCE: Legislative Budget Board. SOURCE: Legislative Budget Board. groups of institutions, such as general academic institutions and community colleges, diff er in how the Legislature for health insurance, retirement benefi ts, and social allocates state appropriations. For example, all general security; and academic institutions receive funding generated from • other indirect appropriations, which are subsequently Instruction and Operations and Infrastructure formulas, allocated to an institution, such as the Available while community colleges have one formula for Instruction University Fund. and Administration. Th e $22.1 billion appropriation includes funds trusteed to While the General Revenue Fund’s portion of direct THECB for distribution to institutions. For the 2012–13 appropriations to institutions is “sum certain,” the biennium, THECB received more than $1,001.3 million in appropriation of Patient Income and Other Educational and trusteed funds. The majority of these funds are allocated for General Income (primarily tuition) is “estimated.” Th is student fi nancial assistance. Those remaining provide means that if patient income or tuition revenue generated by funding for the Baylor College of Medicine, incentives for an institution is greater than the amount included in the the general academic institutions, and the Texas Research GAA, the institution can spend at a level beyond the amounts Incentive Program. in the GAA. If an institution generates less tuition revenue, it must spend less. Figure 3 shows the percentage of state funding appropriated to the various types of institutions, excluding the allocation Th e GAA establishes a key distinction for higher education for employee insurance and retirement benefi ts. entities differentiating them from other state agencies. Statute (Texas Education Code Section 61.059(k)) calls for State appropriations to THECB that benefi t private each higher education institution to receive a lump sum institutions include: fi nancial assistance programs (e.g., appropriation for base funding. Th e GAA expands this Tuition Equalizations Grants, B-On-Time and related concept and provides each higher education institution with programs) for Texas residents attending approved private one lump sum appropriation. For each institution, the GAA institutions; per student funding at the Baylor College of provides an “Informational Listing of Appropriated Funds” Medicine; and grant funds from the Advanced Research below each institution’s lump sum appropriation. Th is Program, a competitive grant program. information refl ects how the state funds are “allocated,” not Within a group, such as general academic institutions, state how they must be spent. Higher education institutions are appropriations are allocated in a consistent manner. Diff erent not bound to spend