Texas universities got more state funding this year than they anticipated — but they’re still hoping for more support

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Texas’ public university officials and higher education leaders said they are breathing a sigh of relief after state lawmakers added a last-minute influx of $380 million in funding for four-year universities and health institutions at the end of this year’s legislative session, a welcome addition for many schools that have seen enrollments rise as they deal with the financial strain caused by the COVID-19 shutdown.

But community colleges aren’t feeling as lucky, as they lost tens of millions of dollars worth of state funding due largely due to enrollment declines during the pandemic. Leaders across two- and four-year schools also say they’re hoping to squeeze out some additional support for higher education in the expected special session later this year.

The additional money for university enrollment growth was not originally included in the budget conference committee report negotiated by the Texas House and Senate, to the frustration of many university officials. But it was added by the time the budget was sent to Gov. Greg Abbott’s desk. How much each university will receive from the late session boost depends on enrollment changes.

“That [funding for enrollment] wasn’t there a week ago,” said state Rep. Chris Turner, D-Grand Prairie, on the House floor before the budget was approved. “I want to thank [Republican House Appropriations Committee] Chairman [Greg] Bonnen for listening on that and for all who led to make that happen. That is a significant win for higher ed and sorely needed.”

Overall, university leaders and postsecondary advocates said higher education fared better than anticipated at the start of the session, as a global pandemic and statewide winter freeze captured lawmakers’ attention and threw the state’s budget into question. Legislators put $8.6 billion into the formulas that make up the majority of funding for higher education institutions — including four-year universities, health-related institutions and community colleges— which is $486 million more than the current biennium budget.

But funding per semester credit hour, which the Legislature uses to determine how much money a public university receives based on the type of class and enrollment, has continued to decline since 2008. Back then, universities received $59.02 per weighted credit hour. Lawmakers approved a $55.65 weighted credit hour for the next biennium.

Still, Texas Higher Education Commissioner Harrison Keller said there’s more work to be done to ensure adequate continued funding remains so the state can meet its long-term goals to educate more students and prepare them for the Texas workforce. Texas leaders have set an ambitious goal that at least 60% of Texans ages 24-35 have a certificate or degree by 2030.

“We are going to have to educate more Texans to higher standards than we've ever achieved before,” Keller said. “The late decision to fund the majority of enrollment growth … was a strong signal that the Legislature understands that higher education is going to have a special role and responsibility to play in driving economic recovery.”

Multiple higher education leaders told The Texas Tribune the U.S. Department of Education disbursement of additional federal COVID-19 stimulus funding during the height of state budget negotiations in early May created a major wrinkle for those advocating for additional state dollars for higher education. While it appeared Texas colleges and universities were receiving a huge influx in funding, it was largely required to be used for direct student aid and pandemic-related costs — and would not cover general day-to-day finances.

“While that [federal] money was really important for us to continue our progress, it’s not the same as recurring appropriations for the lifeblood of the accomplishments that each university provides for its community,” said Sandra Woodley, president of University of Texas Permian Basin. “We needed the increase in the recurring money to take on our everyday expenses of the work that we do.”

Ultimately, the extra funding boost added about $2.6 million to UT-Permian Basin’s budget in the next biennium, which Woodley says is vital for a small school with an approximately $100 million budget in an area of the state with high unemployment.

On the other side of Texas, University of Houston System Chancellor Renu Khator said the federal funding helped UH fill a $100 million shortfall and avoid layoffs. She said it would have been “disastrous” for higher education if the Legislature had not provided that extra money.

“If you do not have that, what that means is larger class sizes, fewer professors, fewer course selections,” she said, which she worried would only compound the burnout professors have experienced in the last year during the pandemic.

She also said the extra funding helps universities provide students support that keeps them on track to graduate, especially as they are tasked with educating increasing numbers of underprivileged students who enroll in schools across Texas.

“It requires actually more intensive labor, much more solid support services,” she said. “You need positive, timely, proactive intervention when you see a student not succeeding, and in order to do that, you need funding to be able to hire the staff to do that.”

Meanwhile, community college leaders say not enough was done to help two-year colleges, many of which are facing budget cuts in the next biennium due to large enrollment declines last year during the pandemic. The Texas Association of Community Colleges had asked the state to essentially maintain funding from the last biennium, which was not provided.

“Everybody understands that the academic year 2020-21 was an anomaly by a lot of stretch, right?” said TACC President Jacob Fraire. “And yet, those are the figures that we’re using to determine the next biennial budget. And so that’s the quandary we find ourselves. ... We did come up short.”

In total, budgets for 24 of 50 community colleges in the state were cut by about $43 million overall. Houston Community College saw a 7% funding cut and Central Texas College in Killeen had its budget drop by 11%.

The state set aside an additional $110 million to provide financial aid grants for students at community colleges and public and private universities. The largest amount of funding, $433 million, is set aside for TEXAS Grants for students at public four-year schools. But higher education leaders estimate that will just allow the state to provide need-based grants to only 56% of eligible students at four-year public universities and about 18% of eligible students at two-year colleges.

“The needs have increased, and enrollments are increasing, especially at universities. That additional $110 million is just what was needed to hold steady,” Keller said.

Tuition revenue bonds, which are used to cover construction of new buildings and refurbish current ones, did not pass for another legislative session, but some university leaders are optimistic that legislators could use the additional $16 billion in federal funds to cover those costs. The state hasn’t passed a tuition revenue bond bill since 2015.

Higher education leaders also hope the Legislature will use the upcoming special session to add funding to some of the initiatives they approved this session. For example, lawmakers passed a bill that would provide grants to community colleges to help them retrain unemployed students in career and technical fields in need of skilled workers, but did not fund the grant program. They also approved a program to provide extra funding to regional public universities based on the number of at-risk students they graduate, but didn’t tie funding to the bill.

Disclosure: Houston Community College, Texas Association of Community Colleges and University of Houston have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.