A Second Chance for Campus Construction Projects?

In the early days of the 82nd regular legislative session, there was a great deal of talk about how, with the economy causing a dip in interest rates and construction costs, the time was right to invest in new campus facilities. But a bill to issue tuition revenue bonds to get projects off the ground never managed to do so itself. Could universities awaiting bonds for new facilities get another chance in the special session?

"Stay tuned," says House Higher Education Committee Chairman Dan Branch, R-Dallas. "I hope that it's something that the governor might be willing to consider adding to the call."

Senate Higher Education Chairwoman Judith Zaffirini, D-Laredo, isn't waiting for the call to come. She's already filed a bill allowing for the issuance of tuition revenue bonds. It's markedly different from the bill she filed during the regular session, which included every request from institutions throughout the state.

Of the new bill, SB 16, she says, "It's very, very conservative, and it makes no obligation for general revenue." Under the new bill, bonds totaling no more than $100 million would only be issued for a project that meets the following criteria: The institution already had two-thirds of the funding in hand, the project is recommended by the Texas Higher Education Coordinating Board, and the institution is willing to take on at least 20 percent of the debt service on those bonds.

Officials at the University of Texas say they are ready to make the necessary commitments to get tuition revenue bonds for a new engineering education and research center — a $290 million project for which they initially asked for $100 million.

"A great university requires three things," says Greg Fenves, the dean of UT's Cockrell School of Engineering. "Top faculty, recruiting the best students, and then the facilities in order to bring all of this together." While he believes UT does the first two well, Fenves says, "We have completely out-of-date facilities." He hopes to replace decades-old structures that he says are not competitive with peer institutions with a new facility that fosters collaboration and entrepreneurship.

"It's hard to have a new Silicon Valley here in Austin without a first-class engineering facility at UT," says Branch, referencing a stated desire of Gov. Rick Perry's to foster just such an environment in the state's capital.

Other institutions also hope to benefit. Kristin Sullivan, a spokeswoman for University of Texas at Arlington, which is hoping for $74.8 million to renovate a life sciences building, says, "We certainly would appreciate any bonds that would help us renovate that space, but we know that it’s a tough budget year."

But the stricter requirements in the new bill may shut out some desiring institutions. Texas State University in San Marcos requested funds for multiple initiatives, including a new $70 million engineering and science building, but none of them made it to the coordinating board's list of highly recommended projects. Mike Wintemute, a spokesman for Texas State University System, says he hopes legislators consider the needs of all institutions and not just those selected by the coordinating board.

It might be a moot point, since there has been no hint of the governor adding tuition revenue bonds to the special session call. "The governor certainly has the prerogative to add items during the special session," says spokeswoman Catherine Frazier, "but what he’s put out so far is what’s official, and he hasn’t decided anything else past that at this point."

Zaffirini says it's important to get the bill filed anyway because of past experience. "In 2006," she recalls, "at 10:30 p.m. on Thursday, when Sunday was the last day when we could pass bills, and Tuesday was sine die, the governor opened the call to tuition revenue bonds. And I was ready.”