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Strategic Budget Advisory Committee (SBAC)
Strategic Budget Advisory Committee

Texas Colleges, Universities Bracing for Deep Budget Cuts

Layoffs, tuition increases, larger classes in the offing, higher education leaders fear.
November 14, 2010

By Ralph K.M. Haurwitz
AMERICAN-STATESMAN STAFF

When state officials ordered public colleges and universities in May to prepare budgets that are 10 percent leaner for the upcoming two-year spending cycle -- on top of 5 percent reductions already imposed -- higher education leaders hoped that would be a worst-case scenario.

Now that the state's projected budget shortfall for 2012-13 has soared to more than $24 billion, colleges and universities would be lucky indeed to get by with 10 percent cuts when lawmakers gather in Austin next year to write spending plans.

That's because the projected shortfall amounts to about 28 percent of the current budget of $87 billion. And higher education is especially vulnerable at tight budget times, in part because lawmakers are less willing to slash such programs as Medicaid, children's health insurance and public education.

Kent Hance
"Kent Hance, Texas Tech System leader expects tuition to rise.

"We don't want the state budget balanced on the back of higher education," said Kent Hance, chancellor of the Texas Tech University System . "Even though we make up only 12 percent of the budget, 41 percent of the cuts to achieve the 5 percent reduction came from higher education. If it had been applied across the board, it should have been 12 percent."

Ricardo Romo, president of the University of Texas at San Antonio , said he would "jump for joy" if higher education sustained no more than a 10 percent cut in the next budget. "But we need to be thinking more like 15, 20, 25 percent" or even higher for contingency planning, he said.

Cuts of that magnitude would force many schools to lay off staff members, nontenured lecturers and tenured faculty members. Class sizes would increase. And governing boards likely would raise tuition.

"The truth is, nothing's off the table," said Denise Trauth, president of Texas State University .

Texas Tech, Texas State and UT-San Antonio haven't had to lay off any employees so far. In contrast, the state's two largest universities, UT-Austin and Texas A&M University, have dismissed scores of staff members and lecturers.

They have also offered buyouts to some tenured faculty members.

Barry McBee, vice chancellor and chief governmental relations officer for the UT System , used words such as "grim" and "perfect storm" to describe the budget prospects for higher education generally and the 15-campus system in particular when he briefed the Board of Regents last week .

UT System Chancellor Francisco Cigarroa said he is also deeply concerned. "This definitely has the potential to harm recruitment and retention of great faculty," he said. "Remember, it is a very competitive world.

Francisco Cigarroa, UT System Chancellor
"This definitely has the potential to harm recruitment and retention of great faculty. Remember, it is a very competitive world. If the state conveys draconian cuts, one would have to look at raising tuition." - Francisco Cigarroa, UT System Chancellor

"If the state conveys draconian cuts, one would have to look at" raising tuition, Cigarroa said.

Hance was more blunt about where tuition is heading: "I think there's no way it's not going to go up substantially next year because of all the budget cuts we're going to have to absorb."

Although funding from the Legislature isn't the only source of money for higher education institutions, it has an outsize importance.

At UT-Austin, for example, general revenue appropriated by lawmakers supplies 16 percent of the overall budget of $2.1 billion a year, with the rest coming from endowments, research grants, tuition and other sources. But general revenue accounts for more than 30 percent of funds for teaching and other core academic functions, university officials said.

Cuts in state funding on the order of 20 or 25 percent would "guarantee" faculty layoffs at Texas Southern University, a historically black school in Houston, said its president, John Rudley .

Equally painful would be reductions in counseling and advising for students there, many of whom are among the first generation in their families to attend college and therefore need extra guidance, he said.

Even a 10 percent cut would be "incredibly grim" for community colleges, forcing them to consider raising tuition and local property taxes, said Rey García , president of the Texas Association of Community Colleges .

"Our projected enrollment increase from the last biennium to this biennium is 22 to 23 percent," García said. "If you combine that enrollment increase with a budget cut of 10 percent, the actual impact on per-student funding is in the neighborhood of 30 percent."

UT System Regent Gene Powell suggested at the system's briefing last Thursday that the nine regents organize a schedule such that one or two of them accompany Cigarroa at all times when he makes rounds at the Capitol to argue for higher education funding during the upcoming legislative session.

"I know that's a commitment from all of us time-wise, but I think that would be very helpful if we did that with you," Powell told the chancellor.

State Rep. Scott Hochberg, D-Houston , suggested that it's somewhat disingenuous of the regents to be complaining about higher education funding.

"All of these regents were appointed by the current governor, who says there will be no problem, that we just have to tighten our belts a bit," said Hochberg, chairman of the House Appropriations Subcommittee on Education .

Gov. Rick Perry has said that it's healthy for schools to look for cost savings and that no one should make assumptions about the ultimate size of the budget shortfall or where and how deep any reductions would fall.

rhaurwitz@statesman.com; 445-3604

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