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LSG report on higher education in Texas

Since the subject of public universities and tuition costs have been in the news lately, this would be a good time to direct you to the just-released Legislative Study Group Analysis and Recommendations on State of Higher Education in Texas – Part 1, which you can find in PDF form here. Topics covered within are:

-Repealing tuition deregulation
-Cutting and freezing tuition rates, lowering costs by at least $500/year
-Creating a new statewide scholarship system based on merit to help students and their parents achieve a higher education without becoming burdened by debt.
-Expanding and increasing the number of top tier institutions of higher learning, from 2 to at least 6. This would help Texas compete with states such as California and New York while expanding the opportunities for excellence for Texas students. Such development would also yield great returns to the state in the form of economic and jobs development.

The last bit is something that should be easier to remedy than you might think. From the report:

As the state with the second highest population total in the nation, there are only two tier one universities in Texas. California has 10 tier one universities, New York has eight, Massachusetts five and Illinois four. Proportionally, Texas should have six to seven total top tier universities to maintain competitiveness.

Investment by the state serves as seed money. To qualify as tier one, a school needs to spend $100 million on research. After initial investments by the state, additional funding is drawn from federal and private grants as a return on the investment. Investment in research and development yields a 20 to 30 percent rate of return to the state in terms of jobs and economic stimulus. Money begets money, and the state’s additional investment in institutions of higher education would not only greatly expand the possibilities for students, resulting in a better educated populace, but would help the state maintain a competitive economic edge in technology and human capital in the 21st century.

[…]

The University of Houston needs $24 million to reach that [$100 million on research] threshhold, Texas Tech needs $49 million, UT-Dallas needs $57 million, UT-El Paso needs $58 million, UT-Arlington needs $65 million, UT-San Antonio needs $68 million and UNT needs $84 million in additional funding. An investment of $405 million could yield seven additional Tier One Schools in Texas, bringing the total to nine. An investment of $188 million could bring in four schools to Tier One status (Tech, UH, UTD & UTEP).

In the context of the state’s budget, and the projected surplus, that’s really not a lot of money to achieve a result that would have great long-term benefit. As the report notes elsewhere, the amount of money currently allocated for the gubernatorial piggy bank known as the Texas Enterprise Fund would more than cover the lower-cost investment cited above, and would surely get a better return as well.

The one thing that isn’t really discussed here is a stable funding source for these needs. We have surpluses now, but we won’t forever – indeed, the Comptroller is already warning that the 2008 revenue numbers are softer than the 2007 figures were. And while we do have a big surplus projected for this year, the reality is that most of it is already spoken for, with the property tax cut from the 2007 legislative session being a big part of that. We could try to establish a revenue source like a local sales tax as proposed by Sen. Royce West, but there are many problems with that, and frankly, it’s not really needed. Having better priorities would do it, or at least would get us most of the way there. Needless to say, that will take a change in the state’s leadership to have any hope.

Part II of this report, which will include a discussion of the cost and income differential between four year colleges and community colleges; workforce needs and innovation for a more competitive Texas; student transition from community colleges to four year institutions; and the demographics of Texas higher education, will be forthcoming. In the meantime, it should be noted that all of this we can and did see coming. Click on for a reprint of an editorial Rep. Garnet Coleman wrote in 2004 that predicted where we’d be now.

From January 17, 2004:

Tuition deregulation pushes education out of reach

by Garnet Coleman

The passage last session of legislation deregulating tuition marks the end of an era of accountability and affordability in Texas public higher education.

For the first time, the Legislature has abdicated its responsibility for setting the maximum tuition rates that state-supported colleges and universities are allowed to charge students and their families. Instead, university system regents – not elected officeholders – now have complete autonomy to set the rates as high as they desire with no direct accountability to the taxpayers.

Gov. Rick Perry and House Speaker Tom Craddick exerted unyielding political pressure to compel the tuition deregulation bill’s passage, using Texas’ $10 billion budget shortfall as the rationale. While top state officials were patting themselves on the back for not raising taxes, they were saddling Texas college students and their families with staggering hikes in tuition rates.

Perry claimed in his State of the State address that education represents the greatest investment we can make in a future of prosperity. He then agreed to slash general revenue funding for higher education by $259 million, which includes his veto of $55 million for excellence in research funds. Yet, the governor simultaneously fought for and received $295 million for a new, unproven economic development fund that allows him to hand out financial incentives to businesses he is attempting to lure to Texas.

According to Texas Comptroller Carole Keeton Strayhorn, “Every dollar invested in our state’s higher education system pumps more than five dollars into our Texas economy.” Our leaders chose to prioritize their experimental pet project over a proven economic investment – the education of our children. These aren’t just tough economic times that challenge the ability of state officials to balance the state budget. These also are daunting economic times for Texas families and individuals, many of whom have experienced the devastation of losing a job, a reduction in employee benefits or spiraling health care costs.

Knowing that it would further strain the ability of many students to pursue a college education, our short-sighted leaders forged ahead with their plan to deregulate tuition. Students holding jobs to pay for their college education will be required to work longer hours or take out additional student loans to cover the costs of unchecked tuition increases.

For example, tuition rates are set to rise by an average of approximately 12 percent this spring at the University of Texas System’s institutions. A student taking a 15-hour course load at the system’s flagship institution, the University of Texas at Austin, faces an even greater increase of 26 percent. By fall, the same student will pay 52 percent more for tuition than he did the previous year.

One major flaw of tuition deregulation is its affect on older students. Proponents of this policy failed to consider the fact that not every Texas university is a flagship and not evey student is a fresh-faced recent high school graduate. At the University of Houston at Victoria, for instance, the average attendee is 33. Increased costs are especially devastating to these nontraditional students who already have jobs, families and other responsibilities. Many cannot afford the extra burden.

Tuition deregulation also has serious consequences for two popular state programs, the Texas Guaranteed Tuition Plan and the Texas Grants Program. Parents and grandparents who were planning on securing a college education for their children and grandchildren by locking in tuition rates through the Texas Guaranteed Tuition Plan (formerly the Texas Tomorrow Fund) will no longer have that opportunity. Recent tuition spikes and uncertainty about future tuition costs have forced that program to close its doors to new enrollees.

Additionally, fewer Texas students will receive grants from the state to offset tuition costs. Without even taking into account the impact of deregulating tuition, the Texas Higher Education Coordinating Board already projects a 12 percent decline in Texas Grants recipients by 2005. Tuition hikes across the state will further diminish the number of new recipients.

At a time when we should be opening doors to more students and making higher education more accessible, we ultimately may be locking out more Texans with this disastrous change in public policy. The solution is for parents and students to demand that their governor and elected state officials take back responsibility for controlling tuition costs at public colleges and universities and commit to funding them adequately.

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