For example, with the Subcommittee on Higher Education in the Senate, four highly experienced senators came together and reviewed the major issues and financial challenges facing Texas’ higher education institutions. They reviewed quality metrics for each institution and performance metrics related to graduation timelines, employment after graduation and other factors. Multiple pieces of data are being analyzed by committee members and their staff. Funding formulas are being evaluated to ensure that the impact of funding to each school is reflective of the Legislature’s intent to reward desired performance and to sustain stellar programs. Funding decisions will be largely based on hard data and less so on subjective feelings or intuition.

 

One must appreciate the amount of time that each legislator devotes to this process and the amount of study that is required of the issues, data and testimony provided by experts in a myriad of fields. Hearings run from 7:30 each morning until the time that the House or Senate takes up business at 10 or 11 a.m.. Subcommittee meetings resume immediately after the Legislature adjourns, which is almost always by noon. Afternoons and evenings are long for those members serving on the financial decision-making committees, as is the endless stream of people trying to get into their offices to advance their personal or agency agendas.

 

So how is UTMB impacted by all this activity? It is very early in the session, so all the moving parts are still moving … at warp speed. UTMB’s base funding, as directed by the formula increases from both House and Senate, is favorable. It is too early to arrive at a specific number. It is safe to say that the number will change as the House and Senate go to Conference Committee and as they consider the new revenue estimate that will be delivered by the Comptroller early in April. With the Texas economy booming and the “oil patch” boom increasing state revenues at record-breaking pace, there will be more money available for funding health care (through the Health and Human Services Commission) and higher education should the Legislature and executive branches decide to do that.

 

UTMB’s  request for formula funding for the hospital has been discussed by both House and Senate appropriators and currently lives in Article XI of the House version of the bill. This means that it still has a chance for consideration at conference committee. However, both House and Senate appropriators have discussed a need to thoroughly reevaluate all higher education funding and formulas during the interim to arrive at a fairer distribution of state funds among all higher education institutions. These formulas were developed in the late 90s, and since then issues have arisen from differences in rates at which institutions are able to grow student enrollment, differences in missions among institutions, and differences in formula methodologies between general academic and health-related institutions that must be addressed with the emergence of new administrative structures that combine an HRI and a general academic institution (e.g. A&M, proposed new UT medical schools). At this point it seems likely that UTMBs hospital formula proposal will be considered during the interim review; and even if the Legislature ultimately adopts a UTMB hospital formula in this session, it will be reevaluated along with all other formulas during the interim.

 

Formula background: Most higher education institution funding is appropriated through formulas that distribute funds among the institutions on the basis of metrics like student counts, space needs, and research activities. In addition, some HRI hospital appropriations are made through patient-based formulas specific to those institutions. For the most part, the remainder of higher education funding is appropriated in “special items” (a budget bill category that contains funding for specific and unique programs at each institution – like UTMB’s AHEC appropriation. Many special items are for specific research programs.)  UTMB’s hospital is funded as separate line item that is neither categorized as a “special item” nor based on a formula. As the Legislature tends to try to fund formulas first, before non-formula items, and to protect them as much as possible during times of budget reductions, UTMB is hoping to have its future hospital appropriations based on a formula. Whether or not a hospital formula is adopted during the session, UTMB will be working closely with interim studies on higher education formula funding.

 

Exceptional Item funding is up in the air as the Legislature tries to decide just how much (if any) money to put into research and other novel programs at the HRIs. For now, those requests have all been relegated to Article XI for discussion in Conference Committee. The same is true for all the Tuition Revenue Bond (TRB) requests.

 

The Senate budget process has taken on a more “generous” nature but with the same overall results for universities and medical schools. Formula funding will increase for education, infrastructure and research based upon established metrics. TRB requests are still under consideration in the Article XI umbrella,Correctional health care funding has received much attention. Both the House and the Senate introduced budgets included an additional $39M above the previous biennial base to cover appropriation shortages. In addition, the House Appropriations Subcommittee has recommended $47M in additional funding. However, this does not include requests for market salary increases for employees, capital investments and restoration of staff positions.  The Senate has recommended a $30.6M adjustment to the new base, added $16M for salary adjustments, designated $5.4M for capital expenditures and $9.7M toward restoration of staff.

 

Earlier today the House passed out HB10, which placed revenue into last year’s budget to correct the underfunded amounts from the 82nd Session. With that squared away, the Legislature will now focus its attention on how to adequately fund public education and health and human services for the next biennium.

 

The deadline for filing bills was Friday, March 8th. Over 5,850 bills and joint resolutions were filed by the deadline, and committee hearings will start to go late and long. Work on the budget will continue on to the House and Senate floors, with the final intense appropriations work to be done in late April and May in conference committee when there will also be a new Comptroller’s revenue estimate. Then, the real debate will begin.

 

Diagrammed below is a simple version of how the budget process works (most of the time).