Higher Education Funding »

Well in advance of the 80th Legislative Session, appropriations expectations were moderated due to the requirements of the mandated property tax relief set into motion by the 79th Legislature during the 3rd Called Session.  It was widely held that while the revenue estimate came in with more than $15 billion in funds available, several billion was necessary to fund current and future property tax reductions.   Additionally the 80th Legislature intended to (and in fact did) make whole some of the measures used by the 79th Legislature for the 2006-07 appropriations for Texas State government, including repaying funds used from the Economic Stabilization Fund and delaying certain August 2007 payments.

Prior to preparing the Legislative Appropriations Requests (LAR) for the 2008-09 biennium, the LBB and Governor’s Office sent a letter to all state agencies and institutions of higher education directing that state agencies and institutions of higher education request no more than 90 percent of the GR and GR-Dedicated amounts appropriated for the 2006-07 biennium, excluding formula funding and tuition revenue bond debt service.  Early in the appropriations process, in the base bill, the Legislature restored these mandated LAR reductions and provided additional funding for higher education.  During the session discussion of designated tuition increases since deregulation in 2003 strongly influenced discussions during the appropriations process, but ultimately for this session did not impact the appropriation process significantly.  

The overall funding for higher education is the largest increase ever provided by the Legislature.  General Revenue funding for higher education is $11.5 billion, which is an increase over the 2006-07 spending level of $1.4 billion, or 14 percent.  The major funding increases for Texas higher education are:

  • $313 million for tuition revenue bond debt service
  • $261 million in increased formula funding for all higher education
  • $145 million for student financial aid
  • $175 million for the Higher Education Fund
  • $100 million for Governor’s Incentive Funding initiative

The funding by segment of higher education is provided in the table below.

General Revenue Funds, in millions
House Bill 1 Appropriations for 2008-09
Compared to 2006-07 Expended/Budgeted Level

 2008-09 Difference % Change
General Academics*       $  4,365.9          $  456.0 11.7 %
Health Related Institutions 2,293.2 285.7 14.2%
Two Year Institutions      
    Community Colleges 1,718.6 91.2 5.6%
    TSTC 126.0 5.5 4.6%
    Lamar State Colleges 49.7 (4.7) (8.7%)
A&M System Agencies** 311.7 22.2 8.1%
System Offices 54.0 22.4 70.9%
Higher Education Coordinating Board 1,078.5 289.4 36.7%
Higher Education Fund 525.0 175.0 50.0%
Higher Ed. Group Insurance+ 1,006.9 69.1 7.4%
   Total, Higher Education++ $11,529.50 $1,411.80 14.0%

*Includes House Bill 15 appropriations for Prairie View A&M University and Texas Southern University for the Academic Development Initiative.

*2 Includes an estimated $7.4 million in additional funding for the state employee pay raise for the A&M research & service agencies.  The Texas Transportation Institute’s operating funds are from the State Highway Fund and are included within this table.
+ Does not include the Governor’s veto of the community college FY2009 group insurance funding.

++ These totals do not reconcile to the overview table at the beginning of this section because the overview table includes the allocation of certain statewide appropriations for retirement, social security and debt service for each article, which are not included here.