Overview of the State Budget »

Across the nation, state budgets are in faced with declining revenues. At the start of the 81st session it appeared Texas would face a difficult budget year when the Comptroller’s biennial revenue estimate was issued. The Comptroller estimated that for 2010-11, the state would have $77.1 billion in funds available for general-purpose spending, a 10.5 percent decrease from the corresponding amount of funds available for 2008-09.

Fortunately, Texas budget leaders managed to craft a budget that met the state’s needs, due in part to the federal stimulus funding made available through American Recovery and Reinvestment Act (ARRA) and the $3 billion that the 80th Legislature wisely set aside in the Property Tax Relief Fund for use in this biennium. However, in future biennia, a structural budget deficit, masked by the ARRA and Property Tax Relief funds this session, will become more pronounced. The Economic Stabilization Fund (aka the “Rainy Day Fund”) is projected to reach $9.1 billion by the end of 2011, but that will not be enough to maintain current services. Put simply, the spending necessary to maintain state’s current level of services is greater than its currently structured revenue stream, even given the conservative budgeting and deliberate planning for future needs held to by the state’s legislative and executive leadership.

During the Regular Session, the Legislature passed two key pieces of appropriations legislation, Senate Bill 1, the General Appropriations Act (GAA); and House Bill 2486, the Supplemental Appropriations Bill. The key elements of each are summarized below.

Senate Bill 1

Senate Bill 1 by Ogden/Pitts appropriates $80.7 billion in General Revenue Funds (GR) for 2010-2011, $1.6 billion less than for the 2008-09 biennium, a decrease of 1.9 percent. However, the All Funds budget increases by $12.6 billion, a 7.4 percent increase due primarily to $12.1 billion of federal stimulus funding the state received from the American Recovery and Reinvestment Act.

For the 2010–11 biennium, SB 1 includes funding for the following key budget items. (Indicated funding increases or decreases are from the 2008–09 biennial spending level.)

Heath and Human Services
  • Medicaid funding increased by $4.5 billion in All Funds, including $2.5 billion in General Revenue and General Revenue-Dedicated Funds, in order to maintain rates at fiscal year 2009 levels and address projected caseload growth.
  • The Children’s Health Insurance Program (CHIP) increased by $122 million in All Funds, including $74 million in General Revenue Funds, primarily to address projected caseload growth.
  • Funding for Child Protective Services (CPS) is increased by $5.7 million in All Funds, including a decrease of $11.8 million in General Revenue Funds and $48 million in stimulus TANF Federal Funds, to maintain August 2009 staffing and salary levels and add 219 positions.
  • An additional $83.6 million in General Revenue Funds is provided in 2010–11 to continue the expanded community mental health crisis services provided in the 2008-09 biennium.
Public Education
  • $1.9 billion in new funding is provided for the Foundation School Program, contingent upon the enactment of legislation relating to a return to a formula-driven school finance system that also provides educator salary increases.
  • $812.8 million in General Revenue Funds is included for instructional materials.
  • Teacher incentive pay was increased by $52 million over the 2008-09 biennium.
  • Funding for the expansion of pre-Kindergarten programs is increased by $25 million, a 14 percent increase over the 2008–09 biennial appropriation.
Higher Education
  • Formula funding is increased by $585.1 million All Funds, including $470 million in General Revenue. This funds all enrollment growth among Community Colleges, General Academic universities, and the Health Related Institutions and provides some enrichment for the formulas.
  • Funding for the Texas Competitive Knowledge Fund is increased by $33 million.
  • Funding for patient care was increased $117.5 million in General Revenue at the University of Texas Medical Branch at Galveston, The University of Texas M. D. Anderson Cancer Center and the University of Texas Health Science Center at Tyler.
  • Financial aid at the Higher Education Coordinating Board was increased by a total of $210.9 million for all the student financial aid programs.
Public and Higher Education Benefits
  • State retirement contributions for the Teacher Retirement System and Optional Retirement Program contributions increase in All Funds and General Revenue by $190.2 million and $9.1 million, respectively. This reflects estimated payroll growth of 5 percent annually in fiscal years 2010 and 2011 in public education, and 7 percent annually in fiscal years 2010 and 2011 in higher education.
  • Public school retirees’ health insurance (TRS-Care) increased by $45.8 million, or 9.6 percent, in General Revenue Funds. The agency projects that this level of funding combined with the fund balance projected for fiscal year 2009 will be sufficient to fund TRS-Care costs through the 2010–11 biennium.
  • Contributions for Higher Education Group Insurance (HEGI) total $1.1 billion, reflecting growth of $61.9 million for premium rate increases.
Criminal Justice
  • An increase of $271.4 million in General Revenue Funds is provided for the incarceration and treatment of adult offenders, including salary increases for correctional officers and covering rising inmate healthcare costs.
  • Funding for residential services at the Youth Commission decreases by $42.9 million in General Revenue Funds primarily due to institutional capacity reductions and elimination of one-time items, but funding is included for salary increases for juvenile correctional officers and other institutional staff.
Natural Resources
  • The bill provides for an All Funds increase of $143.9 million ($108.1 million in General Revenue Funds and $35.8 million in Other Funds) in debt service appropriations for General Obligation (GO) Water Bonds.
Transportation
  • $17.1 billion in All Funds is provided for transportation planning and design, acquisition of right-of-way, construction, and maintenance of the state’s transportation system. This funding represents a $0.3 billion decrease in All Funds, including increases of $1.1 billion in State Highway Funds and $2.0 billion in Proposition 12 (2007) General obligation Bond Proceeds, offset by decreases of $1.6 billion in Texas Mobility Funds and $1.0 billion in State Highway Fund Revenue Bond Proceeds for highway improvements and safety projects.

American Recovery and Reinvestment Act

In February 2009, the American Recovery and Reinvestment Act (ARRA) was signed into law. The ARRA will provide an estimated $16 billion in increased Federal spending to Texas. Not all of those funds are under the purview of the General Appropriations Act, however. For the 2010–11 biennium, SB 1 includes $12.1 billion in Federal Funds in Article XII. Some of the ARRA funds may be used to make state funding available for other governmental services; thus Article XII reduces General Revenue appropriated elsewhere in the bill by $6.4 billion, resulting in a new increase in funding to state agencies from the federal ARRA funds by $5.7 billion.

There are four major areas of funding in Senate Bill 1 from the ARRA Funding.

  1. The largest program under ARRA is a more favorable Medicaid match rate to Texas; SB 1 includes $2,513 million for this program, thus freeing up a like amount of General Revenue appropriated elsewhere in the bill.
  2. The second-largest allocation is intended for education stabilization to continue historical levels of support for public and higher education. SB 1 allocates $1,866 million to the Texas Education Agency for providing for a stable level of funding for public schools $1,384 million to address the reduction in deposits to the state Available School Fund.
  3. Finally, ARRA provides $700 million to be used for government services. These funds are allocated to the Texas Education Agency ($361.6 million for textbooks), the Higher Education Coordinating Board ($80.0 million for incentive funding), and to institutions of higher education ($147 million for formulas). They also provide net new funding of $111.4 million to various institutions of higher education and state agencies.
  4. Other funding under ARRA is for programs directed for expanding existing federal programs. Some examples of significant funding increases to existing funding streams include Title I and Individuals with Disabilities Education Act funding in public education; highway and bridge construction at the Texas Department of Transportation; weatherization at the Department of Housing and Community Affairs; Child Care Development Block Grant at the Texas Workforce Commission; and State Energy Program at the Comptroller of Public Accounts.

SB 1 clearly directs state agencies and institutions of higher education to use ARRA funds for nonrecurring or one-time items. State agencies and institutions of higher education have several additional reporting requirements laid out in SB 1 for the ARRA funds. State agencies and institutions of higher education are required to submit an initial plan for expenditure of ARRA funds by August 31, 2009 to the Governor and to the Legislative Budget Board as well as quarterly reports to the Governor, Legislative Budget Board, State Auditor’s Office, and Comptroller of Public Accounts detailing the expenditure of appropriated ARRA funds.

Governor's Vetoes

The governor used his line-item veto power to reduce the two-year budget by $97.2 million in general revenue and $288.9 million from all funding sources. These vetoes are for either bills that did not pass the legislature or bills that the Governor vetoed.

The Governor issued three cautionary notes in the veto proclamation:

  1. A reminder that stimulus funds are one time in nature and should not be spent on items that create an ongoing obligation of the state.
  2. A request for providing more transparent items of appropriation and increasing the number of specific line items.
  3. A recommendation for continuing to further reduce and eliminate method of finance diversions in future budgets.

OVERVIEW OF THE STATE BUDGET

General Revenue Funds, in millions

Function Expended or
Budgeted 2008-09*
Senate Bill 1 2010-11 Biennial Change Percent Change
Article I - General Government $2,109.8 $2,141.8 $32.0 1.5%

Article II - Health and Human Services

$21,499.3 $24,343.6 $2,844.0 13.2%
Article III - Agencies of Education $48,202.5 $49,142.2 $939.6 1.9%
     Public Education** $35,783.8 $35,485.4 ($298.5) (0.8%)
     Higher Education $12,418.7 $13,656.8 $1,238.1 10.0%

Article IV - The Judiciary

$402.9 $436.7 $33.8 8.4%
Article V – Public Safety/Corrections $8,048.0 $8,588.8 $540.8 6.7%
Article VI – Natural Resources $682.5 $867.9 $185.4 27.2%

Article VII – Bus./Eco. Development

$648.3 $585.8 ($62.5) (9.6%)

Article VIII – Regulatory

$338.6 $393.8 $55.1 16.3%

Article IX – General Provisions

- $227.5 $227.5 NA
Article X – The Legislature $343.5 $354.3 $10.8 3.1%
Total $82,275.8 $80,601.9 ($1,673.9) (2.0%)
Property Tax Relief Funding $2,230.4 $6,113.1 $3,882.7 174.1%
GRAND TOTAL $67,804.4 $79,965.5 $12,161.0 17.9%

Source: Legislative Budget Board and Governor’s Veto Proclamation.

Notes: Amounts are calculated on actual amounts before rounding.

* Includes certain anticipated supplemental spending needs.

** Estimated/budgeted amounts for 2008-09 include $1,487.6 million to cover the cost of the 25th payment to the Foundation School Program, reversing the deferral for the August payment into the next fiscal year.

 

Constitutional Spending Limits

Texas has four constitutional limits on spending. The 2010-11 biennial appropriations are within these spending limits.

  1. Article III, Section 49a, “Pay-as -you-go” Limit. It requires that bills making appropriations be sent to the Comptroller for certification that the appropriations are within available general revenue. SB1 appropriations from the General Revenue Fund for the 2010-11 biennium total $80.6 billion, which is within the “pay-as-you-go” limit.
  2. Article VIII, §22, Limit on the Growth of Certain Appropriations. This provision limits the rate of growth of appropriations from state tax revenue not dedicated by this Constitution to not exceed the estimated rate of growth of the state’s economy. The Legislative Budget Board (LBB) met on November 14, 2008, and adopted the constitutional spending limit. The 2010-11 level of appropriations is within the Article VIII limit set by the LBB.
  3. Article III, §51-a, Welfare Spending Limit. This provision limits the amount that may be paid out of state funds for assistance grants to or on behalf of needy dependent children and their caretakers to no more than one percent of the state budget in any biennium. The biennial amount included in SB 1 that is subject to the limit on state dollars paid out in Temporary Assistance for Needy Families grants is $131.4 million. This amount is $1,691.7 million less than the 1 percent limit.
  4. Article III, §49 (j), Debt Limit. The Legislature may not authorize additional state debt if, in any fiscal year, the resulting maximum annual debt service payable from the General Revenue Fund, excluding revenues constitutionally dedicated for purposes other than payment of state debt, exceeds 5 percent of the average annual unrestricted general revenue for the previous three years. The Bond Review Board calculates this as two limits. The first limit applies to outstanding or issued debt, and for the end of fiscal year 2008, the issued debt calculation is 1.30 percent. The second limit calculation includes both issued and authorized but unissued bonds. The Bond Review Board has determined that the state is currently at 4.09 percent of unrestricted general revenue for the end of fiscal year 2008 based on the second calculation. If bonds for the Water Infrastructure Fund (WIF), the State Participation, and the Economically Distressed Areas Program (EDAP) programs that are included in SB 1 are included, the constitutional debt limit increases from an estimated 4.09 percent to 4.27 percent for debt service of the three year average of unrestricted general revenue.
Economic Stabilization Fund (Rainy Day Fund)

The Economic Stabilization Fund, frequently referred to as the Rainy Day Fund, had a balance of $6.66 million as of January 1, 2009. The Comptroller forecasts that by the end of fiscal year 2011, the balance in the Economic Stabilization Fund will be $9.1 billion.

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Higher Education Appropriations

Funding for Higher Education

General Revenue and ARRA Funds

Senate Bill 1 Appropriations for 2010-11

Compared to 2008-09 Expended/Budgeted Level

2008-09 2010-11 Difference % Change
General Academics Institutions $ 4,378,122,040 $  4,630,115,469 $  251,993,429 11.7 %
System Offices 48,295,571 75,278,575 26,983,004 55.9%
Health Related Institutions 2,288,232,712 2,612,479,315 324,246,603 14.2%
Two Year Institutions 1,895,949,346 2,047,856,724 151,907,378 8.0%
A&M System Agencies 310,662,034 332,885,399 22,263,365 7.2%
Coordinating Board 1,036,780,015 1,421,648,717 384,868,702 37.1%
Higher Ed Group Insurance 951,150,250 1,123,066,327 171,916,077 18.1%
Higher Education Fund 525,000,000 525,000,000   0.0%
Grand Total Higher Education: 11,447,234,584 12,768,330,526 1,321,095,942 11.7%

Notes: Does not include higher education portion of retirement or social security benefits which are included in the statewide functional table at the beginning of the appropriations section of this report. Includes appropriations made in Art. III, Art. IX, and Art. XII of Senate Bill 1. Amounts for Texas Transportation Institute include both base funding State Highway Fund 6 and special item funding from General Revenue. Amounts for the 2008-09 expended/budgeted funding level are reduced above by the $13.1 million of one-time reimbursements related to wildfire response made in 2008-09.

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General Academic Institutions

Funding for the 2010-11 biennium for the general academic institutions increases by $252 million in General Revenue and American Recovery and Reinvestment Act funds over the 2008-09 biennium, which is a 5.8 percent increase.

Funding changes can broadly be summarized as follows:

  • $181m increase in formula funding
  • $40 million for hold harmless
  • $40 million net decrease due to the elimination of one-time items
  • $2.5 million for Institutional Enhancement for certain institutions
  • $20.3 New Special Items, including the System Centers in San Antonio and Killeen; the increase for UNT-Dallas is included in UNT System funding
  • $1.8 million for increases to existing Small Business Development Centers
  • $33 million for the Competitive Knowledge Fund
  • $42.5 million for ARRA Special Items
  • $28.9 million net decrease in TRB debt service

Additional information on these funding decisions is detailed below.

Formulas

Funding increases to the general academic formulas totals over $181 million.  Approximately $148 million of the total increase is to cover enrollment growth of 3.55 percent between the last base period and the current base period, including the spring 2009 semester.  There is also an additional increase of about $34 million to improve all the general academic formulas. 

Funds are appropriated to the General Academic Institutions in Article XII of the General Appropriations Act which allocates the federal American Recovery and Reinvestment Act funding.  Of the formula funding that is provided to the academic institutions, $81 million is funded from the ARRA Funds and a like amount of General Revenue that is appropriated in Article III is reduced in Article XII, Section 30 Reduction in Appropriations. 

An additional $66,533,200 is added to the Instruction formula for formula enrichment based on a shift in funding from the Excellence and Institutional Enhancement strategies.  An amount equal to each institution's gain in the formula based on the added $66.5 million was deducted from its Excellence and Institutional Enhancement strategies.  The cost to the bill and the cost to each institution is neutral this biennium based on this policy change. 

The legislature continues to use the relative cost-based matrix weights.  These cost-based weights use the average of the most recent three years of expenditure data available and phase the new rates in 100 percent for the final phase in of the cost-based matrix.  The 2008-09 biennium phased the cost-based matrix in at 75 percent. 

The split of funding between the Instruction formula and the Infrastructure formula, before enrollment growth and formula enrichment is added, is 83% to Instruction and 17% to Infrastructure.  The formula rate for the instruction formula is $62.19 per weighted semester credit hour, up from $59.02 last biennium.  The formula rate for the infrastructure formula is $6.21 per square foot, up two cents.   The split between Utilities and Operations and Maintenance is 57.4% / 42.6%.

$40.0 million is provided for formula hold harmless for 12 institutions.  (The $40 million in hold harmless is not included in the $181 million of formula increases cited above.) The hold harmless was calculated without the $66.5 that was moved from Excellence and Institutional Enhancement into the formula.  The hold harmless policy provides that that no institution receives less than a four percent increase in formula funding general revenue as compared to the 2008-09 biennium.   However, the Texas Woman's University hold harmless funding is capped at $10 million.  In the Texas A&M University System, Prairie View A&M University received $8,002,564 and West Texas A&M University received, $832,042 in hold harmless funding.   Each institution that receives hold harmless funding has a rider that states that the funding is for the 2010-11 biennium only and it is the legislative intent that the funding not be continued into the 2012-13 biennium.   

The funding includes a change to the Small Institution Supplement.  The total cost of the Small Institution Supplement is $38.2 million, an increase of $26.2 million from the 2008-09 biennium.  In the past, the Small Institution Supplement of $1.5 million each biennium was provided to all institutions with headcount enrollments of fewer than 5,000; this supplement was included in the line item for Infrastructure Support and not separately identified in the bill pattern.   Beginning with the 2010-11 biennium, the Small Institution Supplement is phased out beginning at 5,000 headcount up to 10,000 headcount.  For the Texas A&M University System, Texas A&M International University would have fully lost the $1.5 million in Small Institution Supplement under the old methodology but received $1.2 million in the 2010-11 biennium as a result of the change to the new methodology.  Other institutions in A&M System that benefitted as a result of the methodology change are Prairie View A&M University ($516,300), Tarleton State University ($110,100), Texas A&M University - Corpus Christi ($256,200), Texas A&M University - Kingsville ($853,800), West Texas A&M University ($735,000), Texas A&M University - Commerce ($314,100).   Texas A&M University @ Galveston and Texas A&M University - Texarkana continue to receive the full $1.5 million.  The system centers / new institutions (Texas A&M University - San Antonio, Texas A&M University - Central Texas and University of North Texas - Dallas) all receive the Small Institution Supplement in FY2011 only ($750,000/institution). 

 

A&M System General Academic Institutions

Formula General Revenue Funds

2010-11 Compared to 2008-09

2008-09 Formula GR Base 2010-11 Formula GR less Adjustment* Hold Harmless Total Formula (w/ Adjustment) Variance % Variance
TAMU 413,753,397 442,983,499   442,983,499 29,230,102 7.1%
TAMU@ Gal. 16,560,082 17,706,202   17,706,202 1,146,120 6.9%
PVAMU 49,268,376 43,236,547 8,002,564 51,239,111 1,970,735 4.0%
Tarleton 46,779,075 53,073,126   53,073,126 6,294,051 13.5%
A&M-CC 45,839,774 51,155,206   51,155,206 5,315,432 11.6%
A&M-Kingsville 40,417,089 44,810,082   44,810,082 4,392,993 10.9%
A&M Internat'l 23,763,706 26,585,926   26,585,926 2,822,220 11.9%
West Texas 36,912,008 37,556,446 832,042 38,388,488 1,476,480 4.0%
A&M-Com. 51,485,510 57,997,091   57,997,091 6,511,581 12.6%
A&M-Tex. 8,481,504 9,855,161   9,855,161 1,373,657 16.2%
    Total A&M 733,260,521 784,959,286 8,834,606 793,793,892 60,533,371 8.3%
    Statewide 3,024,554,936 3,205,602,056 39,998,333 3,245,600,389 221,045,453 7.3%

Notes:  *2010-11 nets out the shift in funding from Institutional Enhancement and Excellence to the formulas.  The variance above reflects the true increase in formula operating funds.

System Centers / New Institutions of Higher Education:

Several appropriations actions affected the three system centers.  As mentioned above, each system center received the Small Institution Supplement in FY2011 for an increase of $750,000 per institution and debt service for their currently authorized tuition revenue bonds (additional discussion below).  The Legislature provides a total addition transition funding of $18.7 million for the three system center operations ($6.3m for Texas A&M San Antonio and $6.1 million for Texas A&M Central Texas).  A new rider is added in the bill pattern of the host institution that directs all appropriations associated with each system center to go directly to the system center.   Currently the appropriations are embedded within the bill pattern of the host institutions (A&M Kingsville for A&M San Antonio; and Tarleton State for A&M Central Texas).  This rider sets in motion the separation of all appropriations information between the host institutions and the new institutions in order to establish a separate bill pattern for the new institutions in the next appropriations cycle.

Non-Formula:

Non-formula items include tuition revenue bond debt service, all special items, Institutional Enhancement, Texas Competitive Knowledge Fund, Research Development Fund, Workers' Compensation Insurance/ Unemployment Compensation Insurance, and Academic Development Initiative. 

Tuition Revenue Bond Debt Service:  Funding requirements for tuition revenue bonds for the general academic institutions decreased by $29 million.  This includes a significant $12.3 million decrease in required debt service for Texas A&M International alone.

Based on legislation (SB629 by West/Aycock ) that passed and was signed by the Governor during the 81st Legislature, the statutory enrollment thresholds for the system centers to issue previously authorized TRBs  are removed and these new institutions are eligible now to issue their authorized tuition revenue bonds.  For the Texas A&M System, $5.6 million in debt service is available for tuition revenue bond debt service for Texas A&M University - San Antonio and Texas A&M University - Central Texas together.

Excellence/Institutional Enhancement:  In addition to the shift of funding from the Excellence and Institutional Enhancement strategies, the Legislature made several other changes to these strategies.

  • The Excellence line item strategy is eliminated and any funding remaining in that line item (after the shift of part of those and the Institutional Enhancement funds to the formula) is rolled into the Institutional Enhancement line item.  
  • $2.5 million in additional Institutional Enhancement funding is added for institutions that the Legislature determined had less than other institutions in similar type of funding.  This resulted in an increase of $500,000 each at Texas A&M University at Galveston, University of Houston - Clear Lake, University of Houston - Victoria, Midwestern State University and Sul Ross State University - Rio Grande College. 
  • Finally, at Tarleton State University, $50,000 in each year is moved from Institutional Enhancement to a new line item strategy, Tarleton Outreach to support the institution's existing operations in Southwest Tarrant County.

Texas Competitive Knowledge Fund:  The Texas Competitive Knowledge Fund is increased by $33.0 million and allocated among the four currently eligible institutions.  UT Austin's funding increases by $15.7 million, Texas A&M University's by $15.6 million, University of Houston's by $870,000, and Texas Tech University's by $840,000.  These funds were allocated using the average of their most recent three years of total research expenditures as reported to the Higher Education Coordinating Board Accountability System.  In addition, contingency riders are added to UT Arlington, UT Dallas and UT El Paso, stating that contingent upon attaining a three-year average of $50,000,000/annum in total research expenditures, $5,000,000 in General Revenue appropriations to the institution are considered funding for the Texas Competitive Knowledge Fund.

Research Development Fund:  The Research Development Fund is funded at the same level as in 2008-09, but the funding is reallocated based on the most recent three years of restricted research expenditures.  A&M System academics increased their total funding from the RDF by $131,000 for the biennium based on the redistribution.

Special Items:  New special items are funded in two places in the appropriations bill -- $9.8 million in new special items are funded directly in each general academic's bill pattern and $42.5 million in special items for general academics are funded in Article XII with the American Recovery and Reinvestment Act (ARRA) funding.  There is decrease of $40.3 million in one-time funding from the amount in 2008-09, such as hurricane emergency appropriations and deferred maintenance.  This includes a decrease at Texas A&M University of $3 million for a Summer School Pilot Program and a decrease of $5.6 million at Prairie View A&M University for unexpended balances in the Academic Development Initiative.

 Increases in special items in Article III include:

  • $1.9 million for small business development centers, including $30,000 for Texas A&M International; $34,050 for West Texas A&M; and $20,000 for Tarleton State University. The Comptroller's Office certified this additional funding as cost neutral;
  • $4 million for Texas A&M Corpus Christi for an Engineering Program;
  • $1 million for Texas A&M Corpus Christi for a Small Business Incubator. The Comptroller's Office certified this additional funding as cost neutral;
  • $555,710 for the Texas State Data Center at the UT - San Antonio, and
  • $2.4 million for the Rural Development Initiative South West Border Network Small Business Development Center at UT - San Antonio.

 In addition several institutions receive one-time special item funding from the ARRA funds in Article XII, including:

  • University of Texas-Austin: Law School Clinical Program - $420,000
  • University of Texas-Dallas Middle School Brain Years $6,000,000
  • University of Texas-Dallas: Academic Bridge - $462,500
  • University of Texas-Dallas: Center for Values in Medicine, Science and Technology - $5,000,000
  • University of Texas-San Antonio: Life Science Institute - $4,000,000
  • University of Texas-San Antonio: P-16 Council - $500,000
  • Texas A&M University-Commerce: BS Construction Engineering - $1,000,000
  • Texas A&M Texarkana: Downward Expansion - $6,000,000
  • University of Houston: Energy Research - $3,000,000
  • University of Houston-Downtown: Community Development - $250,000
  • Midwestern University: Autism Support Program - $220,000
  • University of North Texas: Institutional Enhancement - $2,000,000
  • University of North Texas: State Historical Association - $150,000
  • Texas Tech University: Emerging Technologies Research - $4,000,000
  • Angelo State University: Nursing & Allied Health - $2,000,000
  • Lamar University: Institutional Enhancement - $2,500,000
  • Sam Houston University: Institutional Enhancement - $4,000,000
  • Texas State University-San Marcos: River Systems Monitoring - $1,000,000

A&M System General Academic Institutions Operating Funding from General Revenue and ARRA Funds (no TRB Debt Service) Senate Bill 1 Appropriations for 2010-11 Compared to 2008-09 Expended/Budgeted Level

 2008-09  2010-11  Difference  % Change
Texas A&M University   474,669,703   516,508,901   41,839,198 8.8%
Texas A&M @ Galveston 23,625,534 24,928,174 1,302,640 5.5%
Prairie View A&M University 94,848,286 96,818,804 1,970,518 2.1%
Tarleton State 69,896,192 81,925,051   12,028,859 17.2%
Texas A&M - Corpus Christi 72,244,214 83,198,876   10,954,662 15.2%
Texas A&M - Kingsville 71,527,181 82,078,244   10,551,063 14.8%
Texas A&M International 45,413,925 48,292,314 2,878,389 6.3%
West Texas A&M 52,114,595 53,707,001 1,592,406 3.1%
Texas A&M - Commerce 60,252,307 67,963,679 7,711,372 12.8%
Texas A&M - Texarkana   16,522,308 23,895,967   7,373,659 44.6%
  Total, A&M System Academics 981,114,245 1,079,317,011 98,202,766 10.0%
  Total,  All General Academics 3,848,741,102 4,170,436,017 321,694,915 8.4%

Notes:

Does not include TRB debt service. 

Does not include FY09 estimated unexpended balances for Prairie View A&M's Academic Development Initiative and certain other one-time reductions from the 2008-09 funding level.

Funding for Tarleton State includes funding for Texas A&M-Central Texas.  Funding for A&M Kingsville includes Texas A&M-San Antonio.

Health Related Institutions

General Revenue Funds for Health-Related Institutions increase by $324 million, including the following:

Health Related Institutions General Revenue and ARRA Funds Senate Bill 1 Appropriations for 2010-11 Compared to 2008-09 Expended/Budgeted Level

2008-09  2010-11  Difference % Change
UT Southwestern 297,612,887 312,340,633 14,727,746 4.9%
UTMB 457,749,136 566,532,697 108,783,561 23.8%
UT HSC Houston 289,200,560 325,194,866  35,994,306 12.4%
UT HSC San Antonio 282,662,529 319,324,503  36,661,974 13.0%
MDA 305,461,019 329,830,055 24,369,036 8.0%
UT HC Tyler 69,813,338 74,722,422   4,909,084 7.0%
A&M HSC 185,590,682 224,683,003 39,092,321 21.1%
UNT HSC 112,774,108 130,104,975 17,330,867 15.4%
TTU HSC 287,368,453    329,746,161 42,377,708 14.7%
Total, HRIs 2,288,232,712 2,612,479,315 324,246,603 14.2%

Formula

Formula funding for the Health Related institutions increases by $159.4 million.  The increase is primarily General Revenue, but $51 million of the increase is funded from ARRA funding.   Increases include: 

  • $100.1 million for the Instruction and Operation Support Formula for weighted student growth and enhancement to the formulas. The formula rate increased from $10,841 to $11,129. This increase includes the small campus supplement funding for The University of Texas Health Science Center at Houston Public Health Austin Campus and for Texas Tech University Health Sciences Center School of Pharmacy Abilene Campus.
  • $20.2 million for the Infrastructure Support Formula, including the multi-campus adjustment for the space projection model funding for Texas Tech University Health Sciences Center School of Pharmacy Abilene Campus. The infrastructure rate dropped by two cents to $7.96 per projected square foot.
  • $4.7 million for the Research Formula. The rate is $1,412,500 plus 1.48 percent of its research expenditures, down from 1.5 percent last biennium.
  • $13.9 million to fund the Graduate Medical Education Formula (GME) cover the growth in numbers of medical residents and enhance the funding per resident.
  • $15.5 million for the Cancer Center operations formula at M.D. Anderson Cancer Center; and
  • $5.0 million to fund the Chest Disease Center Operations Formula at The University of Texas Health Science Center for Tyler.

For the A&M Health Science Center, the increase for the three core formulas totals $24.7 million in General Revenue/ARRA, including:  $23 million for Instruction and Operations (with $1,258,904 for the new Nursing program), $52,000 for Research Enhancement, and $1.7 million for Infrastructure Support.  The increase for GME is $1.4 million.

Non-Formula

Non-formula General Revenue changes in Article III include:

  • $97 million for The University of Texas Medical Branch at Galveston hospital operations
  • $8.0 million for the College of Medicine expansion at the Texas A&M University System Health Science Center Round Rock campus; the A&M Health Science Center received an additional $8 million in ARRA funding for the College of Medicine expansion efforts as listed below.
  • $4.0 million decrease from a one-time funding of lease space for the Texas A&M University System Health Science Center Temple campus;
  • $17.6 million to fund the School of Medicine expansion at the Texas Tech University Health Sciences Center at El Paso; and
  • $4.7 million decrease in debt service on existing tuition revenue bonds.
Other Funds

General Revenue-Dedicated Fund increased by $12.4 million in tuition, and fees and other income.

Other Funds increased by $75.4 million due to projected increased patient income of $107 million primarily at the University of Texas M.D. Anderson Cancer Center and decreased earnings on Tobacco Funds for all institutions ($31.6 million).

American Recovery and Reinvestment Act Funds

Additional funds are appropriated to the Health Related Institutions in Article XII of the General Appropriations Act which allocates the federal American Recovery and Reinvestment Act funding.  Of the formula funding that is provided to the health related institutions, $51 million is funded from the ARRA Funds and a like amount of General Revenue that is appropriated in Article III is reduced in Article XII, Section 30 Reduction in Appropriations. 

In addition several institutions receive one-time funding from the ARRA funds, including:

  • UT-Southwestern: Institute for Genetic & Molecular Disease - $8,000,000
  • UT Health Science Center- Houston: Heart Institute--Adult Stem Cell Program - $5,000,000
  • UT Health Science Center- Houston: Public Health - $9,500,000
  • UT Health Science Center - San Antonio: Life Science Institute - $4,000,000
  • UT Health Science Center - San Antonio: Regional Academic Health Center - $6,500,000
  • Texas A&M Health Science Center: College of Medicine Expansion - $8,000,000
  • Texas A&M Health Science Center: Biosecurity and Import Safety (McAllen) (HB 1831 by Corte)- $1,000,000
  • Texas Tech Health Science Center: West Texas Area Health Education Center $4,000,000

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Texas A&M System Agencies

General Revenue and ARRA Funds

Senate Bill 1 Appropriations for 2010-11 Compared to 2008-09 Expended/Budgeted Level

Agencies  2008-09  2010-11*  Difference % Change
Texas AgriLife Research 114,314,197  118,845,484 4,531,287 4.0%
Texas AgriLife Extension 97,206,494 99,649,354 2,442,860 2.5%
Texas Engineering Experiment Station 28,358,556 33,248,713 4,890,157 17.2%
Texas Transportation Institute** 12,950,360 15,124,209 2,173,849 16.8%
Texas Engineering Extension Service 13,908,730 14,318,369 409,639 2.9%
Texas Forest Service*** 31,355,466 38,550,563 7,195,097 22.9%
Texas Vet. Medical Diagnostic Lab 12,528,231 13,148,707 620,476 5.0%
Total, Texas A&M System Agencies   310,622,034   332,885,399 22,263,365 7.2%

Notes: 

*Includes appropriations made in Art. III, Art. IX, and Art. XII of Senate Bill 1. 

**  Amounts for Texas Transportation Institute include both base funding State Highway Fund 6 and special item funding from General Revenue.

***  Amounts for the 2008-09 expended/budgeted funding level are reduced above by the $13.1 million of one-time reimbursements related to wildfire response made in 2008-09. 

The Texas A&M System Agencies funding increases by $22.3 million for agency operations.  The increases include $2.2 million for annualizing the across-the-board salary increases provided by the 80th Legislature, $0.6 million for In-Brazos County infrastructure, and $19.5 million for new initiatives.  New initiatives include:

- Texas AgriLife Research:  $3 million for Research Equipment and Facilities (contingent upon Comptroller's certification of additional General Revenue)

- Texas AgriLife Extension:

o   $1 million for Program Delivery System

o   $500,000 for Rural Community Economic Development

- Texas Engineering Experiment Station:  $5 million for the Nuclear Power Institute ($1 million funded with General Revenue and $4 million funded with one-time ARRA funding)

- Texas Transportation Institute:

o   $500,000 for Center for Strategic Transportation Solutions;

o   $1 million for Center for Transportation Safety

o   $400,000 for a feasibility study on the implementation of a school bus seat belt program

- Texas Engineering Extension Service:  $600,000 for Drinking Water Protection Training

- Texas Forest Service:  $7 million for Texas Wildfire Protection Plan

- Texas Veterinary Medical Diagnostic Laboratory: $500,000 for Protection of Texas Livestock and Public Health Sectors.

In addition, the 81st Legislature provided additional operating funds for the Texas Wildfire Protection Plan by removing a rider restriction requiring group health insurance contributions to be paid from funds appropriated directly to the Texas Forest Service.  Removal of this provision, while not changing the total dollars appropriated, will enable the Texas Forest Service to have approximately $500,000 per year more available for programmatic operations.

Funding for the Rural Volunteer Fire Department Assistance Program increases by $30 million for the biennium based on appropriating all anticipated receipts to the General Revenue Dedicated Volunteer Fire Department Assistance Account.   This provides the necessary appropriation authority for a funding mechanism that was approved by the 80th Legislature.   HB 4002 by Swinford/Duncan provides that up to $10 million of the Volunteer Fire Department Assistance Fund appropriated to the Texas Forest Service per biennium may be used for the Wildfire Protection Plan

The A&M Agencies also are included in the one-time retention payment for state employees.  State employees that are employed continuously between March 31, 2009 and August 1, 2009 and that make less than $100,000 are eligible for a one-time $800 retention payment to be made prior to August 31, 2009.  It is estimated that this will total $1.5 million in additional General Revenue for the A&M Agencies in FY2009.  This funding is one-time in nature and will not be part of their future base.

SYSTEM OFFICES

Additional funding is provided to the System Offices for operations totaling $12.9m, increasing funding for state supported operations for each system office to $2 million per year.   This increase was not provided for the Texas State System.   For the Texas A&M University System this results in an additional $1,471,465 each year in General Revenue for system office operations; however, for both UT and A&M Systems, the additional funding is contingent upon decreasing the AUF support by the same amount.  The additional funding for the UT System is $1,218,606 per year. 

In addition University of North Texas System receives $6.3 million on behalf of UNT - Dallas in Article III and one-time special item funding of $5,000,000 from the ARRA funds in Article XII for the Law School Contingency.

TWO YEAR INSTITUTIONS

Funding for the community colleges is increased by $140.0 million in General Revenue Funds, including  $118.5 million to enrich state formula contributions; $15.2 million in formula hold harmless; and $6.0 million to fund a formula-driven Small Institution Supplement.   General Revenue Funds for Texas State Technical College increase by $7.3 million, including $1.8 million in the instruction formula to fund 2.0 percent contact hour growth and an additional $4.8 million in formula enrichment, which includes $3.0 million in hold harmless funding.  Funding for the Lamar State Colleges increases by $2.15 million.

HIGHER EDUCATION COORDINATING BOARD

Funding for the Texas Higher Education Coordinating Board increased by $384.9 million in General Revenue Funds. 

Student Financial Aid funding provided by the Legislature to the Coordinating Board totals over $1 billion, with an increase of $213 million in General Revenue over the 2008-09 biennium.   Key increases include:

  • TEXAS grant program ($185.9 million),
  • B-On-Time Program ($15.0 million),
  • Texas Educational Opportunity Grant Program ($10.0 million),
  • Teach for Texas Loan Repayment Program ($2.5 million),
  • Top Ten Scholarships ($34 million), and
  • Texas Armed Services Scholarship Program (HB3452 by Gattis/Ogden) ($2.0 million).

The additional funding for the TEXAS Grant program allows an estimated 35,000 additional students to receive state financial aid.  General Revenue-Dedicated Funds for financial aid programs increase by $53.5 million, primarily due to $28.0 million in unexpended balances for the B-On-Time Program and $20.0 million in increased designated tuition set-asides for fiscal years 2010-11 for the program.

Increases in the Coordinating Boards Trusteed Programs for Health Related Programs include:

  • Professional Nursing Shortage Reduction Program ($35.0 million) (HB 4471 by Kolkhorst),
  • Baylor College of Medicine ($5.7 million),
  • Baylor College of Medicine Graduate Medical Education formula allocation ($2.4 million),
  • Joint Admission Medical Program ($5.0 million),
  • Hospital Based Nursing Grant Program ($5.0 million),
  • Family Practice Residency Program ($3.8 million), and
  • Alzheimer's Disease Centers ($2.9 million).

Other increases include Adult Basic Education Community College Grants ($10.0 million), Developmental Education Program ($5.0 million), Alternative Teaching Certification Programs ($2.3 million), New Campus Funding ($3.5 million), and General Academic Enrollment Growth ($3.5 million).

The Coordinating Board also is appropriated $50 million in General Revenue in Article IX, contingent upon the enactment of HB 51 by Branch/Zaffirini.  This funding is for the Texas Research Incentive Program (TRIP), which will provide emerging research universities with matching funds to assist eligible universities with leveraging private gifts for enhancing research productivity and faculty recruitment. (see "Bills Passed" for more details re HB 51 and its effects.)

The 81st Legislature continued the incentive funding that was strongly supported by Governor Perry and was first funded by the 80th Legislature.  In FY2009 $100 million total funding was allocated for incentive funding for the general academics ($80 million) and for Top Ten Scholarships ($20 million).  The 81st Legislature continued the $80 million in incentive funding but the funds will be allocated over the two years of the biennium.   The $80 million in incentive funding is funded from the ARRA Funds and a like amount of General Revenue that is appropriated in Article III is reduced in Article XII, Section 30 Reduction in Appropriations.  An additional $34 million is provided for Top Ten Scholarships in order to continue to fund these scholarships at the FY2009 level and fund two additional cohorts during the 2010-11 biennium.  

Key Rider Changes:

Rider 35:  Professional Nursing Shortage Reduction Program.  The rider directs the allocation of the $49.5 million for this program.  Specifically the rider: 

- allows the Coordinating Board to use up to five percent of the funding for administrative costs (no change);

- Allocates $7.35 million / year based on increased number of nursing graduates, including institutions with new programs.  Up to 50 percent of this part of the program funding can be allocated to community college programs (an increase from 40 percent of the program last biennium).

- Allocates $20.5 million for the biennium to be allocated based on increased enrollment for nursing programs with graduation rates in excess of 70 percent and that meet increased enrollment thresholds, projected at 18% over the biennium (12% in FY2010 and 6% additional increase in FY2011).   The funding rate for this piece of the program is $10,000 per increased nursing student.

- Allocates the remaining estimated $9.5 million to programs with graduation rates of less than 70 percent, hospital based diploma programs, or new programs with no established graduation rate.  Institutions will receive $20,000 for each additional initial RN graduate in two year programs and $10,000 for each additional graduate in one-year programs.  Through an application process to be outlined by the Coordinating Board, institutions will agree to increase graduates by a certain amount and must meet certain benchmarks to receive payment of these funds.

- Allocates a one-time grant of $5 million to UT - Arlington for the Regional Nursing Education Center for the purpose of establishing a simulation learning facility.

Rider 49:  Physician Education Loan Repayment Program Retention Rates.  Directs the Coordinating Board to report the results of a survey of physicians who have completed a Physician Education Loan Repayment Program contract to practice in a health professional shortage area in exchange for a loan repayment award to determine rates of retention in those shortage areas and counties.

Rider 51:  Health-related Formula Cost Matrix Study.  Directs the Coordinating Board to conduct a study to validate the relative weights contained in the formula matrix for health-related institutions. The study should provide an "all funds" analysis of the HRI costs.

Rider 52:  TSTC "Returned Value" Funding Study.  Directs the Coordinating Board to report to the next Legislature on the feasibility of a formula funding model for TSTC based on "returned value."   The Coordinating Board will consult with the Comptroller, Texas Workforce Commission (TWC), and the TSTC System for the study. The TSTC System is directed to transfer up to $100,000 in fiscal year 2010 to the CB to cover the costs associated with the study.

Rider 55:  Dual Credit.  Directs the Coordinating Board to work with the Texas Education Agency to provide data on dual credit, including the following:

a)  # of community college contact hours generated by dual credit courses taken on a high school campus and on a CC campus;

b) # of CC districts charging tuition for dual credit courses, and the amount of the tuition; and

c) # of high schools and community colleges that have entered into agreements to offer dual credit courses.

Rider 59:  Funding for Non-Semester-Length Developmental Education.  Directs the Coordinating Board to approve non-semester-length developmental education interventions in the Lower-Division course guide manual by August 31, 2009. Institutions must analyze the fiscal and instructional impacts on student outcomes for both semester-length and non-semester-length developmental education interventions and report to the Coordinating Board. The Coordinating Board must analyze and compare all institutional reports to determine the most effective and efficient combination of developmental education interventions and make recommendations to the Legislature by January 1, 2011.

Rider 60:  Statistical Analysis of Predictors of College Success.  Directs the Coordinating Board to provide data to the Legislative Budget Board as requested sufficient to conduct a statistical study of the predictors of access and success in higher education. The Coordinating Board is to assist the Legislative Budget Board in the analysis and interpretation of these data, and a final report is to be submitted to the legislature no later than October 1, 2010.

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Higher Education Fund

The 81st Legislature passed HB 51 by Branch/Zaffirini, which, among many other policies, updated the Higher Education Fund allocation.  The revised allocation corrects inaccurate allocations due to errors made last biennium.  The bill also updates the allocation for the next  5-year period based on the Coordinating Board recommended 3-factor HEF model.  The following table compares the FY2008 annual allocation with the FY2009 and FY2010 updated allocation, and the FY2011 and beyond annual allocation:

  Annual Allocation for FY2008 Annual Allocation for 2009 and 2010 Change: 2009 and 2010 from 2008 Annual Allocation for 2011 and Beyond Change: 2011 from 2008
UT Pan American 12,882,348 13,176,800 294,452 12,311,123 (865,677)
UT Brownsville 4,186,790 4,284,677 97,887 5,057,420 772,743
A&M  - CC 8,278,993 8,471,116 192,123 7,139,067 (1,332,049)
A&M  - K 5,052,232 5,167,540 115,308 5,046,885 (120,655)
A&M International 3,130,211 3,202,241 72,030 3,796,436 594,195
West Texas A&M 4,776,890 4,886,159 109,269 4,652,995 (233,164)
A&M - Commerce 5,345,678 5,684,047 338,369 5,193,232 (490,815)
A&M - Texarkana 1,646,352 1,684,587 38,235 1,307,907 (376,680)
UH 35,276,140 36,091,538 815,398 35,885,768 (205,770)
UH-Clear Lake 6,001,337 5,355,874 (645,463) 5,214,167 (141,707)
UH-Downtown 9,628,151 9,548,995 (79,156) 7,435,238 (2,113,757)
UH-Victoria 2,282,883 2,335,692 52,809 2,393,921 58,229
Midwestern State 3,434,348 3,810,377 376,029 3,559,433 (250,944)
UNT 26,137,233 27,122,687 985,454 27,846,476 723,789
Stephen F. Austin 7,025,771 6,907,643 (118,128) 8,425,937 1,518,294
Texas Southern 11,156,463 11,283,387 126,924 8,894,700 (2,388,687)
Texas Woman's 8,424,209 8,615,167 190,958 10,169,695 1,554,528
Texas Tech 26,829,477 27,446,656 617,179 23,936,088 (3,510,568)
Angelo State 3,585,802 3,667,497 81,695 3,743,027 75,530
Lamar University 11,210,508 8,028,333 (3,182,175) 8,330,933 302,600
Sam Houston State 9,916,306 10,184,001 267,695 11,893,110 1,709,109
Texas State University 19,799,276 20,258,248 458,972 21,863,258 1,605,010
Sul Ross 2,043,772 2,090,896 47,124 1,625,061 (465,835)
Sul Ross RGC 379,831 388,203 8,372 445,380 57,177
LUIT Incl. in Lamar 1,825,332 1,825,332 2,332,463 507,131
Lamar - Orange 1,115,048 1,140,745 25,697 1,235,752 95,007
Lamar - Port Arthur 1,190,119 1,217,124 27,005 1,244,694 27,570
TSTC 5,775,000 5,775,000 0 5,775,000 0
UNT HSC 8,139,391 7,994,676 (144,715) 8,771,265 776,589
TTU HSC 17,849,441 14,854,762 (2,994,679) 16,973,569 2,118,807
Statewide Total, HEF 262,500,000 262,500,000 0 262,500,000 0

The Coordinating Board's 3-factor model uses the factors of space deficit, facilities condition, and institutional complexity to determine an institution's annual allocation of HEF funding.  In their recommendations to the 81st Legislature, the Coordinating Board changes how an institution's space deficit is calculated.  In the past the space deficit was determined by the amount of space predicted by the space model for each institution less the amount of space on-line.  The recommendation counts both the current space plus any space that is approved but not yet online.  Inclusion of approved space significantly reduces the space deficit numbers for institutions that have construction projects in the pipeline and result in a lower annual HEF allocation.

HB 51 also clarifies that the University of North Texas - Dallas is eligible to participate in the Higher Education Fund when they begin operations as a general academic institution.   The allocations listed in statute made no specific allocations for UNT-Dallas.

Available University Fund

Estimated earnings in SB 1 for the Available University Fund increase by $46.2 million.  These estimates were based on data from the Legislative Appropriations Request submitted by the UT System in August 2008, prior to the sharp market downturn.

The estimated AUF distributions for FY 2010 and FY 2011 are estimated at $516.4 million and $483.4 million, respectively.  This represents a decrease in available university fund amounts of almost $20 million as compared to the 2008-09 biennium.  Because of the declines in the market value of the Permanent University Fund, future distributions are expected to decline further or be frozen.  The constitution provides that distributions must not be increased if the purchasing power of the Permanent University Fund is not maintained for any rolling 10-year period.  Due to the limitations on distributions from the PUF, excellence funding for Texas A&M University and Prairie View A&M University will not be increased and no new allocations for PUF-funded capital improvement projects will be recommended.

Higher Education Group Insurance

Higher Education Employees Group Insurance (HEGI) provides health benefits coverage to higher education employees based on which of the following three systems administers their health insurance coverage plan:   the University of Texas System (UTS), the Texas A&M University System (TAMUS), or the Employees Retirement System (ERS). The ERS Group Benefits Program provides coverage to eligible  employees of all higher education institutions that are not part of either the UTS or the TAMUS. The 2010-11 state appropriations for HEGI include in a General Revenue Funds increase of $171.91 million, and fund premium contribution rates at 97.5 percent of ERS general state employee premium rates for state institutions participating in the ERS Group Benefits Program, 83.5 percent for community colleges participating in the ERS Group Benefits Program, and 95 percent of ERS general state premium rates for component institutions within the UTS and the TAMUS. HEGI contributions also provide rate increases of 6.5 percent in fiscal year 2010 and 6.8 percent in fiscal year 2011 for all higher education institutions.

Retirement Benefits

State retirement contributions for the Teachers Retirement System (TRS) and the Optional Retirement Program (ORP) are 6.4 percent of payroll, down from 6.58 percent. TRS increases by $190.2 million to reflect assumed payroll growth of 5 percent annually in fiscal years 2010 and 2011 in public education and 7 percent annually in fiscal years 2010 and 2011 in higher education payroll.  In Article IX, TRS is allocated an additional $120.5 million in funding for the 2010-11 biennium.  Based on authorization in HB 3347 by Truitt/Duncan, and contingent upon an Attorney General's opinion allowing it, this funding is allocated for a one-time payment to eligible members equivalent to their monthly benefit but not to exceed $500. Absent an Attorney General's opinion allowing the one-time payment, the funding is to be transferred to TRS and used to increase the state contribution rate from 6.4 percent to 6.644 percent.

Funding for ORP increases by $9.1 million in All Funds and $7.8 million in General Revenue.  This funding assumes a 6.4 percent state contribution rate and reflects estimated payroll growth of 3.0 percent.   Employee contributions remain at 6.65 percent for ORP participants.  Grandfathered participants in ORP may continue to receive an institutionally funded supplement to the state base rate in ORP for an employer contribution of  7.31 or 8.5 percent depending on date of employment.   Because the state base rate will be going down from 6.58 percent to 6.4 percent, the institutionally funded supplement , if provided, increases from .73 to .91 percent, or 1.92 percent to 2.1 percent, respectively.

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Riders: Article III Special Provisions

The following summarizes the changes to the Article III Special Provisions:

Amended Sections:

Sec. 22.  Uncompensated Care Reporting Requirement.  Amended to standardize reporting with the Health and Human Services Commission. 

Sec. 23. County Indigent Care Contracts. 2. County Indigent Care Contracts Reporting.   Added reporting date of no later than December 1.

Sec. 28. General Academic Funding.  Provides funding rates for formulas for 2008-09:

  • Instruction and Operations Support - $62.19 / weighted SCH;
  • Teaching Experience Supplement - 10 percent; and
  • Infrastructure Support - $6.21 per square foot.

Updates the matrix to use the relative cost-based matrix weights.  These new cost-based weights use 100 percent of the average of three years of expenditure data in determining the relative matrix values.

Sec. 29. Health Related Institutions Funding.  Provides funding rates for health institutions funding formulas for 2008-09: 

  • Instruction and Operations - $11,129 per weighted student;
  • Infrastructure Support - $7.96 per square foot for all institutions excluding UT M.D. Anderson Cancer Center and UT Health Center at Tyler; the rate for those two institutions is $7.19 per square foot;
  • Research Funding - $1,412,500 plus 1.48 percent of research expenditures; and
  • Graduate Medical Education Formula - for each year of the 2008-09 biennium the appropriations are $6,653 per resident. 

Mission Specific Funding:  The Legislature institutionalizes the methodology for funding the UT M.D. Anderson Cancer Center based on the total number of Texas cancer patients served and limits the growth in funding from one biennium to the next to the average growth in funding for all health related institutions in the Instruction and Operations formula for the current biennium.  The rate is $2,773 per cancer case in 2010 and $2.774 in 2011.  The mission specific formula for the UT Health Center at Tyler is based on the number of chest disease cases treated in FY2006, with funding rates of $389 per case for FY2010 and FY2011.

Sec. 50.  Report Concerning Designated Tuition.  Amended to incorporate more detailed reporting in part (3) to include the following categories:  grants, scholarships, work-study programs, student loans, and student loan repayment assistance.

New Provisions:

Sec. 52. Appropriations for the Research Development Fund.  Moves informational listing of amounts appropriated to each institution for the Research Development Fund to a separate rider.  Last biennium the rider was part of Section 55. Higher Education Incentive Fund, which was deleted.

Sec. 53. Appropriations for the Texas Competitive Knowledge Fund. Moves informational listing of amounts appropriated to each institution for the Texas Competitive Knowledge Fund to a separate rider.  Last biennium the rider was part of Section 55. Higher Education Incentive Fund, which was deleted.

Sec. 54. Special Item Study. Directs the Higher Education Coordinating Board and the Legislative Budget Board to study each item under the Special Item Support Goal.  The study shall determine:  

a)  if the special item is for "start up funding" and if so, for how long should it be continued;

b)  does the institution get formula funding for the item and should the special item be reduced by an equal amount and;

c)  does the item still serve its original purpose and if so, how long should it continue.

The provision states that it is the intent of the Legislature that items identified as "start up funding" only be funded for six years after the inception of the program.

Sec. 55. Community College Transfer Student Reporting Requirement. Directs the general academic institutions to develop and submit an annual report to the Texas Higher Education Coordinating Board  that details the institution's goals to increase the number, success, and persistence of community college transfer students as measured by THECB. The report shall be delivered to the House Appropriations Committee, the Senate Finance Committee, the Legislative Budget Board and the Governor by November 1 of each year.

Sec. 56. Academic Reporting Requirement for Museums. Directs that each institution that receives General Revenue appropriations for a museum prepare a report outlining the museum's relevance to the academic program at the institution. The provision states that it is the intent of the Legislature that General Revenue funding for museums that are not relevant to the academic program at the institution be discontinued after the 2010-11 biennium.

Sec. 57. Mexican American Studies Program or Other Course Work. States legislative intent that the governing board of each general academic institution located in one or more counties with a substantial and growing Mexican American population may establish a Mexican American studies program or other course work in Mexican American studies at the institution and that an institution may use a portion of its general revenue funds for the purpose of evaluating the demand for and feasibility of establishing a Mexican American studies program or other course work in Mexican American studies.

Deleted Sections:

  • License Plate Scholarship Program
  • Tobacco Settlement Receipts - Baylor College of Medicine
  • Special Item Appropriations
  • Higher Education Incentive Funding (current bill splits out RDF and CKF funding into individual sections)

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Article IX General Provisions

The following section lists the major changes made to the provisions in Article IX.

Amended Sections

3.05(3) Scheduled Exempt Positions.  Creates a new subsection of Article IX, which grants permission to the governing board to make a request to set the rate of compensation as laid out in subsection (c)(1) once per fiscal year or when a vacancy occurs in the exempt positions listed in subsection (c)(6).

3.05(C)(5) Scheduled Exempt Positions.  If a proposed rate of compensation is approved, the LBB must notify the affected agency, the Governor, and the Comptroller.

5.06(a)  Travel Meals and Lodging Expenses.   Meal and lodging expenses are no longer a specific amount ("$85 per day per location for lodging and $36 per day for meals"), but rather an amount to be determined by the Comptroller, depending upon location. 

6.08(b)  Benefits Paid Proportional by Fund.  Amends the subsection to allow for junior colleges or public community colleges to spend money appropriated for employee benefits on any employee if the employee is eligible to participate in the benefits program and is an instructional or administrative employee whose salary may be fully paid from funds appropriated under the General Appropriations Act, regardless of whether the salary is actually paid from appropriated funds.

6.08(d)  Benefits Paid Proportional by Fund.  Due to changes in 6.08(b), all "including a community or public junior college" clauses now read "excluding a community or junior college."

7.09 Reporting of Historically Underutilized Business (HUB) Key Measures.  Provides a link on the LBB website which reports information provided in legislative appropriations requests of agencies and institutes of higher education.

8.02(b) Federal Funds/Block Grants.  Creates a new subsection of Article IX, which mandates an agency report to the LBB, Governor, and Comptroller amounts of federal funds given to that agency and their intended purpose, if amount given is $10M in excess of the amount appropriated by the state.  The reporting agency must go through a ten day notification period during which the LBB and the Governor may issue a written notice of disapproval of the usage of the funds.  If no such notice is given, the Comptroller automatically releases funds to the agency.

8.05(c)  Refunds of Deposits.  Creates a new subsection of Article IX, which prohibits the Comptroller from approving claims or issue warrants that are in excess of revenue estimated by the Biennial Revenue Estimate.  Any claim that is in excess is to be presented to the next Legislature so a specific appropriation for the cause may be addressed. This limit does not apply to any taxes or fees paid under protest.

8.05(d) Refunds of Deposits.  Creates a new subsection of Article IX, providing the Biennial Revenue Estimate determines that no revenues are estimated from a tax, fee, or other revenue source, and if a special fund has been abolished, any balances which may have been transferred or credited to the General Revenue Fund because of such abolishment, repeal, or expiration are appropriated from that fund to pay refunds otherwise payable under this section.

10.08 Payment for Medical Errors.  Creates a new subsection in Article IX, which allows the Employees Retirement System, Teachers Retirement System, University of Texas System, and Texas A&M System to jointly study the feasibility and cost effectiveness of including a provision to deny payments for the 28 National Quality Forum events and additional conditions identified by the Centers for Medicare and Medicaid Services.  A report on their recommendations is to be presented to the LBB and the Governor no later than December 31, 2009.

10.09 Study on Directly Contracting with Medicare for Prescription Drug Coverage.  Allows the Employees Retirement System, Teachers Retirement System, University of Texas System, and Texas A&M System to study directly contracting with Medicare for retiree prescription drug coverage to determine whether such contracting is cost-efficient.   If any agency determines direct contracting to be the most cost-efficient means, the agency may begin negotiations to become an Employer Group Waiver Plan sponsor.

14.02(A)  Limitation on Expenditures- Capitol Budget.  Creates a new subsection of Article IX, allowing amounts identified elsewhere in this act in FY11 for "Data Center Consolidation" to be transferred to FY10 to pay data center consolidation costs.  Agencies making such a transfer must notify the Governor or the LBB 30 days prior to the transfer of funds. 

14.02(B) Limitation on Expenditures- Capitol Budget.  Defines "Data Center Consolidation" as state consolidated data center services in accordance with Government Code, Chapter 2054, Subchapter L.

14.04(a) Disaster Related Transfer Authority.  This subsection now serves as a means for quickly, effectively, and efficiently transferring appropriations in the event of a disaster.  It also provides an exception to any other provision of this act which might otherwise limit the amount of a transfer or might cause a delay in the transfer. 

Part 17  Contingency and Other Provisions.  Section updated to contain all provisions made during the 81st Legislative Session.

Deleted Sections

  • 3.05(e) Scheduled Exempt Positions
  • Part 4 Employment Policies and Provisions
  • 5.06(c) Travel Meals and Lodging Expenses
  • 6.12 Construction Policy
  • 6.14 Research Policy
  • 6.23 Restriction on Expenditures for Lobbying Activities
  • 6.24 Political Ad and Legislative Influence Prohibited
  • 6.27 Grants to Certain Peace Officer Organizations
  • 7.02(b) Annual Reports and Inventories
  • 7.07 Disclosure of Federal Funds
  • 8.03(a-c) Reimbursements and Payments
  • 8.05(c) Refunds of Deposits
  • 10.04 Interagency Contract Funding for Regional Specialist Projects
  • 12.06 Vehicle Fleet Management
  • 13.04 Incentive and Productivity
  • 13.08 Strategic Sourcing
  • Part 19 Additional Contingency and Other Provisions

Moved Sections- No Change

Part 4  Grant-Making Provisions.  Moves from Part 17 without amendment.

This listing of provisions and riders is an overview of the changes and may not include every change that occurred this session.  If a question arises on a particular section, please contact the Office of Government Relations.

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Other Appropriation Legislation

HB 4586 by Pitts / Ogden (Supplemental Appropriations Bill) relating to making supplemental appropriations and reductions in appropriations and giving direction and adjustment authority and prescribing limitations regarding appropriations.

The bill provides funding to a number of state agencies for disaster related expenses, shortfalls in funding, and program/operations funding.  The bill also provides for reductions to the 2008-09 appropriations at several state agencies.  Funding for higher education institutions totals $423.6 million and includes:

- $227.3 million for disaster related expenses.  These funds are primarily for damages and expenses related to Hurricane Ike but also include other natural disasters.  This section of the bill also includes $150 million for damages at UTMB Galveston.  Funding for Texas A&M System entities includes:

o   $6.2 million for Texas A&M University @ Galveston, includes $500,000 for debt service for tuition revenue bonds authorized by HB51.

o   $0.5 million for Prairie View A&M University for facility repair due to Hurricane Ike.

o   $1.2 million for Texas Engineering Extension Service for Galveston facility and hurricane deployment.

o   $31.9 million for the Texas Forest Service, primarily for wildfire-related costs.

- $23.4 million for various programs/operations at higher education institutions.  Funding for Texas A&M System entities includes:

o   $2 million at Texas A&M International University for outreach, access, enrollment, advising, tutoring and retention support.

o   $250,000 Texas A&M University System/Texas AgriLife Research contingency funding for SB 2534 by Wentworth to operate the Task Force on Economic Growth and Endangered Species.

o   $2.5 million for the Texas Forest Service out of the General Revenue Dedicated Account - 5064 for grants to volunteer fire departments for training and equipment through the Volunteer Fire Department Assistance Program.

Funding at other higher education institutions in this section includes $9.9 million for UT Austin for hold harmless for the 08-09 biennium (with $700,000 specified for Marine Science Institute to support the National Estuarine Research Reserve); $1.3 million for UT Tyler for its Palestine campus; $2.5 million for Texas Southern for administrative expenses and archival papers; $617,224 for Texas State University for the School Safety Center; $2.8 million for the UNT System for reimbursement for costs associated with construction of its second building on the

new UNT Dallas campus; and $1.5 million for Navarro College for its new campus.

- $10 million for trauma care at certain health related institutions.

- $10 million in contingency funding to Texas State Technical College System for facilities.

- $152 million to community colleges for higher education group insurance premiums vetoed by the Governor in FY2009.

- The bill also includes legislative intent language that the Governor's Division of Emergency Management reimburse the Texas Engineering Extension Service for costs incurred in connection with the response of the Texas Task Force 1 to flooding events ($1-$2 million estimated).

HB 2729 by Pitts/Ogden relating to directing payment, after approval, of certain miscellaneous claims and judgments against the state out of funds designated by this Act; making appropriations.  Includes the following:

  • To pay the A&M System Texas Transportation Institute (TTI) $14,221.82 from Fund 006 to provide technical support to enhance effective utilization of high occupancy vehicle lanes April 24, 2002 - August 31, 2005.
  • To pay TTI $5,550 from Fund 006 to provide technical support to enhance effective utilization of high occupancy vehicle lanes April 24, 2002 - August 31, 2005.