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Saturday, June 25, 2022


Bill would give University access to education fund

permanent university fund

Lawmakers heard testimony on Wednesday over a proposal that would allow the University of Houston System to access the state’s Permanent University Fund. | File photo/The Cougar

Lawmakers in Austin heard testimony on a proposal Wednesday afternoon that would open access for the University of Houston System to a multi-billion dollar fund, according to the Houston Chronicle.

The proposal, introduced by UH graduate and Houston Democratic Rep. Carol Alvarado, would allow UHS and the Texas Tech University System to benefit from the Permanent University Fund — a state investment fund that collects royalties from oil and gas leases. Currently, only the University of Texas System and Texas A&M System have access to the fund, according to the Chronicle’s coverage.

“My goal is to start a discussion to highlight the gross disparity between the level of funding that some universities receive and that of the University of Houston, which is a Tier 1 Research University,” Alvarado said. “The notion that the great state of Texas can only have two premier AAU universities, while California has six, is shortsighted. When we invest in and improve the quality of all of our Tier 1 Research Universities, all Texans win.”

Access to the fund would help UH join the Association of American Universities, a 62-member club of North American higher education institutions, according to the Houston Chronicle. UT, Texas A&M and Rice University are the only Texas universities in the elite club.

Joining the AAU has long been a goal of UH President and UHS Chancellor Renu Khator.

‘Slush fund’

The PUF, established in the Texas Constitution in 1876, is a $17 billion fund that portions money to the Available University Fund based off of oil and gas leases, said Jason Smith, the vice chancellor of Government Affairs at UH.

Only UT and Texas A&M can access this fund for “excellence,” he said, which is a broad term the universities can use to fund whatever they see as necessary, including a distinguished professor’s salary, construction of labs and scholarships for out-of-state students.

“All of the universities within the UT System have access to PUF, but those other universities that do have access can only use it to build buildings,” Smith said. “They can’t use it for ‘excellence.’  So the real advantage is the fact that (UT and Texas A&M) can use this money for excellence, and it’s basically a slush fund for whatever they determine they need for excellence at their university.”

The funds give UT and Texas A&M a major financial advantage over UH, Smith said. According to statistics provided by Smith, the University of Texas and Texas A&M received $242.85 million and $132.07 million from the AUF for ‘excellence,’ respectively, during the 2016 fiscal year.

“We have an institutionalized system of haves and have-nots in higher education right now, and we have to change that dynamic,” Smith said.

Not the first time

A similar bill was introduced by Mayor Sylvester Turn in 2015 when he was a state representative, according to the Chronicle. Turner’s bill would have divided the PUF equally among UT, Texas A&M and UH, but it never received a vote.

“There was a hearing on it, and they left it pending,” Smith said. “It was kind of the same thing that’s going to happen with Rep. Alvarado’s bill this session.”

Because the PUF is set in the state Constitution, it would require support from two-thirds of both the House and the Senate then support of voters in a state-wide referendum — a scenario Smith said is unlikely this year.

The barrier, Smith said, is changing the underlying thinking in the Legislature that the PUF has always been for UT and Texas A&M.

“When PUF was created, the University of Texas was the only university in the state,” he said. “So, this argument of, ‘Oh, well, this was designed for the University of Texas’ — no, it was designed for the students of the state of Texas. We’ve grown way past what the founders of the state of Texas could’ve imagined. We’ve got to give our students more access to a top university, and this is just how it’s going to happen.”

Leaders from UT and Texas A&M voiced explicit opposition to Rep. Alvarado’s bill on Wednesday, citing worries that widening the fund threatens their universities.

“You’re going to destroy two great AAU universities and bring them down to make everybody equal,” Texas A&M Chancellor Jon Sharp said to lawmakers.

UT Board Chairman Paul Foster concurred.

“Do not jeopardize the excellence of UT Austin and Texas A&M,” he said.

‘Too much money’

Chairman of the UH Board of Regents Tilman Fertitta said in April that the UT System’s purchase of 300 acres for a new UT campus in Houston in 2015 was “a case of someone having PUF funds and too much money,” according to the Chronicle.

UT System Chancellor Adm. William McRaven cancelled plans to build a UT Houston campus in March after criticism from Texas lawmakers. A new UT campus in Houston would have been unfair, Smith said, because UH does not have the same resources as UT.

UT planned to pay the debt service for the land purchase with funds from PUF, which exemplifies UT’s financial advantage, Smith said.

“As a university, we’re not on an equal playing field, because we can’t come to the table with the same resources that they do,” he said. “When people were saying, ‘Well, you guys shouldn’t just shy away from competition,’ we said, ‘We’d love to be able to compete, but we need to be competing with the same tools as the University of Texas.'”

Negotiations between UH, Rice University, Texas Southern University, Texas A&M and UT to use the land as a collaborative data science institute are ongoing.

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