President Eighmy provides budget updates for UTSA regarding the 88th Texas Legislature

JUNE 20, 2023 — Editor’s note: The following message was sent today via email from President Taylor Eighmy to all faculty and staff.

Now that the 88th Texas Legislative regular session has concluded, I’m writing to provide general updates on several outcomes and their implications on UTSA, particularly around the state budget passed by House Bill 1 and signed into law by Governor Greg Abbott.

To begin, I want to express my deep gratitude for the work of our governmental relations teams at UTSA and at The University of Texas System. Alongside our counterparts at UT System, they advocated for our UTSA community and higher education. I’d like to especially thank Carlos Martinez, Teresa Niño, Jason Hassay and Albert Carrisalez; their collective internal and external engagement was very beneficial. Also, I’m immensely grateful to Senior Vice President for Business Affairs Veronica Salazar and her colleague Senior Associate Vice President for Financial Affairs Sheri Hardison, who worked with the Office of Budget & Financial Planning team and many UTSA subject matter experts to respond to more than 328 inquiries from UT System regarding proposed legislation over the course of the session. Thank you, all.

Overview

By way of context, the Legislature convened this past January with a record budget surplus of $32.7 billion and a robust economic forecast for Texas. This represented a unique opportunity for the Legislature to consider generational investments in higher education. In a collaborative effort to make uniform investments across higher education, Texas’s six major public higher education systems shared an initiative with the Legislature surrounding affordability. Each university would freeze in-state tuition and some fees for undergraduate resident students over the biennium if the state were to strategically invest $1 billion into reducing higher education’s growing expenses. Specifically, the state investment would increase formula funding to adjust for inflation, subsidize Hazlewood legacy costs, fully pay for higher education health insurance, and continue regional university funding. 
 
UTSA also supported collaborative initiatives such as the establishment of the Texas Semiconductor Innovation Consortium, the Texas Space Commission and the Mental Health and Brain Research Institute of Texas, in addition to UTSA specific non-formula funded items. The Semiconductor and Space Commission will be funding and collaborating on opportunities for our researchers.
 
Appropriations to higher education institutions were contingent on the passage of specific policies and the stipulation that an institution’s in-state, undergraduate resident's tuition and some fees would be frozen for the next two academic years. Specifically, HB1 required that SB 17, prohibition of diversity, equity and inclusion (DEI) programs, and SB 18, the codification of tenure, be passed by the Legislature before appropriations would be released. As shared in a May 30 communication, more information will be provided about implementation of SB 17 and 18 once guidance is received from UT System. I want to reiterate our deep commitment to who we are as an institution, the students we educate, and the community that we serve.

HB1 reflects a portion of the requested affordability investment, roughly $700 million, to achieving the affordability goal. While the additional funding is appreciated, it doesn’t fully eliminate the operational challenges moving into the 2024-25 biennium. 

Appropriated General and Supplemental Funding

The budget for the next biennium reflects an increase of roughly $71 million in appropriations and roughly $6 million in supplemental funding, bringing our biennial allocation from roughly $292 million to $363 million. The allocations reflecting these increases are described below.

Formula Funding 

Based on the funding enumerated in HB 1, UTSA will receive a formula general revenue appropriation of $281 million spread over the two years of the biennium—an increase of $20 million (8%) over the last biennium.

I would like to emphasize that our collective efforts to continue improving retention rates and student success outcomes for our Roadrunners—paired with affordability additions—contributed to positive funding outcomes for UTSA in this session. My thanks go to the many who contributed their energies to this important work, including Provost and Senior Vice President Kimberly Andrews Espy, academic deans, vice provosts, department chairs, faculty and staff in Academic Affairs.

Hazlewood

As part of the affordability initiative the Legislature increased appropriations to the Hazlewood legacy program, which reimburses institutions for the reduced cost of attendance of military-affiliated students and their dependents. The Legislature appropriated $184.9 million over the biennium to reimburse all general academic institutions 72% of 2022 total cost to institutions. UTSA’s increase was roughly $13 million over the biennium.

Higher Education Group Insurance

The Legislature increased appropriations to cover roughly 88.6% of basic life and health coverage for all active and retired higher education employees participating in the Employees Retirement System group benefits program. The reimbursement of these expenses is capped, and UTSA’s cap increased approximately $5.7 million over the biennium.

National Research University Fund (NRUF) – Texas University Fund (TUF)

The Legislature eliminated NRUF beginning in FY24 and created a $3 billion TUF, which must be approved by a statewide referendum in November 2023. The TUF will significantly benefit the University of Houston, Texas Tech University, the University of North Texas and Texas State University. UTSA and the other three University of Texas System PUF-eligible emerging research universities will not be eligible to participate in the TUF. We are presently under audit for our share of the FY23 NRUF fund, expected to be over $5 million.

Core Research Support Fund (CRSF) – National Research Support Fund

When the Legislature eliminated NRUF they also renamed CRSF to NRSF and provided a funding increase. That increase was contingent on specific legislative policy passing and requires UT System to match the funding. We are working with UT System to better understand those matching opportunities. UTSA’s projected increase is roughly $33.6 million spread over the next two years of the biennium. Additionally, the timing of fund availability is contingent on the passage of the statewide TUF referendum.

Texas Grants

The Texas Grants program continues to have a clear impact on the retention and graduation rates of our Roadrunners. HB1 included an increase of $84 million over the two years of the biennium in statewide funds for these grants. This will give more of our students—some 70% of whom rely on financial aid—access to this financial support. 

San Antonio Life Sciences Initiative (SALSI)

The Legislature was very supportive of UTSA’s SALSI initiative given the success and impact the program is having on life sciences research. The Legislature provided an additional $2 million one-time allocation for the 2024-25 biennium. 

Texas B-On-Time (BOT)

UTSA will receive a one-time $4 million supplemental appropriation from funds remaining in the Texas BOT, which was a former loan program intended to encourage on-time graduation rates by incentivizing students with lower costs. Since the program was not fully utilized, the Legislature will now reimburse institutions for the unused funds.

Collaborative R&D Opportunities

UTSA worked collaboratively to support and advance the Texas Semiconductor Innovation Consortium which will oversee the Texas Semiconductor Innovation Fund (TSIF). The TSIF was appropriated $700 million to provide matching funds to institutions of higher education for semiconductor manufacturing and design projects.
 
UTSA has also lent support for the Space Exploration and Aeronautics Research Fund, a component of the newly created Texas Space Commission. HB 1 appropriates $150 million in related grants which can be utilized by UTSA researchers. 
 
UTSA was also supportive of the initiative to create the Mental Health and Brain Research Institute of Texas that would have provided significant grant opportunities to advance the research being conducted at UTSA. Regretfully, this initiative didn’t pass. 
 
Other Special Items

UTSA worked to secure additional funding for several UTSA specific, non-formula funded or exceptional items and advance a new Bold Research Initiative (BRI). While BRI did receive support, new funding for it–or, additional funding for existing initiatives—didn’t materialize. Each of UTSA’s existing non-formula items, including the Texas Demographic Center, the Small Business Development Center, the Institute of Texan Cultures, Cybersecurity for Manufacturing, Texas Pre-Engineering Program, Foster Care Pilot Program and Institutional Enhancement maintained their 2022-23 biennium funding levels.

The emerging research universities advocated for addressing the back log on Texas Research Incentive Program (TRIP) funding, but the back log was not addressed this session.

Please be aware that Senior Vice President Salazar, Provost and Senior Vice President Espy and I will send a follow-up message about the implications of this net funding increase and other components of our FY23-24 budget preparations and our IRM budget modeling.

I’d like to reiterate that the entire San Antonio legislative delegation (listed alphabetically)—Senators Campbell, Flores, Gutierrez, Menéndez and Zaffirini; and Representatives Allison, Bernal, Campos, Cortez, Dorazio, Garcia, Gervin-Hawkins, Lopez, Lujan and Martinez-Fischer—were strong advocates for UTSA’s priorities, especially given the unique challenges they faced this year in formulating the budget. I am deeply appreciative to them for supporting so many programs that are vital to our ongoing success.

I am equally appreciative of all of you. Your hard work this year on behalf of our students, community and research enterprise did not go unnoticed by our elected leaders. Thank you for the many ways you have helped UTSA to thrive.