Higher ed funding fails

Texas State officials said the new building would allow the school to begin relocating its college of health professions from San Marcos to Round Rock. Texas A&M officials said with the additional laboratory space, the school could have begun offering a complete four-year curriculum to its Round Rock–based medical students. Instead, the failure of the bill likely means the postponement of any major construction in Round Rock until at least the 2015 legislative session.

Funding freeze

TRBs have operated as an integral revenue source for Texas' public universities for more than four decades. According to the Texas Higher Education Coordinating Board, the Texas Legislature has approved more than $2.1 billion worth of TRBs since 1991—funds specifically earmarked for new campus construction and facility improvements.

TRBs are actually a misnomer, however, in that student tuition revenue does not fund the bonds' debt payments. In actuality, the Legislature includes the cost of paying off the bonds within the state's general budget.

In theory, TRBs free up schools' budgets for operations and reduce tuition costs. Without TRBs, universities are limited in how much they can invest in facilities at satellite campuses such as in Round Rock, said William Nance, Texas State University vice president for finance and support services.

"You might get somebody to give you $1 million ... to get their name on [the new building]—but you [still] have a long way to go," he said. "We could raise tuition a whole bunch. ... But that really puts the burden on the students who are here now and will pay before the buildings are built. There are not any real good choices."

State Sen. Judith Zaffirini, D-Laredo, whose district includes the Texas State University campus in San Marcos, considers herself one of the Legislature's leading proponents of TRBs. On Nov. 12, 2012, Zaffirini prefiled the first 30 bills of the 83rd Texas Legislature, the first of which would later be assigned the designation SB 16—a $2.4 billion TRB bill.

"Tuition revenue bonds are very important to the universities ... because there is no funding that is appropriated [by Legislature] directly for construction," Zaffirini said.

Zaffirini—who was first elected to the Texas Senate in 1987 and served as chairwoman of the Higher Education Committee from 2006 through 2012—said the unofficial custom in the past was for the Legislature to approve a new round of TRB funding once every four years. The last TRBs to pass, however, were in 2006, meaning by the next scheduled legislative session, Texas public universities will have gone nearly a decade since receiving state-funded bonds.

"It is exceedingly disappointing because the universities need [funding] so badly," Zaffirini said. "This is the perfect time because construction costs are down, interest rates are down and the need is great."

'Nobody blinked'

Multiple legislators, lobbyists, and university representatives said SB 16 appeared a lock to pass up until the final days of the regular session.

According to legislative records, on April 23, the Senate passed the bill by a unanimous vote, and a month later the House of Representatives approved an amended version by nearly a 5-1 margin.

There were, however, notable differences between the House and Senate versions of the bill. According to state Rep. Larry Gonzales, R-Round Rock, the House-amended bill allotted all of the schools included with 80 percent of the total funding they individually requested. In some cases, such as the Texas State Round Rock Campus, this formula translated into a funding decrease from the Senate version, but for some other schools it equated to more money.

"Our version had support of all [58] schools—the Senate version did not. And therein lies the problem," Gonzales said. "The Senate version was picking and choosing winners and losers."

With just three days remaining in the regular session, it appeared the House leadership expected the Senate to approve the amended version rather than losing the bill altogether, Zaffirini said. Instead, the Senate requested the formation of a conference committee to work out the differences. When the House refused to appoint members to the committee, the bill's progress stalled.

"I think both sides thought the other side would say, 'OK, I give. We just want to get a bill,'" said Randy Cain, a legislative lobbyist employed by the city of Round Rock. "But nobody blinked."

Gonzales said the failure of SB 16 was emblematic of what occurs when personal agendas interfere with legislative action.

"I tell people all the time: You learn in seventh grade how a bill becomes a law, but what they don't teach you is the variables of personalities," he said. "[Sometimes] the policy loses out to the politics and personalities, and I think that is what happened here. You walk away shaking your head, thinking, 'We needed these.'"

After the regular session ended, there remained hope among legislators and higher education leaders that Gov. Rick Perry would place the bill on the call of one of the subsequent special sessions. However, after needing three special sessions to resolve issues on redistricting, abortion and highway funding, Perry declined to introduce the bill again.

"The governor put very specific issues on the call that needed to be addressed, and the Legislature took three sessions to get that work complete," said Josh Havens, deputy press secretary for the governor's office. "Unfortunately the timing didn't allow for TRBs to be offered to the call."

Moving forward

Zaffirini has already promised to reintroduce TRB legislation at the next legislative session.

However, with statewide elections looming in 2014, the future political climate and appetite for billions of dollars worth of TRB funding is difficult to predict. Aside from the fact there will be a new governor in office by the time of the next session, it is also possible there could be transitions in the lieutenant governor's office as well as the legislative committee chairs.

"There are going to be a lot of moving parts," Acevedo said. "Next time we will see who the players are and we will see who the lieutenant governor is, and we will see if that's going to be a partner of TRBs or not."

Regardless of the results of the 2014 elections, Texas State and Texas A&M officials in Round Rock say they are already preparing new TRB funding requests. The idea, said Dr. Brett Giroir, interim executive vice president for the Texas A&M Health Science Center, is for Round Rock's higher education institutions to cooperate, instead of competing, in securing the state funding he says they both need to expand.

"Collaboration between [academic] institutions is often not done because everybody wants something to be mine, mine, mine," Giroir said. "But we have to transcend that instinct to work together. That is what the people of Texas expect us to do, and that is what our patients expect."