Texas Universities Pitch New Quid Pro Quo: A Two-Year Tuition Freeze For $1 Billion

Leaders of six public university systems in Texas have proposed a grand tuition bargain – a two-year freeze on tuition rates for all undergraduates in exchange for nearly $1 billion in new state funding. First reported by The Texas Tribune, the pitch came in a letter sent to legislative leaders by the six chancellors in December.

According to The Texas Tribune’s reporting, the letter, which it obtained this week, was sent to Lt. Gov. Dan Patrick, Speaker of the House Dade Phelan, Senate Finance C.ommittee Chair Joan Huffman and House Finance Committee Chair Greg Bonnen.

The letter was signed by James Milliken of the University of Texas System, John Sharp of the Texas A&M University System, Renu Khator of the University of Houston System, Michael R. Williams of the University of North Texas System, Tedd Mitchell of the Texas Tech University System and Brian McCall of the Texas State University System.

The chancellors’ request comes at a time when Texas enjoys an unexpected and historic budget surplus of $33 billion, thanks to surging state revenues. With the surplus, Texas has $188.2 billion it can spend over the next two years, 26% more than the last biennium.

In the letter, the chancellors claim, “our education mission is funded almost entirely by two sources of funding: state support and student tuition and fees. Without increased state support, Texas institutions must look to additional efficiencies and then tuition and fees to be able to continue to maintain high quality education. In order to hold tuition flat for our students and their families, Texas universities seek increased state investment.”

Citing the fact that today’s students need more services and technology and that their institutions are battling inflationary increases and labor shortages, the chancellors asked for more state funding in the following areas:

1. $352 million, equal to a 7% increase in the money allocated through the state’s higher education funding formula;
2. $80 million in funding for regional universities, such as Texas A&M International University in Laredo and the University of Texas at Tyler;
3. $276 million for the Hazlewood Legacy Program, through which the universities waive tuition for qualifying military veterans and their families;
4. $290 million, which would enable the state to fund health insurance for higher education employees at the same rate as other state employees. Currently, according to the chancellors, the state covers less than 80% of the rate it pays for state employees.

Freezing undergraduate tuition in exchange for greater state appropriations has become a deal frequently struck between governors and public universities in recent years. Missouri, South Carolina and Kansas are examples. What sets the Texas pitch apart is the magnitude of the requested funding increase and the collective enrollment at the institutions involved, which runs to hundreds of thousands of students.

Texas leaders now face decisions of what to do with the windfall as they put together a budget for the 2024-25 biennium. Many, like Governor Greg Abbott, want to reduce tax burdens. Others point to the need for investing in infrastructure improvements along with providing tax relief.

It’s too early to tell how much traction the universities’ ask for additional funding will gain. It’s their opening bid. Look for something smaller in any final deal.