UT’s portion of the Permanent University Fund (PUF) might be cut in half to help fund The University of Houston.
Last week, Rep. Sylvester Turner (D-Houston) laid out a bill and constitutional amendment before the House Higher Education Committee that, if passed, would be a step toward adding UH to the PUF, an endowment that is currently designated to fund university operations at the UT and Texas A&M systems through the Available University Fund (AUF).
Chief financial officer Mary Knight said this could have a significant financial impact on the university.
“As far as the overall budget, a hundred million dollar reduction to any of our sources would be a very major reduction to the budget,” Knight said. “A lot of research and scholarships are funded from the AUF, so we would have to make reductions somewhere to be able to account for this.”
Since the state constitution dictates that only UT and A&M receive the funds, the constitution must be amended to add UH to the short list of the fund’s recipients. Additionally, Turner’s complimentary bill must pass.
Currently, $263 million of UT’s $2.658 billion budget comes from the PUF, according to Knight. UT receives two-thirds of the $17 billion fund, while A&M receives one-third of the money. Turner’s proposals would cut UT’s portion and transfer part of it to UH, granting each institution one-third of the fund.
At Wednesday’s hearing, Turner said he thinks The University of Houston is underfunded compared to A&M and UT. This year The University of Houston received $143 million in general revenue state appropriations compared to about $262 million and $252 million at UT and A&M, respectively.
The University of Houston, which is Texas’s third tier-one research institution alongside UT and A&M, should become Texas’s third flagship university, according to Turner.
“We do need to have a major conversation, and we do need to find ways of making sure we have additional flagship universities that are funded at the same or similar levels to benefit other students as we move forward,” Turner said at the hearing Wednesday.
Shaun Theriot-Smith, civil engineering junior and University of Houston student government president, said he believes UH is deserving of the PUF funding but said it should not come at the financial expense of UT and A&M.
“As far as the student perspective goes, any chance to increase funding for the University is always a good thing, but I don’t think any [UH] student is really interested in a situation which might compromise another University, such as UT or A&M,” Theriot-Smith said. “It would result in A&M or [UT] receiving a smaller slice of the pie, but there’s a way to apportion for [UH] in a way that would not compromise the financial stability of [UT] or A&M.”
University spokesperson Gary Susswein declined comment on the legislation, which is pending in committee.
Student government president Xavier Rotnofsky said he thinks legislators should consider the impact that cutting PUF funds will have on UT when engaging in a conversation around adding The University of Houston to the PUF.
“Public institutions in Texas should be involved in the dialogue of appropriations, but we have to keep in mind the impact that cutting from PUF to UT would have considering the population size of not only UT-Austin but also the UT system as a whole,” Rotnofsky said. “We get a lot of our funding from PUF, so it’s a huge asset of ours. We have to keep in mind the impact of adding another entity.”