Barry McBee

For the 2015 legislative session, the UT System is seeking funding from the Texas Legislature for large infrastructure projects at each of its educational institutions through tuition revenue bonds.

In a July meeting, the Board of Regents approved the System’s plan to request $1.9 billion in tuition revenue bonds, also known as TRBs, from state lawmakers. UT-Austin’s share in the proposal includes two building renovation projects: $100 million for Welch Hall and $105 million for the McCombs School of Business. 

If authorized, the proposed TRBs will pledge a revenue stream serviced by income from tuition charges levied against students with the expectation that the state will later reimburse the expenditures.

Barry McBee, System vice chancellor and chief governmental relations officer, said the lack of TRBs has contributed to overcrowding in classrooms and more limited access to laboratories at many of Texas’ public universities. While the System has used funding alternatives, such as the state’s Permanent University Fund and philanthropic contributions, to keep some projects afloat, they are not enough to meet all the needs of higher education institutions, according to McBee.

“A good example in Austin would be the engineering building; that was a TRB request last time,” McBee said. “It was the highest priority for UT-Austin, and it was obviously not funded, but we were able to put together funding for the project to proceed. That probably means that some other priority project on the campus had to be delayed.” 

The legislature historically passed new TRB legislation every other session, but lawmakers have not authorized new TRBs since a third-called session in 2006. Up until 2013, TRBs were consistently passed over because of budget concerns, according to McBee.

“Higher education collectively had an expectation in 2009 that we would return to what we call a TRB session,” McBee said. “But it was really something the state just could not afford at that time and it was sort of cut off again in 2011.”

In 2013, the House of Representatives and Senate proposed different versions of TRB legislation but, in the last days of the session, failed to pass a bill. McBee said 2015 is the next opportunity to negotiate with legislators over the need for state support for construction.

State Sen. Kel Seliger, R-Amarillo, filed Senate Bill 150, a $2.86 billion proposal that would fund 64 construction and renovation projects at higher education institutions across the state with cash either from direct appropriation or from the Rainy Day Fund, a savings fund that allows the state to set aside surpluses in revenue for use in times of unexpected revenue shortfall.

Another construction financing bill, filed by State Sen. Judith Zaffirini, D-Laredo, proposes roughly $5 billion for infrastructure projects, according to Seliger. 

“If we’re going to take money from the Rainy Day Fund, which I think is a legitimate way to do it, a $2.85 billion dollar subtraction is far more feasible than something over $5 billion,” Seliger said.

Sean Griffin, Zaffirini’s chief of staff, said Zaffirini wanted to take a broader approach with her bill, potentially granting institutions more funding. The bill’s cost will likely change to reflect the legislature’s budget and priorities. 

“Our bill is different because we want to discuss it with the entire legislature; it’s an open discussion of where we should put our resources,” Griffin said.

Seliger said he believes his bill, if passed, will help universities make significant progress in terms of infrastructure without piling on excess debt. 

“I’m not a big believer in debt,” Seliger said. “I think it appropriates forward to the tune of $200-250 million dollars every biennium for a long time, and, if you have the cash for one-time projects to fund and then not deal with again, I think that’s a good opportunity.” 

University spokesman Gary Susswein said TRBs are an important factor in funding new building construction as well as keeping tuition stable.

“We used these bonds to build the Seay Building in the late 1990s and the Norman Hackerman Building in the late 2000s,” Susswein said. “These facilities have ensured that our students and faculty have access to state-of-the-art lab space and classrooms.”

According to Susswein, the failure to pass TRB legislation in recent years has made it more difficult for the University to maintain state-of-the-art facilities. 

“Our goal of becoming the top public research institution in the nation is far more difficult to achieve without access to adequate funding, including tuition revenue bonds,” Susswein said.

McBee said he is cautiously optimistic that lawmakers will approve TRB legislation in the upcoming session.

“We recognize legislators have to make difficult decisions about funding Medicaid and roads, and public education, and higher education,” McBee said. “We would hope that the collective voice of higher education pointing out our needs will be persuasive to the legislature.”

Photo Credit: Stephanie Tacy | Daily Texan Staff

Money will be on the minds of both the University and the UT System during the 2015 legislative session.

Barry McBee, System vice chancellor of governmental relations, said the System will push legislators for additional funding to support institutional growth and programs, particularly for veterans. Meanwhile, UT-Austin President William Powers Jr. said the University hopes to receive money to provide for faculty salary increases.

Powers said the University has been unable to raise faculty salaries for the past few years because of limited funding.

“We’re falling behind at a competitive notion,” Powers said. “I think we need to put some resources into that. We need more sections of some classes. It’s been tough managing with flat and actually decreased — even in nominal dollars — budgets.”

According to Powers, UT takes a $40 million hit every year from inflation and another $40 million hit from building and equipment depreciation.

“Buildings get old and they have to constantly be renovated with the air conditioning and heating and infrastructure,” Powers said. “We’ve had some deferred maintenance that we’ve got to get done.”

At the Board of Regents meeting in November, McBee said the System intends to make receiving state support for the construction of new institutional buildings its top priority.

“The principal reason why we need state support is because we haven’t had it in almost a decade,” McBee said. “We’ve added 26,000 students within The University of Texas System since then. We are asking the legislature for comprehensive and statewide support to develop new buildings for the 21st century and to replace older buildings.”

Along with funding for construction, McBee said the System would be seeking state support for paying the cost of Hazlewood benefits for veterans. The Hazlewood Act, first adopted in Texas in 1929, grants veterans an exemption from paying tuition at public universities. In 2009, veterans’ family members were also made eligible to receive benefits.

According to McBee, System institutions forwent about $42 million in tuition revenue during the 2013-2014 fiscal year because of the Hazlewood Act. He said this amount is expected to increase as more people leave military service.  

“The UT System has always been in support of [the act], but it is an increasingly expensive benefit,” McBee said. “And it is one where the legislature simply exempts those students from paying tuition and it does not provide, other than in a nominal amount, an offset of other funding. We will ask the legislature to fully fund the Hazlewood benefit.”

McBee said another priority during the 2015 legislative session is to receive state support for institutional research and funding to increase the health care workforce in Texas.

“I think it’s a pretty comprehensive list,” Chairman Paul Foster said during the regents’ meeting. “Obviously, it’s a fluid list and one that changes throughout the legislative session as our priorities become more apparent to us.”

In an interview Friday, McBee said, although the legislature should have an extra amount of money to spend because of a state surplus, he is unsure what amount of funding will be allocated toward higher education.

“We’ll get a picture of that when the comptroller provides an updated revenue estimate early in the session in January of 2015,” McBee said. “We would certainly hope that legislators see the value of an estimate in higher education as part of the state’s critical infrastructure and would continue to keep the economy strong, given the state surplus.”  

Photo Credit: Amy Zhang | Daily Texan Staff

When Greg Abbott laid out his higher education plan in September, he said affordability would be key. With Abbott now set to become governor in January, Barry McBee, UT System vice chancellor and chief governmental relations officer, said he thinks Abbott will work toward that goal.

“Affordability is going to be on the mind of any Texas governor,” McBee said. “My sense is that he sees affordability as ensuring students can move through college and attain a high quality education in as quick a time as possible.”

According to State Sen. Judith Zaffirini, D-Laredo, Abbott will need to balance affordability and efficiency with providing high-quality education in his new term.

“I believe that Governor-elect Abbott will prioritize research, that he understands the value and is committed to excellence,” Zaffirini said. “He shares the enthusiasm about issues like affordability and accessibility and cost efficiency and productivity. We all support all of those concepts but not at the expense of excellence, and I hope Abbott shares that perspective.”

In his higher education plan, Abbott, a UT alumnus, focused on using online courses and accepting community college credits at four-year institutions as a means to make college more accessible. Zaffirini, who serves on the Senate Committee on Higher Education, said she can see the value of online courses, but that they shouldn’t take the place of person-to-person education.

“I believe that online courses are important and valuable, but we need more than that,” Zaffirini said. “Sometimes the options provided by online courses aren’t good enough. I believe it has its place, but it is not a cure-all, and, on its own, it is certainly not satisfactory to meet standards of excellence.”

Victor Sáenz, education administration associate professor, said Abbott seems to be following in his predecessor’s steps in regard to higher education.

“I think that he is definitely … on the surface pursuing similar policy ideas, [with] more of a move toward a performance-based budget and funding in higher education,” Sáenz said.

One of Abbott’s early responsibilities as governor will be appointing three new members to the UT System Board of Regents. Zaffirini said those decisions play a huge part in shaping higher education in Texas.

“The appointments are certainly some of the most important,” Zaffirini said. “Higher education is so important to the future of our state. It defines excellence. It defines our future goals.”

Citing regents Steve Hicks and Robert Stillwell, Zaffirini also said, if Abbott appoints regents of the same caliber as some of Gov. Rick Perry’s appointees higher education will benefit. She said she does hope to see a change in the board’s methods of operation.

“The people typically appointed are passionate about their alma maters, and they should be,” Zaffirini said. “You have people enthusiastic about serving, and what’s important is that every appointee understands the standards of governance.”

McBee said he looks forward to working with the governor-elect.

“We were encouraged by a number of elements of Governor-elect Abbott’s plan,” McBee said. “First, the desire to elevate research institutions like UT-Austin as the flagship for the UT system and for emerging UT institutions. We look forward to working for him in that regard.”

Barry McBee, UT System vice chancellor for government relations, represents the UT System in state and federal government. McBee is one of the public faces representing the UT System in the Texas Legislature.

Photo Credit: Gabriella Belzer | Daily Texan Staff

While university presidents and the chancellor may be the public faces in front of the Texas Legislature, one UT System official plays a more behind-the-scenes role in the lawmaking process.

Since 2006, Barry McBee, UT System vice chancellor for governmental relations, has acted as the liaison between the System and the state and federal governments, both of which he has considerable experience in. Over the years, McBee has hopped from executive office to executive office, working for Govs. William Clements, George W. Bush and Rick Perry, as well as Texas Attorney General Greg Abbott.

“It’s a little bit of walking in a man’s moccasins,” McBee said. “I’ve walked in a lot of moccasins in town so that’s kind of helpful when I go see people. I’m representing UT but I also know where you are in this issue and maybe that helps us all get to a win-win.”

McBee said his experience as a “creature of the executive branch” helps him discuss issues that could impact the System with staff in those offices and members of the Legislature.

McBee said he and his office work to provide objective information to the state government on how the System and its institutions will be impacted by certain reforms, such as outcomes-based state funding. He said they also work with the state to facilitate System projects that require state action, such as establishing a new institution in the Rio Grande Valley.

“Our job is to provide lawmakers with an institutional perspective on how we will [be] impacted by the law,” McBee said.

To do so, McBee meets with legislators, attends committee meetings and sometimes testifies before those committees.

McBee brings years of governmental experience to his current job. The University of Oklahoma graduate became involved in state politics at a crucial turning point in Texas’ partisan makeup. In 1986, McBee sought work from James R. Huffines, then secretary of appointments to the recently elected Clements, the first Republican governor of Texas since Reconstruction. 

In 1990, Perry tapped McBee to be his deputy commissioner after winning the post of Texas agriculture commissioner. McBee also served stints as Perry’s chief of staff during his terms as lieutenant governor and governor. 

“There weren’t many Republicans around town,” McBee said. “So when Rick Perry won and Kay Bailey Hutchison [who became state treasurer, an office abolished in 1996] won statewide office, the first place they looked to start putting their teams together were people who worked for Bill Clements because we were the only young Republicans in town.”

During his time in state politics, McBee also weathered a fair share of controversy and played roles in key events in state politics from the past decade.

For example, McBee sought legal advice in 2001 regarding appointing a former Enron executive to the Public Utilities Commission after the company’s crash. He was also frequently called for legal advice when Democratic legislators left the state to prevent the Legislature from voting on a controversial redistricting bill in 2003.

These experiences may have prepared McBee for his current position, which he took about seven years ago after Huffines, then chairman of the UT System Board of Regents, suggested he take it. 

The System is currently embroiled in a controversy surrounding President William Powers Jr. and the regents, which state Rep. Jim Pitts, R-Waxahachie, recently called a “witch hunt” intended to oust Powers. As a result, lawmakers have begun examining the role of regents within university systems.

McBee said the controversy does not impede his job and that he focuses on providing accurate and unbiased information to legislators about how proposals to reform how boards of regents govern system institutions would impact the System.

“If you don’t walk in with credibility that I’m going to give you accurate information, that’s the kiss of death,” McBee said. “I lose all credibility otherwise.”

The UT System’s chief governmental relations officer said Thursday that System leaders must continue to push for increased state funding during the next legislative session, even in the face of a massive state budget deficit.

Barry McBee, general counsel for the UT System, said the next Legislature could face the worst budget shortfall in Texas history, and budget maneuvers used to quell the $10 billion shortfall in 2003 cannot be used again. He said UT will need more — not less — state funding in the 2012-2013 biennium to keep up with the cost of growth.

“We will ask as further cuts are made to be treated equitably and not bear a disproportionate percentage of further reductions,” McBee said. “We all acknowledge the need of UT-Austin for more funding in its quest to become the nation’s greatest public university.”

The previous Legislature spent $6.4 billion in temporary stimulus funds to fill its own budget gap, including $9.9 million for UT. So the Legislature will begin its session behind where it would normally be, he said.

The state’s shortfall goes back to 2006, when legislators slashed property taxes but failed to generate enough revenue from new business taxes to sustain the budget. The sales tax also failed to perform as the economic recession started to settle in — even the population and economic growth that Texas enjoyed put budget strains on the state’s public education and health services, McBee said. The result is a budget shortfall estimated as high as $25 billion.

After Republican lawmakers increased their majority to 48 seats in the Texas House in the midterm election, there will be little enthusiasm to spend the Rainy Day Fund, Texas’s saving account, because the state may face another shortfall in the next legislative session, he said.

Regent James Dannenbaum said legislation after the introduction of new business taxes in 2006 exempted more and more businesses, leaving the state fewer tax dollars.

“Part of that shortfall is not economic activity, it’s a policy change by the Legislature — regardless of how you feel about it, it’s not likely to change,” Dannenbaum said.

Texas saved $1.2 billion from cuts to state agencies’ budgets this year, but because many areas were put off-limits, 40 percent of the cuts came from higher education. The UT System dropped $200 million into the state’s combined higher education contribution of $520 million. The cuts amount to $500 per student at UT’s academic institutions and $7,000 per student at health institutions.

McBee said in an odd way, the budget shortfall could also present an opportunity for UT to cast off regulatory burdens — eliminating the need for unused, unread reports and approval for decisions from other governmental agencies. But UT’s top priority will be to ask the Legislature for general revenue to replace the stimulus funds in the University’s budget, he said.

How UT’s chief administrators interact with the Legislature will be key to pushing the University’s goals.

UT Chancellor Francisco Cigarroa said after the next legislative session begins in January, he will start living at the Capitol for the next six months. He said UT representatives have met with 150 legislators to convey the interests of the UT System campuses, and must continue to express the idea that higher education is an investment in the future.

“We will be easily accessible to legislative leadership,” he said. “It’s very important to have that presence. We’re all going to be in this together — and the regents are going to have to support us in articulating the importance of higher education.”

Regent William Eugene Powell said the board should create a schedule so they can always be at the Capitol speaking with legislators.

“I know that’s a time commitment for all of us, but I know that would be helpful,” Powell said.