Two years after Texas legislators poured unprecedented amounts of money into higher education, colleges and universities are braced for an about-face during the 2011 legislative session that begins next month.
"I'm very worried," said William Flores, president of the University of Houston-Downtown. "We've got to make higher education possible."
No one disagrees, but a shortfall of $20 billion or more in the state budget may force significant changes in how that education is delivered, and how much students and their families pay for it.
Colleges and universities expect double-digit cuts. Financial aid may be cut, too.
"There's no way to get through this without somebody being impacted," said Brenda Hellyer, chancellor of San Jacinto College.
Schools will react by increasing class sizes, cutting class sections and, maybe, offering fewer degree programs. Many schools will order layoffs or furloughs; the state's two largest universities already have implemented early retirement programs for faculty.
Faculty members who still have jobs may have to teach more classes. Tuition will go up, even though governing boards are leery of dramatic increases.
And community colleges, which depend on property taxes for part of their budgets, will consider raising tax rates.
"If there are areas where we can be more efficient, we ought to do it, whether we're talking about teaching loads or research loads," said Rep. Dan Branch, R-Dallas and chairman of the House Higher Education Committee. "We don't want systems that have too much bureaucracy and prove the perception that higher education is not as efficient as it can be."
Saving the heart
The budget cuts began earlier this year, with public agencies being asked to return 5 percent of state funding for 2010 and 2011. That was increased by another 2.5 percent last month.
An additional 10 percent cut has been proposed for 2012 and 2013, but it may go higher.
The impact will vary by institution, since some depend far more on state money than others.
The University of Texas at Austin, for example, draws about 16 percent of its operating budget from the state. At Texas Southern University, it's 39 percent.
Flores has urged that cuts be made based on an institution's needs and mission, rather than asking each university to cut by the same percentage.
"I do think we have to look at how do we drive down costs and produce more graduates, but we can't cut out the heart," he said.
The cuts come at a time of increased urgency over higher education, sparked by studies showing the U.S. falling behind other nations in producing a globally competitive workforce. That's especially true in Texas, where just 25.4 percent of people 25 or older have a bachelor's degree.
Enrollment in Texas is growing, most quickly at community colleges and among Hispanic students. But graduation rates lag, and the predicted cuts have raised concern over how to educate these new students.
"That is serious at a time when we are serving more students, and we have such momentum in the state of Texas," said Renu Khator, president of the University of Houston and chancellor of the UH system.
'Never coming back'
Any changes made now may become permanent.
"State support at the level we have enjoyed for the last 15 or 20 years is never coming back," Stanton Calvert, Texas A&M University's vice chancellor for governmental relations, told regents there earlier this month. "There will almost surely be less money for a long time going forward."
Recent polls indicate public support appears to be building for substantial change, with likely voters favoring spending cuts over increased taxes and with higher education the top choice for the cuts.
Lee Jackson, chancellor of the University of North Texas system, said those opinions are influenced by the growth of for-profit institutions, such as the University of Phoenix, which offer degrees but whose faculty, often part-time teachers, aren't expected to do research or contribute new knowledge in their fields.
Traditional universities expect more and balance faculty teaching with other demands, he said.
"If someone is discovering the cure for cancer, that person is going to be given a waiver from some teaching duties," he said.
So higher education leaders have heard the message, but they also have one of their own: The public wants accountability, but it also wants Texas to prosper, Khator said.
Support from the business community for higher education is strong, although not necessarily for the status quo. The Texas Association of Business supports reforms it says will increase the number of Texans with a post-secondary degree or credential.
Those recommendations align with proposals by the Texas Higher Education Coordinating Board, calling for universities and community colleges to compete for 10 percent of their base funding, dictated by such measures as degrees awarded, degrees to students from low-income families, and degrees in high-priority fields including science, engineering and math. Community colleges would compete based on degrees and certificates, as well as completion of college-level math courses.
The proposal to shift 10 percent of funding to outcomes may be sensible, Branch said.
"We all want graduations," he said. "That's how we're being measured against other states."
But the schools most likely to lose money under that proposal say the results could be devastating.
"You're blaming the victims," said John Rudley, president of Texas Southern. "I understand where it's coming from, but if you ask us to assist underserved students, you can't do that without giving me extra money. Either you want me to help that kid or you don't."
UH and the state's other emerging research universities — Texas Tech, the University of North Texas and UT campuses in Arlington, Dallas, El Paso and San Antonio - may get a boost. Branch said the National Research University Fund approved by voters in 2009 and intended to help those schools expand their research efforts has grown to $570 million and won't be raided by budget-cutters.
Branch also supports continuing to use state money to match private donations for those schools, an approach first approved two years ago.
But Khator said private money alone can't elevate the state's universities.
"We are a public university, and I think a partnership between the community and the Legislature is our future," she said.