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Regents approve $15.6 billion operating budget for UT System

AUSTIN – The University of Texas System Board of Regents today (Aug. 21) approved a $15.6 billion operating budget for the 2015 fiscal year, which begins Sept. 1. The new budget represents a 7 percent increase, or $1 billion, over the previous fiscal year.

“This budget reflects the priorities of The University of Texas System by placing an emphasis on high-quality and affordable higher education, providing excellent patient care and investing in research that changes lives and improves society,” said Chancellor Francisco G. Cigarroa, M.D. “We have done our best to identify efficiencies and work in as cost effective a manner as possible and we are reinvesting those saved dollars in programs that directly benefit students.”

The $1 billion increase includes an additional $181 million for instruction and academic support; $519 million for hospitals and clinics; and $55 million for research.

Additional resources for instruction and academic support illustrate UT System’s continued commitment to excellence. The increase includes backing for new academic and medical faculty, expansion of clinical programs and money earmarked for priority programs such as the Dell Medical School at UT Austin and the new UT Rio Grande Valley, which will also be home to a medical school.

More than two-thirds of the UT System total budget is made up of health institutions, and the majority of the budget increases are for hospital and clinic related activity primarily to meet the growing patient care demand and investments in health care quality and delivery. Funds in this budget are included for the opening of the new William P. Clements Jr. University Hospital at UT Southwestern Medical Center. 

The budget is financed primarily by revenue from four major sources: hospital, clinic and professional fees make up just over 41 percent; federal, state, local and private sponsored programs account for nearly 20 percent; state appropriations are 13.1 percent; and less than 10 percent of the budget comes from tuition and fees.

Revenue from tuition and fees essentially remained flat this fiscal year, with the Board of Regents holding the line on tuition costs for resident undergraduate and graduate students and their families at all nine UT academic institutions. To compensate, Board of Regents today approved a proposal to send $28.2 million in additional recurring funding from the Available University Fund to UT Austin and shift audit functions and the cost of certain other System-wide insurance programs, digital library services and information technology at UT’s eight other academic campuses to the UT System.

This will free up more than $31 million for the institutions, providing an additional $13 million in recurring support over the $18 million in projected revenue that would have resulted solely through that proposed tuition increases.

“The board is focused on accessibility to higher education and affordability for students,” Regents Chairman Paul Foster said. “We asked Chancellor Cigarroa and his team to be creative and think outside of the box to identify ways to provide campuses with the resources they need while continuing to minimize the burden of tuition and fees for our students.”

The board also authorized a special one-time distribution from the Permanent University Fund into the Available University Fund for fiscal year 2014 in an amount equal to an increase in the distribution rate from the PUF of 1.5 percent – an estimated $188 million – to be divided between the UT and A&M systems.

The additional funding is intended to support online and on-campus enrollment growth with excellence as a top priority. Cigarroa will ask leaders at UT academic institutions to develop a plan explaining how the funds will be used on individual campuses for those purposes.

Along with the operating budget, Regents approved $20 million of PUF bond proceeds for the highly successful STARs (Science and Technology Acquisition and Retention) program, designed to attract and retain the highest quality faculty. The STARs program is widely credited with helping UT institutions recruit and retain world-class professors and researchers, adding to the caliber of UT faculty, and ultimately, to the strength of UT students.

Regents also approved $30 million of Permanent University Fund (PUF) bond proceeds for the Library, Equipment, Repair and Rehabilitation (LERR) program. The LERR program is used by eligible institutions to acquire library materials and capital equipment and to complete small repair or rehabilitation projects.

About The University of Texas System

Educating students, providing care for patients, conducting groundbreaking research and serving the needs of Texans and the nation for more than 130 years, The University of Texas System is one of the largest public university systems in the United States, with nine academic universities, six health institutions and a fall 2013 enrollment of more than 213,000. The UT System confers more than one-third of the state’s undergraduate degrees, educates two-thirds of the state’s health care professionals annually and accounts for almost 70 percent of all research funds awarded to public universities in Texas. The UT System has an annual operating budget of $14.6 billion (FY 2014) including $3 billion in sponsored programs funded by federal, state, local and private sources. With about 90,000 employees, the UT System is one of the largest employers in the state.