1. HIGHER EDUCATION FINANCE AND BUDGETING May 2017

2. Contents
State of Texas Budgeting
Higher Education Funding in Texas
Texas A&M University Budgeting

3. STATE OF TEXAS BUDGETING

4. State of Texas Budgeting
26.9M People
State of Texas Budgeting
Public Higher Education Funding in Texas
Texas A&M University Budget
1.49M Students
61K Students

5. Texas Legislature
The Texas Legislature convenes in Austin for a 140 day regular session every two years in odd-numbered years. The 85th Legislature convened January 10, 2017.
Texas Senate – 31 senators
Texas House – 150 Representatives
The budget is the essence of public policy
The budget process is political
Texas prepares a 2 year (biennial) budget

6. Legislative Budget Timeline
June Governor/Lt. Gov./Speaker budget parameters Legislative Budget Board (LBB) Budget instructions issued June Chancellor’s review of A&M System institutions’ special item and tuition revenue bond needs August Initial budget requests due to LBB and Governor’s Office September LBB/Governor’s Office Budget Hearings for A&M System October Budget revisions due; LBB staff begin work on Base Bill November LBB adopts constitutional spending limit

7. Legislative Budget Timeline
January 10, th Regular Session Begins January LBB Base Bill; Governor’s State of the State; and Comptroller’s revenue estimate issued; Legislative Committees and Chairs named in House and Senate Feb. – March House Appropriations bill hearings and mark-up Feb. – March Senate Finance appropriations bill hearings & mark-up April – May Emergency/Supplemental appropriations bill finalized April – May Conference Committee on appropriations bill May 29, 2017 End of 85th Regular Session (140th day) June Comptroller revenue certification June 18, 2017 Last day for Governor’s vetoes (20 days following final adjournment)

8. The Texas Biennial Budget Cycle

9. Where does Texas’ Money Come From?
In order of contribution….
State Tax Collections (nearly 2/3 of all Revenue)
Federal Funds
Fees, Fines, Licenses
Interest and Investment Income
Lottery
State Land Income
Other

10. Texas 2016-2017 General Revenue Appropriations
Total
$106.6 Billion 10

11. HIGHER EDUCATION FUNDING IN TEXAS

12. Funding Higher Education in Texas
Public institutions serve about 91% of the 1.6 million students enrolled in higher education in Texas
All institutions in Texas have goals of instruction, research and public service; however, each has a unique set of academic offerings and a unique regional or statewide mission

13. Funding Higher Education in Texas
Formula Funding– The formulas are used to distribute higher education funding among the state institutions.
Instruction and Operations
Infrastructure
Texas Research University Fund (TRUF)
Non-Formula:
Special Items
Available University Fund (AUF)
Group Insurance
Tuition Revenue Bonds
Total $17.3 billion

14. Formula Funding in Higher Education
Instructions and Operations Formula
Based on student enrollments on the 12th class day
Expenditure study used to adjust funding on a cost-weight basis
Teaching Supplement incentivizes the use of tenured faculty instructors in undergraduate courses with a 10 percent bonus to weighted semester credit hours
Infrastructure Formula
Provides per square foot support for maintenance and operations
Provides support for utilities
Uses Coordinating Board Space Projection Model
Small Institution Supplement distributes additional resources for the reduced economies of scale associated with operating small institutions
Coordinating

15. Funding Sources for General Academic Institutions
Formula Funds can be used to pay for
Faculty Salaries
Department Operating Expense
Libraries
Instructional Administration
Student Services
Institutional Support
Research Enhancement
Infrastructure Support
Ineligible Expenses
TRB Debt Service
New construction and major repairs

16. TEXAS A&M UNIVERSITY BUDGETING

17. Texas A&M Budget Process
Timing Varies Depending on Legislative Cycle
System Provides Guidelines
University Develops Guidelines and Calendar
Phase 1 – Lump Sum
Phase 2 - Salary
Decentralized Process
Incremental Budget Model

18. Where does Texas A&M’s Money Come From?
In order of contribution….
Tuition and Fees
State Appropriations
Sales and Services
Contracts and Grants
AUF
Gifts
Other

19. Fund Groups Educational & General (E&G) Designated Funds
State Appropriated Funds
Designated Funds
Purpose defined by the Board of Regents (BOR)
Auxiliary Enterprises
TAMU Business Enterprises
Restricted Funds
Contract, Grant & Gift Accounts 19

20. Available University Fund Designated Tuition & Fees
Sources of Revenue
General Revenue
Statutory Tuition
Available University Fund
E&G (also referred to as “State” funds)
Appropriated sources of revenue from the State of Texas
E&G Funds
(1xxxxx)
Designated Tuition & Fees
Investment Earnings
Service Departments
Indirect Costs
Designated funds (also referred to as “Institutional” or “local” funds)
Accounts designated for a specific purpose by the BOR
Purpose is not restricted by an outside source
Designated Funds
(2xxxxx)

21. Student Center Complex Transportation Services
Sources of Revenue
Auxiliary Enterprise funds
Enterprises that provide services to students, staff, faculty, and the general public
Enterprises are essentially self-supporting
Other enterprises: Recreational Sports; Beutel Health Center, the Children’s Center
Athletics
Student Center Complex
Transportation Services
Residence Halls
Auxiliary Funds
(3xxxxx)
Contracts & Grants
(4xxxxx)
Gifts
(5xxxxx)
Scholarships
(6xxxxx)
Restricted funds
Funds are restricted to a specific purpose by donors from outside TAMU
Scholarships and fellowships
Research gifts, grants and contracts (federal, state, local)
Gift Funds
Unrestricted – Use must be tied to the mission of the University
Restricted – Gifts given for a very specific purpose. Must be used as designated by the donor.
Restricted Funds
(4x, 5x, 6x) 21

22. FY 2017 Revenue by Source of Funding
Total Revenues (in millions)
$1,772.7

23. FY 2017 Revenue Budget

24. FY 2017 Expenses by Category (including Debt Service)
Total Expenses (in millions)
$1,728.6

25. FY 2017 Expense Budget (including Debt Service)

26. Thank YOU! Questions? Deb-wright@tamu.edu