For higher education in Texas, this year’s session was a mixed bag of interference and investment

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When state lawmakers released a final version of the budget for the next two years, they included $700 million extra in state funding for Texas’ public universities.

University leaders requested extra funds at the start of the session and agreed to keep tuition flat for undergraduate students for the next two years if the state provided the financial boost.

But budget writers included an additional caveat.

Universities would get this extra money only if two pieces of legislation became law: Senate Bill 17, which banned diversity, equity and inclusion offices in Texas higher education, and Senate Bill 18, the proposal to ban or overhaul tenure. By the end of the regular session, both bills were sent to the governor for approval.

Texas faculty leadership groups said they were “shocked” by lawmakers’ decision to link this funding to the passage of those two bills, where were priorities of Lt. Gov. Dan Patrick.

But it was illustrative of the central tension that underscored the conversations about higher education this session: As public universities and their allies sought a slice of the state’s historic $32.7 billion budget surplus, they also had to tiptoe through the politics of several contentious bills that critics say will have detrimental impacts on Texas’ higher education.

In addition to the $700 million, the state invested more than $650 million this year in community colleges as part of an agreement to start funding these schools based on student outcomes. Four public universities will benefit from a new $3 billion endowment created to help them expand their research activities. The state’s two flagship universities in Austin and College Station got nearly $700 million to invest in facilities that research and develop microchips.

But while university leaders tried to secure the funding, they remained broadly silent on the measures to ban DEI initiatives and rein in tenure, much to the disappointment of students and faculty.

“We are disheartened at what we perceive to be deliberate silence by Texas university leaders in response to the anti-tenure and anti-DEI bills,” students with the group Texas Students for DEI said, calling on universities to step up and protect DEI employees whose jobs might be at risk now that the bill has been sent to the governor.

“By standing up for DEI, our university leadership affirms their dedication to upholding values that make our universities places of academic excellence and community,” the group said.

Here’s more of what you need to know about the biggest changes and debates about higher education during the legislative session.

More funding, some caveats

Before the start of the session, university leaders pitched a deal to state lawmakers: Their schools would keep undergraduate tuition flat for two years if the state gave them $1 billion to help them pay for employee insurance, fund a program that provides free tuition to children of military veterans and provide extra support for regional public universities like Texas A&M University International in the U.S.-Mexico border or the University of Texas at Tyler.

Lawmakers liked the idea, but they promised to give universities only around $700 million to cover these costs — and they made passage of SB 17 and SB 18 a condition to get the money.

Overall, Texas lawmakers set aside nearly $43 billion in the regular budget for public college and universities. Of that, a little over $9 billion is specifically for public universities’ general funds, representing a $1.1 billion increase from last biennium.

The supplemental budget includes millions of dollars for additional projects at individual universities. For instance, the University of Texas at Austin received $440 million to create the Texas Institute of Electronics, while Texas A&M University got $226.4 million for chip fabrication and the creation of the Center for Microdevices and Systems. In recent years, Gov. Greg Abbott has pledged to make Texas a hub for microchip research and development.

The budget also includes nearly $1.5 billion in grants for low-income students. State higher education leaders say that money will serve 70% of students in public community colleges and 70% of four-year university students who qualify.

Patrick’s ire targets tenure, DEI

Over a year ago, Patrick set his eyes on public universities and vowed to ban faculty tenure and expand a K-12 ban on the teaching of “critical race theory,” an academic discipline that looks into the roots of institutional racism. Some conservatives have used “critical race theory” as a shorthand to describe what they perceive is a liberal bias in how schools discuss race and racism.

In January, conservative think tanks started to hone in on diversity, equity and inclusion offices, accusing them of indoctrinating students with left-wing ideology and forcing universities to hire people based on how much they support diversity efforts rather than merit and achievement.

DEI offices have become increasingly common at universities across the country as they work to boost faculty diversity and help students from all backgrounds succeed.

These offices often coordinate mentorships, tutoring and programs to boost the number of underrepresented groups in fields like science and engineering. They help departments cast a wide net when searching for job candidates and ensure that universities don’t violate federal discrimination laws.

In February, when Abbott directed state agencies to disregard diversity considerations in hiring, many universities didn’t wait for anti-DEI legislation to play out at the Texas Legislature before taking action. They paused the implementation of any new diversity policies, reviewed hiring practices and prohibited the use of diversity statements in hiring. Diversity statements are used to give job candidates an opportunity to share how they work with diverse student groups and help them succeed. Critics argue they are akin to loyalty oaths.

Faculty and students have argued that these bills would hurt higher education by making it harder to recruit and retain top faculty, make students of color feel unwelcome and walk back years of progress in opening universities to everyone in the state.

But their concerns fell on deaf ears among Republicans. The Senate promptly passed three pieces of legislation to ban critical race theory, tenure and DEI offices in universities. They all had different outcomes.

Senate Bill 16, which Patrick dubbed the bill to ban critical race theory, never got a hearing in the House higher education committee. SB 17, the anti-DEI bill, passed with modest changes. The House watered down SB 18 to keep faculty tenure and directed university governing boards to establish policies to grant and revoke tenure.

Ultimately, faculty groups said the legislation that passed was a better alternative to the versions initially proposed by the Senate, but they were still disappointed with what they got.

In a statement, the Texas AAUP repeated warnings that banning DEI would make it harder for faculty to be awarded federal and private grants that require universities to do that type of work.

“Because of the critical role grants play in supporting thousands of personnel, and in training the next generation of workers with advanced skills, we believe that SB17 will prove devastating to the economy, and to building the highly trained workforce of Texas,” Brian Evans, Texas AAUP vice president, said. “The State should prepare for a loss of billions of dollars in research and programmatic grants.”

A new way to fund community colleges 

Not all higher education legislation sparked such contentious debate.

Lawmakers gave overwhelming approval to a bill that would overhaul the state’s community college funding system.

Starting in September, the state will fund its community colleges based on student outcomes like the number of students who earn a certificate or degree or transfer to a four-year university.

The proposal came from a state-appointed Commission on Community College Finance, which met between the 2021 and 2023 legislative session to review the current funding system and recommend other models.

Texas’ community colleges are primarily funded by local property taxes; student tuition and fees; and state money. Over time, the state’s share has not kept pace with the other sources of funding, accounting for less than 25% of community colleges’ budgets. Supporters of reforming the funding model — which included all 50 community college districts in Texas, business leaders and state lawmakers — said the change would help community colleges better respond to workforce demands and build out programs in high-need fields like health care or information technology.

Before, the state allocated a set amount of money for community colleges every two years and then divided it among the schools, creating a system where they were essentially competing against each other for money. With an outcomes-based model, advocates say, schools will compete against their own performance history.

Critics point out that research shows outcomes-based funding has had mixed results in other states. But state leaders hope the additional influx of cash will help schools adjust to their new model.

A new endowment emerges 

Public universities got additional financial investments, too.

For decades, the University of Texas System and the Texas A&M University System have benefited from a nearly $32 billion endowment known as the Permanent University Fund, which is composed of assets that come from oil and gas revenues generated on more than 2 million acres of state land in West Texas.

Lawmakers, higher education officials and boosters at the University of Houston and Texas Tech University — some of the largest schools not in the UT or A&M systems — have argued that other universities’ inability to tap into the Permanent University Fund has hampered those schools’ capacity to rise in the national rankings and improve their prestige and stature.

The calls for more support finally reached sympathetic ears last year, after the University of Texas at Austin announced it was leaving the Big 12 football conference to join the Southeastern Conference. Texas Tech football fans worried UT-Austin’s departure would negatively impact their team’s revenue streams locally and with television contracts.

After much debate, lawmakers took an existing research fund and reconfigured it to become the Texas University Fund. They also provided an additional $3 billion to help relaunch the fund.

The Texas University Fund would provide money to Tech and UH, but also to the University of North Texas and Texas State University. And it sets up a path for other universities to access the fund if they meet certain milestones with their research activity. If that happens, the Legislature would need to add more funding so schools already in the fund don’t see a drop in the amount they get each year. Ultimately, lawmakers hope the money will be used to help these schools reach the next level of research prominence.

The new fund requires voter approval. If voters give the OK this November, UH is estimated to receive the most money in the first year — $48 million — while UNT will receive the smallest portion, around $21 million.

University of Houston Chancellor Renu Khator said UH would use the new money to expand research facilities and purchase state-of-the-art lab equipment. The university plans to recruit 150 faculty who are pursuing grants in energy and health innovation.

Overall, she said, the fund “would propel our research endeavors to new heights.”

When asked about how the bills regarding tenure and DEI offices might impact the university’s research goals, a spokesperson said while the impact of that legislation is unclear, university officials are "optimistic" about the advantages the city of Houston has to offer researchers who might want to relocate to their university to work.

Disclosure: Texas A&M University, Texas Tech University, Texas A&M University System, University of Texas at Austin, University of Texas System, University of Houston and University of North Texas have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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