UH System/University of Houston
Presentation to the Legislative Budget Board Staff
September 15, 2014
Introductory Remarks
Good afternoon. I am Renu Khator, and I serve as Chancellor of the UH System and President of the
University of Houston.
Thank you for the opportunity to meet with you today, and thank you for all of the hard work you do on
behalf of Texas. Developing the state’s budget is the most important work our legislature does, and it
wouldn’t be possible without you.
I’ll begin my presentation as Chancellor, with a brief overview of major accomplishments at the UH
System over the past two years, and then summarize our legislative priorities for the upcoming session.
UHS Major Accomplishments
As the global economy becomes increasingly driven by the creation of new knowledge and technological
innovation, success for Houston and Texas depends increasingly on the existence of a highly-skilled,
professional workforce and cutting-edge research and development.
Combined, the UH System's four universities do more to fulfill these needs than any other institution in
the region.
In recent years, our universities have also experienced extraordinary transformational change, more
perhaps than any university in the nation. For example:
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The University of Houston has ascended to the ranks of a Tier One university, as recognized by
the Carnegie Foundation, the Center for Measuring University Performance, U.S. News, and
many other organizations.
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UH-Clear Lake and UH-Victoria have enrolled freshmen and sophomores for the first time, a
major shift in the missions and cultures of both universities.
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All four UHS universities have been designated Hispanic Serving Institutions (HSls) by the federal
government. In fact, no ethnic group constitutes a majority of our students. They are 14%
African-American, 15% Asian, 28% Hispanic, and 31% White.
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The UH System has opened two new off-campus teaching centers in Pearland and Northwest
Houston, both of which enjoy broad community support and permanent facilities in rapidly
growing parts of the metropolitan area.
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System-wide enrollment has grown dramatically since I arrived in 2008, by over 10,000 students.
Finally, in order to fulfill the UH System's vision to reach the broadest student population possible, we
are offering 11 MOOCs this semester, including- 10 from UH and 1from UH-Victoria.
Approximately 55,000 students have enrolled in these courses.
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UHS Legislative Priorities
None of these accomplishments would have been possible without strong support from the state, and
as we look to the upcoming session we will again bring forward several system-wide priorities that we
ask you to consider.
First is base formula funding:
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As demands on our universities grow, it is imperative to provide adequate resources for basic
educational services through the formulas.
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While the formula funding rate for the current biennium was 2% higher than for the last
biennium, it was still 12% lower than the rate for the FY10-11 biennium. It is essential to close
this gap.
Second is funding for the Higher Education Fund (HEF).
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Given the growth at Texas universities, their need for expanded facilities, and increasing
construction costs, we recommend that the Legislature re-authorize HEF for the next ten years
with a 50% increase – from $263 million to $394 million.
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This increment is consistent with increases for the past two ten-year allocation cycles.
Third is full state coverage for Hazlewood exemptions:
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The UH System is dedicated to supporting veterans and their families by expanding
opportunities for them to earn a college degree.
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However, the cost to universities statewide of funding Hazlewood has jumped from $25 million
in FY09 to $118 million in FY13. The UH System universities funded $9 million in Hazlewood
exemptions in FY13.
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Absent full state coverage, our universities must fund these exemptions through other
institutional resources, including tuition paid by other students.
Our fourth priority is increased funding for TEXAS Grants, which is essential if Texas is to expand access
to higher education and facilitate student graduation.
And finally, the UH System is requesting exceptional item funding for three initiatives and TRB support
for one capital construction project.
Our first exceptional item request is for the UH System Global Campus:
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Having established campuses throughout the region, the UH System is now aggressively moving
beyond bricks and mortar to expand access to higher education.
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The UH System Global Campus will make available to students throughout Texas and the world
the 99 programs currently available from the UHS universities online, as well as new programs
we plan to develop.
Second is Guided Pathways to Success (GPS) through which the UHS universities in partnership with
regional community colleges will improve student retention and graduation while minimizing excess
credit hours. Essential components of GPS include:
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Providing students with degree maps to ensure they make informed choices about courses and
majors
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Scheduling prerequisite courses so they can be taken in consistent and consolidated time blocks
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Intrusive on-time advising to make sure students remain on track to complete their degree, and
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Encouraging students to complete 30 credit hours over an academic year.
According to a report from the Coordinating Board, Texas students take an average of 147 hours to
complete a 120-hour degree. The CB has also estimated that the state could save approximately $15
million and that students could save $94 million by reducing accumulated SCH by 12 hours. GPS will
help reduce these costs.
Our final exceptional item request is for the Texas Aerospace Scholars Program and the Technology
Outreach Program (TOP). Administered by the NASA-Johnson Space Center:
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Texas Aerospace Scholars provides unique educational and internship experiences for K-12 and
community college students, while
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The Technology Outreach Program provides technical and scientific support to emerging
businesses.
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Representatives from NASA are here today to answer any questions you may have about these
programs.
Finally, we are requesting capital funding for the UH System at Cinco Ranch:
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Through this project, the UH System would purchase land and construct a new academic
building (60,000 square feet) in the West Houston/Katy region.
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This project is part of a major effort to expand academic programs to address the workforce
needs in the rapidly growing area.
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The UH System universities currently offer 32 degrees in high-demand fields such as business,
education, and nursing at Cinco Ranch.
This concludes my presentation on the UH System. If you have any questions, I’ll be happy to answer
them now. Otherwise, I’ll move on to my discussion of the University of Houston.
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University of Houston Major Accomplishments
The University of Houston has achieved much in recent years as it rises among the ranks of national
universities:
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First, the Carnegie Foundation for the Advancement of Teaching has classified UH as a university
with “very high research activity,” a distinction it shares with only three other universities in
Texas (Texas A&M, UT-Austin and Rice).
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Second, UH is one of only three Tier One universities nationwide to be designated as a Hispanic
Serving Institution.
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Third, UH was recognized as one of the “Top Green Colleges” in the U.S. by the Princeton
Review in 2014, and as one of the “Best Value Universities” in 2013.
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Fourth, the University of Houston has achieved record success on many of its student success
and national competitiveness measures:
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Total degrees awarded: 8,590
Freshman first-year retention rate: 85%
Freshman six-year graduation rate: 48%
Freshman Median SAT: 1140
Course completion rate: 97%
Doctoral enrollment: 2,061
Total research expenditures: $131M
Private support: $125 million
IP income: $22 million. Currently, UH ranks among the top 20 public universities
nationally.
To further improve student success at UH – and to fulfill the Legislature's directive to move from an
access to success-based agenda – we have launched a powerful new initiative that incentivizes students
to graduate in four years – UH in 4:
Through UH in 4, freshmen are guaranteed a flat tuition rate for four years as long as they earn 30 credit
hours per year.
Approximately 2,000 incoming freshmen (60% of the entering class) and 600 transfer students have
signed up for UH in 4 this fall.
More impressive, 96% of the freshman class is attending full-time, and 69% are enrolled in 15 credit
hours this fall.
University of Houston Legislative Priorities
The legislative priorities for the UH System I shared with you earlier are all essential to the University of
Houston, as well. I will add three additional priorities that are imperative to UH:
First is state funding programs for Tier One universities:
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Research Development Fund ($5.6M)
Texas Competitive Knowledge Fund ($4.4M)
Texas Research Incentive Program
National Research University Fund
State funding for these programs is the primary way in which UH and other universities not
supported by the Public University Fund pursue their Tier One goals. We recommend increased
appropriations to each of these funds.
Next is funding for special items and exceptional items. The University of Houston is requesting
exceptional item funding for five major initiatives:
First, we are requesting start-up funding to support the development of a new Hobby School of Public
Affairs:
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The increased size and complexity of government requires highly skilled individuals who are
equipped not only to lead and manage, but to leverage technology, analyze complex data
and arrive at effective solutions.
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Faculty and students at the Hobby School will serve government, business, and non-profit
organizations by applying advanced research methods to address real world problems
ranging from pension shortfalls, to government inefficiency, to school funding issues.
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Solutions developed by the Hobby School will benefit not only the city of Houston, but other
cities in Texas and the nation that share similar challenges.
Second, we are seeking funding to expand the university’s energy portfolio through our Intelligent Oil
Fields Initiative:
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Recent developments in smart materials, sensors and devices – along with advances in
nanotechnology, data storage, analytics and large-scale computing – provide the basis for the
design of intelligent oil and gas fields.
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Goals of this initiative include better estimation of reserves, recouping a greater percentage of
hydrocarbons in a reservoir, and extending monitoring and sensing technologies to ultra-deep
subsea reservoirs.
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UH faculty will work in partnership with industry to develop and implement these new
technologies and processes.
Third is equity funding for Texas pharmacy programs:
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Currently, there is considerable disparity between the funding for Texas pharmacy programs
that are funded through the health sciences formula versus those that are funded through the
formula for general academic institutions.
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In 2000, the formula funding rate for these programs was approximately equal. Today,
however, the rate for pharmacy programs at general academic institutions is approximately
three times less than the rate at health-related institutions.
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Two years ago, the Legislature appropriated $4 million to the UH College of Pharmacy to
partially close this gap. For the upcoming biennium we are requesting the balance of $8.9
million.
Fourth, as part of our health sciences initiative, we are requesting start-up funding for new programs
and infrastructure needed to support the UH Health Science Center:
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Over the past two years, UH has consolidated its existing health-related programs into a Health
Science Center approved by our Board of Regents in January 2013.
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As a next step, we are planning new programs in nursing, a doctoral program in Physical
Therapy, and a Primary Care Clinic in partnership with a Federally Qualified Health Clinic.
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These programs will enable the university to address critical workforce shortages, leverage
external research funding, and provide health services to a community in need.
Fifth, the UH Small Business Development Center proposes to increase job creation through the
establishment of a High-Growth Stage 2 Business Team.
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Stage 2 businesses, which typically employ 10-99 employees and have annual revenue of
$500,000 to $50 million, are primed for economic and job growth and are excellent
opportunities for investment.
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We see a significant opportunity for the SBDC to provide critical support to these firms.
Finally, the University of Houston is requesting capital funding support for two major construction
projects:
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The Health and Biomedical Sciences Center 2 ($165,000,000) will provide state-of-the-art
infrastructure to support students, faculty, and research activities in the university’s health
science programs.
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The new center will include a primary care clinic, nursing and physical therapy programs, the
College of Pharmacy, the Center for Drug Discovery/Research, Social Work programs, and
several health science research labs.
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The UH Sugar Land Academic Building ($91,350,000) will enable the university to expand its
programs in the high-growth Sugar Land/Fort Bend community.
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UH plans to add 22 new programs in business, education, and technology at Sugar Land, and for
the College of Technology to serve as an anchor college at the campus.
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The state’s investment would complement the $20 million that the community has already
invested in the development of this campus.
Conclusion – Effective Management of Resources and Accountability
To conclude, while the University of Houston believes that increased state funding for higher education
is important to the future of Texas, we also realize that universities must be good stewards of the dollars
with which they are entrusted. The University of Houston is committed to this principle.
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Over the past several years, the university has eliminated non-essential services, consolidated
departments, reduced expenses, and, in general, made it a practice to reallocate resources to
pursue institutional priorities in order to limit increases in tuition.
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UH is currently ranked 7th nationwide for students graduating with the least amount of debt.
This is a distinction we will work hard to maintain.
I will be happy to answer any questions.
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