Texas lawmakers heard testimony Thursday about the impact of a proposed consolidated UT System school in the Rio Grande Valley on a state fund intended for institutions in the UT and Texas A&M systems.

Bills filed in both houses of the Texas Legislature would bring UT-Brownsville, UT-Pan American in Edinburg and the Regional Academic Health Center in Harlingen under the administration of one institution and give that institution access to the Permanent University Fund. The fund, established by the Texas Constitution, allocates money to institutions in the UT and Texas A&M systems.

Sarah Keyton, higher education team manager for the Legislative Budget Board, told the House Appropriations Committee the fund will have $1.3 billion during the 2014-15 biennium.

Kris Kavanaugh, higher education team member at the Legislative Budget Board, said there would be fewer funds for other UT System institutions if the Legislature approved the consolidation. He said the Legislature would not approve how much the consolidated school would receive from the fund.

“That would be a Board of Regents decision,” Kavanaugh said. 

Two-thirds of the Permanent University Fund is allocated to UT System institutions. The remaining amount goes toward the A&M system. 

Kavanaugh said the fraction of the fund allocated to the UT System would not change if UT-Brownsville and UT-Pan American gain access to the fund.

The UT System Board of Regents approved spending $100 million of its own funds over 10 years to help transform the Regional Academic Health Center into the proposed South Texas School of Medicine, which will be part of the consolidated university. The System will also seek $10 million per year in state general revenue funds to assist the consolidation. Those appropriations would be separate from the Permanent University Fund.

UT-Brownsville and UT-Pan American are the only schools in the UT System that are not eligible for inclusion in the Permanent University Fund.

UT System spokeswoman Jenny LaCoste-Caputo said the institutions were not previously included because they were not originally established under the UT System.

“The only way the Texas Legislature can allow UT-Brownsville and UT-Pan American to be PUF eligible is to create a brand new university,” LaCoste-Caputo said.

LaCoste-Caputo said the Regional Academic Health Center in Harlingen is part of the UT Health Science Center at San Antonio, which means it is already eligible for money from the Permanent University Fund.

“Making the new medical school in South Texas part of the new university opens up many opportunities for synergies and partnerships with other academic departments and programs, much like we anticipate at UT-Austin with its new medical school,” LaCoste-Caputo said.

Published on February 8, 2013 as "State may open fund to proposed university".