Prepared Remarks
Arthur K. Smith
Chancellor, University of Houston System, and
President, University of Houston
Senate Finance Committee Hearing
February 5, 2001
Austin

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Thank you, Chairman Rosenthal.

Chairman Ellis, members of the Senate Finance Committee, it is a pleasure to come to you today as Chancellor of the University of Houston System and President of the University of Houston.

With your permission, and to expedite our portion of your schedule, I will be speaking on behalf of the entire UH System. The presidents of our other universities are here today to answer any specific questions you may have. If I may, I would like to introduce them to you. President William Staples of UH-Clear Lake; President Max Castillo of UH-Downtown; and President Karen Haynes of UH-Victoria.

As Chairman Rosenthal said a few minutes ago, the UH System and our four universities are committed to ensuring that our educational resources are concentrated on the needs of the people of Texas and of our diverse communities.

It has been my belief, during more than 30 years in higher education, that our most important objective is the enhancement of the quality of the undergraduate experience. This is the foundation of excellence for everything we do. It is the reason we strive to ensure that our students have the academic and financial support they need to complete their education.

We cannot accomplish this, however, simply with lofty words and high ideals. We are here today to ask you to consider the several funding issues that are critical to the missions of the UH System and each of our universities.

The people of our communities appreciate the area’s need for a highly skilled and educated workforce. This is reflected in the enrollment growth within the UH System and throughout Texas universities and community colleges. We expect continued enrollment growth under the Coordinating Board’s plan to close the gaps in participation and success. A key component of the plan is to increase higher education enrollment by a half-million Texas students by the year 2015.

If we are to increase enrollments and degrees awarded to that extent, then Texas universities will require additional funding for faculty, classrooms, financial aid and scholarships, student advising, support staff, and technology. Base funding through the core formulas must be increased for all of higher education if Texas is to maintain a competitive economic and social environment. This is why we encourage you, as our first priority, to increase the formula funding to all the general academic institutions in Texas.

State investments in the current biennium have allowed the UH System universities to improve support for students, enhance our academic and research programs, and make important contributions to the community and industry.

Among our responsibilities is to ensure access to all qualified students, regardless of their cultural and ethnic backgrounds or their economic positions. These are factors that have served as roadblocks to participation in the higher education process. They will not be barriers to an education in the University of Houston System.

For example, for this fiscal year, the University of Houston, the most ethnically diverse research university in the nation, has increased scholarships by $1 million, and established two new scholarship programs: The Valedictorian Scholarship Program and The Automatic Scholarship Program.

Along with these programs, we are assisting students through the TEXAS Grant program. This landmark legislation was passed during the last session with the leadership of Chairman Ellis, and we encourage its continuation and expansion.

Eliminating the barriers to participation is just the first step. Keeping those students in school is the second step. All of the UH System universities are doing a remarkable job in this area, considering the unique challenges we face.

Over the past two years, the University of Houston has invested more than $450,000 in The Scholars’ Community to address many of the challenges facing our urban student population. The freshman retention rate within the Scholars’ Community is seven percent higher than the retention rate for the general freshman population — 83 percent as opposed to 76 percent. The freshman enrollment in the Scholars’ Community doubled over the past year to 800 out of the 3,000 now enrolled in the program.

At UH-Clear Lake, an upper-level graduate university closely linked to the neighboring NASA/Johnson Space Center, the undergraduate retention rate for the 1998-99 academic year was 84.4 percent.

At UH-Downtown, which serves the population of first-time-in-college students and downtown workers seeking training for the new economy, the retention rate for First Time In College Freshmen students rose from 54.7 percent in the Fall of 1998 to 61.4 percent in the Fall of 1999, which is remarkable progress for an open-admissions urban university. UH-D’s Cultural Enrichment Center, a special item, is responsible for much of this success.

UH-Victoria, also an upper-level and graduate university, and the area’s only provider of bachelor’s and master’s degrees, has a 90 percent retention rate and a 70 percent graduation rate.

I am pleased to tell this committee today that the University of Houston leads all Texas public universities in the percentage increase of Bachelors degrees awarded to African-American and Hispanic students, as well as in the category of Other Ethnicity. Data compiled by the Coordinating Board for the period from FY 1990 to FY 1999 show that we have come a long way in our efforts to increase participation, retention, and graduation; but they also indicate there is still much work to be done.

Another goal of the Coordinating Board’s plan is to make the Recommended High School Program of college preparatory courses the standard curriculum. We strongly endorse this goal. But if it is to be successful, our universities must have the resources to prepare and produce qualified teachers who, in turn, will prepare and produce qualified high school graduates. The alternative is to lower the bar for admission, graduation, and certification of teachers, and that is not acceptable.

Today, UH-Clear Lake participates in four school district-community college partnerships through the Success Through Education Program, or STEP. This program’s goal is to recruit, retain, and graduate students who will become teachers in the area’s school districts by providing special academic programs and support services.

UH-Downtown is actively engaged in improving education at the K-12 level through its urban teacher education program and school partnerships.

At UH-Victoria is a new special item, LEAD — Letting Education Achieve Dreams. Funds will be used to increase the number of skilled and educated citizens who can meet the demands of the technology-based workplace and to compete in the global marketplace.

At the University of Houston is the Partnership to Support Public Schools. This collaboration between the MOVE-IT Math Initiative and the Consistency Management/Cooperative Discipline Program has measurably improved educational outcomes in HISD and other public schools.

Woven throughout all of this are our greatest resources, our top-quality faculty and support staff. The quality of faculty and staff we want at our universities, however, is the same kind wanted by other universities and by the private sector. While we cannot match the salaries of the private sector, we must provide the compensation packages that will make our institutions more attractive. This will allow us to attract and retain high-quality faculty and staff, who, in turn, will help us attract and retain the very best students. We encourage you to treat our higher education faculty and staff as you treat other state employees in terms of salary increases.

Providing our students with high-quality programs is the best way to ensure academic and professional success. This is why the UH System’s top priority is to invest in its programs.

Important investments have been made in the current biennium, and significant achievements have been realized.

At the University of Houston we created 32 new faculty positions, strategically allocated to areas of strength within the University, such as materials science, the computational sciences, and the biomedical sciences, among others. These areas align with the major industries in the Houston area and Texas, such as energy, aerospace, health care, and telecommunications. They also are the focus of many of our Special Item requests.

I know you are familiar with some our outstanding research centers in these areas, such as the Texas Learning and Computation Center (TLC²); the Houston Partnership for Environmental Studies; the Space Vacuum Epitaxy Center (SVEC), which is a NASA Commercial Space Center; and the Texas Center for Superconductivity at the University of Houston (TCSUH).

The University has invested in research programs and infrastructure to help us attract and retain high-quality faculty. We have renovated and equipped laboratories; provided matching funds for grant proposals; and seeded new research centers.

The result has been dramatic. For FY00 that ended last August 31, research awards for the University of Houston were approximately $53.5 million, an 18 percent increase in sponsored research funding over the previous year. And in the first four months of this fiscal year, research awards are running $10 million ahead of the same period last year.

In addition to research investments that we make through formula funding and the HEAF, the state also invests in these programs through special item funding. Continuation and expansion of these investments are critical if the University of Houston is to achieve its research goals and effectively serve the needs of the people and the industries in the region and the state.

The following are some of the important goals and achievements that have been realized through our special and exceptional items:

Research

TLC²

The air quality in the Houston-Galveston-Brazoria area was a topic of special concern this past summer.

Among other significant initiatives TLC2 has provided the seed funding for an Air Quality Modeling project that will model the chemical reactions occurring in the atmosphere that lead to the formation of ozone and other atmospheric pollutants.

The Houston Partnership for Environmental Studies

The Houston Partnership for Environmental Studies is a joint program with UH and UH-Clear Lake’s Environmental Institute of Houston. The Institute focuses on environmental research, environmental education through teacher training, and resolution of environmental issues.

SVEC

Last May, a SVEC spin-off company broke ground for its manufacturing and research facility in Sugar Land. Applied Optoelectronics, Incorporated, or AOI, provides advanced semiconductor optoelectronic devices for emerging applications, including biomedical and chemical sensing, and defense.

TCSUH

TCSUH has helped establish two start-up companies with UH-licensed technology. The Legislature created TCSUH in June 1987 to establish a world-class center to conduct long-term, multi-disciplinary research and development, education, and technology transfer programs in high temperature superconductivity and related materials.

Public Service Items

Community service is the third component of our missions, along with teaching and research. In light of the importance of instruction and research, the resources available to our System universities for reaching out into our communities are never equal to existing needs. Special item funding is an important way for the State to help us address the needs of the communities we serve. Some recent goals and accomplishments are the following:

UH

Health Law & Policy Institute

The University of Houston’s Health Law & Policy Institute is one of the nation’s premier interdisciplinary centers for the study of health law and policy. U.S. News & World Report has ranked it as the top Health Law Program in the nation.

Small Business Development Center

This is to continue special item funding for the UH and UH-Victoria SBDCs. The focus is to provide quality assistance to the small business community by increasing growth and survivability.

Statewide Initiatives

I would also like to reiterate some statewide higher education issues the UH System supports, many of which I have worked on with the other chancellors of the state’s university systems.

These issues include:

Increased formula funding for the state’s universities, and related to that,

The Capital Equity and Excellence formula

With the passage of HJR 58 last session, and the adoption of Proposition 17 by the voters in 1999, we also recommend revision of the Capital Equity and Excellence formula. We recommend that the formula provide an equitable distribution of the funds using equally weighted factors that reflect legislative priorities.

Still other issues are increased financial aid, PK-16 Public School Partnerships Initiative, treatment of higher education faculty and staff as other state employees in terms of salary increase, and

Retention of indirect costs

Retention of 100 percent of indirect cost (also called "overhead") recovery is vital if our research universities are to remain competitive. A recent study by state Comptroller Carole Keeton Rylander shows the overall state economy would also benefit by gaining nearly $110 million if public universities were allowed to recover these indirect costs.

Other issues will be addressed this session in separate legislation outside the Appropriations Bill, which will have a significant impact on our funding. These include:

Identification of more Tier I research universities in the state’s largest metropolitan areas.

Texas cannot compete successfully in this new century with only two Tier I public research universities. Texas must have additional top tier research universities to support the new high-tech, knowledge-based economy, in both terms of a highly educated workforce and a dynamic research base.

Tuition Revenue Bonds

The University of Houston System has submitted Tuition Revenue Bond Projects totaling $231.3 million for classrooms and student services buildings that are vital to serving our students.

Tuition step increases

We support renewing the gradual and predictable increases in tuition. We suggest a modest $3 per semester credit hour per year increase over the next 10 years with a continued 15-percent set aside for financial assistance.

 

Conclusion

Chairman Ellis, Texas is now the second largest state in the nation, and it continues to grow rapidly. The educational needs of our ethnically diverse population must be accommodated if our workforce is to receive the top-quality education and professional skills demanded by the economy of this new century. Our intellectual and instructional needs, at the current rate of funding, will not keep pace with the changing needs of Texas.

More than 20 million Texans now rely on our colleges and universities to create the new knowledge, discover the new technologies, and prepare the best minds that will keep us competitive in the global economy. We stand at the millennial cusp with a clear view of where we’ve been and a distinct vision of where we must go. To grow and to survive will require us to put our money where our minds are, and need to be, for the future of Houston and all of Texas.

We are ready to meet our challenges, asking only that we be given the resources we need to do so with the excellence that our citizens deserve.

Chairman Ellis, that concludes the formal presentation of the University of Houston System. Thank you for allowing us this opportunity to address the committee on these vitally important issues. Now, we would be happy to answer any questions you and the committee may have.

Guidelines for Contacting Legislators

It's important that legislators hear from faculty, staff, alumni, and friends of the UH System. But if you are a member of the faculty or staff (a state employee) wishing to contact your legislator, it's equally important to follow certain guidelines when you write or fax letters. Go to <http://www.uhsa.uh.edu/gov/process/letter_writing.html>. for letter-writing guidelines.

For information on governmental relations policies, go to <http://www.uhsa.uh.edu/gov/policies/lobbying.html>.

To find the names and addresses of U.S. Senators and Congressmen/women, go to <http://www.usfronline.com/congress.htm>

To find the names and addresses of Texas Senators and Representatives, go to <http://www.senate.state.tx.us/75r/senate/members.htm>, or <http://www.house.state.tx.us/house/byzip.htm>.