87th LegislatureEducationTaxes & SpendingTexas Legislature Guarantees $3.3 Billion in Bonds for Public University Renovations

The eleventh-hour bill authorizes public colleges to issue $3.3 billion worth of debt to finance building and renovation projects.
October 19, 2021
In a race to the finish line, the Texas legislature agreed to cover $3.3 billion in tuition revenue bonds for building projects at public universities.

Senate Bill (SB) 52 by state Sen. Brandon Creighton (R-Conroe) passed out of conference committee today just before the legislature adjourned. The bill authorizes Texas public universities to borrow over $3 billion for construction and renovation that will ultimately be repaid from state funds.

To correct a misnomer, the bill changes the name from “tuition revenue bonds” to “capital construction assistance projects.” On paper, universities that issue these bonds would pay them back with money they take in from students’ tuition payments; however, in practice, the state covers these debts.

It quickly passed both chambers by wide margins, facing opposition only from the most conservative wings of the legislature.

Lt. Gov. Dan Patrick asked Governor Greg Abbott to add the topic of tuition revenue bonds to the special session agenda on Wednesday. During special sessions, lawmakers can only pass laws on topics authorized by the governor. However, by this point, SB 52 had already gone through its first committee.

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On Friday, Abbott added the topic to the agenda, albeit vaguely. The governor issued a proclamation authorizing lawmakers to consider “legislation to improve higher education.”

The Senate passed SB 52 the same day 30 to 1. Sen. Bob Hall (R-Friendswood) was the lone nay vote.

It passed the House two days later 131 to 8. The members that voted against it are Reps. Jeff Cason (R-Bedford), Bryan Slaton (R-Royse City), Kyle Biedermann (R-Fredericksburg), Briscoe Cain (R-Deer Park), Brian Harrison (R-Waxahachie), Matt Schaefer (R-Tyler), Steve Toth (R-Spring), and Cody Vasut (R-Angleton).

Rep. Greg Bonnen (R-League City), the House sponsor of the bill, presented it as a needed investment for growing student bodies.

“We have more students than we’ve ever had before, and the state continues to grow,” Bonnen said.

“Our campuses are becoming more and more congested, and they’re educating more and more students.”

When asked by Rep. Chris Turner (D-Grand Prairie) how the bill authors arrived at the specific amounts for each institution, Bonnen said Texas public colleges were broken into five categories: research, emerging research, comprehensive regional, technical schools, and health-related institutions.

Much of the disagreement arose from high tuition costs and the additional funding in federal relief that had already been allocated to universities. In an effort to minimize student loan debts and give universities an incentive to keep tuition low, Schaefer offered an amendment that would have reduced the allocated amounts for each college that raised tuition since last year.

“The cost of higher education for our students has been skyrocketing year after year. This year, we poured billions of dollars of additional federal money into our higher education universities. And many of them are going to raise tuition and fees… The amount of student loan debt that many of our staff persons have, that many in the younger generation have, is extraordinary. They essentially have a mortgage and no house,” Schaefer said.

“The Permanent University Fund kicks out almost a billion dollars a year that UT and A&M could use to build buildings or do bonds if they wanted to, but they come to us and we give it to them again. We just keep giving it to them. And they keep raising tuition, and they keep raising fees, and we’re drunk at the bar and we pour another drink.”

The amendment failed 34 to 98. Reps. Donna Howard (D-Austin) and John Turner (D-Dallas) expressed sympathy for Schaefer’s goal but said the amendment would not have accomplished it.

Tuition bonds touched discussions of virtual learning earlier this year. Harrison Keller, commissioner of the Higher Education Coordinating Board, told a Senate committee in March that widespread virtual learning would likely outlast the pandemic.

In response, Sens. Paul Bettencourt (R-Houston) and Lois Kolkhorst (R-Brenham) asked why new facilities or renovations would be needed if colleges were to depend more heavily on remote learning. Keller answered that virtual learning costs more than traditional classrooms and that universities would “have to retool a lot of spaces.”

The version passed by the House reduced particular allocations for certain schools but overall cost more than the version passed by the Senate.

The final bill text and a complete comparison of the Senate, House, and conference committee versions can be found here. At each of these stages, the bill took on about $10 million more in total cost as lawmakers revised it.

The bill will fund projects at 10 major colleges and university systems, though the two chambers initially disagreed about how much money to give each institution. This graph demonstrates how these allocations changed as the bill passed through the Senate and House before being finalized in a conference committee between the two chambers today. The rightmost column for each institution is the final number.


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Isaiah Mitchell

Isaiah Mitchell is a reporter for The Texan, a Texas native, and a huge Allman Brothers fan. He graduated cum laude from Trinity University in 2020 with a degree in English. Isaiah loves playing music and football with his family.