Regents increase UT-Austin’s share of endowment payout


Highlights

The university will get 53 percent, or $338 million, instead of 49 percent, or $314 million.

“I think it’s time for us to put our money where our mouth is,” said Regent R. Steven Hicks, who made the motion.

The governing board of the University of Texas System voted unanimously Thursday to boost UT-Austin’s share of the system’s annual endowment payout by 4 percentage points, or $24 million, to $338 million.

The Austin campus had been scheduled to receive 49 percent, or $314 million, of the payout. Instead, it will get 53 percent, effective for the budget year that begins in September.

In making the motion for the increase near the end of a two-day UT board retreat, Regent R. Steven Hicks, a 1972 graduate of the university, said the increase would send a message of support to the flagship after a period when the board was locked in “a political battle” with the campus. That was a reference to disputes regarding admissions, fundraising and other matters.

“I admittedly bleed orange,” Hicks said. “It was painful for me being on this board to watch your alma mater be attacked and investigated.”

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The increased funding, he said, would help the university pursue a goal of ranking among the top five public universities in the nation. “I think it’s time for us to put our money where our mouth is,” Hicks said.

Regents’ Chairman Paul Foster echoed that view. “UT-Austin is our flagship,” he said. “This board is absolutely committed to making it a top, top-tier university — it already is, but to elevate it even further and to continue to support it.”

The increase in UT-Austin’s share of the payout from the Permanent University Fund — a multibillion-dollar endowment overseen by the Board of Regents — applies only to the coming fiscal year. Nonetheless, the board has tended to stick with such policy-oriented changes in the past.

Because of a projected surplus in the payout, the increased allocation to UT-Austin will not affect funding available for the system administration or debt service at the system’s 14 academic and health campuses, said Scott Kelley, the system’s executive vice chancellor for business affairs.

UT-Austin President Gregory L. Fenves expressed gratitude for the regents’ action.

“During this challenging budget cycle, these funds are especially needed,” Fenves said in a statement. “They will be used for strategic initiatives to support our students and faculty.”

The board also voted unanimously to instruct Chancellor Bill McRaven to recommend “a significant increase” in funding for the UT System’s so-called STARS program, which helps recruit top faculty members to the campuses. No specific amount was mentioned. The current annual budget for the program is $30 million. McRaven said he would make a recommendation when the regents meet in August.

The retreat, held at the Hotel Granduca Austin in West Lake Hills, came at a time when the relationship between the board and McRaven is in flux. Some of the regents had been openly critical of his plan to establish a campus of sorts in Houston — an initiative that he scuttled in March. And the chancellor, a retired admiral, stopped short last month of saying whether he wants to stay on the job after his three-year contract expires at the end of the year.

On Thursday, he sounded considerably more upbeat but still declined to address the matter of his future. “We have not had a discussion,” he said, adding, “I very much enjoy working with this board.”

It became clear during the retreat that the regents would like to reduce the size and budget of the system administration that oversees the various campuses, but no decisions were made. They spent more than half of the retreat behind closed doors discussing personnel, legal and budget matters. That was a sharp contrast to a regents’ retreat in 2009, when sessions were all open to the public.

The UT regents, who are appointed by the governor, serve without pay. The UT board is considered perhaps the most prestigious in all of state government, overseeing one of the largest university systems in the nation, with 14 academic and health campuses that count more than 228,000 students, more than 20,000 faculty members and nearly 80,000 health care professionals, researchers, student advisers and support staff.



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