Six years ago, it seemed like a political no-brainer.
Texas lawmakers voted unanimously to expand a state program dating back to 1923 that waives tuition and fees for military veterans at public colleges and universities so they could pass those benefits on to their children. Besides demonstrating support for those who have sacrificed for the country, the vote also had no financial strings attached, at least for the state — Senate Bill 93 didn’t alter a previous stipulation that colleges and universities pick up the entire tab, which has since grown nearly sevenfold.
But now, lawmakers are having big regrets.
Last month, a federal judge struck down a provision of the so-called Hazlewood Act that says military veterans and their families may receive tuition benefits only if they enlisted while living in Texas. The ruling creates the possibility that more and more veterans who enlisted elsewhere could move here to claim free tuition after taking just a year to establish residency.
Hazlewood waives tuition for veterans who don’t receive federal benefits or whose federal benefits don’t completely cover tuition and fees, and it allows them to pass the unused benefit to their children.
In his decision, U.S. District Judge Ewing Werlein Jr. said the University of Houston couldn’t deny Hazlewood benefits to plaintiff Keith Harris just because he had enlisted in the Army while living in Georgia.
The Texas attorney general’s office said this week it plans to appeal the ruling. But if it sticks, and lawmakers don’t tweak the program, the Texas Veterans Commission estimates the annual cost associated with the Hazlewood exemption could immediately jump from $169.1 million in fiscal 2014 to $750 million and eventually surge to $2 billion a year — assuming veterans begin moving here to claim tuition benefits.
Those staggering figures were relayed to Senate budget writers for the first time this week by Senate Finance Committee Chairwoman Jane Nelson.
“This has got to be fixed. We’ve created a monster,” responded a wide-eyed state Sen. Charles Schwertner, R-Georgetown.
“We didn’t see this one coming,” said state Sen. Royce West, D-Dallas.
“No,” replied Nelson, R-Flower Mound. “We need to make sure the intent of the original Hazlewood program is kept intact, but our current path is just not sustainable.”
Adding to the pressure, Gov. Greg Abbott during his campaign last year called for the state to pick up the entire tab for Hazlewood, describing it as an “unfunded mandate” for colleges and universities — a position that higher education leaders wholeheartedly agree with.
While University of Texas System Chancellor William McRaven this week described the Hazlewood program as “phenomenal,” he said he hopes the state will fund it to lift the burden on public universities.
Apart from the staggering cost projections tied to the court ruling, the exemptions granted under Hazlewood already were on the rise thanks to a 2009 amendment that created the so-called Legacy Program, which lets veterans pass their unused tuition exemptions to their children.
In 2008-09, the annual price tag of Hazlewood was $24.7 million with just 9,882 students, according to the Legislative Budget Board. In 2013-14, it had grown to nearly $170 million with nearly 39,000 students participating — half of them considered “legacies.”
In 2013, responding to rising costs, lawmakers set aside $15 million a year to help offset Hazlewood exemptions, although only $11.4 million has been paid out so far, according to the budget board. The Senate’s first-draft 2016-17 budget proposes spending $23.5 million.
Budget board staff told the Senate Finance Committee on Thursday that if no changes are made to the program, the tuition and fees waived under Hazlewood likely would grow to $371 million by fiscal 2019 to cover 63,200 students. That estimate assumes most of the future growth will be within the legacy program.
In December, prior to the court ruling, the budget board issued a report that proposed three different ways to rein in the legacy program, including adding a financial need provision, reducing the number of semester credit hours that can be transferred from a veteran to a child or — as is done in the federal Post 9/11 GI Bill — tying the number of credit hours that can be passed on with the veteran’s length of military service.
But Texas House chief budget writer Rep. John Otto said Friday that “the district court’s decision has changed the landscape” of the discussion.
“The Hazlewood Act is important and will be a priority this session,” the Dayton Republican said in a statement that also noted the budget-writing House Appropriations Committee will be briefed on the issue next week.
Austin lawyer Sergio Tristan, 33, an Army veteran who claimed Hazlewood benefits to attend the Texas Tech University School of Law after his first of two tours in Iraq, said he is concerned about proposals to turn Hazlewood into a state appropriation rather than an exemption because that would mean veterans would have to fight for funding every two years when the Legislature meets.
“That is not the Texas way,” he said, noting the state’s long history of supporting veterans.
Tristan also casts doubt on the $2 billion projection that assumes a flood of veterans into Texas.
He said the program’s exponential growth could be addressed simply by altering the so-called fixed-point residency requirement in current law — the one struck down in the recent court ruling — so that it requires only that a veteran and their dependents be Texas residents for at least eight years before becoming eligible to apply for Hazlewood benefits.
Tristan said that also would fix another problem with the current law: “If a soldier enlists in Georgia — like the guy who sued Texas did — (then) comes to Texas and lives in Texas for 80 years, he still is not eligible for Hazlewood.”