Gene TrainorFort Worth Star-Telegram, Texas

Released : Monday, November 10, 2008 3:00 AM

Nov. 10--TEXAS' GOOD FORTUNE -- a state budget surplus and a comparatively stable economy -- will allow area universities to go forward with plans to construct buildings, increase financial aid budgets and hire top-tier researchers. Other U.S. colleges and universities are facing budget meltdowns.

Even in Texas, reductions may be necessary. Gov. Rick Perry sent a letter Oct. 14 to presidents of public universities and other state agency leaders asking them to reduce costs where possible. And private colleges are also looking for savings, given the woes on Wall Street.

Overall, officials are guardedly optimistic.

"Texas is in a good position economically," said Allison Castle, Perry's press secretary. "Our economy is one of the strongest in the nation. But Texas isn't an island."

Contrasts

Grim announcements are being made throughout America's campuses. In September, Boston University announced it will freeze hiring and construction. Spokesman Colin Riley said BU has a balanced budget but wants to be cautious given the economy.

In October, the University of Massachusetts Amherst announced that it must cut $12 million, or 5 percent of its budget, because of a state budget crunch. U-Mass Chancellor Robert Holub has asked for ideas about what gets eliminated.

In California, another state facing budget woes, the University of California System must find about $213 million in cuts to help balance an annual budget of $18 billion to $19 billion. Cutbacks are expected in hiring, library hours, the number of courses and tenured positions. Universities in Arizona, Florida, Georgia and Pennsylvania also face budget crunches.

Texas, in contrast, is expected to post an $11.8 billion biennium budget surplus by Aug. 31, equivalent to more than half the total state spending on higher education -- $21 billion. And the state's unemployment rate of 5.1 percent in September, the most recent figure available, contrasted to the national rate, 6.1 percent.

Building plans

Texas Woman's University in Denton plans to renovate and expand a science building at a cost of $26.4 million, build a recreation center for $16 million and add a building to its Dallas campus for $55.5 million, all by 2011, officials said.

The University of Texas at Arlington broke ground in September on a $116 million engineering research complex and plans to continue to set aside 20 percent of any new revenue for financial aid, said John Hall, vice president for administration and campus operations.

Perry is also committed to creating more major research or Tier 1 universities in Texas, Castle said. It would cost at least $70 million to elevate one of seven universities -- such as UT-Arlington, the University of Texas at Dallas and the University of North Texas in Denton -- that the state deems most likely to attain Tier 1 status.

Meanwhile, the private Texas Christian University in Fort Worth will go forward with a $25 million academic building scheduled to open in 2010.

Southern Methodist University in Dallas is adding a $14.4 million theology building that is to open in September and a $26.3 million engineering building that is to open in December 2009.

"Right now our plans are to continue as we intended," said Brad Cheves, SMU vice president of development and external affairs.

Smart planning

Still, public institutions are under pressure to cut discretionary costs, such as travel and purchasing. Perry set no percentage or dollar figures, but officials say they take his letter seriously.

David Daniel, president of UT-Dallas, said employees will cut back on trips in general, make more day trips to avoid hotel and meal costs and work with other groups to buy products in bulk.

TCU will conduct an energy audit in December, hoping that new technologies will help cut usage and costs, said Brian Gutierrez, vice chancellor for finance and administration.

But Gutierrez said TCU's $1.1 billion endowment is diversified enough to withstand the shocks on Wall Street, though he expects some short-term loss given the stock market drop.

The return on SMU's endowment fell about 6 percent from Jan. 1 through Sept. 30 to $1.29 billion, SMU Treasurer Liz Williams said.

That's a better return than the 19.3 percent drop in the Standard & Poor's 500 Index over the same period. Hiring will continue as needed, Cheves said.

"We're guardedly optimistic," he said.

Cutting campus costs UT-Dallas President David Daniel said his school will take these steps to limit or cut costs:

All travel must be essential, such as attending mandated meetings and fundraising events and recruiting key faculty. When travel is necessary, people will be asked to travel together and make day trips when possible to avoid hotel and meal costs.

A top university official (dean, vice president or president) must approve out-of-state or foreign trips.

Employees must use purchasing cards to buy items that cost less than $1,000. That allows for less paperwork, and the state gets rebates from credit-card companies. Most items that cost more than $1,000 are likely to be considered assets and need to be tracked.

Products will be bought in large quantities when possible with other universities in the UT System or through group purchasing programs.

To cut down on paperwork, direct deposit will be used for employee reimbursements, student refunds and vendor payments.

Source: UT-Dallas

GENE TRAINOR, 817-390-7419

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