After sailing to approval in the Texas House, a package of bonds worth about $3.1 billion in college campus construction might have a more uncertain future in the Texas Senate. The bill approved earlier this month in the House drew only a few “no” votes, mainly from lawmakers aligned with some groups that claim to be fiscally conservative. They argue it’s not the right time for the state to take on debt for this purpose
But, leaders in higher education and business groups have made the case that there is an urgent need in Texas to fund more classroom space at colleges and universities as part of the state’s overall effort to maintain an educated and balanced workforce. As noted in the Austin Business Journal, “The construction requests of the state’s major university systems this legislative session correlate with the growth of high-demand jobs in the science, engineering and technology fields in Texas.” So, this kind of investment will bolster middle skill jobs during the construction itself and high skill jobs in the long-term.
The proposal, House Bill 100, carried by Rep. John Zerwas, R-Simonton, would set up the financing for 64 projects around the state through so-called “tuition revenue bonds.” That debt would be floated by tuition and fees. The state hasn’t done this in a decade, hence the sense of urgency now. In past legislative sessions, proposals to issue tuition revenue bonds have died despite what seemed like broad support.
Rep. Zerwas is the Chairman of the Higher Education Committee in the House. He’s said that he thinks chances are better than ever that lawmakers will pass a quality piece of legislation and put it on the governor’s desk for his signature. "I'm pretty confident that the governor is supportive of this," Zerwas said in an interview with the Texas Tribune.
Even though very few lawmakers oppose taking on this kind of debt, Zerwas said the good news is that borrowing money at the moment is cheap. While some might want to spend cash for this, Zerwas noted that the Texas economy isn’t guaranteed to keep hitting on all cylinders.
“The price of oil is still depressed," Zerwas said. “Is it problematic to leave a little money on the table when a very significant part of your economy and your resources is at $50 (per barrel) or less?"
Zerwas’ counterpart in the Senate, Higher Education Chairman Sen. Kel Seliger, R-Amarillo, said the opposition to tuition revenue bonds is political in nature and not based in reality.
"I think some people are opposed because they're told to oppose by groups in elections," Seliger said. "When you see the opposition, you will generally if not exclusively see it coming from members who don't have institutions of higher learning in their districts," he said.
“It needs to happen,” Seliger said, adding that he does believe the bill passed by the House will be passed by the upper chamber of the Legislature and sent to Gov. Abbott for his signature. "The support is going to be there and we will end the session with a very good bill."
A full list of the projects that would be funded under this legislation can be found here.