Texas universities are bracing for a significant financial blow. The state's Senate and House have both proposed budgets for 2026-2027. These budgets do not include funding for a key program that has been providing universities with $423 million over the past two years. This program is called the institutional enhancement fund.  If this fund is not renewed, several major universities in Texas will face substantial losses. Texas A&M University could lose around $52 million, Texas Tech University and the University of Houston could each lose about $50 million, and the University of Texas at Austin could lose nearly $40 million.  The Senate proposed a budget of $332. 9 billion, while the House suggested $335. 7 billion. Both budgets lack funding for the institutional enhancement fund for the next two years.

The state's budget proposals have sparked concerns about the future of higher education in Texas. The institutional enhancement fund has become a crucial part of university budgets, supporting faculty and teaching. Without it, universities will have to find new ways to fund their operations or make significant cuts.  The Texas Public Policy Foundation, a conservative think tank, hosted an event where Lieutenant Governor Dan Patrick suggested that higher education funding could be tied to the removal of diversity, equity, and inclusion (DEI) policies.  Patrick stated that universities would receive less funding if they did not eliminate DEI programs. However, this connection was not explicitly mentioned in the budget proposals.  Last year, a law banning DEI programs on campus led to hundreds of job cuts across Texan universities.  The Association of Former Students, an alumni group at Texas A&M University, has made protecting the institutional enhancement fund a top priority. They estimate that around 775 course sections could be forced to close if the fund is scrapped.

The House Speaker Dustin Burrows emphasized the importance of the budget debate, stating that it will set the financial boundaries for considering other major legislation.  The Texas Tech University System Chancellor Tedd Mitchell described the institutional enhancement fund as a "de facto part of baseline budgeting. " Texas A&M University System Chancellor John Sharp warned that eliminating the fund would have a significant impact on universities, as it is primarily used for faculty and teaching.  The Texas House and Senate will now work to find a common position on their budget proposals. If the institutional enhancement fund is axed, universities will need to find new funding sources or make cuts.  Governor Greg Abbott is backing a proposed law that would provide $1 billion for educational savings accounts. These accounts could be used to support private school or home-school expenses. This could lead to dramatic changes in Texas's education landscape.

Texas Universities Face Big Budget Cuts

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