Public School District Debt - $5 Billion For Each Student

Transcription

1 Susan Combs Texas Comptroller of Public Accounts Your Money and Education Debt A Texas, It s Your Money report digging deeper into public and higher education debt.

2 A Texans Right to Know To maintain Texas position as a global economic powerhouse, we have to ensure that tomorrow s leaders have the education they need to keep our state competitive. But educating Texans is becoming increasingly expensive, and some of these costs are being pushed off for future generations to pay. School districts have the largest outstanding share of local government debt in Texas. Debt service payments have increased from 7 percent to 9.8 percent of total school district expenditures, making them the fastest-rising spending category in Texas public education during the past decade. This growth is largely due to school construction and technology upgrades. The debt burden of higher education is rising rapidly as well. Since, state university and college enrollment rose by 32 percent, while outstanding debt increased by 246 percent. This report on public and higher education debt provides a snapshot of how much debt our public and higher education institutions are carrying, highlighting trends in debt growth. It also suggests information that taxpayers should get from their state and local governments before approving new debt. Texans deserve comprehensive information on the details T AF of all debt carried in their R D names. This report is the third in a series that will help Texas taxpayers know more about the AFT DR /12 ways in which government affects 9/5 their wallets. Susan Combs Texas Comptr oller of Public Accoun ts Sus an Com bs ller Comptrounts Texas lic Acco of Pub d oney an Your Mxing Facts The Ta Your Money Pension Ob and ligations s Comptroller, one of my roles is to predict how and where our economy will grow and to provide state leaders with critical information for future decisions. Educating young Texans is crucial to the state s continued economic success, but these costs are rising. Our public and higher education institutions have an obligation to be financially prudent and manage their expenditures and debts, just as Texas taxpayers and business owners do. Our office is committed to making Texas state government transparent and our books open, accessible and understandable to our citizens. Government should not make it hard for you to see our books. But it really only works when taxpayers use that information to make informed decisions and hold their government accountable. As taxpayers, you need accurate information to decide whether public and higher education institutions are meeting the responsibility of managing debt as prudently and conservatively as possible. SUSAN COMBS EVERY TEXAN S RIGHTS You have a right to know who is taxing you and for what purpose. A Texas, It s Your report digging Money public pension deeper into s Your hard-earned dollars deserve the light of day, down to the penny. ey Your Mon g as, It s A Tex on who is taxin report why. you and Su sa n Co Tex mb as of Pu Comp s blic tro Acco ller unts Keeping A Shar Yo and ur Mon e Loc al D y ebt p Eye On Pens ion Obligation s We encourage you to visit and to read this report for a detailed look at how much school districts, community colleges and state universities and colleges owe. Follow the Comptroller s Texas, It s Your Money series of reports at A Te rep xas, It s ort local diggin Your Mo gover g dee ney nm ent per int o deb t. You have a right to know exactly how and where state and local governments spend your money. Through our Web resources such as Where the Money Goes, we ve opened the state s books for public inspection, and we re encouraging all other levels of Texas government to make transparency their highest priority as well, placing annual budgets, annual financial reports and virtual check registers online. You have a right to expect that government obligations are transparently funded, and that government finances are managed soundly and prudently. Government should provide its citizens with an honest assessment of the financial challenges it faces. You have a right to know about the debt local officials issue in your name. All ballots proposing new debt should provide voters with a full disclosure of existing debt. You have a right and a responsibility to be aware of and engaged in the affairs of your government. Our democracy depends on it. In short, you need to know, and have the right to know. 2 YOU R M O N E Y A N D E DUC ATI O N DE B T

3 15.7% THE COST OF EDUCATION: TODAY AND TOMORROW Anyone who follows the economy or has a child knows that education is vitally important for our kids success as well as for our state as a whole. Virtually all of tomorrow s jobs will require a quality education and some degree of technical training. Education is not exempt from rising costs. Alongside the increased expense of delivering instruction, continued investments in classrooms, technology and other facilities, leaders in public schools, community and junior colleges, and the state s public college and university systems have to make strategic decisions about how to pay for education. That has included issuing new debt and refinancing existing debt to take advantage of improved interest rates or more advantageous terms. For public schools, the majority of debt service is supported directly by local property tax revenues, although the state s Permanent School Fund is the guarantor for much of this debt, and state funds directly support annual debt service for almost half the school districts with debt. Community colleges, too, have local property tax levies as part of a broad spectrum of revenue. Overall, the debt incurred by schools, colleges and universities is increasing, passing costs to future generations. Each school district, community college district and university has unique needs and must grapple with a broad array of challenges. The reasons for issuing debt, identifying available revenue, and other variables can affect how, why and when educational institutions spend money. Public education accounts for more than one-third of local government debt in Texas. As citizens and taxpayers, you should ask questions of our education leaders and hold them accountable for their spending decisions to ensure they are spending borrowed dollars efficiently and effectively. Public universities and colleges don t collect taxes directly, but rely on state appropriations to service some debt, as well as drawing on revenue generated by state assets through the Public University Fund and Higher Education Fund. To understand the issues surrounding public education debt, you need to understand the basic facts. This report highlights the numbers through fiscal (the most recent available data). We hope it will provide a useful basis for exploring education-related government debt. LOCAL GOVERNMENT DEBT OUTSTANDING 7.7% 33.0% 32.6% 6.9% 2.2% 1.8% OUTSTANDING TOTAL $192.7 BILLION PUBLIC SCHOOL DISTRICTS COMMUNITY AND JUNIOR COLLEGES HEALTH/HOSPITAL DISTRICTS COUNTIES CITIES OTHER SPECIAL PURPOSE DISTRICTS WATER DISTRICTS/RIVER AUTHORITIES Note: Total may not sum due to rounding. Source: Texas Bond Review Board WHAT IS DEBT? DEBT can refer to debt issued or outstanding debt. AUTHORIZED BUT UNISSUED DEBT is debt available for borrowing without the need for further voter approval. DEBT ISSUED is the total amount of funds borrowed during a specified time period. DEBT OUTSTANDING is the total principal owed over the remaining life of all bond issues. DEBT SERVICE is the amount needed to repay the principal and interest on debt outstanding. LEASE PURCHASE is financing the purchase of an asset over time through lease payments that include principal and interest. Lease purchases can be financed through a private vendor. REVENUE-SUPPORTED DEBT is secured by nontax revenues such as tuition or admissions to athletic events. This type of debt does not require voter approval. TAX-SUPPORTED DEBT is funded by property tax levies within the school or community college district s boundaries. It must be voter-approved. WHO ISSUES DEBT? PUBLIC SCHOOL DISTRICTS may issue debt supported by local property taxes, state funds and other revenues. COMMUNITY AND JUNIOR COLLEGE DISTRICTS may issue debt supported by local property taxes, tuition and fees, state revenue and other revenues. PUBLIC COLLEGES AND UNIVERSITIES may issue debt supported by state general revenue, the Permanent University Fund s revenue, tuition and fees or other revenues. SUSAN COMBS: TEXAS COMPTROLLER OF PUBLIC ACCOUNTS 3

4 OUR BIGGEST DEBT: PUBLIC SCHOOLS Local Government Debt at a Glance 33.0% 33% $63.6 BILLION PUBLIC SCHOOL DEBT OUTSTANDING, TO THE POINT Transparency Duty No. 1: Before approving new debt, taxpayers should be told how much outstanding debt has been issued and how much would be added. In fiscal, public school districts combined had one-third of outstanding Texas local government debt $63.6 billion or $13,530 for every student in a district with debt. Of Texas 1,024 school districts, 854 have outstanding debt. From -, public school districts total debt outstanding rose by percent, far more than the increase in inflation. This debt is incurred locally, meaning that each district s taxpayers are responsible for paying it back. The school district property tax includes two portions: Maintenance & Operations (M&O) tax, which pays for recurring expenses such as salaries, instructional materials and utilities; and Interest & Sinking (I&S) tax, which is intended exclusively for meeting debt obligations. Most School Debt is Tax-Supported The most common way school districts incur debt is by selling bonds approved by voters, which currently account for $62.6 billion of local debt outstanding. Although turnout for bond elections is often very low, bond propositions need to be approved only by a majority of those voting in the elections. Before bonds may be issued, a school district must show the Office of the Attorney General that it will be able to meet all of its debt obligations without levying an I&S tax rate of more than 50 cents per $100 of assessed property value. This is often called the 50-Cent Debt Test. Texas law limits the uses of school bond revenue to expenses such as building, renovating and equipping school facilities; purchasing capital items such as land and school buses; and refinancing previous bonds. Permanent School Fund Lowers Debt Interest Rates The state helps school districts obtain lower interest rates by allowing their bonds to be guaranteed by the AAA rated Permanent School Fund (PSF), a state-managed endowment valued at about $25.5 billion in fiscal More than $53 billion of voterapproved public school debt is PSF-guaranteed, saving the districts millions in interest costs. A portion of the PSF s revenues are transferred to the Available School Fund (ASF), along with a quarter of Texas net motor fuels tax revenues. The ASF, which is expected to total $3.7 billion for the fiscal biennium, is distributed to schools $3.1 billion for general expenses, and $0.6 billion for instructional materials. While voter-approved bonds traditionally represent about 98 percent of all school district debt, districts can issue several other types of debt: Maintenance & Operations (M&O) tax debt is accrued by issuing maintenance tax notes that can only be used to finance renovations; issuing time warrants (with a maximum length of five years) to buy or renovate buildings and equipment; or by entering into other contractual obligations. These debt obligations do not require voter approval. In, M&O tax-supported debt totaled $612.5 million. Lease-purchase agreements allow school districts to provide security for bonds issued by an affiliated nonprofit corporation to finance buildings. Because districts are only bound by an annual lease contract, lease-purchase agreements are often the most costly type of debt. After notice of the proposed bonds is made public, voters can petition the district to place these debt obligations on the ballot. In, debt supported by leasepurchase agreements totaled $373.1 million. Revenue debt is secured by school district revenues other than property taxes, such as revenues from high school football tickets or concessions. This type of debt also does not require voter approval. In, revenue debt totaled $3.4 million. 200% CUMULATIVE PERCENTAGE GROWTH OF SCHOOL DISTRICT DEBT BY FISCAL YEAR TOTAL DEBT OUTSTANDING INFLATION (CPI) ENROLLMENT 155.2% 26.5% 21.0% 0 Sources: Texas Bond Review Board, Texas Education Agency, Bureau of Labor Statistics 4 YOUR MONEY AND EDUCATION DEBT

5 Texas school districts report their expenditures to the Texas Education Agency (TEA) by broad categories called objects, such as: PAYROLL salaries, wages and benefits for school district employees; OTHER OPERATING COSTS operating expenses such as food services, vehicle fuel, supplies, materials and services; CAPITAL OUTLAY spending on fixed assets such as buildings, equipment, furniture, library books, vehicles; and DEBT SERVICE principal and interest payments on bonds and other debt. GROWTH RATE OF PUBLIC SCHOOLS COSTS THROUGH SCHOOL YEARS PAYROLL OTHER OPERATING COSTS 126.5% 150% 120 In the past decade, when interest rates generally declined, debt service costs were the fastest-growing category of public school spending. TO THE POINT Source: Texas Education Agency $0 CAPITAL OUTLAY DEBT SERVICE ENROLLMENT PUBLIC SCHOOLS: WHERE THE MONEY GOES OTHER OPERATING COSTS CAPITAL OUTLAY DEBT SERVICE (IN BILLIONS) PAYROLL % 62.9% 29.2% TOTAL 21.0% PURPOSE SCHOOL YEAR SCHOOL YEAR CHANGE PAYROLL $21,057,582,565 $34,311,016, % OTHER OPERATING COSTS $5,398,969,441 $9,060,357, % CAPITAL OUTLAY $4,657,389,690 $6,018,183, % DEBT SERVICE $2,359,097,181 $5,344,363, % TOTAL $33,473,038,877 $54,733,921, % Source: Texas Education Agency Transparency Duty No. 2: Before approving new debt, taxpayers should be told how much annual debt service they are currently paying, how much new debt service would be added and the length of obligation. In the school year, debt service payments cost Texas school districts more than $5.3 billion, accounting for 9.8 percent of all expenditures. Over the previous 10 years, expenditures on debt service rose by percent, compared to total growth in payroll and other operating expenditures of 63.5 percent. New construction, rising construction costs and technology upgrades are factors in this increase. As a result, debt service costs are generally highest in fast-growing suburban districts. SUSAN COMBS: TEXAS COMPTROLLER OF PUBLIC ACCOUNTS 5

6 PUBLIC SCHOOLS FUNDED FROM MULTIPLE SOURCES In recent years, funding for public education has come from five main sources: LOCAL TAX REVENUE is generated through the levy of Maintenance & Operations tax and debt service (Interest & Sinking tax) on property within the school district. Rates for these two tax rates are capped at $1.17 and $0.50 per $100 property value, respectively. OTHER LOCAL REVENUE includes donations, cafeteria sales, admissions to athletic events or performances, rental income or fees. FEDERAL FUNDS are distributed to school districts through a variety of programs including Title I grants for low-income children, GEAR UP, Head Start, and the National School Breakfast and Lunch Program. STATE FISCAL STABILIZATION FUND is part of the American Recovery and Reinvestment Act (ARRA), the stimulus package passed by the U.S. Congress in STATE FUNDS are primarily distributed to schools through the Foundation School Program (FSP), which allocates money according to the number and type of students served. This program is (IN MILLIONS) $60,000 50,000 40,000 30,000 20,000 10, funded through the state s sales taxes, the franchise tax and the Permanent School Fund. The state also distributes some aid for facilities, instructional materials and other grants outside the FSP. PUBLIC SCHOOLS: WHERE THE MONEY COMES FROM LOCAL TAX REVENUE OTHER LOCAL REVENUE FEDERAL FUNDS STATE FISCAL STABILIZATION FUND (STIMULUS) STATE FUNDS DEBT GROWTH EXCEEDS ENROLLMENT GROWTH M&O I&S 2010 Note: This chart has not been adjusted for inflation. Sources: Texas Education Agency, Texas Comptroller of Public Accounts While debt per student rose across the board from to, it rose most for districts with slower enrollment growth. Average per student debt for districts in the bottom 20 percent of enrollment growth increased most from $1,988 in to $7,109 in an increase of percent. This can be partially explained by enrollment trends in these districts because per student debt burden increases when enrollment decreases. For districts in the top 20 percent of enrollment growth, average per student debt is highest, increasing from $7,067 in to $16,847 in an increase of percent. CHANGE IN SCHOOL DISTRICT DEBT For these fastest-growing districts, average debt per student in dollars increased by $9,780, more than districts with slower growth that added $5,125 on average. The fastest-growing 20 percent of districts account for 53.0 percent of all outstanding debt and enroll 40.4 percent of all Texas schoolchildren. QUINTILE GROUPS BY - ENROLLMENT GROWTH NUMBER OF DISTRICTS AVERAGE ENROLLMENT CHANGE AVERAGE DEBT PER STUDENT AVERAGE DEBT PER STUDENT TOTAL DEBT PER STUDENT CHANGE 80TH 100TH PERCENTILE % $7, $16, % 60TH 80TH PERCENTILE % $4, $10, % 40TH 60TH PERCENTILE % $3, $9, % 20TH 40TH PERCENTILE % $2, $8, % 0 20TH PERCENTILE % $1, $7, % ALL DISTRICTS % $3, $10, % Sources: Texas Bond Review Board, Texas Education Agency, Texas Comptroller of Public Accounts 6 YOUR MONEY AND EDUCATION DEBT

7 DEBT SERVICE TAX RATES INCREASED WHEN OPERATING TAX RATES WERE CUT From to, average property tax rates for debt service (Interest & Sinking or I&S rates) rose from 9.5 to 17.6 cents per $100 property value, an 86 percent increase. This represents an average annual growth rate of 6.4 percent. By law, Maintenance & Operations (M&O) property tax rates were compressed downward between 2005 and 2007, from an average of $1.46 per $100 in 2005 to $1.04 in This compression in M&O rates allowed school districts to raise debt service rates with taxpayers still seeing a decrease in their total tax rates. Debt service rates rose from 11.2 cents to 14.5 cents per $100 between 2005 and 2007, a 30.1 percent increase. The bulk of the debt service increase occurred between 2006 and 2007, jumping from 11.9 cents to 14.5 cents per $100, an increase of 22.3 percent in one year, greatly exceeding the average annual increase of 6.4 percent over the past decade. In the same year, M&O rates were compressed by an average of 21.8 percent. CUMULATIVE PERCENTAGE CHANGE OF SCHOOL DISTRICT TAX RATES BY FISCAL YEAR 100% AVERAGE DEBT SERVICE (I&S) TAX RATE AVERAGE MAINTENANCE AND OPERATIONS (M&O) TAX RATE M&O rates were compressed over two tax years 86.0% 40 AVERAGE TOTAL TAX RATE % -23.2% Source: Texas Comptroller of Public Accounts STATE FUNDS DEBT SERVICE PAYMENTS FOR SCHOOLS Two state public education programs, established in response to a perceived need for new and renovated facilities in some school districts, give less-wealthy districts more access to funding for facilities, and help districts retire existing debt. The Instructional Facilities Allotment (IFA) reimburses school districts for a portion of debt service costs on new debt issued for the construction or renovation of instructional facilities. In the school year, the state spent $303.0 million in IFA payments to 376 districts. The Existing Debt Allotment (EDA) can help districts retire debt. The state provides assistance only on the first 29 cents of the I&S tax rate. In the school year, the state spent $295.9 million on EDA payments to 402 districts. (IN MILLIONS) $ PUBLIC SCHOOLS: HOW THE STATE HELPS OUT TOTAL ALLOTMENT $598.9 EXISTING DEBT ALLOTMENT INSTRUCTIONAL FACILITIES ALLOTMENT SUSAN COMBS: TEXAS COMPTROLLER OF PUBLIC ACCOUNTS $295.9 $303.0 Source: Texas Education Agency In , the state s IFA and EDA programs funded $598.9 million. Of the 481 districts funded, 297 received money from both programs.

8 SCHOOL CONSTRUCTION COST SURVEY REVEALS WIDE COST VARIATIONS TO THE POINT Transparency Duty No. 3: Before approving new debt, taxpayers should be told the outstanding debt per capita and what new debt per capita would be added. The primary use of public education debt is school construction and renovation. It can be difficult to learn just what our school districts are acquiring with this debt, however, since the state does not collect data on school size, capacity and costs, and few districts provide facilities inventories. For the purposes of this report, the Comptroller s office surveyed a broad group of Texas public school districts asking them to provide information on construction costs. It may not be reflective of statewide costs; a comprehensive statewide analysis of school construction would be helpful. Specifically, the survey requested information on construction costs (exclusive of land acquisition) for new or replacement schools built from 2005 to the present. Data was requested from 23 of the 1,024 school districts across Texas ranging in size from fewer than 3,400 students to more than 200,000. More than 1 million children are enrolled in these 23 selected districts, 22.2 percent of the state s total public school enrollment. One district did not respond to repeated requests; school construction data from its website was used when available. TYPE In all, the survey collected information for more than 181 school campuses, including seven pre-kindergarten centers, two intermediate (grades 2-5) campuses, one upper elementary (grades 5-6) campus, 116 elementary schools, 30 middle schools, three pre-k to 8th-grade campuses, one ninth-grade campus, one ninth and tenth grade campus, two academic (grades 6-12) centers, 16 high schools and two early college high schools. In addition to actual construction cost data, the survey also collected data on capacity, square footage and year of construction. The following table shows the range of costs per square foot, cost per student and space for student by elementary, middle and high school as reported. One item of interest that emerges from these numbers is the wide range of construction costs and space per student. While such variation may be due in part to factors such as geographical location and local labor costs; it is also clear that there is little standardization in Texas school construction. Some districts have found that using common prototype designs for buildings can yield considerable savings. For a complete list of all districts and campuses included in our survey and individual schools spotlighted, see CONSTRUCTION COSTS FROM SELECTED SCHOOL DISTRICTS COST PER SQUARE FOOT COST PER STUDENT AT CAPACITY SQUARE FEET PER STUDENT AT CAPACITY LOW HIGH LOW HIGH LOW HIGH ELEMENTARY $88 $249 $7,880 $30, MIDDLE SCHOOL $85 $229 $12,273 $33, HIGH SCHOOL $107 $280 $16,607 $50, Note: Texas Comptroller of Public Accounts surveyed school construction cost data from 23 public school districts. Data was requested for schools constructed from 2005 to Source: Texas Comptroller of Public Accounts Anita Uphaus Early Education Center Wide variances are found in construction costs per square foot and costs per student in traditional elementary, middle and high schools built in Texas between 2005 and There are also significant differences in non-traditional school facilities. For example, among the seven prekindergarten and kindergarten schools surveyed, Martin Luther King Jr. Early Childhood Center built in 2005 in the Houston Independent School District had a below-average cost per pre-k student of $13,717. The Anita Uphaus Early Education Center built in the Austin Independent School District in 2012, however, had a cost per pre-k/k student of $40,444, nearly double the sample s average of $20,947. Learn more by visiting 8 YOUR MONEY AND EDUCATION DEBT

9 SAVINGS SNAPSHOT: KAHLA MIDDLE SCHOOL Cypress-Fairbanks Independent School District serves more than 105,000 students in a fast-growing suburban area west of Houston. In the last decade, the district has built 33 new campuses, including Kahla Middle School, which opened its doors in 2005 with room for 1,539 students in grades 6 through 8. Based on data supplied by the school district, construction costs for the facility were just $85 per square foot, well below the average of $147 found in a Comptroller survey of public schools built in Texas between 2005 and The construction cost per student (at capacity) was $12,273, just under 57 percent of the average of $21,683. To make the most efficient use of its resources and employ optimal instructional designs, Cypress-Fairbanks ISD uses architectural prototypes, with several designs suited for elementary and middle schools and one developed for high schools. According to district officials, prototype designs save money, permit faster construction and allow the district to test materials and improve its work processes with each successive use. By using an existing architectural prototype suited to the grades served and the building site, the district saved more than $470,000 in design fees alone on the Kahla project. KAHLA MIDDLE SCHOOL AT A GLANCE SQUARE FOOT (OPENED 2005) TOTAL CONSTRUCTION COST $18,888,186 TOTAL SQUARE FEET 222,049 CAPACITY (STUDENTS) 1,539 COST PER SQUARE FOOT AT CAPACITY $85 COST PER STUDENT AT CAPACITY $12,273 SQUARE FEET PER STUDENT AT CAPACITY 144 COST PER SQUARE FOOT AT CAPACITY $85 COST PER STUDENT AT CAPACITY $12,273 MIDDLE AND JUNIOR HIGH SCHOOLS AT A GLANCE (CONSTRUCTED ) AVERAGE COST PER SQUARE FOOT AT CAPACITY $147 AVERAGE COST PER STUDENT AT CAPACITY $21,683 AVERAGE SQUARE FEET PER STUDENT AT CAPACITY 148 SQUARE FOOT AVERAGE COST PER SQUARE FOOT AT CAPACITY $147 AVERAGE COST PER STUDENT AT CAPACITY $21,683 Note: The averages are for the sample and may not be representative of statewide averages. Sources: Comptroller survey, FAST data and information provided by CFISD SUSAN COMBS: TEXAS COMPTROLLER OF PUBLIC ACCOUNTS 9

10 SNAPSHOT: CORBETT JUNIOR HIGH SCHOOL Schertz-Cibolo-Universal City Independent School District serves more than 12,000 students in an area northeast of San Antonio. In 2009, Corbett Junior High School moved to a new campus with a capacity of 1,200 students in grades 6 through 8. Based on data supplied by the school district, Corbett s construction cost per student (at capacity) of $32,025 was 68 percent above the average of $21,683 found in a Comptroller survey of public schools built in Texas between 2005 and The cost per square foot of $229 was 64 percent above the average of $147. It should be noted, however, that Corbett was built in a time of relatively high labor and material costs, prior to the nationwide economic slowdown. CORBETT JUNIOR HIGH AT A GLANCE (OPENED 2009) TOTAL CONSTRUCTION COST $38,430,582 TOTAL SQUARE FEET 168,000 CAPACITY (STUDENTS) 1,200 COST PER SQUARE FOOT AT CAPACITY $229 COST PER STUDENT AT CAPACITY $32,025 SQUARE FEET PER STUDENT AT CAPACITY 140 SQUARE FOOT COST PER SQUARE FOOT AT CAPACITY $229 COST PER STUDENT AT CAPACITY $32,025 MIDDLE AND JUNIOR HIGH SCHOOLS AT A GLANCE (CONSTRUCTED ) AVERAGE COST PER SQUARE FOOT AT CAPACITY $147 AVERAGE COST PER STUDENT AT CAPACITY $21,683 Corbett Junior High School AVERAGE SQUARE FEET PER STUDENT AT CAPACITY 148 SNAPSHOT: BULVERDE RANCH MIDDLE SCHOOL The new Bulverde Ranch Middle School, $36,997 is 71 percent over the average is scheduled to open in August 2014 of $21,683 for public middle schools in the North East Independent School built in Texas between 2005 and 2012, District in Bexar County. Based on data based on a Comptroller survey of 23 supplied by the school district, the school districts. At $258 per square campus is projected to cost $55,494,985. foot, projected construction costs for With a capacity of 1,500 students, the 214,711-square-foot facility are 76 the construction cost per student of percent over the average of $147. SQUARE FOOT AVERAGE COST PER SQUARE FOOT AT CAPACITY $147 AVERAGE COST PER STUDENT AT CAPACITY $21,683 Note: The averages are for the sample and may not be representative of statewide averages. Sources: Comptroller survey, FAST data and district/school websites 10 YOUR MONEY AND EDUCATION DEBT

11 SCHOOL DISTRICT DEBT As of Aug. 31,, Texas school districts issued more than $63.6 billion in outstanding debt, or about $2, per Texas resident and $13, per student. Ten large urban and fast-growing suburban districts had more than 23 percent of school district debt. The Bond Review Board lists no debt for 170 (16.6 percent) of districts. TOP 10 SCHOOL DISTRICTS BY TOTAL DEBT OUTSTANDING AS OF AUG. 31, DISTRICT TOTAL DEBT OUTSTANDING DEBT PER RESIDENT* DEBT PER STUDENT - ENROLLMENT GROWTH RANK IN SIZE*** DALLAS ISD $2,619,400, $2, $16, % 2ND HOUSTON ISD $2,448,992, $1, $12, % 1ST CYPRESS-FAIRBANKS ISD** $1,765,185, $3, $16, % 3RD NORTHSIDE ISD (BEXAR)** $1,755,365, $3, $18, % 4TH FRISCO ISD** $1,247,258, $7, $33, % 30TH NORTH EAST ISD** $1,225,367, $3, $18, % 8TH KATY ISD** $1,083,556, $4, $17, % 12TH LEWISVILLE ISD** $1,014,778, $3, $19, % 17TH CONROE ISD** $1,006,845, $3, $19, % 18TH PLANO ISD $976,599, $3, $17, % 14TH ALL OTHER 844 DISTRICTS WITH DEBT $48,481,058, $2, $12, % TOTAL (854 DISTRICTS WITH DEBT) $63,624,405, $2, $13, % * District resident information is from the 2010 U.S. Census. These data are the most recent measure of district resident population available. **Denotes fast-growing school districts that are in the top 20 percent of enrollment growth from -. ***The Rank in Size column is a ranking of all 1,024 school districts from largest enrollment to smallest enrollment. Sources: Texas Bond Review Board, Texas Comptroller of Public Accounts, Texas Education Agency, U.S. Census Bureau PUBLIC SCHOOL DISTRICT DEBT PER CAPITA EXAMPLE In the map at left, the darkest colors represent the school districts with the most outstanding debt per resident. Of school districts with debt, 90 had debt-per-resident burdens exceeding $5,000 in. 170 districts have no debt. INTERACT ONLINE>> Go to Transparency.org for interactive versions of these maps where you can click to see more details on the outstanding debt per school district. HOUSTON ISD Tax-Supported Debt Interest & Sinking: $2,218,028, Maintenance & Operations: $112,015, Revenue-Supported Debt: $0.00 Lease-Purchase Debt: $118,948, Total Debt Outstanding: $2,448,992, District Population: 1,312,684 Debt per Capita: $1, District Enrollment: 203,294 Debt per Student: $12, DEBT PER CAPITA $0 $.01-$ $1,000-$2, $2,500-$4, GREATER THAN $5,000 DALLAS - FT. WORTH HOUSTON Sources: Texas Comptroller of Public Accounts, Texas Bond Review Board, Texas Education Agency, U.S. Census Bureau SAN ANTONIO - AUSTIN CORPUS CHRISTI SUSAN COMBS: TEXAS COMPTROLLER OF PUBLIC ACCOUNTS 11

12 COMMUNITY COLLEGES FUNDED BY LOCAL AND STATE REVENUE 80% LOCAL TAX REVENUE AND STATE APPROPRIATION FISCAL 2003 THROUGH LOCAL GOVERNMENT DEBT Local AT Government A GLANCE Debt at a Glance COMMUNITY COLLEGE LOCAL PROPERTY TAX REVENUE STATE FUNDING FALL ENROLLMENT Note: Tax revenue data is not available before Sources: Legislative Budget Board, Texas Higher Education Coordinating Board COMMUNITY AND JUNIOR COLLEGE REVENUES AND EXPENDITURES STATE 20.7% TUITION AND FEES 24.5% FISCAL REVENUES OTHER REVENUES 30.0% Counties: 7% 49% Cities: 33% 41% Water: 16% SPDs: 8% 2.2% $4.3 BILLION 18% COMMUNITY COLLEGE DEBT OUTSTANDING, COLLEGE DEBT OUTSTANDING, Texas community $4.3 and BILLION junior colleges receive revenue from multiple sources. Debt at a Glance More than half of community college expenditures in were related to instruction. The Texas Bond Review Board estimates that the community colleges debt service (principal and interest) for 2012 will total $394 million. 7% COUNTY DEBT OUTSTANDING, LOCAL PROPERTY TAXES 24.8% REVENUES TOTAL $5.4 BILLION $ FUNDING SOURCE REVENUES STATE $1,117,250,376 TUITION AND FEES $1,325,145,151 OTHER REVENUES $1,622,111,563 LOCAL PROPERTY TAXES $1,337,961,389 TOTAL $5,402,468,479 EXPENDITURES INTEREST ON DEBT 3.7% OTHER 2.8% FACILITIES 12.5% ADMINISTRATIVE 29.6% INSTRUCTION 51.5% $0 PURPOSE EXPENDITURES INSTRUCTION $2,490,289,568 EXPENDITURES TOTAL $4.8 BILLION ADMINISTRATIVE 1 2 3$1,433,886, FACILITIES $603,122,345 INTEREST ON DEBT $176,832,279 OTHER $136,147,874 TOTAL $4,840,278,957 Source: Texas Higher Education Coordinating Board Community College Revenue and Expenditure Definitions: Debt at a Glance REVENUES: 8% State State appropriations, grants and contracts. Tuition and Fees Tuition and fees after exemptions and allowances. Other Revenues Auxiliary enterprises, local government grants, gifts, 2% investment income and other SPECIAL operating PURPOSErevenue. DISTRICTS DEBT Local Property Taxes OUTSTANDING, EXPENDITURES: Instruction Program instruction, scholarships and fellowship grants. Debt at a Glance Administration Academic support, student services, institutional support and auxiliary expenses. 16% Facilities Operations and management of plant and depreciation. Interest on Debt Only interest on debt service is reported to the Texas Higher Education Coordinating Board. (Principal WATER DISTRICT is distributed DEBT among the other spending categories.) OUTSTANDING, Other Other expenses including research and public service. 12 YOUR MONEY AND EDUCATION DEBT

13 COMMUNITY AND JUNIOR COLLEGE DEBT OUTPACES ENROLLMENT Texas community college systems occupy a uniquely important place in our educational system, pursuing multiple missions at the intersection of public and higher education. An almost 60 percent growth in enrollment points to the increasing demand for affordable education in the past 10 years. They offer college preparation for high school students through a wide variety of dual-credit programs. Their technical training degrees and certifications allow students to enter the workforce quickly, with high-demand skills. And they allow students pursuing academic degrees to earn their first two years of college credit inexpensively and with flexible hours that can accommodate varying work schedules. Many offer evening classes as well. 300% $1.1B Texas 50 community and junior college districts (CCDs) have issued outstanding taxsupported debt, revenue debt and debt from lease-purchase agreements. At the end of, Texas CCDs had $4.3 billion in outstanding debt. At that time, 29 of the 50 CCDs had tax-supported debt, 42 issued revenue debt and only two issued debt related to lease-purchase agreements. Tax-supported debt is secured through local property taxes levied by the district and requires voter approval. Taxsupported debt accounted for more than $3.0 billion or 70.6 percent of the total. Revenue debt is secured by CCD revenues other than property taxes, including tuition and fees, and typically does not need voter approval. Revenue debt represented nearly $991.1 million or 23.0 percent of the total. Lease-purchase agreements allow a CCD to provide security for bonds issued by an affiliated nonprofit corporation to finance buildings. Because districts are only bound by an annual lease contract, lease-purchase agreements are often the most costly type of debt. After notice of the proposed bonds is made public, voters can petition the district to place these debt obligations on the ballot. This debt totaled nearly $274.4 million or 6.4 percent of total CCD debt in. CUMULATIVE PERCENTAGE GROWTH OF COMMUNITY COLLEGE DEBT DEBT OUTSTANDING TUITION AND FEES ENROLLMENT INFLATION (CPI) FISCAL THROUGH $2.1B Note: Tuition and fee rate of growth is assumed for as data is not available. Sources: Texas Bond Review Board, Texas Higher Education Coordinating Board, Bureau of Labor Statistics $4.3B 297.2% 100.9% 58.9% 26.5% TO THE POINT Transparency Duty No. 4: Before approving new debt, taxpayers should be told how the debt will improve educational outcomes at a reasonable price. Since, community and junior college debt per student has outpaced enrollment growth and inflation. Although a steep increase, this debt represents a very small portion of local government debt. SUSAN COMBS: TEXAS COMPTROLLER OF PUBLIC ACCOUNTS 13

14 COMMUNITY COLLEGE TOTAL OUTSTANDING DEBT FISCAL - TO THE POINT TAX SUPPORTED DEBT REVENUE DEBT $ 3.04 $3 LEASE PURCHASE DEBT Transparency Duty No. 5: Before approving debt, taxpayers should be told the estimated cost of borrowing. For example, how much will a $50 million bond cost taxpayers by the time it is repaid? $ 0.99 $0.62 $0.46 $0.27 $ Source: Texas Bond Review Board. Outstanding debt held by Texas community college districts (CCDs) rose by 297 percent between and. Debt supported by property taxes accounts for the majority of CCD debt (IN BILLIONS) COMMUNITY AND JUNIOR COLLEGE DISTRICT DEBT EXAMPLE INTERACT ONLINE>> Go to Transparency.org for interactive versions of these maps where you can click to see more details on the outstanding debt per school district. DEBT PER CAPITA $0 $.01-$ $250-$ $500-$ GREATER THAN $750 * Note: Based on district population reported at the most recent debt issue. Sources: Texas Bond Review Board, Texas Higher Education Coordinating Board The darkest colors indicate community colleges with the most debt per district resident. Cisco Junior College District has the most debt per resident* of $2, Three districts have no debt. SOUTHWEST TEXAS JUNIOR COLLEGE DISTRICT Tax-Supported Debt: $0 Revenue-Supported Debt: $8,225,000 Lease Purchase Debt: $0 Total Debt Outstanding: $8,225,000 District Population (2010): 40,573 District Enrollment ( ): 5,664 Debt per Capita*: $ Debt per Student: $1, YOUR MONEY AND EDUCATION DEBT

15 COMMUNITY AND JUNIOR COLLEGE DISTRICTS OUTSTANDING DEBT AS OF AUG. 31, DISTRICT DEBT OUT- STANDING** ENROLL- MENT* DEBT PER STUDENT DISTRICT DEBT OUT- STANDING** ENROLL- MENT* DEBT PER STUDENT ALAMO CCD $627,315,000 62,517 $10,034 HOUSTON COMMUNITY COLLEGE SYSTEM $618,069,527 51,413 $12,022 LONE STAR COLLEGE SYSTEM $591,625,000 68,254 $8,668 DALLAS COUNTY CCD $421,735,000 78,549 $5,369 AUSTIN CCD $365,128,175 42,004 $8,693 SAN JACINTO CCD $325,880,568 33,382 $9,762 CITY OF CORPUS CHRISTI (DEL MAR) JCD $115,105,000 12,022 $9,575 LAREDO CCD $100,381,943 10,046 $9,992 MCLENNAN CCD $100,115,000 10,180 $9,834 SOUTHMOST UNION JCD (TEXAS SOUTHMOST COLLEGE) $98,175,000 10,503 $9,347 ODESSA JCD $87,505,000 5,112 $17,118 BRAZOSPORT JCD $64,340,000 4,194 $15,341 GRAYSON COUNTY JCD $63,460,000 5,166 $12,284 TYLER JCD $62,680,000 11,540 $5,432 SOUTH TEXAS CCD $61,389, $2,080 EL PASO CCD $60,490,000 28,146 $2,149 AMARILLO JCD $58,710,000 11,329 $5,182 COLLIN COUNTY CCD $51,605,000 27,179 $1,899 MIDLAND COUNTY JCD $47,199,000 6,061 $7,787 WASHINGTON COUNTY (BLINN) JCD $43,670,000 18,080 $2,415 TEMPLE JCD $38,587,264 5,692 $6,779 TARRANT COUNTY COLLEGE DISTRICT $30,495,000 56,806 $537 NAVARRO COUNTY JCD $26,865,000 10,383 $2,587 LEE COLLEGE DISTRICT $25,860,000 6,416 $4,031 HOWARD COUNTY JCD $22,480,000 4,666 $4,818 ANGELINA COUNTY JCD $22,415,000 5,836 $3,841 NORTHEAST TEXAS CCD $20,181,574 3,324 $6,071 ALVIN CCD $16,960,000 5,193 $3,266 VICTORIA JCD $16,810,000 4,514 $3,724 PARIS JCD $15,527,000 5,936 $2,616 SOUTH PLAINS COLLEGE DISTRICT $14,640,000 10,505 $1,394 WILBARGER COUNTY JCD (VERNON REGIONAL JR COLLEGE) $12,125,000 3,247 $3,734 CISCO JCD $10,425,000 4,363 $2,389 SCURRY COUNTY JCD (WESTERN TEXAS COLLEGE) $8,645,000 2,286 $3,782 PARKER COUNTY JCD (WEATHERFORD COLLEGE) $8,515,000 5,513 $1,545 NORTH CENTRAL TEXAS (COOKE CO) CCD $8,460,000 9,831 $861 SOUTHWEST TEXAS JCD $8,225,000 5,664 $1,452 PANOLA COUNTY COLLEGE DISTRICT $6,763,081 2,561 $2,641 WHARTON COUNTY JCD $6,170,000 6,998 $882 BEE COUNTY (COASTAL BEND) COLLEGE DISTRICT $5,635,000 3,900 $1,445 HILL COUNTY JCD (HILL COLLEGE) $3,905,000 4,307 $907 GALVESTON COLLEGE $2,625,000 2,214 $1,186 KILGORE COLLEGE DISTRICT $2,605,000 6,355 $410 TRINITY VALLEY CCD $2,455,000 7,482 $328 FRANK PHILLIPS COLLEGE DISTRICT (BORGER JCD) $1,885,000 1,031 $1,828 CLARENDON JCD $1,740,000 1,343 $1,296 COLLEGE OF THE MAINLAND $855,000 4,168 $205 CENTRAL TEXAS COLLEGE DISTRICT $0 10,737 $0 RANGER COLLEGE DISTRICT $0 1,736 $0 TEXARKANA CCD $0 4,484 $0 *Fall student enrollment was used for enrollment and to calculate debt per student. **Debt outstanding includes tax-supported, revenue-supported and lease purchase debt. Sources: Texas Bond Review Board, Texas Higher Education Coordinating Board SUSAN COMBS: TEXAS COMPTROLLER OF PUBLIC ACCOUNTS 15

16 SNAPSHOT: TARRANT COUNTY COLLEGE DISTRICT The Tarrant County College District (TCCD) is one of the fastest growing community college districts in the state, with enrollment nearly doubling over the past decade as Fort Worth and surrounding communities have grown in population. Despite this rapid expansion, TCCD has reduced its outstanding debt by 66 percent since. Both TCCD s in-resident tuition and total tax rate have continued to stay near or below state averages. This reduction in outstanding debt is largely attributable to TCCD s payas-you-go strategy for financing facility construction, rather than issuing bonds that accrue interest. New Campuses Built Although TCCD s Trinity River East campus which opened in did draw scrutiny over its cost, the facility was financed without issuing bonds. It brings state-of-the-art nursing training, which will provide increased capacity to meet a high-demand workforce need in Tarrant County, which ranks 190 out of the 254 counties in Texas for LVN-topopulation ratio. The District s new Haltom City Center was opened in a renovated former library. To further save on costs, TCCD obtained financial support from Haltom City and private companies. TARRANT COUNTY COLLEGE DISTRICT AT A GLANCE % CHANGE TOTAL DEBT OUTSTANDING $88,635,000 $30,495, % ENROLLMENT 26,836 49, % TOTAL TAX RATE $ $ % STATE AVERAGE $ $ % TUITION AND FEES IN-DISTRICT RESIDENT ENROLLED IN 12 HOURS* $447 $ % STATE AVERAGE $402 $ % *Tuition and fee rates are for the fall semesters of and. Sources: Texas Association of Community Colleges, Tarrant County College District, Texas Bond Review Board, Texas Comptroller of Public Accounts, Texas Higher Education Coordinating Board Refunding Debt is Reducing the Long-term Burden TCCD also works to bring down interest costs by refunding past bond issuances at lower interest rates and has the top AAA bond rating from Standard & Poor s. In 2004, TCCD refinanced bonds worth $23.5 million, saving taxpayers an estimated $845,000 over the life of the bonds. The district expects to be debt free by Serving More Students TCCD has employed innovative facilities and educational delivery models to manage its debt: Through distance learning, TCCD delivers instruction to 22,000 students in 250 courses. Weekend College is offered at all TCCD locations to more than 6,500 students. Dual enrollment participation has grown in recent years and now serves more than 4,000 high school juniors and seniors in area school districts. 16 YOUR MONEY AND EDUCATION DEBT

17 TEXAS EDUCATION: WHAT LIES AHEAD Every facet of the educational process may be on the cusp of massive change, and public schools will not be exempt. The digital revolution is already altering the most fundamental processes involved in education, and the growing availability of courses that offer high school students access to college credit and has made many high schools de facto extensions of local colleges. Wider adoption of electronic textbooks, complete with interactive features and video tutorials, may create significant new opportunities for self-paced learning. Online education may greatly expand our schools course offerings and allow campuses and districts to share resources across jurisdictional boundaries. Of course, such innovations will never eliminate the need for traditional school campuses. Many students may still benefit from face-to-face instruction. But these changes may reduce the size and number of facilities our school districts need, and perhaps even the number of teachers and support staff. A few decades from now, the dimensions of and need for public school debt may look very different. SAMPLE BALLOT IF KEY INFORMATION WAS INCLUDED Currently, the only information that voters get to see on their ballot when voting on a proposed debt issuance is the amount their local government entity proposes to borrow and a general description of the purpose. As the example here demonstrates, providing increased transparency that informs voters about the tax-supported debt already on that entity s books could be accomplished by simply adding information about existing debt, any change to the tax rate required to support the new debt, and the effect that tax rate would have on the debt service component of and average value residential property tax bill in the entity s jurisdiction. BETA COMMUNITY COLLEGE DISTRICT BOND ELECTION - NOVEMBER 06, 2012 DEBT TOTAL DEBT DEBT OUTSTANDING REMAINING SERVICE OUTSTANDING PRINCIPAL INTEREST PAYMENT PER CAPITA AUG. 31, 2012 $65,030,343 $42,742,000 $107,772,343 $1, PROPOSED ISSUE $25,795,000 $18,200,000* $43,995,000* $ AVERAGE LENGTH OF PROPOSED DEBT: 20 YEARS EXISTING ANNUAL DEBT TAX RATE $0.18 per $100 PROPOSED NEW RATE IF BOND PASSES $0.22 per $100 EXISTING AVERAGE RESIDENTIAL DEBT SERVICE TAX LEVY** $ ESTIMATED DEBT SERVICE TAX LEVY IF BOND PASSES ASSUMING NO STATE ASSISTANCE $ % INCREASE 22.2% % INCREASE 22.2% * Estimated interest and total payment. ** Average debt service tax is calculated on the average 2012 residential property value in the city of $152,760. PROPOSITION THE ISSUANCE OF BONDS IN THE AMOUNT OF $25,795,000 FOR THE CONSTRUCTION, RENOVATION, ACQUISITION AND EQUIPMENT OF SCHOOL BUILDINGS, INCLUDING THE CONSTRUCTION OF THREE SCI- ENCE CLASSROOM AT BETA COMMUNITY COLLEGE, REHABILITATION OF THE PERFORMING ARTS CENTER AND THE MULTIPURPOSE STADIUM AT W.H. BETA HIGH SCHOOL AND THE LEVYING OF THE TAX IN PAY- MENT THEREOF. FOR AGAINST BETA ISD BOND ELECTION - NOVEMBER 06, 2012 DEBT TOTAL DEBT DEBT OUTSTANDING REMAINING SERVICE OUTSTANDING PRINCIPAL INTEREST PAYMENT PER CAPITA AUG. 31, 2012 $65,030,343 $42,742,000 $107,772,343 $1, PROPOSED ISSUE $25,795,000 $18,200,000* $43,995,000* $ AVERAGE LENGTH OF PROPOSED DEBT: 20 YEARS EXISTING ANNUAL DEBT TAX RATE $0.18 per $100 PROPOSED NEW RATE IF BOND PASSES $0.22 per $100 EXISTING AVERAGE RESIDENTIAL DEBT SERVICE TAX LEVY** $ ESTIMATED DEBT SERVICE TAX LEVY IF BOND PASSES ASSUMING NO STATE ASSISTANCE $ % INCREASE 22.2% % INCREASE 22.2% * Estimated interest and total payment. ** Average debt service tax is calculated on the average 2012 residential property value in the city of $152,760. PROPOSITION THE ISSUANCE OF BONDS IN THE AMOUNT OF $25,795,000 FOR THE CONSTRUCTION, RENOVATION, ACQUISITION AND EQUIPMENT OF SCHOOL BUILDINGS, INCLUDING THE CONSTRUCTION OF THREE SCI- ENCE CLASSROOM AT BETA MIDDLE SCHOOL, REHABILITATION OF THE PERFORMING ARTS CENTER AND THE MULTIPURPOSE STADIUM AT W.H. BETA HIGH SCHOOL AND THE LEVYING OF THE TAX IN PAYMENT THEREOF. FOR AGAINST VOTERS SHOULD BE TOLD THE DEBT FACTS Unless they ve done research on their own or proponents of a local government debt issue have shared information about the current debt outstanding, voters are often not fully informed before they walk into the voting booth. Ballot propositions currently offer no information other than the debt issue being considered. Key debt information could be included on ballot forms that would let voters decide whether new debt is merited based on how much debt they, as taxpayers, are already paying. For example, the sample ballot above shows key information about the local government entity s debt that voters could consider if the details were on the ballot. SUSAN COMBS: TEXAS COMPTROLLER OF PUBLIC ACCOUNTS 17

18 STATE UNIVERSITIES HAVE EXPANDED ENROLLMENT, FACILITIES AND DEBT State colleges and universities use bond debt primarily to fund facility construction and renovation projects. At the end of fiscal, Texas public four-year colleges and universities had $12.5 billion in outstanding debt. From fiscal through, state university and college enrollment rose PUBLIC COLLEGE AND UNIVERSITY REVENUES AND EXPENDITURES 0 0 AND REVENUES (IN BILLIONS) STATE 30.8% () TUITION AND FEES 28.5% () FEDERAL 17.3% () INSTITUTIONAL RESOURCES 23.4% () (IN BILLIONS) by 32.5 percent to 610,558 while outstanding debt increased by 246 percent. The state has established funds that service debt using revenues generated by state assets including the Permanent University Fund and the Higher Education Fund. REVENUES TOTAL $11.5 BILLION FUNDING SOURCE REVENUES REVENUES CHANGE STATE $2,705,454,688 $3,542,118,364 31% TUITION AND FEES $1,212,198,736 $3,282,497, % FEDERAL $730,130,688 $1,990,587, % INSTITUTIONAL RESOURCES $1,560,725,243 $2,694,027,043 73% TOTAL $6,208,509,355 $11,509,230,597 85% RESEARCH 11.4% () FACILITIES 10.9% () OTHER 4.1% () EXPENDITURES (IN BILLIONS) INSTRUCTION 40.5% () ADMINISTRATION 33.2% () EXPENDITURES TOTAL $10.2 BILLION PURPOSE EXPENDITURES EXPENDITURES CHANGE INSTRUCTION $2,458,589,774 $4,144,390,711 69% RESEARCH $562,868,548 $1,166,034, % ADMINISTRATION $1,873,228,992 $3,395,916,988 81% FACILITIES $971,827,072 $1,117,268,492 15% OTHER $172,270,356 $414,661, % TOTAL $6,038,784,742 $10,238,272,022 70% Sources: Texas Higher Education Coordinating Board 250% HIGHER EDUCATION DEBT CLIMBS 0 Definitions: FISCAL THROUGH UNIVERSITY DEBT OUTSTANDING 246% COMBINED ENROLLMENT AND INFLATION 67.8% Sources: Texas Bond Review Board, Texas Higher Education Coordinating Board REVENUES STATE State appropriations, state grants and contracts, Research and Development Fund, Texas Competitive Knowledge Fund, Higher Education Fund and Permanent University Fund. TUITION AND FEES Tuition and fees after exemptions and allowances. FEDERAL Federal grants and contracts. INSTITUTIONAL RESOURCES Endowment and interest income, local government grants, private gifts and grants, sales and services, net auxiliary enterprises and other income. EXPENDITURES INSTRUCTION Program instruction, scholarships and fellowship grants. RESEARCH All expenses for research activity. ADMINISTRATION Academic support, student services, institutional support, auxiliary expenses. FACILITIES Operations and management of plant, capital outlay from current fund sources. OTHER Other services not directly related to basic services, public service. For more detailed information, visit the Texas Higher Education Coordinating Board s website at 18 YOUR MONEY AND EDUCATION DEBT