PRESS RELEASE
From the Office of State Senator Rodney Ellis

For Immediate Release
February 28, 2001
Contact: Jeremy Warren, (512) 463-8393

Ellis Education Initiatives Move Forward
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Engineering, College Savings Plan Legislation Clear Senate Education Committee

(Austin)// The Senate Education Committee today passed SB 353 and SB 555, legislation by Senator Rodney Ellis (D-Houston) to boost the number of engineering and computer science graduates in Texas, and give Texas families more options when saving for college. The legislation will now be considered by the full Senate.

Senate Bill 353, affectionately known as the "Texas Needs Nerds" bill, will address the growing shortage of high tech workers in Texas by increasing the number of electrical engineering and computer science graduates from Texas universities. The legislation creates the Texas Engineering and Technical Consortium, which will be made up of all public engineering and computer science programs, plus private companies. Those companies will contribute money into a special pool to fund targeted programs for students enrolled in or interested in electrical engineering and computer science studies.

"Texas needs nerds," said Senator Ellis. "Unfortunately, Texas is not doing enough to produce the fuel that powers the high tech economy -- engineers and computer scientists. Senate Bill 353 will substantially increase the number of electrical engineering and computer science graduates we need to fuel the digital economy."

Under SB 353, Texas would commit up to $5 million annually to match $5 million raised annually from the technology industry and other private sector sources - for a total of $10 million. The fund would be administered by the Texas Higher Education Coordinating Board, guided by a public private advisory committee. The consortium would make grants to public universities to increase enrollment and improve retention rates in those programs, specifically encouraging participation by women and minority students as part of the overall effort to increase the number of technology workers.

Technology is perhaps the driving force behind Texas' economic growth. Today, high tech industries employ more Texans than the oil and gas drilling, agriculture, food products and petroleum refining sectors combined. Between 1993 and 1998, high-tech employment in Texas jumped 48 percent; more than 132,000 new technology jobs were created in the state. But just as the need for high tech training has increased, the number of engineering and computer science graduates has decreased. Between the 1993-94 and 1998-99 school years, the total number of electrical engineering or computer science graduates increased by less than 10 percent, and the number of electrical engineering graduates actually dropped. Today, some 34,000 high skilled technology jobs are now vacant in Texas.

"If Texas wants to remain a national and world leader in high tech, we must do more to recruit and train engineers and computer scientists," said Ellis.

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The Senate Education Committee today also passed SB 555, Ellis legislation to create a new college savings program to help Texas families save for college. Senate Bill 555 creates the college savings program, which will allow Texans to set aside funds in a tax-deferred account to cover the full cost of attending college. This legislation will allow the board that operates the Texas Tomorrow Fund to compliment the prepaid tuition plan with a college savings plan.

"The Texas Tomorrow Fund, while revolutionary, no longer gives the best bang for the buck," said Ellis. "Creating a new college savings plan will provide Texans with more options when saving for college and will provide a better return on their investment."

The Texas Tomorrow Fund has lost some steam since its creation in 1996. In the initial enrollment period, more than 40,000 contracts were sold; in 2000, that number fell to just over 12,000. Experts believe this drop off is due to the popularity of alternative savings plans like mutual funds and stocks. In essence, the tomorrow fund is not considered the best investment because it only locks in tomorrow's tuition costs at today's prices, and provides nothing for other education expenses.

Senate Bill 555, a Performance Review recommendation by State Comptroller Carole Keeton Rylander, makes Texas' college savings plans more competitive with private accounts and with other states. Currently, thirty four other states currently have adopted similar college savings plans, and 8 others have plans in the pipeline. Unlike Texas Tomorrow Fund accounts, the college savings accounts will not be backed with the full faith and credit of the state of Texas, reducing the financial burden to the state and placing more responsibility on the individual investor.

"In the new economy, what you earn depends on what you learn," said Ellis. "This legislation gives Texans another tool to save money for their kids' college or to go back to school and continue their own education."

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