Press Release
From the Office of State Senator Rodney Ellis

For Immediate Release
March 23, 2005
Contact: Jeremy Warren, (512) 463-0113

Ellis Questions Spending Priorities
SB 1 increases overall spending by $22 billion yet cuts the TEXAS Grants program

(Austin)// Senator Rodney Ellis (D-Houston), a former Chairman of the Senate Finance Committee today raised pointed questions about the direction of state funding for financial aid during debate on SB 1, the 2006-2007 biennial budget.

Ellis specifically criticized the decision to cut funding to the TEXAS Grant program. Under SB 1, the TEXAS Grant program receives $294 million over the biennium, a $30 million cut which will force at least 15,000 students to lose their TEXAS Grant.

"It is simply a matter of priorities," said Ellis. "If we wanted to make sure every eligible child could get a TEXAS Grant and go to college, it would cost an additional $220 million over the biennium. This budget increases spending by $22 billion, yet we're telling at least 15,000 students that their dream of going to college will have to be deferred. I think that is the wrong priority for Texas."

The $30 million cut will force 15,000 students to lose their TEXAS Grant over the next two years. However, the budget cut represents only a part of the problem. Last year, the combination of budget cuts and skyrocketing tuition, as a result of tuition deregulation, dropped 22,000 students from the TEXAS Grant program. Education analysts believe tuition costs will continue to rise over the next two years, potentially cutting thousands more students from the program.

Created in 1999, the TEXAS Grant program provides tuition and fees for qualified Texans to go to a public or private college in Texas. As Texas struggles to meet the challenges of a growingly diverse population, the TEXAS Grant program has proven to be the best plan to help close the gap between minority students and Anglos. Of the total grants funded, 64,000, or 46 percent, have gone to Hispanic students, and 18,000 grants, or 13 percent, have gone to African American students. Overall, 115,000 students have received 235,000 grants totaling over $648 million to go to college in Texas.

In 2001 as Finance Chairman, Senator Ellis led the effort to triple funding for the TEXAS Grant program from $100 million to $300 million. That funding provided TEXAS Grants to 68,000 students over the 2002-2003 biennium. The 2004-2005 budget essentially carried forward the previous budget for the TEXAS Grant program, which initially provided aid to 63,000 students. The 2006-2007 budget will provide TEXAS Grants to 48,000 -- before taking into consideration the impact any further tuition increases at Texas public universities. Fully-funding TEXAS Grants would cost Texas $524 million over the biennium and would serve 86,000 students.

Early budget projections recommended funding the TEXAS Grant program at only $194 million for the 2006-2007 biennium. Following objections from Ellis and other leaders, $100 million was restored.

"I am very concerned about the message we are sending to Texans," said Ellis. "Texas already provides about $120 million less in direct state grants to students than the other five largest states, and now we're cutting more from a program we know, without a doubt, works. We just widened the gap."

Budget Snapshot

Year Passed
Fiscal Years
Amount Appropriated
2001
2002 -2003
$113.8 billion
2003
2004-2005
$117 billion
2005
2006-2007
$139.3 billion

The 2006-2007 budget represents a 22.4 percent increase over the 2002-2003 budget.

TEXAS Grants

Year
Amount Appropriated
Total Students Served
# of New Students
2001 (FY 02-03)
$300 million
FY 02 = 53,318
FY 03 = 68,178
FY 02 = 33.934
FY 03 = 38,793
2003 (FY 04-05)
$324 million
FY 04 = 63,834
FY 05 = 56,109
FY 04 = 21,898
FY 05 = 15,274
2005 (FY 06-07)
$294 million
FY 06 = 48,727
FY 07 = 42,375
FY 06 = 12,500
FY 07 = 14,950

Note-Adding the new recent together might give a higher total for the biennium than the total served for the biennium. This is due to a student not meeting the satisfactory academic progress requirements or not showing financial need in the preceding year.

CHIP

Year
Amount Appropriated
Children Served
2001 (FY 02-03)
$1.029 Billion
FY 02 = 497,705 actual
FY 03 = 506,968 actual
2003 (FY 04-05)
$807.8 Million
FY 04 = 409,865 avg.
FY 05 = 340,329 avg.
2005 (FY 06-07)
$1.070 Billion
FY 06 = 324,750 avg.
FY 07 = 331,132 avg.

SB 1 does not put any additional money in for CHIP enrollment growth.

According to the Health and Human Services, there were 332,000 Texas children being served by CHIP in January 2005. According to LBB estimates, on August 31st, 2007, under SB 1only 331,000 children will be served by CHIP, despite an increasing population.

SB 1 increases spending by $22 billion, yet provides insurance to fewer children and college aid to fewer students.

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