Ensure the Texas State Technical College System Is Properly Funded

Provide sufficient funding for the Texas State Technical College System to train students in advanced and emerging technologies.

The state realizes significant benefit by investing in the future of its citizens. The Texas State Technical College (TSTC) System is important to the state s economic future because it provides job training programs that equip citizens to work in emerging industries.

Technical training education is likely to become an increasingly valuable skill in Texas. According to the National Center on Education and the Economy: Forty-two million people are employed in jobs in America that required a significant amount of training beyond a basic education, but not a four-year college degree. In this group fall the traditional skilled workers apprenticed trades, auto mechanics, secretaries, data workers, fire fighters, electricians, plumbers and technicians. It was in these jobs that we found occupation-specific skills shortages most often mentioned. M any of the traditional skills are provided by trade (or proprietary) schools and community colleges.

The case for strong technical training is made more compelling considering that almost half of the new manufacturing jobs in the state over the next 35 years will be in industries related to high technology, including computers, industrial machinery and el ectronics. 1

TSTC has a unique mission within Texas higher education. By statute, its mission is to offer instructional programs in highly advanced and emerging technical areas. Although often compared to community colleges (which also offer technical programs at the two-year level) TSTC enrollments are concentrated in export-related clusters of technical programs rather than in the service-related clusters which are more predominant in the community colleges. That is, the program emphasis at TSTC is more on training for jobs that produce goods and services for consumption in other states and nations rather than in the local area. Further, TSTC has ac hieved a high graduation rate. Table 1 compares the number of students and the number of graduates by technical program cluster for the community colleges and TSTC during the 1990-91 academic year.

TSTC serves a valuable and necessary function in its delivery of technical education. This function should be strengthened. To the extent that duplicative programs are offered by community colleges and TSTC campuses in close proximity, both institutions missions and funding are diluted. TSTC has a special obli gation to provide courses in emerging or advanced technical areas that address the statewide demand for technical training, as opposed to community colleges, whose primary mission is to respond to market demands in their specific communities.

A significant feature of TSTC is its revenue stream. Unlike community colleges, which receive a significant portion of their funds (about 20 percent) through their local taxing authority, TSTC relies heavily on state general revenue. The same state funding formulas a re used for both TSTC and for community colleges. Each college submits the average cost for each course taught and the median cost for each course is calculated and multiplied by the number of contact hours to arrive at a formula-generated recommended appr opriation.

Table 1 - Distribution of Students and Graduates by Program for
Community Colleges and Texas State Technical Colleges
1990-91 Academic Year

Number of Students Number of Graduates
Technical Community Technical Community Technical
Program Area Colleges Colleges Colleges Colleges

Service-Related Clusters
Medical/Health Care 30,370 481 6,939 283
Biotechnologies 2 0 0 0
Automotive/Heavy Mechanics 2,175 827 665 340
Building Systems and Construction 2,428 470 371 161
Applied Service and Business 46,725 1,074 5,656 432
Related Instructions 0 0 2 0

Subtotal 81,700 2,852 13,633 1,216

Export-Related Clusters
Information 13,727 1,207 1,457 287
Energy and Environmental 544 274 53 84
Laser/Electronics 6,205 1,541 1,014 402
Manufacturing, Design and Engineering 6,494 1,316 925 435
Aerospace 1,270 627 227 114
Agribusiness 875 253 250 107

Subtotal 29,115 5,218 3,926 1,429

Grand Totals 110,815 8,070 17,559 2,645

Source: Texas State Technical College System, A Comparative Analysis of Postsecondary Technical Education in Texas: An Executive Summary, 1992.

Due to their lack of access to local tax revenues, TSTC must rely more heav ily on federal funding sources than the typical Texas community college. TSTC is the only higher education institution in the state without a dedicated revenue source for capital expenditures. (Another recommendation in this report addresses this issue.)

Surprisingly, given the lack of local tax support, TSTC student tuition and fees comprise a significantly smaller proportion of total revenues than in the community colleges. However, student tuition and fees per contact hour (50 minutes of direct communit y college instruction for each clock hour) are roughly comparable at the two types of institutions. The disparity is partially due to the relatively higher costs of the technical programs offered at TSTC as opposed to those offered at community colleges.

Table 2 illustrates the distribution of revenue by source for fiscal 1991 for both community colleges and TSTC. Also, the table displays the same information on a per-contact-hour basis for 1991 the most recent fiscal year for which data are available.

Table 2 - Distribution of Current Fund Revenue by Source
For Community Colleges and Texas State Technical Colleges
Fiscal 1991

Community Colleges TSTC
Revenue Dollars per Dollars per
Source Percent Contact Hour Percent Contact Hour

State Funds 48.1% $3.17 68.8% $6.41
Federal Funds 10.5 0.69 17.0 1.58
Student Tuition/Fees 16.2 1.07 10.3 0.96
Local Taxes for Current Operations 20.1 1.32 0.0 0.00
Other Income 5.1 0.34 3.9 0.37

Total 100.0% $6.59 100.0% $9.32

Sources: Texas Higher Education Coordinating Board, Current Funds Revenues (Excluding Auxiliary Enterprises) Public Junior Colleges and Higher Education Coordinating Board, Summary of Public Junior College Cost Survey Analysis of Total Contact Hours.

TSTC spends the largest proportion of its available funds, more than 60 percent, on the direct costs of instructional programs. Lesser amounts are spent, respectively, on general administration and for physical plant operation and maintenance. A small prop ortion of the total expenditures is for libraries. Table 3 compares the distribution of expenditures by function per contact hour during fiscal 1991 for TSTC and the community colleges.

Table 3 - Distribution of Expenditures by Function and Per Contact Hour
For Community Colleges and Texas State Technical Colleges, Fiscal 1991

Community Colleges TSTC
Revenue Dollars per Dollars per
Source Percent Contact Hour Percent Contact Hour

General Academic Instruction 26.7% $2.57 2.9% $2.13
Vocational-Technical Instruction 22.9 3.43 61.2 4.76
General Administration & Student Services 13.6 0.79 7.4 0.52
General Institutional Expense 4.8 0.28 2.7 0.19
Organized Research 0.0 0.00 0.0 0.00
Extension and Public Service 2.3 0.13 0.0 0.00
Library 4.0 0.23 1.3 0.09
Physical Plant Operations/Maintenance 12.0 0.70 12.0 0.84
Major Repairs and Rehabilitation 1.8 0.10 2.8 0.19
Special Items 2.9 0.17 4.1 0.29
Staff Benefits 9.0 0.53 5.6 0.39

Total 100.0% $8.93 100.0% $9.40

Totals may not add due to rounding.
Sources: Texas Higher Education Coordinating Board, Education and General Expenditures, Public Junior Colleges and Higher Education Coordinating Board, Summary of Public Junior College Cost Survey Analysis of Total Contact Hours.

Table 3 reveals that TSTC is focusing primarily on its mission to provide technical and vocational instru ction. However, many of the technical and vocational courses are in service-related areas such as nursing, auto mechanics and business. With community colleges in close proximity to every TSTC campus location, there is no need for TSTC to provide courses outside new and emerging technology. The TSTC mission is narrow but crucial: build a competitive Texas work force in the global marketplace.

Because state education policy makers have been sufficiently concerned about TSTC and its relationship to community colleges, several reviews have been completed recently. TSTC s mission was amended by the Legislature in 1991 to emphasize highly specialized advanced and emerging technical and vocational areas. Further, the House Committee on Higher Education appointed a Subcommittee on Technical Education in 1992 to review concerns about program duplication between the TSTC and the community colleges.

At the direction of the Legislature, the Texas Higher Education Coordinating Board (THECB) has conducted several studies of TSTC issues during the past year. THECB adopted several recommendations regarding technical education program responsibilities and T STC funding. Two THECB recommendations relate d to TSTC funding include provisions for (1) priority funding categories for selected technical disciplines related to economic development requirements and (2) TSTC eligibility for Higher Education Assistance Fund (HEAF) support. 2

The Legislature s decision to change from all funds budgeting in 1988 (see other recommendations in this report addressing the funding issue) appears to underlie many of the recent funding problems for the TSTC. These problems are compounded by the budget formula which fails to recognize the emphasis on high cost disciplines at TSTC. Recent THECB recommendations attempt to address the funding issues at TSTC through their new emphasis on high priority programs many of which are found at TSTC.

A. The Texas Higher Education Coordinating Board (THECB) should employ a formula-funding technique that recognizes the unique costs associated with the advanced technology programs offered at Texas State Technical College (TSTC).

The funding scheme that THECB has proposed for technical programs may fulfill the aim of this recommendation. However, THECB should continue to assess the strengths and weaknesses of the current instruction formula for two-year programs.

B. THECB should underscore the mission of TSTC, which is to provide courses in emerging or advanced technology.

THECB should evaluate all programs offered by TSTC and develop a strategy for phasing out those programs that are primarily service-based or general academic.

Further, THECB should review the comp letion and enrollment rates of all programs offered by TSTC on a biennial basis and eliminate those programs that are no longer necessary. THECB should eliminate high-cost programs at TSTC that offer graduates only minimum or low-wage earning potential. Th is would require THECB, in cooperation with TSTC, to develop a system to track graduate placement and salary.

THECB is already working toward strengthening the quality of technical education programs offered in the state. Implementing the re commendations would effectively use existing regional infrastructures and maintain the appropriate partnerships between local communities and the state-supported community colleges.

Phasing out primarily service-based or general academic programs may cause some short run decline in TSTC enrollment. However, the state will avoid duplication of services and appropriately focus limited resources on providing specialized technical educati on.

Fiscal Impact
No significant fiscal impact is associated with these recommendations.

1 National Center on Education and the Economy, America s Choice: High Skills or Low Wages! (Washington, D.C., June 1990).
2 Comptroller of Public Accounts, The Changing Face of Texas (Austin, Texas, August 1992), p. 5.
3 Texas Higher Education Coordinating Board, Report on Technical Education in Texas (Austin, Texas, October 1992).