DALLAS — If Texas voters approve Proposition 4 next week, the state would invest $450 million toward adding seven Tier 1 universities in hopes of closing an educational gap with other large states.

The Proposition 4 ballot initiative would repurpose the existing Higher Education Fund for use as an endowment for high-level research programs.

Though relatively small now, the renamed National Research University Fund would grow to nearly $2 billion by the time any of the universities become eligible to receive distributions in 2035, according to a study by economist M. Ray Perryman, founder of the Perryman Group in Waco.

Though proponents of Proposition 4 describe the HEF as “dormant,” conditions for its use would not substantially change. The fund is dormant only in the sense that the Legislature has made no contributions since 2003 and because it has not reached the $2 billion threshold required for distributions.

The HEF was created by the Legislature in 1996 for colleges and universities not eligible to use the Permanent University Fund that endows the University of Texas and Texas A&M systems. Like the PUF, the HEF was intended to allow universities to buy land, expand campuses, and provide debt service on HEF bonds. But the HEF could not be tapped until it reached $2 billion.

Since 1999, the eligible universities have sold more than $2.7 billion of bonds backed by the PUF, according to data from Thomson Reuters.

Under Prop. 4, some of the universities that would have benefited from the HEF are cut out, thus concentrating funds on the seven that have been identified as emerging research universities: the University of Texas branches at Arlington, Dallas, El Paso, and San Antonio, the University of Houston, and the University of North Texas, based in Denton.

Proposition 4 would require annual legislative appropriations of $25 million to the National Research University Fund, along with funding to the seven universities based on their success in growing their own research endowments and other measures.

While there is a risk that the NRUF could also go dormant if lawmakers fail to support it in the future, backers of Prop. 4 point to the Legislature’s unanimous support for HB 51, which generated the ballot initiative. The targeted universities’ locations in the state’s major urban areas is also likely to mean enduring political support, proponents say.

The new fund would not be available to the state’s two existing Tier 1 state universities, UT Austin and Texas A&M, nor to Rice University, a private Tier 1 university in Houston.

With only those three Tier 1 universities, Texas lags other large states, particularly California with nine and New York with seven.

While there is no formal definition of “Tier I,” the term is generally applied to research universities. The Center for Measuring University Performance at Arizona State University in Tempe produces an annual ranking of research universities with at least $40 million in federal research expenditures measured across nine factors. The top 25 are referred to as “Tier 1” research universities.

In the 2008 rankings, Columbia University supplanted Harvard University in the top spot. Harvard fell to fourth, behind the Massachusetts Institute of Technology and Stanford University and ahead of the University of Pennsylvania. The highest-ranked public university was the University of Michigan in ninth place. UT Austin was ranked 21st overall and ninth among public universities. The University of California System was led by Berkeley in 11th place, Los Angeles in 12th , San Francisco in 17th, and San Diego in 19th.

Despite the often populist rhetoric of Texas conservatives, Republican Gov. Rick Perry said he has already cast his vote for Proposition 4.

In supporting the ballot measure, Perry is breaking with conservative groups like the Houston Tea Party Patriots, who oppose it because they say research should be conducted by the private sector. Perry, who has sought to curry favor with the so-called Tea Party movement, made headlines earlier this year when he suggested at a state capitol rally of the group that Texas might secede from the union.

Support from the governor’s office for the state’s universities was not always a sure thing. In 1916, Gov. James E. “Pa” Ferguson vetoed appropriations for the University of Texas and announced that he was shutting it down because it was “elitist.” When he was challenged over his decision to fire individual professors, he said: “I don’t have to give reasons, I am the governor of Texas.”

Ferguson’s self-proclaimed “war” with UT was one factor that led to his impeachment and the subsequent election of his wife, Miriam A. “Ma” Ferguson, the first female governor of Texas. Miriam Ferguson, who had actually attended college, ran on the slogan “Me for Ma, and I Ain’t Got a Durned Thing Against Pa.”

The claim of elitism still echoes in the opposition to Proposition 4 but on a different basis. Opponents say that high research status does not mean that a university is better at educating students than one considered less prestigious.

“Why should just seven universities in Texas have an exclusive kitty of $2 billion?” the fiscally conservative Web site EmpowerTexans.com asks. “The public should find this exclusivity unacceptable and unfair — indeed, a gross discrimination against the balance of colleges and universities throughout Texas.”

Colleges and universities that would lose access to the Higher Education Fund include two UT branches in far South Texas, Midwestern State University in Wichita Falls, Stephen F. Austin State University in East Texas, the historically African-American Texas Southern University in Houston, Texas Woman’s University in Denton, and the Texas State Technical College System.

While Texas ranks among the lowest achievers in terms of public K-12 education success — last in percentage of residents with a high-school degree — enrollment in community colleges and public universities soared nearly 24% between 1999 and 2005, according to state figures.

Opponents of Proposition 4 say that targeting areas of population growth, especially the border region, would make more sense than investing in research universities if the state were serious about serving high-growth, under-served areas.

In his analysis of Prop. 4, Perryman cites the economic impact of raising the seven “emerging research” universities to Tier 1 status.

“Texas’ adverse ranking has notable negative consequences for the economy, including lost opportunity for billions of dollars in research funding and an out-migration of the bright high school graduates, as well as disadvantages in generating startup firms in emerging fields and attracting major clusters of technology-oriented production,” he wrote in his report. “In addition, the lack of nationally recognized research universities has even been shown to diminish university attendance more generally.”

Under the most modest of three scenarios, the addition of two Tier 1 universities by 2035, business activity would grow by $161 billion, adding 344,393 jobs, the report estimates. State government would gain $4.2 billion in annual revenues, with another $1.3 billion going to local governments, Perryman says.

“Among Tier 1 universities in Texas, the per-capita research expenditures in 2007 totaled $143 per person, ranking it at the lower end of per-capita research expenditures in the most populous U.S. states,” the report says. “Only Florida, which has a notably different economic base, was significantly lower.”

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