To the list of ideas to deal with an expected state funding reduction -- cut programs, faculty and staff and increase tuition -- was added another.
Accept more students, lots of them, to generate revenue.
Regent Jim Schwertner of Austin mentioned the idea during a Board of Regents meeting Friday in College Station.
Students pay about $8,800 in tuition, and more than 26,000 applied last year to Texas A&M. About 8,100 accepted offers and will attend. In the business world, Schwertner said, leaders would have to scramble for new customers in budget reduction times.
"The System doesn't have that problem," said Schwertner, president and CEO of Schwertner Farms, Inc. "We've got customers out there, banging on the door."
He worked out the numbers, as he did earlier in the week in smaller meetings with faculty members.
"For every thousand we can increase the bottom line in excess of $8 million," Schwertner said during a budget update by Chancellor Mike McKinney. "So if you have 5,000 students just in Texas A&M, you could have $40 million of additional revenue."
The state also provides formula funding per student.
Schwertner acknowledged the increased burden on the classroom and services.
"We got to roll our sleeves up," he said. "If you don't want to have as many cuts, just work a little harder."
No action was taken, and Schwertner only urged the presidents of the A&M System's 11 universities to consider such an option in their deliberations.
The idea underscores a reality: With a tuition freeze the board intends to implement for the fiscal year starting September 2011, and a state reduction in funding, not many options remain for creating revenue.
But enrollment at Texas A&M has been delicately controlled. For the fourth year now, A&M has sent out about 14,000 to 15,000 acceptance letters a year with the target of bringing in between 8,000 and 8,100 freshmen.
"There is, more or less, a consensus we're about as big as we want to be," said Clint Magill, a plant pathology professor who was on a 14-person task force charged with making recommendations about enrollment strategies.
The chair of that committee, J. Martyn Gunn, noted the successful effort two years ago to accommodate students evacuated from the Galveston campus following Hurricane Ike. However, he added, absorbing the 1,500 Sea Aggies had its challenges.
"You must remember, we were teaching classes in churches," said Gunn, vice provost for academic services.
He added: "Currently, we don't have the facilities to absorb a large number of new students. Having said that, it would be possible to plan for that in the future if that's what the university wanted to do."
He said the planned budget reductions already mean larger class sizes.
Board Chairman Morris Foster declined to comment on the issue.
Budget cuts a key issue
It was board business as usual Friday, but the issue of the budget popped up during updates.
Texas A&M earlier this week released plans submitted by the deans of its colleges and heads of its divisions that addressed how it would deal with a $39 million "worst-case" state reduction on top of a $21 million internal reallocation plan.
The plans -- which were being reviewed by a committee and could change before submittal to Texas A&M President R. Bowen Loftin -- would slice nearly 500 faculty and staff positions, including 210 currently filled.
Regardless of the outcome of the potential 10 percent state reduction, Texas A&M already cut the state portion of its budget 5 percent, or $28 million, for the current two-year period -- called a biennium -- that began September 2009.
"Even at the 5 percent level, the cuts are not without impact," McKinney told regents. "It is our responsibility to minimize those impacts. I will make sure that I say that to the Legislature."
Stanton Calvert, vice chancellor for governmental relations for the A&M System, said a goal is to argue to the Legislature not to take a disproportionate amount in future reductions from higher education.
Regarding the completed 5 percent reduction, he said, higher education accounted for 41.5 percent of the $1.25 billion that was given back to the state, even though it represents only 10 to 12 percent of the state budget.
"We're not quitting," Calvert said. "Our institutions represent longtime, strong investments for the state of Texas. This is our opportunity to spell out to the Legislature, finances allowing, what we can do for the good of the state and good of the region."
Operating budget is approved
Amid planning for state cuts, regents Friday approved the A&M System's annual operating budget of $3.3 billion -- a 4 percent or $141 million increase from the previous year -- for all its universities, seven state agencies and Health Science Center.
The budget, which takes effect Sept. 1, includes $1.2 billion for the flagship College Station campus, and nearly $31 million for A&M System offices.
It reflects tuition raises limited to 3.95 percent, enrollment increases, expansion, and the 5 percent state reduction, which amounted to roughly $80 million across the A&M System.
"The board and system administrators worked together to keep budget increases as low as possible given the current economic climate," stated an official release.
Roughly $1.9 billion of the 115,000-student System's expenses, or 56.4 percent, are tied up in personnel.
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