Posted: Jun 1, 2014 11:00 AM
Updated: Jun 1, 2014 11:01 AM
DALLAS (AP) Texas' oil shale boom is pumping cash into the state's largest universities, giving them a financial windfall they're using for new construction and affordable tuition.
The endowment for the University of Texas and Texas A&M University systems has grown by about 70 percent over the past five years as gushing oil revenue has pumped about $1 billion a year into the Permanent University Fund, The Dallas Morning News reported (http://bit.ly/1oXyLlx ).
Both systems have spent hundreds of millions on projects, such as UT-Dallas' $60 million arts and technology center and a still-developing $108 million lab. Other projects paid for with fund money include a $50 million expansion and clinic renovation at Southwestern Medical Center.
"It's a huge game-changer and is something that no other university system has to this extent," said James Huffines, a Dallas bank executive and former member of the University of Texas System Board of Regents. "Just look around the campuses at all the new construction. A lot of it is supported by oil money, and those royalty payments should keep growing."
Austin has noticed the growth, which Gov. Rick Perry cited last month when he urged University of Texas System regents not to raise tuition rates. The board responded by not raising in-state tuition for the 2014-2015 school year keeping annual costs below $10,000 a year.
The board promised to look for other sources of money that the schools still say they need in order to recruit top faculty members and stay competitive.
The boom of oil money comes from 2.1 million acres of land in West Texas set aside in 1839 to help fund higher education. In the early years, the state made money from ranching leases. That changed in 1923 when the universities' first oil well was struck.
Revenue from oil and gas has quadrupled over the last eight years as horizontal drilling and hydraulic fracturing have tapped vast oil deposits that had been long though undrillable. In 2013, the fund had more than $19 billion and distributed almost $650 million across the two university systems.
David Daniel, president of UT-Dallas, said the school has built $600 million worth of academic and dormitory space over the past nine years.
"And we've still got many of hundreds of millions of dollars of new buildings we still need," Daniel said. "Without the (fund), that isn't possible."
Information from: The Dallas Morning News, http://www.dallasnews.com