Texas Senate Bill SJR57

Texas 2017 - 85th Regular

Caption

Proposing a constitutional amendment relating to the maximum amount of the annual distribution made from the permanent university fund to the available university fund.

Impact

If passed, SJR57 will amend Section 18(e) of Article VII of the Texas Constitution, which governs the management and distribution of capital assets from the PUF. The amendment is designed not only to allow current funding needs to be met but also to safeguard the long-term value of university investments. This change reflects a proactive approach to financial stewardship, ensuring that the fund can continue to support public education while aspiring to mitigate any potential shortfalls in future funding due to inflationary pressures or poor investment performance.

Summary

SJR57 is a joint resolution proposing a constitutional amendment to modify the annual distribution limits from the Permanent University Fund (PUF) to the Available University Fund (AUF). The resolution aims to ensure a stable and predictable stream of funding for universities supported by the AUF, by proposing a maximum distribution limit of six percent of the average net fair market value of PUF investment assets. This is a slight reduction compared to the existing limit of seven percent, aimed at preserving the purchasing power of the PUF investments over time.

Contention

Discussions around SJR57 may involve significant stakeholder opinions, including university regents, educational institutions, and financial analysts. Some proponents may argue that reducing the distribution limit from seven to six percent could potentially slow the funding growth necessary for universities to thrive in a competitive educational landscape. Critics, however, might see this as a necessary measure to protect the core fund from economic fluctuations that could endanger its longevity and sustainability in the face of rising educational costs and a growing student population.