Texas community colleges mull tax hikes to make up for vetoed funding

Community college officials said they will have to consider property tax increases, tuition hikes and educational program cuts to compensate for $154 million in funds vetoed by Gov. Rick Perry.

The college officials made their case for restoring the funding at a hearing of the Senate Higher Education Subcommittee Tuesday. Perry aides said the governor supports more funding for the colleges, but testimony showed that providing the funds could be complicated.

Sen. Judith Zaffirini, D-Laredo, who heads the panel, said she is optimistic a fix can be found, though she said, "We're far, far away from a solution."

In June, Perry vetoed the funding, which was meant to cover health insurance costs for community college employees, because he and college leaders disagree how the costs should be split between the state and local taxpayers and students.

Perry has said that lawmakers put provisions into the budget forbidding use of state money for benefits of employees whose salaries are paid with local money.

College officials have argued that the proposal was a fair request and that the state hasn't met its funding obligations for community colleges systems.

To deal with the veto, Austin Community College already has increased student fees by $2 and cut $2.9 million from its budget.

Dr. Wright Lassiter, chancellor of the Dallas County Community College District, said the cut will cost his district's budget $15.7 million, or 5 percent.

To address the problem, Perry's aides proposed adding $200 million or more for community colleges. They said $92 million should be spent on health insurance, and the rest for performance incentives, technology grants or other programs.

They said the plan is still under development, but the funds should be initiated by next month to prevent colleges from having to cut programs or raise taxes and fees.

Legislative Budget Board staff members said a change in budget rules means the vetoed money is off limits until January 2009. They said lawmakers would have to shift money from some another agency to pay for college employees' health insurance, and then repay the affected agency through a supplemental budget bill.

Sen. John Whitmire, a Houston Democrat who supports restoring all of the money, said state leaders face a "real impediment."

"We've got a hell of a problem," he said.

- Associated Press