Property taxes for UT med school... Why? (real estate, how much)

[steve78757]

Originally Posted by TexasVines

UT Austin is not even being close to being one of the richest universities on the planet

1. a large portion of the money generated by PUF funds under management of UTIMCO endowment go to other system universities and medical schools

2. another large portion of of the endowment dollars listed as "UT Endowment" dollars (PUF funds and private dollars are listed together as total endowment) are actually privately raised dollars for universities and medical schools in the UT System that are not UT Austin and the payouts from those private dollars do not benefit UT Austin at all....they are for UTSW, UTD, MD Anderson and on and on, but they are often listed as and assumed to be UT Austin dollars

3. (and most important) in the State of Texas universities and medical schools are funded using formula funding the universities have 2 formulas and the medical schools have 2 formulas that are very similar, but slightly different because running a medical school is not quite the same as a full university......all of the formulas are based in some part on enrollment.....one formula is for basically covering the cost of faculty, staff and administrators and the second one it to cover the cost of buildings, classroom and lab space.....in addition to enrollment the formulas take into account types of degrees offered (STEM, Arts, Liberal Arts ect) and also graduate enrollment VS undergrad enrollment.......the formula for classroom and lab space takes into account those same factors along with utilization efficiency of the classrooms and labs relative to the typed of degrees offered and the graduate and undergrad enrollment

the PUF (the money managed by UTIMCO that is "state" money VS privately raised money) covers the formula infrastructure cost for the PUF participating universities and medical schools in Texas......so non-PUF participating universities in Texas (which includes some universities in the UT System) have their formula infrastructure funding covered by general state appropriations along with their formula funding for faculty and staff

the PUF participating universities have their formula funding for faculty and staff covered by general state appropriations, but their formula funding for infrastructure comes from the proceeds of the PUF investments instead of general state revenues......the exact same formulas are used for all PUF and non-PUF universities for both faculty and staff formula funding and formula infrastructure funding the only difference is the sources of money for formula infrastructure funding between PUF and non-PUF participating universities (general state appropriations VS PUF investment revenues)

the PUF investments pay out 5% of a 3 year rolling average of the total dollars and first the formula infrastructure funding needs are met for all of the PUF participating universities and medical schools and after those are met the remaining money is sent to UT Austin for "excellence" ("excellence" has very defined uses for what that money can be spent on)

the same is true for the TAMU System universities the difference is "excellence" funds are sent to TAMU College Station and to PVAMU

so if one is looking at endowment listings on the NACUBO website and they see "UT System" listed with 18,263,850,000 dollars and TAMU System and Foundations with 7,638,555,000.....or if one looks at the UTIMCO website and sees 24 million dollars under management many people just assume that 100% of the proceeds of that money goes to Austin or that Austin gets first dibs on that or that Austin and College Station get first dibs on that

but the reality is a large portion of that money especially in the case of the UT System is private endowment dollars for UTSW MD Anderson, UTHSC-SA, UTMB-Galveston, UTD, UTEP and on and on and UT Austin has no rights to or claim to any of that money

and the part that is "state" money (the actual PUF funds) are endowment dollars that the proceeds of serve to take the place of general state appropriations for the formula infrastructure portion of the state funding for PUF participating universities and medical schools and it also covers system operations for the UT and TAMU Systems

if one is looking at the NACUBO yearly endowment study with the UT and TAMU System figures listed above a large portion of the TAMU System 7+ billion would actually be the representative of the TAMU System portion of the PUF the rest would be private dollars managed by the TAMU System Foundation

if one was looking at the total UTIMCO managed assets it would include that same TAMU System portion of the PUF, but it would not include the TAMU System Foundation privately managed dollars

the PUF pays out the 5% 3 year rolling average into the AUF (Available University Fund) and that is what is spent each year.....after the formula infrastructure funding of all the PUF participating universities (most, but not all of the TAMU and UT System schools and medical schools and TAMU Statutory State Agencies) and the UT and TAMU system operations are covered the remainder is split 2/3 UT Austin and 1/3 TAMU College Station and PVAMU for "excellence" (again with "excellence" having a number of restrictions on what it can be spent on)

so for the most part a very large portion of PUF proceeds paid into the AUF are basically dollars that are replacing general revenue formula funding for the PUF participating universities

so then if one looks at the NACUMO endowment listings and right down the list is Cal Berkeley, Michigan, Virginia (other state universities) one might think "wow UT and TAMU are so much more rich than they are", but the difference is the endowment dollars listed for those schools and other state schools on down the list are totally private endowment dollars and they are not "endowment" dollars that take the place of state funding......those schools like Michigan and Berkeley and UVA get state funding that is equal to or greater than UT and TAMU on a per student basis and then they also have those large private endowments as well while UT and TAMU showing those even larger "endowments" are actually showing money that takes the place of state funding in one formula and would be counted as "state funding" when used in a side by side comparison of "total state funding" between peer public universities and actually the remainder of the AUF for "excellence" would be counted also as state funding in a peer to peer comparison

so to really compare how "rich" UT Austin is one needs to look past the "endowment" dollar listings and the total UTIMCO managed assets and they need to instead strip those dollars out and look at the privately raised portion of the UTIMCO managed assets to compare true "endowments" between universities and they also need to look at where UT Austin and TAMU College Station compare to peer state funded universities and in the case of Cal Berkeley (and all UC System Schools) and UVA I am pretty positive that UT Austin and TAMU College Station get less total state appropriations per student that those schools and most likely less than Michigan, Wisconsin, Minnesota, Ohio State and many of the other very highly ranked public universities even when you include "excellence" funds as well as the formula funds

4. the reason the tax payers in the Travis county area are paying for the medical school is they voted to do so and they voted to do so because they want a hospital district that is more capable of providing indigent care and one that has a medical school to train doctors while doing so and because they want the economic benefits that come from having a major research medical center in the Travis County area and the jobs, spinoffs and dollars spent from private, state and federal grants and research funding as well

TexasVines, thank you for a very informative post. I now have a greater appreciation and understanding of how the endowment works. But that does not change the fact that, relatively speaking, The University of Texas has incredible wealth and could have started a medical school without the Travis County tax payer. It may have been more modest, but they were capable of making it happen. They saw the federal matching dollars that were available and wanted in on the action. The only issue in question here is the scale of the project.

Also, regarding your 4th point. Many people who voted against it wanted those same things, yet believed there was another way to make it happen.

[austin-steve]

Originally Posted by mm57553

You need to address this question to all the people who voted in favor of it. I wasn't one of them.

People here tend to believe everything their local politicians tell them and vote for every bond proposal put on the ballot.

Well, not EVERY proposal. Some just lost. The Affordable housing stuff. Two of the school bonds. The competing proposal to the 10-1 City Council redistricting.

Use to be that rail would get defeated every time too. But they kept plugging away.

[GreenPlastic]

You must be rich. j/k

By the way, I voted against it. But I had many friends give me a guilt trip about this vote, using the logic in my original post. The business stimulus argument was used to, and I absolutely agree that we will get more jobs, etc., but the individual cost to me just was not worth it.

Also, Seton is having money issues right now. If down the road, the new medical school is having financial issues, I'm pretty sure they won't be shy to try to jack the central health tax up some more to cover the shortfall. City of Austin taxpayers are a rainy day fund for them now.

Originally Posted by mimimomx3

I don't see those more fortunate than me paying for my healthcare....

[steve78757]

Originally Posted by GreenPlastic

Also, Seton is having money issues right now. If down the road, the new medical school is having financial issues, I'm pretty sure they won't be shy to try to jack the central health tax up some more to cover the shortfall. City of Austin taxpayers are a rainy day fund for them now.

That's scary. Or as Mack brown would say, that scares me to death.

[Austin97]

I laughed when the central health district was chartered to be able to raise taxes to .25 but were starting them at something lower (maybe .11?). How long did it take them to max it out and ask for more?

[mimimomx3]

Originally Posted by GreenPlastic

You must be rich. j/k

By the way, I voted against it. But I had many friends give me a guilt trip about this vote, using the logic in my original post. The business stimulus argument was used to, and I absolutely agree that we will get more jobs, etc., but the individual cost to me just was not worth it.

Also, Seton is having money issues right now. If down the road, the new medical school is having financial issues, I'm pretty sure they won't be shy to try to jack the central health tax up some more to cover the shortfall. City of Austin taxpayers are a rainy day fund for them now.

I did not vote for the med school, nor did I vote for the healthcare district (or whatever it's called now). I'm not sure how to define rich. But even if I were, there's always someone richer....why don't they pay for MY healthcare???

[mimimomx3]

Originally Posted by Austin97

I laughed when the central health district was chartered to be able to raise taxes to .25 but were starting them at something lower (maybe .11?). How long did it take them to max it out and ask for more?

Bend over....

[philopower]

Ahahahahaha im a ut student who voted for it and i dont even pay property taxes, eat it libertarians

[mimimomx3]

Originally Posted by philopower

Ahahahahaha im a ut student who voted for it and i dont even pay property taxes, eat it libertarians

Do you pay rent? I mean, do your parents pay rent? Then guess, what? You (or your parents) DO pay property taxes!

[Idlewile]

Originally Posted by mimimomx3

Do you pay rent? I mean, do your parents pay rent? Then guess, what? You (or your parents) DO pay property taxes!

Exactly. Why do some renters need this explained to them?

That's okay. He's a philosophy major.