Oil and education
The lingering bust should encourage a hard look at public universities.
How do you sell your national birthright?
If you’re the Deputy Crown Prince of Saudi Arabia, you do it through a stock offering.
The state-owned Saudi Aramco, the world’s largest oil producer and source of the royal family’s wealth, is planning a historic IPO. It is part of a plan by Prince Mohammed bin Salman to raise money for a sovereign wealth fund that will help diversify the kingdom’s economy away from oil in the wake of the petroleum price bust.
This project is unique in its size and scope, but the underlying idea isn’t new. For decades, Texas has relied on revenues from oil and gas leases to fill the coffers of the Permanent School Fund, which helps support primary and secondary public schools, and the Permanent University Fund, which helps support the University of Texas and Texas A&M systems.
It isn’t the sort of sweeping economic transformation that the Saudi prince is proposing, but our schools and universities do help train the doctors, engineers and businessmen who work in our state’s major industries outside of oil and gas.
A recent report by the Brookings Institution on fracking and permanent trust funds pointed to Texas as a model for other states to follow. It may seem counterintuitive, but oil-rich economies often suffer from a “resource curse” as extraction industries stunt the growth of higher-skill, high-tech fields. Our universities have worked to diversify the Texas economy and helped us weather the recent oil and gas downturn.
There’s no doubting the success of Texas’ higher education fund, but what happens when oil no longer pays the bills? Saudi Arabia is preparing for the biggest hedge against oil in modern economics.
The threat of a permanent oil slowdown scared Saudi Arabia’s leaders into radical reanalysis of their economy, and Texas needs to take a similarly unencumbered look at how we distribute our higher-education resources. Because right now, things don’t look good.
The University of Texas System is moving forward on a $450 million Houston campus without seeking approval from the Texas Higher Education Coordinating Board, which is supposed to, well, coordinate higher education. Meanwhile, Texas A&M is planning to spend about $70 million on new stadiums just after pouring $485 million into a Kyle Field renovation.
Texas has six different public university systems — University of Texas, Texas A&M, University of Houston, University of North Texas, Texas State and Texas Tech — in addition to four independent public universities and 50 different public community college districts.
These educational networks overlap in their geographic boundaries and institutional goals. Competition is great in the private sector, but pitting tax-funded institutions against each other threatens to waste limited public funds.
There is a sense in the Texas Capitol that our public universities need some important retooling, but so far the action has been limited to fights with the University of Texas Board of Regents, campus carry legislation and complaints about rising tuition.
Before spending time on the nitty gritty of running a university, our elected officials need to take a big-picture look. Otherwise, we risk selling out an education system that should be a birthright for every ambitious Texas student.