The most-discussed subject at last week’s House Higher Education Committee hearing never made it onto the agenda.
Public commenters came to talk about Senate Bill 37 — the 2025 law that expanded regents’ authority over curriculum and hiring at Texas public universities. It was the top topic in public testimony, according to Rep. Vince Perez, who sits on the committee. It was also outside the interim charges Speaker Dustin Burrows assigned, which direct the committee toward affordability, research security, foreign-adversary influence, and how well universities align degrees and research with workforce and national security needs.
“It’s still really fresh and still really raw,” Perez says of the testimony that didn’t happen. “But it’s not part of the interim charge, so it’s not being discussed.”
What the committee did spend its morning on was a different kind of state control — the kind exercised through a funding formula. Taken together, the two subjects describe the same shift, according to Perez: over the past three sessions, Texas has taken firmer command of both what its colleges teach and how they are paid. Perez, a freshman legislator who spent two terms as an El Paso County commissioner overseeing roughly $1.4 billion in combined county and hospital district budgets before winning House District 77 in 2024, argues the state has been more comfortable claiming the authority than accepting the obligations that come with it.
The deal the state made — and the bill that came due
In 2023, lawmakers rewrote community college finance with House Bill 8, shifting the bulk of state formula funding away from enrollment and toward outcomes: credentials with labor-market value, transfers, and dual credit. The Legislature paired it with roughly $680 million in new money. It is widely regarded as one of the most successful higher education reforms in recent Texas history, and Perez does not dispute that.
“There’s been a lot of positive changes to the way that we fund community colleges,” he says. “They did so good that the state ran out of money.”
That is essentially what happened. Colleges across the state beat the outcome projections lawmakers had budgeted against, and the appropriation did not stretch far enough to pay the awards the formula had promised. Because Texas community colleges set budgets and tax rates in advance against expected state revenue, the shortfall landed after the fact.
Then came the part Perez objects to most. Rather than simply absorbing the overrun, the Texas Higher Education Coordinating Board adjusted the formula — reducing the weights attached to outcomes for academically disadvantaged students, economically disadvantaged students and adult learners. Those weights were the mechanism by which HB 8 rewarded colleges for moving the hardest-to-serve students across the finish line.
“That was who the bill was designed to help,” Perez says, describing a reduction of roughly 20 percent in funding tied to those students.
The dollar figures are not abstract. The Alamo Colleges District projects a $3.9 million decrease in state funding for fiscal 2027. Amarillo College estimates it will receive nearly 12 percent — about $2.29 million — less in outcomes-based funding than the prior year. There are about 50 community college districts in Texas, and most were counting on money that did not arrive.
Perez walks through the arithmetic as a former county budget writer would. A college builds a $50 million budget expecting $20 million from the state, sets its tax rate accordingly, and then learns late in the cycle that the state number is short by several million. “The college, which already passed their budget, already set their tax rate, now has a shortfall,” he says.
That leads to the consequence with the widest reach, and the one least discussed in higher education circles: Texas community colleges are taxing entities, appearing as a line on local property tax bills. A state shortfall does not vanish. It migrates. “It’s going to result in a property tax increase, at least in my community, to make up that difference,” Perez says.
The pressure is compounded by a second state decision. Undergraduate tuition and fees at Texas public institutions have been frozen since 2023, a freeze Gov. Greg Abbott has extended through the 2026-27 academic year. Perez, who dates the freeze to the pandemic era, describes institutions “stuck frozen in time” while their costs moved with everything else in the economy. The state has partially offset it — roughly $700 million accompanied the initial freeze, and lawmakers added $328 million in financial aid in the 2025 budget cycle — but the freeze removes the lever colleges would otherwise pull when a formula underdelivers, leaving property taxes as the remaining option.
The committee spent hours on the question of whether to make the colleges whole. “The colleges incurred this expense. They met their end of the deal. We should at least make them whole,” Perez says. Rep. Donna Howard, the committee’s vice chair, made a nearly identical argument in a separate interview: honor the commitment first, revisit the formula afterward.
The other kind of control
The second thread runs through content rather than dollars, and here the disagreement is genuine rather than procedural.
SB 37, authored by then-Sen. Brandon Creighton, reasserted governing boards’ authority over general education curriculum, required periodic review of course offerings and degree programs, made faculty senates advisory, and created an ombudsman’s office at the Coordinating Board. Its rationale was that public universities owe students and employers degrees with demonstrable market value, and that elected officials’ appointees — not faculty bodies — bear ultimate accountability for delivering them.
The law’s author is now on the receiving end of it. Creighton left the Senate to become chancellor of the Texas Tech University System in November, and his campuses reviewed some 14,000 courses under the statute. Less than 1 percent were changed or modified, he has said, calling the process a potential national model and describing revisions ranging from math curricula recalibrated to oil and gas industry expectations to low-enrollment courses weighed against the cost of the faculty assigned to them.
Perez sees the same statute and forecasts a different outcome. His concern is less about any single course than about precedent and trajectory.
“We have a situation where state government is meddling more in the classrooms in terms of what’s being taught and what can’t be taught,” he says. “I don’t think that’s a good thing.”
He grounds the objection in his own education. Perez attended a private Catholic university outside Texas, and argues the value of the courses he took — including women’s studies and courses on race — was not their subject matter but the intellectual friction they created. “It didn’t indoctrinate me, as a lot of people would probably say,” he says. “Ultimately, colleges are designed to teach you to think. It doesn’t matter what you major in, as long as you know how to think critically.”
His worry is competitive rather than ideological, at least as he frames it: that graduates of national universities operating without state curricular direction will arrive in the job market with a breadth of perspective Texas graduates lack. In a state where roughly 60 percent of residents are Hispanic, Black or Asian, he argues that breadth has practical value — including for legislators reading data and writing policy.
“I’m concerned that in certain areas, Texas students are going to be at a disadvantage,” he says. Then, notably: “Ultimately, that’s what all these laws are designed to do, is to position Texas for the future. And I hope we’re right.”
Supporters of SB 37 would answer that academic freedom has never meant freedom from public accountability at institutions the public funds, that regents appointed by elected officials are the constitutional mechanism for that accountability, and that a review touching under 1 percent of courses is a modest exercise of it. Perez’s rejoinder is about direction of travel rather than the current mile marker: once the state establishes that it may decide what belongs in a curriculum, the list of what does not belong is set by whoever holds the majority next.
What both threads are actually about
The connective tissue is the workforce question the committee was chartered to examine, and on which both sides largely agree.
Texas faces a projected shortage of more than 10,000 physicians by 2030, alongside persistent gaps in nursing, advanced manufacturing and skilled trades. Perez adds a newer wrinkle: artificial intelligence is absorbing precisely the entry-level work that once served as the on-ramp for graduates. “A lot of the entry-level jobs — the kind of jobs that you and I probably had getting out of college — it’s changing,” he says. “A lot of this is now being taken over by AI.”
That is why the committee’s second day featured a senior Army Futures Command officer — the service’s modernization command, headquartered in Austin — alongside public university presidents including UTEP’s Heather Wilson, a former Secretary of the Air Force. The charge directs the committee to examine how Texas institutions can contribute to national security and high-technology research, and how research funding reaches students.
Perez represents the place where those stakes are concrete. House District 77 sits inside the El Paso-Juárez region, which he calls the largest binational metropolitan area in the world, and which — combined with southern New Mexico and Ciudad Juárez’s 1.5 million residents — exceeds the Austin metro in population. It is home to UTEP, a Texas Tech campus, and one of the state’s larger community college districts, in a community whose commercial tax base cannot match Austin’s.
That vantage informs both halves of his critique. A funding formula that trims the weights for economically disadvantaged students falls hardest on institutions serving communities like his. And a curriculum policy set in Austin applies uniformly to campuses whose students, he argues, need the widest possible frame of reference to compete.
If there is a thread connecting the money and the coursework, it is the one Perez keeps returning to: the state has claimed more authority over its colleges on both fronts, and the open question heading into January is what it intends to supply in exchange.
He is, for what it is worth, unsentimental about who gets to decide. “Your legislators don’t have some special credential that allows them to do this,” he says. “The only requirements to be a state representative are to be 18 years old, a registered voter and a citizen. Anybody can do this.”