Senate Bill 566 would allow The University of Texas System, Board of Regents (BoR) to establish a school of pharmacy at The University of Texas at Tyler (UTT). The BoR would provide for the operations and capital expenses of the school to be supported by gifts, grants, and other institutional funds. The school would not be eligible for formula funding for instruction, operations, or infrastructure as part of state appropriations.  The school would be eligible for funding from the Available University Fund and for General Revenue funding for special item support and tuition revenue bond debt service.
 
General Institutional Information and Related Degree Programs
 
UTT was founded in 1971 under the name Tyler State College and became a part of The University of Texas System in 1979.  It was originally an upper-division-only institution; in 1998 it was authorized to begin enrolling freshman, sophomore, and graduate students.
 
UTT’s current total enrollment is 6,875 students, consisting of 5,251 undergraduates and 1,624 graduate students.  Its Fiscal Year (FY) 2011 six-year graduation rate was 53.3 percent.  The university employs 388 faculty and its FY 2011 research expenditures were $2.7 million.  Its program inventory consists of 47 bachelor’s degrees, 41 master’s degrees, and 2 doctoral degrees. In FY 2012, UTT awarded 1,630 degrees, consisting of 1,144 bachelor’s, 469 master’s, and 16 doctoral. During the past three years of review, 11 of UTT’s programs failed to meet the productivity thresholds for low-producing programs.  None of these low-producing programs were in health-related or science disciplines that might directly contribute to a PharmD program.
 
The institution currently offers two doctoral degree programs. One is a health-related program, a Doctor of Philosophy (PhD) in Nursing, which is now in its fourth year of operation.  The other doctoral degree program is the PhD in Human Resource Development, which was approved in 2008, but did not officially begin until 2011. 
 
UTT has three degree programs on their program inventory that could directly contribute to a proposed PharmD degree program:  a bachelor and a master of science in biology, and a bachelor of science in chemistry.
 
Existing Pharmacy Schools 
 
Texas currently has seven institutions of higher education that offer the Doctor of Pharmacy degree (PharmD), the entry level credential for becoming a pharmacist:  Texas A&M University System Health Science Center in Kingsville; Texas Tech University Health Sciences Center in Amarillo with locations in Lubbock, Dallas, and Abilene;  Texas Southern University in Houston; University of Houston; University of the Incarnate Word (a private institution) in San Antonio; University of North Texas Health Science Center at Fort Worth; and The University of Texas at Austin with satellite campuses in the Rio Grande Valley, El Paso, and San Antonio.  In 2012, the six schools enrolled 2,757 PharmD students and awarded 681 PharmD degrees.
 
Need for a New Pharmacy School 
 
The establishment of a pharmacy school at UTT would provide students access to pharmacy education in the East Texas region, where currently no pharmacy school exists. 
The Texas Workforce Commission projects that Texas will need an additional 1,005 pharmacists for each year between 2010 and 2020.  Licensee data from the Texas Board of Pharmacy (TBOP) show that the state exceeded that number for FY 2012.  It reports that 1,594 new pharmacists were licensed, representing a net increase of 1,088 pharmacists for the year.  With that year’s total, TBOP calculates that the state has seen a 21.8 percent net increase in pharmacists since 2006.
That increase is due, in part, to a substantial increase in the number of the nation’s accredited pharmacy schools.  From 2006 to 2013, the number of schools increased from 85 to 132 schools with another 15 schools currently in some stage of pre-accreditation. 

In the last decade, Texas has been a net importer of pharmacists, a trend best reflected in statistics from TBOP’s 2012 data.  Of the new licensees for FY 2012, 672 (42.2 percent) were in-state graduates, 788 (49.4 percent) were out-of-state graduates, and 134 (8.4 percent) were foreign graduates. 

During this high growth period, Texas established three new pharmacy schools. Two are at public higher education institutions, Texas A&M University System Health Science Center at Kingsville and the University of North Texas Health Science Center at Fort Worth, while the third is at a private university, University of the Incarnate Word in San Antonio.  Of the three new schools, Texas A&M University System Health Science Center has produced graduates, but has not yet reached enrollment capacity.  It expects to begin expanding its class size from 87 to 125 students once the Texas A&M University consolidation is finalized.  The University of North Texas Health Science Center’s pharmacy school will enroll its first class of 80 students in fall 2013 and plans to increase to 100 students in 2014. 

The creation of a new pharmacy school may adversely affect the ability of the state’s pharmacy schools to maintain a sufficient number of clinical sites for their students.  The new University of North Texas Health Science Center’s pharmacy school may already have difficulty finding clinical sites in the Metroplex and surrounding areas.  UTT’s remote location could make it difficult for the school to obtain a full cadre of clinical experiences in the East Texas region. 

Among the more established schools, the University of Houston will increase its entering class size from 110 to 125 students in fall 2013 with plans to expand to 200 students, contingent on the construction of a new pharmacy school building.    

The Coordinating Board estimates that these expansion efforts alone are expected to produce graduates that will likely bring Texas closer to the Texas Workforce Commission projection without any reliance on importing out-of-state and foreign graduates, and with its history of attracting pharmacists from out of state, Texas would likely continue to exceed workforce projections for the profession without the establishment of a new school at UTT.

The UTT estimate of the need for additional pharmacists did not include new pharmacy licensees who came to Texas upon graduation from schools outside the state or practicing pharmacists who moved to Texas.

Regional shortages of pharmacists may exist, and traditionally shortages tend to be greater in rural and remote areas.  The Coordinating Board has not verified evidence that UTT provided that such shortages currently exist in the East Texas region. 

UTT Business Plan
 
UTT has developed a business plan for the proposed pharmacy school that is based on a model created by East Tennessee State University.  The Tennessee model proposes that the pharmacy school would be self-sustaining through tuition and donations and the school would not require state appropriations for operation.  The business plan also includes a partnership with the University of Texas Health Science Center at Tyler, which would lead the research efforts, while UTT would deliver the curriculum and manage the clinical rotations.  If the proposed school is approved by June 2013, UTT estimates that the first class of 100 students would matriculate in fall 2015.  The projected revenue from 100 students ($3.2 million) would allow the school to cover first year projected operating costs ($3.05 million).

Fiscal Analysis  
 
The bill prohibits formula funding at this time.  However, if the school was eligible for formula funds, it would first qualify for formula funding in the 2016-2017 biennium.  Based on the projected student headcounts in UTT’s business plan, UTT would receive $2.5 million in formula funding ($1 million in general revenue) for that two-year period.  The school is eligible under the bill for funding from the Available University Fund and General Revenue funding for special items and tuition revenue bond debt service.
 
Estimated annual tuition for the PharmD degree program would be approximately $32,098 per student (or $1,000 per semester credit hour at 32 hours per year). This is approximately $2,000 more per year than what is charged of students enrolled at the private University of the Incarnate Word, which is the only independent institution offering the PharmD degree in Texas.  The proposed resident tuition rate is almost double of that charged by The University of Texas at Austin, which has the highest PharmD tuition rate of the six public-supported state pharmacy schools.  The following table compares current tuition rates for the state’s PharmD programs:  

Comparison of Current Tuition at Texas Pharmacy Schools
Institution	Public or Independent	Average 2012-13 Resident Tuition
TAMUS Health Science Center	Public	$7,738.00
Texas Southern University	Public	$11,830.00
TTU Health Sciences Center	Public	$13,731.00
University of Houston	Public	$15,482.25
University of the Incarnate Word	Independent	$30,000.00
UNT Health Science Center at Fort Worth*	Public	$14,480.00
UT Austin	Public	$17,597.00
UT Tyler (proposed)	Public	$32,098.00

* Fees may offset differences in tuition rates.
* This program will begin in fall 2013.
Source: American Association of Colleges of Pharmacy.
 
Pharmacy School Building   
 
Based upon the Coordinating Board’s facilities inventory for fall 2012, UTT campus has 34 buildings with an average age of 16 and half years. Of the 34 buildings, 33 buildings are owned by UTT and one building is being leased. The UTT campus consists of 20 general purpose, six auxiliary, four physical plant, and four student housing buildings. The current UTT campus efficiency for its general purpose buildings is at 57 percent, suggesting an underutilization of approximately 25,000 net assignable square feet. The UTT Space Usage Efficiency (SUE) scores of 58 for classrooms and 92 for class laboratories with an overall score of 150 meet two of the three standards set forth by the Coordinating Board. 
 
The legislative appropriations request submitted by UTT requested an exceptional item for Tuition Revenue Bonds (TRBs) for a facility in Tyler. This request is for the construction of a Science, Technology, Engineering, and Mathematics (STEM) complex, including the renovation of the current business building. This request will provide 61,600 additional net assignable square feet to its current inventory, reducing the campus space deficit. The total project cost is estimated at $48.5 million and the TRB request is for $48.5 million. In the TRB submitted to the Coordinating Board, UTT noted that if the funds were not provided through the TRB, then the project would not be built.
 
UTT’s current underutilized campus space inventory with the addition of the requested TRB could  support the additional enrollment of the PharmD program. If the accreditation process requires a stand-alone facility for the program, the construction of a new 41,000 gross square foot facility with a total project cost of $17.5 million would be required. 
         
Statutory Considerations

The legal basis for UTT to set its own tuition, and thereby offset the lack of formula funding is likely related to Texas Education Code Section 54.545:  Fees for Continuing Education Courses, which states:

             Sec. 54.545.  FEES FOR CONTINUING EDUCATION COURSES.  (a)  The governing board of an institution of higher education shall charge a reasonable fee to each person registered in a continuing education course at the institution.  The board shall set the fee in an amount sufficient to permit the institution to recover the costs to the institution of providing the course.
             (b)  This section applies only to a course for which an institution does not collect tuition or receive formula funding, including an extension course, correspondence course, or other self-supporting course.
 
This Section has been used primarily by The University of Texas System institutions to set tuition rates for certain degree programs that provide access to extended education for post-baccalaureate, nontraditional students.  An example would be The University of Texas at Austin’s Executive MBA program, which is intended for experienced business managers who have already earned a degree and elect to take courses on weekends to enhance their business careers. 

The PharmD program would admit full-time traditional students who have completed a minimum of two years of lower division instruction and would be seeking the degree that is required for licensure to become a pharmacist.