Members of the Higher Education Coordinating Board formula advisory committee discussed possible changes to how the Higher Education Investment Fund (HEIF) is allocated, focusing on inflation assumptions, research‑expenditure growth and proposals to expand a small‑institution supplement.

At a meeting that included a staff briefing, Emily Geirdorf, leader of the committee’s Charges 1–3 work group, said the group is testing multiple funding scenarios and different inflation assumptions, including replacing an initial 9.5% estimate with a more conservative HEPI three‑year rolling average. “We met last week to talk over the funding high level funding recommendations,” Geirdorf said, summarizing the group’s review of inflation, research spending assumptions and the small‑institution supplement proposal.

The changes under consideration matter because HEIF is a major funding source for deferred maintenance and capital needs at institutions that do not receive the Available University Fund. Andy McLaurin, coordinating‑board staff, briefed the committee on last year’s HEIF study and the fund’s statutory context, noting that the Texas Constitution requires the legislature to review HEIF funding and allocation every 10 years and that the legislature may adjust allocations in the fifth year of that cycle.

Geirdorf said the work group is examining three main topics: how to determine an inflation adjustment (moving from a 9.5% figure toward a HEPI‑based three‑year rolling average used in the prior biennium), how to model research‑expenditure growth given uncertainty in federal research funding, and whether to change the small‑institution supplement. On the supplement, the group is considering raising the maximum payment to $5,000,000, expanding the population that receives the full amount from institutions with up to 5,000 students to those with up to 10,000 students, and extending the phase‑out run‑way to 20,000 students. Geirdorf said the group will circulate firmer recommendations for committee review when available.

McLaurin summarized key findings from the HEIF (also referred to in committee materials as HEAF/HEIF) study: total deferred‑maintenance needs at HEIF institutions rose about 112% from 2018 to 2023; HEIF appropriations have not kept pace with construction inflation; HEIF expenditures account for roughly half of institutional spending on deferred maintenance; and the coordinating board previously recommended doubling annual HEIF appropriations, while the legislature provided a 50% increase in the most recent session. “The facility supplement provides up to $2,000,000 for each institution with less than a 5,000 student head count,” McLaurin said, adding there is a proportional phase‑out from 5,000 to 20,000 students.

McLaurin also noted a limitation the study group encountered: the current methodology does not account for the effective age of buildings because the coordinating board’s data include original occupancy dates but not consistent, systemwide records of renovations or building condition. The study group considered a factor to weight facilities by effective age but declined to adopt it without consistent renovation/condition data; the group recommended exploring data collection options and revisiting methodology in the future.

Committee members asked for additional materials to analyze the scenarios. The coordinating‑board staff agreed to share the underlying distribution spreadsheet and follow up with the committee. The group set its next meeting for Thursday, Oct. 30, at 1:00 p.m., with a virtual option.

Votes at the meeting were procedural: the committee approved the Sept. 5 meeting minutes and later approved a motion to adjourn. Individual roll‑call vote names were not recorded in the transcript; both motions carried on voice vote.