AUSTIN — University of Texas System regents pledged $10 million annually toward the development of the Rio Grande Valley’s long-sought medical school Thursday but left open the question of where to find the rest of the money.
UT’s commitment set the stage for Valley legislators to work on filling the financing gap for a medical school that could cost upward of $50 million to operate each year. While regents also laid groundwork for some of the school’s capital costs to be covered by the state’s Permanent University Fund, UT officials acknowledged that much work is ahead.
“The money that you’re proposing to consider for the medical school is crucial to moving that agenda forward,” Dr. Kenneth Shine, the University of Texas executive vice chancellor for health affairs, told regents Thursday. “In fact, we will still have a great deal of work to do for getting the final funding for the medical school.”
Valley officials have worked for decades to develop a medical school to combat the region’s physician shortage and address its healthcare disparities, including high rates of diabetes and obesity. But the push for a South Texas medical school has gained speed in recent months after Valley officials openly expressed displeasure with UT’s slow pace and flirted with Texas A&M University about its interest in expanding its presence here.
UT System Chancellor Francisco Cigarroa arrived in Edinburg in August to unveil a blueprint for graduating the first cohort of Valley medical students in 2018 by relying on medical school infrastructure already in place in the Valley and San Antonio. Thursday’s financial commitment from the regents builds upon the blueprint Cigarroa originally announced in August.
UT regents also authorized Cigarroa to establish a new South Texas university that includes the University of Texas-Brownsville, the University of Texas-Pan American and the future South Texas School of Medicine. The reorganization will make both universities and the medical school eligible for allocations from the Permanent University Fund, an endowment authorized by the Texas Constitution that is funded by mineral revenues.
In a move that generated tensions among Valley officials, the regents voted in May to provide a new medical school in Austin some $30 million annually from the Permanent University Fund, or PUF. It spurred discussions between Valley and Texas A&M officials over whether that university system was a better alternative.
While UT regents didn’t commit any PUF funds toward the Valley’s medical school Thursday, the reorganization at least makes it a future option. UT regents allocate PUF funding toward capital projects based on specific requests from individual institutions.
But UT regents did direct $100 million in legislative appropriations over the next decade toward transitioning the Regional Academic Health Center in Harlingen into a school of medicine. UT constructed the Regional Academic Health Centers, or RAHCs, in Harlingen and Edinburg during the early 2000s to focus on medical education and research, respectively, and serve as the base for the future medical school.
State Sen. Juan “Chuy” Hinojosa, D-McAllen, said Thursday’s announcement represents another step toward the medical school, but he added there are “unanswered questions” that remain.
“Right now, (the medical school) is more of a vision and concept,” Hinojosa said. “The next step is details of what it would look like.”
However, UT officials indicated they will soon take steps to develop the Valley’s medical school by partnering with the Health Science Center in San Antonio.
Under UT’s initial plan, the Valley’s medical students would be accepted through an independent admissions process, spend their first two years in San Antonio and then finish school at existing academic centers in Edinburg and Harlingen. The Valley’s stand-alone medical school would be phased in over a period of years as it goes through accreditation.
Shine, who oversees all of UT’s health campuses, told regents Thursday that the system’s $10 million annual appropriation will launch recruitment of a founding dean and additional faculty who can serve in San Antonio and the Valley. Work will also continue to secure commitments from Valley hospitals for up to 150 residency slots that could retain doctors after they finish medical school here.
But further development of the medical school will depend on additional funding.
UT officials hinted Thursday that administrative savings generated by the merger of UTB and UTPA could be directed toward the medical school. Scott Kelley, the system’s executive vice chancellor for business affairs, said conservative estimates peg savings from the merger at $6 million.
The rest of the medical school’s funding would come from additional legislative appropriations and, perhaps, the creation of a taxing district that could leverage federal funds.
UT officials might be tasked with finding at least $20 million a year in state appropriations for the medical school, a monumental challenge in a difficult economic climate with a large crop of legislators opposed to new spending. Hinojosa, the leading Democrat on the Senate’s budget-writing committee, has expressed doubts that such a large commitment from the Legislature is possible right now.
Another option is to develop a taxing district — similar to hospital districts in the state’s urban centers — that could raise funds for the effort.
State Sen. Eddie Lucio Jr., D-Brownsville, has floated a plan for a “medical education district” to add local revenues to the pot. Travis County voters agreed in November to a property tax increase to fund the Austin-based medical school now in development.
A similar taxing district in the Valley, though, would raise internal conflicts between Hidalgo and Cameron county officials about where its major components should be located. Although most of the tax base is in Hidalgo County, the medical school’s primary component would be located in Harlingen under UT’s plan.
McAllen, Edinburg and Mission plan to fund an economic strategy study to examine whether the medical school should be placed in Hidalgo or Cameron counties. McAllen Mayor Richard Cortez said he’ll support the effort to build a medical school in South Texas, but he said further studying its planned location would ensure it is best positioned for success.
The McAllen area has built out its hospital and medical infrastructure more than Harlingen and has a larger population base to draw upon, Cortez said. And if the medical school requires the financial support of taxpayers, he argued that it should go in the county with the bulk of the tax base.
Hidalgo County contains more than $30 billion in taxable property values, compared to $16 billion in Cameron County.
“If that’s the case, the numbers are in Hidalgo County, not Cameron County,” Cortez said. “So it seems to me that you would want to put a larger percentage of the school in Hidalgo County rather than Cameron County because that’s where the numbers are.”
Whether a taxing district will be needed remains to be seen.
Lucio has proposed filing legislation for the next legislative session to create the medical education district that would encompass Hidalgo and Cameron counties.
But a spokesman for Lucio’s office said Thursday that the senator was re-evaluating the need for the taxing district based on the regents’ financial commitment Thursday. UT officials have also assured other Valley officials that a taxing district is not required.
By including the medical school in the reorganization of the Valley’s higher education institutions, UT lowered the medical school’s cost and expedited its development, Lucio said. The $100 million commitment from the regents will advance its prospects, along with the possibility for funds from the Permanent University Fund.
“This infusion of funds for the future school of medicine not only proves UT System’s continued commitment to the people of South Texas but also paves the way for better access to crucial healthcare services,” said Lucio, who passed legislation in 2009 authorizing the creation of an independent medical school in South Texas.
Valley representatives who attended the regents meeting Thursday expressed optimism that South Texas is now closer to its dream of a medical school.
Edinburg Mayor Richard Garcia, who joined Harlingen Mayor Chris Boswell and others in Austin, said the “real work begins with the Legislature.”
“The medical school is a grand idea,” Garcia said. “The story yet to be told is about the funding.”
Jared Janes covers Hidalgo County government, Edinburg and legislative issues for The Monitor. He can be reached at email@example.com and (956) 683-4424.
Andrew Kreighbaum covers education and general assignments for The Monitor. He can be reached at Andrew@themonitor.com and (956) 683-4472.
Monitor staff writer Dave Hendricks contributed to this report.