At TCU, faced with a $100 million loss from its endowment, officials are asking departments to trim 8 to 10 percent of their budgets for next school year and are imposing a hiring freeze.
"You would have to be under a rock not to know that times are difficult," said Jim Hille, TCU's chief investment officer. "We will try to maintain the momentum of the university."
SMU is just starting work on its 2009-10 budget, but officials said departments would be asked to hold spending at this year's level and to prepare for undetermined campuswide spending cuts. A letter from president R. Gerald Turner in November mentioned endowment losses but expressed confidence SMU would meet the goals of its recently announced $750 million capital campaign.
The letter did say though that SMU expects "budgetary challenges" as it copes with the endowment drop and recession.
Among schools surveyed by The News, the University of North Texas took the hardest endowment hit with a drop in value of more than 25 percent. UNT officials have a preliminary plan that, if approved, would create a sliding scale for reducing payouts from the endowment to protect its core worth.
UNT has the newest and smallest endowment among the schools surveyed. The endowment, which provides less than one half of 1 percent of the university's operating funds, mainly pays for scholarships.
"Scholarships will see a lower payout," said Andrew Harris, UNT's vice president for finance. He said the university would try to make up the difference by reallocating money and by appealing to the Legislature.
The University of Texas at Austin, Texas A&M University at College Station and Texas Tech University are also hoping for help from lawmakers. Officials there said they are asking for more money to help offset endowment losses.
Help from the Legislature though isn't likely, said Sen. Judith Zaffirini, chair of the Subcommittee on Higher Education. The Democrat from Laredo said state leaders have asked for 10 percent spending cuts from state agencies and that other senators are more focused on such higher education issues as changes to the "top 10 percent rule."
"But that's not going to stop us from trying," Zaffirini said.
Officials at public universities said endowment spending wouldn't be seriously affected, at least not immediately, because payouts are based on averages of the endowment's value over a few years. These averages absorb short-term gains or losses, allowing schools to rely on a fairly stable level of spending unless the drop continues for a prolonged period.
Texas A&M-College Station is in the early stages of identifying potential cuts, with officials asking departments to prioritize projects in case requested state funding comes up short. Officials at UT-Austin and Texas Tech indicated that budgets will probably be tighter than in previous years but haven't asked departments to make cuts.
UT-Austin president Bill Powers e-mailed a letter saying the school is trying to be fiscally responsible by participating in purchasing cooperatives on everything from office supplies to health care. Like SMU, UT decided to proceed with a major capital campaign -- $3 billion in UT-Austin's case.
"We don't want to suggest that the sky is falling. We've managed well through it already, and our size works to our advantage," said Kevin Hegarty, the UT-Austin chief financial officer.
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