State Appropriations
Base Year
The Base Year refers to the three semesters the state utilizes reported student credit hour (SCH) enrollment as the foundation for each general academic institution’s state appropriations for the next biennium as part of the state’s Formula Funding.
The Base Year starts with the summer semester in even calendar years. The university’s state appropriation for the FY2028-FY2029 biennium will be based on SCH enrollment from the Summer 2026, Fall 2026, and Spring 2027 semesters.
State Legislative Session
The state legislature’s regular session begins in January of odd calendar years and ends in May. During the legislative session, the legislature determines state appropriations to state agencies and institutions of higher education for the next two fiscal years.
For example, in 2027, the state appropriations for FY2028 and FY2029 should be finalized by the summer.
State Formula Funding and Non-Formula Funding
Funds are appropriated by the state, as determined by legislators, based on formulas, known as Formula Funding, or as a fixed allocation of state funds to an institution unassociated with a formula, known as Non-Formula Support funding.
Formula Funding for general academic institutions is primarily based on SCHs, state funding rate, course level and discipline weights, expenditures and predicted square feet for education and general (E&G) activities. The Instruction and Operation (I&O) Formula is the primary and largest portion of the formula which is appropriated to fund general university operations such as faculty salaries, department operating expenses, instructional administration, student services, research enhancement and institutional support.
Legislative Appropriations Request (LAR)
The Legislative Appropriations Request (LAR) is a state document required to be submitted by state agencies and institutions of higher education during even calendar years to the Office of the Governor, Budget and Policy Division and the Legislative Budget Board (LBB). The LAR requires institutions to report information on current state appropriations, actual and projected state tuition revenues, institutional costs, full-time equivalent (FTE) positions and spending by fund source and strategy as determined by the state.
As explained by the LBB, “An agency’s LAR connects the development of the agency’s strategic plan and the General Appropriations Act (GAA) by providing a fiscal expression of the agency’s priorities. This fiscal expression includes quantitative information, such as projected performance, projected cost(s), and methods of finance proposed for state services; and qualitative information related to narrative language that is integral to preparation of the GAA”.
The LAR allows institutions to request funding from the state for Non-Formula Support initiatives, known as Exceptional Items. The LAR also allows institutions to request funding for capital projects from revenue bonds, known as Capital Construction Assistance Projects (CCAPs). CCAP requests are generally used to acquire, purchase, construct, improve, renovate, enlarge, or equip property, buildings, structures, facilities, roads, or related infrastructure on or for the campus.
UHD’s LAR is submitted by the Budget Office in August and October of even calendar years, in preparation for the upcoming legislative session that starts in January of odd calendar years.
Legislature and UHD Budget Planning and Development
The UHD budget development timeline is based on whether it is a year state legislators will meet.
Whether it is a legislative year or not, the University Budget Advisory Committee’s (UBAC) first meeting of the budget planning and development cycle for the next fiscal year budget typically convenes in November. Subsequent meetings are convened, lasting through February or April.
In legislative years (old calendar years), UBAC meetings last through April, while the legislature’s regular session concludes in May. State agencies and institutions of higher education must wait for final state appropriation amounts for the next two fiscal years (biennium) to be communicated, which may occur in June, at the earliest. Since final state appropriation revenue amounts are unknown until the summer, revenue and expense budget adjustment data entry in Hyperion for the upcoming fiscal year occurs in May and lasts through June.
In legislative years, the University of Houston System Board of Regents considers budgets for the upcoming fiscal year in August.
In non-legislative years (even calendar years), UBAC meetings last through February. The university already knows the state appropriation amounts for the upcoming fiscal year since it was determined during last year’s legislative session. Revenue and expense budget adjustment data entry in Hyperion for the upcoming fiscal year occurs in the month of March.
In non-legislative years, the University of Houston System Board of Regents considers budgets for the upcoming fiscal year in May.