Wednesday, August 24, 2016

UT's Horizon Fund updates Board of Regents

"So teach us to number our days,
That we may gain a heart of wisdom."
Psalm 90:12

Sigmund Freud is rumored to have once said "sometimes a cigar is just a cigar."  We thought of that alleged quote during this morning's meeting of the UT Board of Regents' technology committee.  No matter how corrupt the other financial activities of the institution in question, sometimes an effort to commercialize research performed on university campuses is just an effort to commercialize research performed on a university campus.

The UT Horizon fund is a $50 million appropriation designed to provide seed funding to bring to market initiatives developed at UT System institutions.  We've documented their expenditures here.  As we explained last week, we also have a separate open records request related to the Horizon fund working it's way through the Attorney General process.

During this morning's update, Technology committee chairman Wallace Hall called the Horizon fund a "cost-effective" way to bring technological developments developed at system institutions to market.  It's actually not a crazy point to make.  If $100 to $200k of seed funding from the university can get a development away from the university bureaucrats and into the private sector, that's a small price to pay.

Here's the thing: This activity sounds an awful lot like having a governmental entity pick winners and losers.  In a way, it reminds us of Rick Perry's infamous Texas Enterprise Fund.  Obviously, that's not something one should support.

But here's the other thing: The difference with the Texas Enterprise Fund is that, technically, the money going in 'belongs' to the university, not the state.  If the university were to cease this activity, the university still gets to keep the money.  And we'd rather have them investing in something that could be useful than hiring a bunch of 'diversity' related bureaucrats.

Obviously, higher education funding is deeply messed up.  Equally obvious, the University of Texas system has too much money.  In the event that higher ed/UT funding undergoes deeper structural reforms, activities like the Horizon fund should be on the table.  Furthermore, the Horizon fund could be a piece of leverage to make the university negotiate in good faith over tuition next session.  But as long as the current system remains in place, there are far worse ways to spend the money.

Bottom Line: UT's endowment is somewhere around $25 billion.  The Horizon fund is a max of $50 million.  If the university wants to use one tenth of one percent of its resources in an attempt to accomplish something useful, we have bigger fish to fry.

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