Fast Start

The 2015 Legislative Session got off to an accelerated start! We’ve hardly had time to respond to usual business with the massive number of meetings and hearings that abound.

So what is different this time?

For starters, we have a whole new team in Austin. All executive leadership has changed from Governor to Land Commissioner. And over half of the legislators (House and Senate) have served less than two terms in their districts. The Speaker of the House, Joe Straus, is the only person to return to his “old job” and that was with a recorded landmark vote of House members, only 19 of whom were opposed. Straus set a rigorous pace by naming committees and chairs in record time, and by shuffling up the leadership roles and distributing the talent around the table.

In the Senate, newly elected Lt. Governor (and President of the Texas Senate) Dan Patrick likewise, named his committees quickly, with Senator Jane Nelson continuing to chair the powerful Senate Finance Committee and Senator Charles Schwertner assuming the role of chair of the very important Health & Human Services Committee.

UTMB’s legislative agenda remains unchanged from this past fall when we provided testimony before the House, Senate and Legislative Budget Board. UTMB’s top priorities remain:

1. Growth in formula funding to support our educational programs for students, necessary university infrastructure for that purpose, and research critical to solving the health problems of the state and nation. All state universities share this same agenda item since the Legislature in 2001 reduced the allocation for formula funding (the amount that the state provides toward student education at public universities) and then went on to deregulate tuition in 2003. Of course, with fewer funds from the state, universities’ only option to cover increased educational costs has been to increase tuition. Increasing formula funding should offer students some future relief from tuition increases.

2. UTMB has grown its student population by 42.4 percent since 2006. In fact, UTMB is ranked the fourth fastest growing university in the US in a survey published this week. With that growth (up from 2,600 when Hurricane Ike flooded its way through our campus to over 3,200 with this year’s fall enrollment), UTMB needs more space for student study groups, lectures, laboratories, and related activities. UTMB leadership’s answer has been to construct a new multipurpose, interprofessional education building on the west end of the Galveston campus. Without that investment, UTMB will not be able to continue to expand its enrollment to address future health care workforce needs of Texas. UTMB is asking the state for a Tuition Revenue Bond or other funding mechanism to provide $67.8 million toward that new facility; the remainder of the proposed $90 million building would come from philanthropy and university financing.

3. UTMB’s renovations and new buildings that have emerged from the wake of Hurricane Ike are now coming on-line, and with that comes the depreciation expense of those buildings in our budget. UTMB needs additional funds in its Health System budget to cover those expenses. Both UT MD Anderson and UTHealth Northeast (Tyler) have “formulas” that drive biennial increases in their hospital budgets. In the past UTMB has sought similar treatment from the Legislature but without success. UTMB is asking the Legislature to treat UTMB with equity regarding the base hospital increases received by other UT System hospitals.

4. All Health Related Institutions have asked for “special item” appropriations to fund university improvement projects and/or research deemed vital to the overall success of the university that also benefits the state and nation. UTMB has asked for three critical areas of support:

Combating Texas’ Emerging Infections ($8.55 million over two years)

i. Expands UTMB’s expertise in combating emerging infections by fostering collaboration with other Texas research institutions
ii. Focuses on the development of artificial organs and tissues that mimic human organs to facilitate the testing of drugs and vaccines
iii. Builds on the substantial federal and state investment in UTMB’s Galveston National Laboratory

Trans-Texas Vaccine Institute ($8 million over two years)

i. Creates a multi-agency institute to support collaborative projects that expedite the development and production of needed vaccines
ii. Builds on the success of UTMB’s interdisciplinary Sealy Center for Vaccine Development, and maximizes impact of expertise found through Texas’ higher education community
iii. Bolsters UTMB’s recent designation as a World Health Organization recognized vaccine center, and helps propel Texas to the forefront of vaccine development in the nation

Regenerative Medicine Matching Grant ($6 million over two years)

i. Provides two years of funding to leverage the recent four-year, $3 million per year Moody Foundation grant focused on reversing trauma induced alterations in the brain and spinal cord
ii. Supports multidisciplinary projects to create agents capable of reversing trauma induced alterations of the brain and spinal cord

Governor Greg Abbott delivered his first “State of the State” address to a combined session of the Texas House and Texas Senate and received an enthusiastic welcome from members of both chambers. Abbott stressed the importance of Texas charting an aggressive course for the future, outlined his budget priorities and listed five items that he placed on his “emergency agenda” – early education, higher education research initiatives, border security funding, transportation funding and ethics reforms.  That agenda simply means that the Legislature is asked by the Governor to make those items a priority for early action during the session.

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The End is…..Near?

Midnight Monday, May 25, 2013, was supposed to herald the end of the 83rd Legislative Session. Some described the whole session as a very long Seinfeld episode—much talk, little action. But in the waning days, it is readily apparent that this has been one of the most productive sessions, with less conflict among members, in recent memory. The litany of potentially divisive issues from past years was absent, so members were able to build trust and rapport with each other over issues of mutual concern, like public education, water availability, transportation, higher education, public safety and the state’s economy.

In addition, the large number of “freshmen” legislators proved to be an asset with their new ideas and open, innovative minds focused on problem solving. The House even instituted a “purple tie” day each Thursday to reminded Republicans (red) and Democrats (blue) that together (red + blue = purple) they worked for common outcomes for the benefit of Texans.

For UTMB, the session was not without its ups and downs since the university is subject to a multitude of funding articles in the budget and impacted by no small number of regulatory changes and Health and Human Services budgetary changes. Even Public Safety in Article V impacts UTMB since it deals with the state’s prison system. As is always the case, the real financial impact often cannot be seen until the dust settles and the effects of the myriad individual funding changes have been analyzed.  But for now, our results fall into the following general patterns related to our legislative appropriation requests:

  1. UTMB asked for growth in formula funding to support the education of our health professions workforce, to provide necessary infrastructure and to build our research infrastructure. Formula funding for the next biennium will increase by approximately $24.5 million. Overall, Chairman John Otto and others of the House Appropriations subcommittee on higher education elected to put more money into formulas to be used at the discretion of the university than to fund special projects and exceptional items as in times past.
  2. UTMB asked for a continuation of the 2012-2013 funding levels for the UTMB Hospital and Health System and for the creation of a Hospital Formula to protect us from drastic General Revenue reductions like we experienced in the last session. The House Appropriations Committee (HAC) was not inclined to create a hospital formula for UTMB at this time, even though both UT Health Science Center at Tyler and UT MD Anderson Cancer Center both have mission-based formulas. Instead, the higher education subcommittee of HAC decided to perform an interim study on that subject and take a look at all higher education and health-related education funding formulas to ensure equity among institutions. The Legislature did respond favorably to our request for an addition to our hospital base by adding $10 million for the biennium since no formula was forthcoming.
  3. Although UTMB and other Health Related Institutions requested exceptional item funding for specific research projects, the House Appropriations Committee elected to forgo those appropriations and fund formulas instead.
  4. At the close of the session, the Tuition Revenue Bond (TRB) bill was caught up in last-minute conference committee deliberations and failed to pass out of the Legislature. This will be placed on the agenda for the special session; UTMB has a $40 million request for funding of a new educational building on the Galveston UTMB campus; the request has been approved by both the House and Senate, but it has not released from conference. That means a new bill will have to find its way through the special session for this purpose. We already know that the bill filed for the special session will lower all TRB requests by 15 percent, reducing our $40 million request to $34 million. But our legislative delegation will work to achieve maximum funding, consistent with what other institutions receive.
  5. Correctional health care funding was an issue of great controversy in prior sessions. However, in the 83rd session under the new contractual arrangement with TDCJ, UTMB has been paid monthly for its provision of health care services by TDCJ so there was no need for a Supplemental Appropriations Request. Instead, the Legislature was able to focus fully on the current and future needs of the correctional health care delivery system. In the end, they agreed upon the following appropriation of $61.7 million for correctional health care funding for the 2014-15 biennium:

Total Appropriation UTMB Portion*
Adjustment to Base $30.6M $27M
Salary Adjustment $16M $12.4M
Capital $54M $4.9M
Restore Staffing $9.7M $3.8M

*Remaining portion goes to Texas Tech University.

There is a host of other changes that we will discuss, but of major importance is UTMB’s continued growth in resources to finance its health care operations, research and educational programs, and community benefits programs. Looking back over the past four sessions, we see the following pattern:

Biennium Appropriation Amount
2008-2009 $457.7M
2010-2011 $566.6M1
2012-2013 $474.2M2
2014-2015 $506M3

  1. Base adjustment after Hurricane Ike; does not include $150 million in Ike matching dollars or $150 million TRB for construction of new Jennie Sealy Hospital.
  2. Reduction of 16.65 % from prior biennium mostly in GR funding reflecting large state GR reductions in higher education; not inclusive of extension of $150 million Ike match
  3. Does not include $11.4 million increase in benefits or potential TRB for educational building.

The state budget is a composite of Senate Bill 1, House Bill (HB) 1025, HB 6, HB 7 and Senate Joint Resolution (SJR) 1—and a lot of sweat equity. Overall, the state budget saw a very modest increase driven by population growth and public school enrollment growth.

  • SB 1 reflects a 3.7 % increase in overall appropriations over the last biennium.
  • SJR 1 sends to voters in November 2013, a referendum on a constitutional amendment to establish the State Water Implementation Fund.
  • HB 1025 is a supplemental bill that puts $2 billion into the water resources fund (if the voters approve SJR 1) and additional money in public education.
  • SB 7 is the fiscal management bill, which consolidates all of the budgets into one ledger.

Public education received serious attention from both parties during the 83rd session. For the state’s public schools, most would agree that this was a winning session. Most of the draconian reductions from the 82nd session were restored and, moreover, the number of end-of-course exams required to graduate from high school was reduced from 12 to 5. Standards were also changed at the high school graduation requirements allowing schools to issue three degrees based upon credit hours, acknowledging the fact that not all high school graduates will head for college.

  • SB 2 expanded the state charter school system and HB 5 changed high school testing and graduation requirements as mentioned earlier.
  • The authority for oversight of charter schools was transferred from the State Board of Education to TEA.

Higher Education

  • HB 29 requires public universities to offer incoming students a four-year, fixed-rate tuition option.
  • SB 215 renewed the authority of the Texas Higher Education Coordinating Board but with some modifications/restrictions in its authority. The bill restricted the THECB from permitting the American University of the Caribbean from sending medical students to Texas for training and changed the rules for the TEXAS Grant program.
  • SB1907 does NOT permit campus carry of concealed handguns, but it does allow CHL holders to store firearms and ammunition in locked cars on college campuses.

Criminal Justice

  • SB213 was passed to reform and reauthorize the state’s prison system, permitting TDCJ leadership to decide how best to address their capacity issues.
  • Corrections-related budget bills also provided for salary increases for correctional officers and for health care employees in the system.
  • Additional reforms expanding membership of the Correctional Managed Health Care Committee were also passed, adding four new members (two from the mental health profession and two from state medical schools). Both UTMB and Texas Tech also retrain a physician member of the committee. The committee’s scope changes to production of the Offender Health Plan and quality oversight; contracting is now the sole responsibility of TDCJ.

Health Care

  • SBs 7, 8 and 58 by Senator Jane Nelson, chair of the Senate Health and Human Services Committee, targeted Medicaid fraud, transitioning of acute and long-term care services and expansion of behavioral health services. The GOP stand against Medicaid expansion also passed in the form of an amendment to SB 7, banning coverage for low-income adults.
  • SB149 allocated another $600 million over the biennium to CPRIT after the addition of measures to better prevent conflicts of interest at the agency
  • Senator Charles Schwertner’s SB 1106 assures independent pharmacies of more transparency when negotiating rates with Medicaid managed care organizations.
  • SB 1803 and SB 1106 protect Medicaid providers’ due process rights during investigations of fraud allegations and decreases administrative burdens on providers who contract with multiple Medicaid managed care plans.
  • Scope of practice for advanced practice nurses and physician assistants was also revised to increase to level of their training while still requiring physician oversight.


  • Bills aimed at creation of a driver’s permit for undocumented immigrants failed, as did other immigration reform measures.

Special Session

As the House and Senate adjourned Sine Die around 5 p.m. on Memorial Day—neither having completed the full book of business set out for the session—the Governor issued a call for a Special Session to begin at 6 p.m. that same day. The only item the Governor has formally placed on the agenda is the unfinished business of redistricting. The House and Senate have appointed committees to study that issue in light of prior legislative action and state and federal court comments. The Legislature will bring forth recommendations to stay with the current districts as utilized in the 2012 elections or to recommend changes. Whatever transpires is sure to be surrounded with highly charged debate.

Other issues may find their way onto the special session agenda. Senator Kel Seliger has already filed a bill for TRBs for state universities totaling almost $2.6 billion. Other issues related to transportation funding, social issues such as abortion and drug testing for Temporary Assistance for Needy Families aid recipients, may also find their way on the agenda.

June will be a busy month for those linked to the Legislature so cancel those vacations and stand alert!

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100 Days and Counting …

As I write this, we are 105 days into the 83rd Legislative Session. It is time to take stock of where we are and what we have to get done prior to Sine Die on May 28! 

Both the Senate and House have wrapped up their budget proposals with minor (and in some cases MAJOR) tweaking continuing to occur. The President of the Senate has appointed five members to the Conference Committee; they will be joined by five members from the House appointed by the Speaker to put the final touches on the budget for the next two years. 

Conference Committee Membership, 83rd Legislative Session

Senate House
Tommy Williams Jim Pitts
Chuy Hinojosa Sylvester Turner
Jane Nelson Myra Crownover
John Whitmire John Otto
Robert Duncan John Zerwas

The agreed upon budget will have to then pass both houses and go to the Governor for his signature. The Governor may veto the budget and send it back to the Legislature for more work (which almost certainly ensures a special session), he can sign the budget, or he can express his disapproval of the budget by not signing it and simply letting it become law at the will of the Legislature.

As we take stock of the progress made by the Legislature over the past several months, the Senate wins the race in that it has heard as many bills at this time during the session as it did in the entire 82nd Legislative Session. However, the House has passed out only about a third of the number of bills as it did in the prior session. The House’s deliberate pace many be a way of minimizing the debate (and controversy) of certain issues.

Specific actions of interest include the following:

  • SB 143 (Nelson), which allocates $11.5 million in the next budget for Graduate Medical Education
  • SB 329 (Huffman), which prohibits minors from using tanning beds because of the increased link to melanoma in young adults
  • SB 822 (Schwertner), which regulates companies or networks that sell, lease or share physician discounts without the physician’s consent
  • HB 63 (Craddick), which bans texting while driving a motor vehicle (Distracted driving costs the US economy $3.5 billion each month; the impact to Texas is thought to be $3.6 billion annually.)
  • HB 3791 (Zerwas), which has a hearing scheduled this week in House Appropriations; if passed it could serve as a future vehicle for Medicaid expansion in Texas (see below for more information)
  • CSHB 1025, the Supplemental Appropriations Bill, which passed out of the House Appropriations Committee this past week and is on its way to the Senate (This bill provides the requested $39 million Supplemental Appropriations Request to cover the estimated funding shortfall for correctional health services.)
  • $17 million allocated by the House to the Higher Education Coordinating Board for 2014-2015 as additional funding for GME start-up programs

Additional bills related to health care scope of practice are pending, including one which lowers the age limit to 6 for pharmacists to administer vaccinations to children. This has been opposed by the Texas Society for Pediatrics based upon presumed negative impacts on the medical home initiative and adverse impact on health and developmental screening. 

Another proposal that would expand the ability of physical therapists to see patients directly for musculoskeletal problems has met with opposition from the orthopaedic surgery and physician community. Likewise, an initiative that would affirm licensure for clinical laboratory scientists has met with opposition from organized commercial medical laboratories who cite increased personnel costs as their main objection.

Overall the issue of health profession shortages continues to gain much attention during the legislative session; however, there is yet to be an acceptable agreement on the best approach to deal with scope-of-practice and access issues.

The House Appropriations Committee met on Tuesday, April 23, and passed out Zerwas’ bill (HB 3791), which focuses on the following summary from the TMA website:

The legislation would create a ‘Texas’ solution for covering the working poor in Texas. The bill consists of four key components:

  • Structure: First choice for coverage for low-income Texans would depend on the state receiving an unrestricted block grant from the federal government to run Texas' current Medicaid program.
  • Funding streams: If the state cannot obtain a block grant, the Texas Health and Human Services Commission (HHSC) would funnel the money in concert with the Texas Department of Insurance (TDI) to purchase private health insurance policies for people under 133 percent of [federal poverty level].
  • Payment: The bill includes reforms that Texas can implement concurrently with a block grant, such as cost-sharing, which means Medicaid recipients would pay a percentage of the coinsurance and/or deductible.
  • Oversight: The bill creates a committee to oversee the implementation of the program. State leaders would appoint members of the committee.

Representative Zerwas said, "This is not expansion of Medicaid. This is creation of a new program that leverages our partnership with the private sector. This is not an entitlement program." He added, "I understand the political radioactivity surrounding this particular bill. This would have a profound impact around the provision of care … and ultimately see a benefit to the taxpayers."

House Appropriations also moved Texas’ water issues a step closer to a House vote by proposing that $2 billion from the Rainy Day Fund (HB 11) be used to address the state’s water shortage.

Both House and Senate Conference Committee members have started their work on crafting a budget for the state. This is the time that meetings start early in the day and go far into the night. It is also the time that lobbyists and citizens start vocalizing their personal support for issues in that budget.

And in an unexpected twist to an otherwise quiet legislative session, the House voted to NOT extend the Lottery Commission at the time of this blog’s writing. That means there is suddenly a $2.2 billion gap in the revenue projections for the budget (including the potential for UTMB to lose more than $10 million in dedicated indigent care funding for the 2014-2015 biennium). This new development adds quite a challenge for the Legislature as members work to reach agreement on budget.


ADDENDUM:  After realizing the adverse impact on their budget, the House revisited their earlier decision in the afternoon to sunset the Lottery Commission and reversed itself to extend the Commission, thus avoiding a derailment of their budget work over the past 105 days.

It’s not over until it’s over, so as always, stay tuned for updates.


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Budget Buzz

 The Texas 83rd Legislative Session is well past its midpoint, and Senate and House financial leadership have crafted a straightforward, no-nonsense budget to take to their colleagues in the House and the Senate. The Senate voted out its budget this past week, and after several tweaks on the House side, their budget will be ready for consideration by the whole House on Thursday, April 4. We will witness House members engage in a lengthy floor discussion and vote for passage with a generous number of amendments, then a conference  committee made up of members from both houses will iron out the differences between the two chambers and reach consensus for the approval of both houses.

So where are we at UTMB in all this? We are glad to see the emphasis placed by both houses on restoration of funding in the formula to support the operations of our educational programs and to support the operation of our hospital. Although we would like for our hospital appropriation to be placed into a mission-specific formula, it appears that formula changes will be reviewed  in a more in-depth fashion during this next interim period between legislative sessions. Timing is everything!

What about the university exceptional item requests? These continue to reside in Article XI of the Senate Budget, which means they can be brought back up for discussion and/or funding if sufficient funds are available in the final days of the session. But, in reality, the mood among members of the Legislature has been to place additional funding into the overall educational support funding rather than in special projects for each university. UTMB has found a strong advocate and friend in alumnus and former faculty member Dr. Greg Bonnen. Dr. (State Representative) Bonnen from Friendswood has filed an amendment to the House version of the budget that would place an additional $1.5 million of funds into UTMB’s operation of the Galveston National Laboratory to offset federal cuts anticipated through the sequester. 

Representative Eiland will also offer up an amendment to restore funding from the unclaimed lottery proceeds to UTMB’s Indigent Care Fund to $10 million per year (rather than the reduction to less than $5 million per year in the current budget).

Correctional Managed Care’s budget requests have found some favor, especially in the Senate with the past two years’ shortfalls added to the base budget, plus an overall base budget increase in anticipation of the increased costs associated with medical inflation. In addition, the Senate has added funding to support salary adjustments for employees (who have had no increase in more than four years), funds for capital improvements (especially digital radiology equipment) and funds for restoration of staffing at selected units.

The issue of provider representation on the Correctional Managed Health Care Committee came up this week in the Senate during a vote on recommendations to restructure the committee. The proposed legislation would have eliminated representation from Texas Tech Health Sciences Center and from UTMB on the committee. Interventions by Senator Robert Duncan and Senator Tommy Williams thwarted that effort, and the Senate adopted language that reconfigures the CMHCC membership to include both Tech and UTMB. as well as two members from other medical schools and two members from the mental health profession.

There is much going on beyond the financial issues that have plagued the state for the past several sessions. The House voted unanimously this past week in support of creating a new mega-university in the Valley under the auspices of the UT System. That university would consolidate UT Brownsville and UT Pan American into a single entity and add a medical school. The university would be eligible for Permanent University Fund (PUF) funding and would immediately undertake the development of a medical school/health sciences center. Support for the new university would come from PUF, local contributions and the UT System. No name has been selected for the university; that will be left to the discretion of the UT System Board of Regents. The addition of a medical school serving South Texas is hailed as a way to address the health care provider shortages that have plagued that region for decades.

Senator Nelson’s Scope of Practice bill (SB 406) has left the Senate and is headed for the House. That bill expands the ability for physician assistants and advanced practice nurses to expand their scope in prescription authority but continues to call for them to report to a physician team leader. Leadership from the Texas Nursing Association, the Texas Academy of Physician Assistants, Texas Pediatric Society and Texas Medical Association have all weighed in to support the bill. In addition, there is another bill that proposes the expansion of the physician assistant education programs in Texas by the addition of a “fast track” for individuals with prior health care experience, such as certified military medics and international medical graduates.

The topic of guns on campus is back for another round of discussions at the Capitol. The right to carry a concealed weapon (with permit) onto a university and/or  hospital campus has resulted in considerable discussion. UT System Chancellor Cigarrora weighed in on the discussion with the following statement, in a Feb. 24, 2011 letter to Governor Rick Perry:

 “I have great respect and value the authority of the Legislature to make this important public policy decision, and I recognize the variety of opinions surrounding it. …Yet parents, students, faculty, and administrators, and the institutional law enforcement have all expressed to me their concerns that the presence of concealed handguns on campus would contribute to a less-safe environment, not a safer one.”

At the Capitol, most of you might already know that a concealed weapon permit gains you access to the building’s interior without going through the usual metal detector and/or security screening process. Some writers have speculated that the Capitol itself probably has more people carrying concealed firearms than any other building in the state! Texans feel strongly about their right to carry, so expect a healthy discussion on this issue. Remember that during the last session the Legislature approved the shooting of feral hogs with automatic weapons from helicopters! Anything is possible. The UTMB Faculty Senate has gone on record as being opposed to concealed carrying of weapons on campus.

Public education continues to be a topic of healthy dialogue in both chambers, with proponents of school vouchers, increases in funding for schools, changes in graduation requirements, changes in testing requirements, and reviews of core curriculum standards all getting generous discussion and action. The House passed out a hefty school package last week and added $1 billion in funding as they voted out their budget recommendations from House Appropriations.

This week’s activities should set the stage for the House to vote their revised version of the Senate budget, and then for a Conference Committee made up of House and Senate members to review and take action on that budget. As always, stay tuned for more.

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Bee Hive at the Capitol

The past two weeks have been as busy as the proverbial bee hive at the Capitol. The House Appropriations Committee (HAC) and the Senate Finance Committee (SFC) have both allocated their work into subcommittee groups for each article in the state budget. That means that a subgroup has studied their assigned major issues with great detail. Each of these subcommittees becomes “subject matter experts” on the funding of their focus issues.

For example, with the Subcommittee on Higher Education in the Senate, four highly experienced senators came together and reviewed the major issues and financial challenges facing Texas’ higher education institutions. They reviewed quality metrics for each institution and performance metrics related to graduation timelines, employment after graduation and other factors. Multiple pieces of data are being analyzed by committee members and their staff. Funding formulas are being evaluated to ensure that the impact of funding to each school is reflective of the Legislature’s intent to reward desired performance and to sustain stellar programs. Funding decisions will be largely based on hard data and less so on subjective feelings or intuition.

One must appreciate the amount of time that each legislator devotes to this process and the amount of study that is required of the issues, data and testimony provided by experts in a myriad of fields. Hearings run from 7:30 each morning until the time that the House or Senate takes up business at 10 or 11 a.m.. Subcommittee meetings resume immediately after the Legislature adjourns, which is almost always by noon. Afternoons and evenings are long for those members serving on the financial decision-making committees, as is the endless stream of people trying to get into their offices to advance their personal or agency agendas.

So how is UTMB impacted by all this activity? It is very early in the session, so all the moving parts are still moving … at warp speed. UTMB’s base funding, as directed by the formula increases from both House and Senate, is favorable. It is too early to arrive at a specific number. It is safe to say that the number will change as the House and Senate go to Conference Committee and as they consider the new revenue estimate that will be delivered by the Comptroller early in April. With the Texas economy booming and the “oil patch” boom increasing state revenues at record-breaking pace, there will be more money available for funding health care (through the Health and Human Services Commission) and higher education should the Legislature and executive branches decide to do that.

UTMB’s  request for formula funding for the hospital has been discussed by both House and Senate appropriators and currently lives in Article XI of the House version of the bill. This means that it still has a chance for consideration at conference committee. However, both House and Senate appropriators have discussed a need to thoroughly reevaluate all higher education funding and formulas during the interim to arrive at a fairer distribution of state funds among all higher education institutions. These formulas were developed in the late 90s, and since then issues have arisen from differences in rates at which institutions are able to grow student enrollment, differences in missions among institutions, and differences in formula methodologies between general academic and health-related institutions that must be addressed with the emergence of new administrative structures that combine an HRI and a general academic institution (e.g. A&M, proposed new UT medical schools). At this point it seems likely that UTMB's hospital formula proposal will be considered during the interim review; and even if the Legislature ultimately adopts a UTMB hospital formula in this session, it will be reevaluated along with all other formulas during the interim.

Formula background: Most higher education institution funding is appropriated through formulas that distribute funds among the institutions on the basis of metrics like student counts, space needs, and research activities. In addition, some HRI hospital appropriations are made through patient-based formulas specific to those institutions. For the most part, the remainder of higher education funding is appropriated in “special items” (a budget bill category that contains funding for specific and unique programs at each institution – like UTMB’s AHEC appropriation. Many special items are for specific research programs.)  UTMB’s hospital is funded as separate line item that is neither categorized as a “special item” nor based on a formula. As the Legislature tends to try to fund formulas first, before non-formula items, and to protect them as much as possible during times of budget reductions, UTMB is hoping to have its future hospital appropriations based on a formula. Whether or not a hospital formula is adopted during the session, UTMB will be working closely with interim studies on higher education formula funding.

Exceptional Item funding is up in the air as the Legislature tries to decide just how much (if any) money to put into research and other novel programs at the HRIs. For now, those requests have all been relegated to Article XI for discussion in Conference Committee. The same is true for all the Tuition Revenue Bond (TRB) requests.

The Senate budget process has taken on a more “generous” nature but with the same overall results for universities and medical schools. Formula funding will increase for education, infrastructure and research based upon established metrics. TRB requests are still under consideration in the Article XI  umbrella, as are Exceptional Item Requests. 

Correctional health care funding has received much attention. Both the House and the Senate introduced budgets included an additional $39M above the previous biennial base to cover appropriation shortages. In addition, the House Appropriations Subcommittee has recommended $47M in additional funding. However, this does not include requests for market salary increases for employees, capital investments and restoration of staff positions.  The Senate has recommended a $30.6M adjustment to the new base, added $16M for salary adjustments, designated $5.4M for capital expenditures and $9.7M toward restoration of staff.

Earlier today the House passed out HB10, which placed revenue into last year’s budget to correct the underfunded amounts from the 82nd Session. With that squared away, the Legislature will now focus its attention on how to adequately fund public education and health and human services for the next biennium.

The deadline for filing bills was Friday, March 8th. Over 5,850 bills and joint resolutions were filed by the deadline, and committee hearings will start to go late and long. Work on the budget will continue on to the House and Senate floors, with the final intense appropriations work to be done in late April and May in conference committee when there will also be a new Comptroller’s revenue estimate. Then, the real debate will begin.

Diagrammed below is a simple version of how the budget process works (most of the time).

The Legislative Budget Adoption Process


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Students Make a Difference during Visits to the Capitol

Over 90 UTMB students from the School of Medicine (SOM) and the School of Health Professions (SHP) stormed the Capitol on the first Tuesday of February. They were greeted on the north steps by our local delegation of Representative Greg Bonnen, Representative Craig Eiland and Senator Larry Taylor. The student group was then introduced to the Legislature in both the House and the Senate, where resolutions were passed declaring it “UTMB DAY” at the Capitol. Senator Taylor was joined by Senator (Doctor) Charles Schwertner in delivering the recognition. Dr. Schwertner is a UTMB graduate and did his orthopedic surgery residency at UTMB; his wife Belinda is also a UTMB SOM graduate.

The Texas Medical Association (TMA) recognized the group at their awards luncheon with two awards: Largest Group and Largest Percentage of Membership  from a medical society.


The sea of white coats then spread out all over the Capitol with students visiting with their hometown legislators. Leading the UTMB students were second-year medical students Byron Smith and Kendra Kaderka, first-year medical student Robert McLaughlin,  and an array of other health profession students, including Student Government Association Vice President Jonathan Ruzicka, a second-year physical therapy major from the SHP. The students competently expressed their concerns about affordable tuition, availability of loan repayment programs for health care professionals, and the need for more Graduate Medical Education slots in Texas. 

After a thorough invasion of the Capitol, the group migrated to the Thompson Auditorium in the nearby TMA building. Joining them were Rep. Eiland, Rep. Bonnen and his wife Kim, and House Higher Education Chairman Dan Branch (whose nephew Daniel W. Branch is a third-year medical student at UTMB). Students spent about an hour and a half discussing the future of medicine with these House members. Rep. Bonnen is a UTMB med school graduate and his wife Kim graduated with a degree in occupational therapy from SHP. Rep. Branch is an attorney and major advocate for Tier I research status for our Health Related Institutions. 

The following week, another 35 students from the School of Health Professions added their voices to those who attended the prior week’s health policy activity. These students focused on the allied health science vocations. The group, led by Physical Therapy second-year class president Kevin Villarreal, met with legislators to voice their opinions regarding educational opportunities and student educational support.

Both groups have been highly effective in advocating for their professions and for improvements in higher education. These interprofessional learning opportunities are an integral part of UTMB’s culture. Learning an appreciation for the roles that each of the health professions contribute to the team is essential in improving the quality of health care. Our students truly are working together to work wonders.   

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Austin Update – January 31, 2013

The House and Senate have released HB1 and SB1, which are their preliminary versions of the 2014-2015 state budget. The two budgets are amazingly similar and only about $200 million apart. From UTMB’s point of view the historic and proposed funding schedule looks like this:




$457.7 million


$566.6 million(1) 


$474.2 million(2) 

FY14-FY15 Senate Proposal

$494.0 million

FY14-FY15 House Proposal

$486.5 million

  1. Base adjustment after Hurricane Ike; does not include $150 million TRB debt service or $150 million Ike Match
  2. Reduction of 16.65% from prior biennium primarily in hospital General Revenue funds

The proposed growth in the base budget for UTMB is derived from formula funding growth associated with the increased numbers of students enrolled in UTMB schools, in the debt service for the Tuition Revenue Bond approved last session and in other formula-driven funds. 

Initial budgets for the Correctional Managed Healthcare enterprise are encouraging.  Both House and Senate have offered up a base budget that adjusts the base from the last biennium to include coverage of the prior deficits. Texas Department of Criminal Justice has also filed Exceptional Item requests that, if funded, would permit market adjustments for employees, addition of capital expenditures for imaging and vehicle replacement, and resources to address rising pharmaceutical costs and restoration of staffing.

Another encouraging financial factor has been the Legislative Budget Board’s approval over the past several months of UTMB’s drawing down revenue from the $150 million Ike recovery match account to pay for Ike-related damages on campus. This approval negates the need to extend this process during this legislative session and allows UTMB to proceed rapidly with Ike-related repairs on campus.

The Lieutenant Governor released his committee appointments last week and conducted the unusual practice of having the senators draw lots to determine who among them will serve two-year terms and who will serve for four years before their next election.

Newly elected Galveston County Senator Larry Taylor drew a four-year term for his district. Taylor was also appointed to serve on Senate Health and Human Services, Education, and Intergovernmental Relations committees.

Senate Finance is chaired by Senator Tommy Williams of The Woodlands; Senator “Chuy” Hinojosa serves as Vice Chair. Other members include Senators Duell, Duncan, Eltife, Estes, Hegar, Huffman, Lucio, Nelson, Patrick, Seliger, West, Whitmire and Zaffirini.

The Senate Higher Education Committee is now chaired by Senator Kel Seliger of Amarillo, with Senator Kirk Watson of Austin serving as vice chair. Other members include Senators Birdwell, Duncan, Patrick, West and Zaffirini.

On Tuesday morning, Governor Rick Perry delivered his “State of the State” address to a joint session of the House and Senate. Emphasizing the importance of maintaining the state’s successful economic growth, Perry surprised many by praising both Democrats and Republicans for their leadership in economic reforms associated with the state’s steady growth over the past 10 years, citing in particular the absence of a state income tax, tort reform and control of government spending. He also called for the state to use money from its Rainy Day Fund to address water resource issues and to support continued investment in infrastructure, especially transportation. The speech was interrupted mid-way by a group of hecklers calling for Medicaid expansion. The disruptors were quickly escorted from the House Gallery and the speech resumed without further interruption. Perry closed by calling for collaboration among members to address the infrastructure and educational needs of citizens in the state.

Later that same day, UTMB’s President, Dr. David Callender, presented UTMB’s Legislative Appropriations Request to the Senate Finance Committee. Callender thanked the Senate’s members for their continued support of the university’s recovery after Hurricane Ike, and pointed out that UTMB‘s student enrollment has grown by more than 600 students since Ike. He presented UTMB’s request for formula funding, a mission-based formula for the UTMB Hospitals, and our three Exceptional Items: (1) Trans-Texas Vaccine Institute ($8 million), (2) Regenerative Medicine ($6 million) and (3) Emerging infection Disease Research ($8.55 million). Additionally, UTMB has asked for a $40 million Tuition Revenue Bond to build an $80 million new inter-professional student education facility.

The Honorable Joe Strauss, Speaker of the House, named membership of the House Committees at 11 a.m. today (Jan. 31); most committee chairmen called for immediate organizational meetings. 

Rep. Jim Pitts returns as chair of House Appropriations and Rep. Sylvester Turner as Vice-Chair. Also on Appropriations is newly elected Galveston County Representative Dr. Greg Bonnen. Representative Craig Eiland will continue to serve as Vice Chairman of the House Insurance Committee and Representative Bonnen will serve as a member of that committee also. Representative Tan Parker will chair the House Corrections Committee with Representative James White serving as Vice Chairman. Full lists of committees can be found at

Losing no time, Representative Jim Pitts called an organization meeting of the House Appropriations Committee for 30 minutes after the House’s adjournment today and announced that hearings for the committee will begin at 7:30 Monday morning. In that meeting, very much like in the Senate, members will hear reports on revenue availability and Legislative Budget Board recommendations. 

More to come in the coming weeks…

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Day 1 (Tuesday, Jan. 8)

With a backdrop of cold, gray, rainy skies, the Texas 83rd Legislature got under way on Jan. 8. Right away, a long-anticipated challenge for the Speaker of the House position evaporated as a lone competitor withdrew from consideration. A quick line of nominations and seconds propelled Speaker Joe Straus (San Antonio) back into that leadership role by acclamation (and without a roll call vote). 

The 83rd Legislature is a changed institution demographically. It is home to 95 Republicans and 55 Democrats in the House; compared to last session when the Republicans held a 101 supermajority, this year’s membership will require a lot more discussion and inter-party work. It is also a “new” House, with almost 50 percent of its members having served one term or less.

Over in the Senate, there was a 20 percent turnover ending with 19 Republicans and 12 Democrats. The Senate has a host of new key committee chairmen in areas such as Higher Education, State Affairs, Finance and Education, among others. 

One gets a dramatic view of the changes that have occurred in the Texas political landscape when comparing the Texas Legislature from 1987 to that of 2013:

















African Americans



Rural White Democrats



White Democrats




This new face of Texas has convened to tackle a diverse group of problems on a stage set with affirmational economic news from State Comptroller Susan Combs. She announced on Monday that the Legislature will have at least $101.4 billion at their disposal to craft the state’s next biennial budget, along with about $11.8 billion in the Rainy Day Fund. All indicators also point to Texas’ economy being among the strongest in the United States. In fact, if Texas were a nation, its economy would rank 14th in the entire world.

State leadership, including the Governor, Lt Governor and Speaker, have consolidated their priorities for the session with a focus on expanding the Texas economy and employment, education (public schools and higher education), transportation and water resources. Also high on most agendas is the topic of health care services.

UTMB’s legislative agenda this year will focus on the future of our educational, research and clinical missions. It is our hope that the bulk of our FEMA funding issues are behind us and that we will be able to focus on those issues that permit us to build a healthier future for our students, patients, faculty and staff. Therefore, we will focus on growth in formula funding support for our health education programs in all of our schools, in our infrastructure and in research. We will also ask the legislature to move our hospital’s funding from the General Revenue category into a formula like that at both MD Anderson and UT Health System Tyler. Because our hospital funding was not in the formula category last session, we were subjected to higher reductions in funding than were our sister institutions. In short, we are asking for equity in our hospital funding for the future.

UTMB has seen a major increase in students, especially in the School of Nursing and the School of Health Professions; UTMB has 500 more students this year than it did four years ago. This growth warrants continued investment in our physical plan in the form of an inter-professional educational building. We will request a $40 million Tuition Revenue Bond to cover half those costs, with the other half coming from philanthropy through our capital campaign. 

Scientific research at UTMB holds great promise not only for the cure of disease and improvement of health, but also for the stimulation of technology transfer and growth in health services. UTMB will seek Exceptional Item funding for the following:

  1. The Trans-Texas Vaccine Center will focus on the development of promising vaccines for the treatment of both chronic and infectious diseases. Working with collaborators from other medical schools across the state and Texas A&M’s Vaccine Manufacturing Center, UTMB would lead a multidisciplinary consortium to aggressively develop preventive therapies for leading threats to health in Texas and beyond.
  2. UTMB’s Regenerative Medicine program will target treatment of traumatic brain injury by providing matching funds for the recent gift from the Moody Foundation to support development of new treatments for acute and chronic TBI using novel drugs in conjunction with stem cell therapies.
  3. Emerging infectious disease research will also be an area of focus, including work on a universal flu vaccine, multi-drug-resistant tuberculosis, and other recently emerging infectious diseases affecting the United States.

Looking ahead, the Senate and House have just released their initial versions of the state budget. The Senate will go into hearings by the end of January to critically assess the Legislative Appropriations Requests from all state agencies. In the House, committees will soon be appointed by Speaker Straus and the process of budget review will also be initiated there. In the meantime, UTMB—like all state agencies—is analyzing the initial budgets.

Stay tuned! 

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From Sine Die to Special Session, in 15 Hours!

For those legislators and staff who were planning on leaving the tumult in the capitol behind them, 5 p.m. Monday shocked many back to reality. The 82nd Session had ended just as prescribed after 140 days of deliberations and debate.

But with major bills caught up in the time limit rules in the House and Senate, both houses adjourned without completing their state business.  SB 1811, which outlines the fiscal matters that make the state budget a working document, remained unresolved.  And, key legislative matters related to cost savings in Medicaid that are critical to the budget were also sidetracked by time and dispute.

Gov. Rick Perry’s proclamation issued Monday afternoon called for “an extraordinary session of the 82nd Legislature” to start at 8 a.m. on Tuesday, May 31, to consider:

1.       “legislation relating to fiscal matters necessary for the implementation of House Bill 1 as passed by the 82nd Legislature, Regular Session, including measures that will allow school districts to operate more efficiently”

2.      “legislation relating to healthcare cost containment, access to services through managed care, and the creation of economic and structural incentives to improve the quality of Medicaid services”

The announcement, though expected by almost everyone, still came as a shock and dampened the usual festive celebration accompanying the last day of the session. Tomorrow would be yet another day, just like the previous 140 days. The making of the sausage was not over.  There would be no vacations, no time off for staff, and no time to focus on other pursuits.

Legislators are paid a whopping $600 a month in salary, so those of more modest means are quite eager to return to their primary livelihood.   Extending their time in Austin, away from home, family, friends and job places an extraordinary burden on them, a major stimulus for them to get to work quickly and return home!

A special session can deal with only the subjects designated by the Governor.  And, each house can decide what is germane to that call. Special sessions can last no longer than 30 days. Traditionally, they move at a much faster pace than a regular session, obviously because the scope is much more focused.  Both houses still must refer bills to committees, have hearings, and follow other rules and procedures.   The Calendars Committee also still has to post the bills to be heard in the House. The Senate, however, may operate in a more relaxed fashion.

Bills introduced in a special session usually are bills that already have been heard but failed to get final approval.  The proposals receive new bill numbers and undergo additional alterations but remain aligned with the Governor’s instruction.

This is only the seventh special session to begin the day after sine die, and only the fifth in 50 years to be held in the 20-day post-session veto period. This is the 115th special session since 1850.

The Governor also can add additional topics to this special session, or wait for the work on these issues to be completed and then call another special session. The news media already are reporting that the Governor is receiving pressure to add Texas Windstorm Insurance Agency , sanctuary cities, immigration issues, congressional redistricting and myriad other issues to his present call; on  Tuesday he added redistricting.

The Senate began the first day promptly, with eight bills in hand (someone worked throughout the night before) and referred them for consideration to the Senate Finance Committee and to the Education Committee.

Senate Finance began hearing the following this morning:

  • SB 1 by Duncan. This was formerly SB 1811 and relates to fiscal matters/non-tax revenue bills containing a hybrid school finance allocation method.
  • SB 2 by Ogden. This restores $34 billion to the budget bill that was contingent on the passage of SB 1811, which includes Foundation School Program payments to school districts.
  • SB 5 by Huffman and Nelson. This bill will establish an Interstate Health Compact (which in turn could allow Texas to opt out of traditional Medicaid and set up its own program).
  • SB 7 by Nelson. This is a Health and Human Services efficiencies bill that creates cost savings in CHIP and Medicaid.

The Education Committee took up the following:

  • SB 6 by Shapiro which deals with curriculum, instructional materials allotments, and textbooks.
  • SB 7 by Shapiro which is the former SB 12.  This bill provides school districts with management flexibility to save money.

In addition, there is a growing number of bills that are deemed by their authors to be relevant to the Governor’s call,  including SB 27 by Zaffirini, which calls for tuition revenue funding for university campus buildings. Of special importance to UTMB is HB 26 by Madden; this replaces HB 3459, providing for operating efficiencies in the correctional health care arena and for an offender premium charge estimated to produce about $13.5 million in revenue.

How long will the special session last? The simple answer is “until all the business is done.”  That could be a couple of weeks or more. There is a time limit of 30 days, so if the business is not finished, the Governor can call a second special session. 

Aren’t you enjoying Texas History and Government 101?

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The Finale…Sine Die

The 82nd Legislative Session has been quite a roller coaster ride — and it’s not over yet, with a special session starting today because the major fiscal matters bill needed to fund the  budget died in a Senate filibuster Sunday night.


By law, the special session can last 30 days; the Governor will determine what is “on the call” (i.e., what the Legislature is allowed to address). Some have lasted the full 30 days; others have finished in a few days, depending on the complexity of the issues in the call.   As of today, two large items are on the call:  fiscal matters needed to implement the appropriations bill, including school finance reform; and health care cost containment, managed care, and Medicaid structural and economic incentives.  


But for now, here’s an update on where things stand as the regular session ended. .


It seems like a century ago when Dr. Callender provided testimony before both the House and the Senate budget committees regarding UTMB’s remarkable resiliency and recovery from Hurricane Ike. Callender described a rapidly recovering campus, growing student enrollment and expanding clinical services, including recertification of the university’s Level 1 Trauma Center. He laid out the potential for an exciting future for the campus that many had previously thought should be moved, closed or otherwise diminished. He confirmed that the 120-year-old battle cry, “The University of Texas Stops for No Storm!” is still relevant.


And there have been plenty of storms in the 82nd Regular Legislative Session. From initial budget bills cutting UTMB funding by as much as 25%, to an audit critical of UTMB’s CMC division released in the first days of the session, to months of heated legislative debate on difficult health care issues with potentially profound impacts on patients and providers, to final hours when major revenue bills died and a special session loomed, the session was anything but smooth sailing.  


UTMB’s requests during the legislative session were modest compared to the requests of many others. The list was simple:


  • Fund the Tuition Revenue Bond for construction of the Jennie Sealy Replacement Hospital that was approved in the 81st Session ($11 million)
  • Permit UTMB to have continued access to the monies appropriated in the 81st Session for use related to Ike recovery and the FEMA match
  • Treat our hospital’s base appropriation reductions in a manner comparable to other health-related institutions with hospitals, and
  • Restructure the correctional health care contract to permit UTMB to contract directly with TDCJ, and provide a supplemental appropriation for UTMB’s CMC-related losses from FY10-11.

Achieving any of these objectives was a serious challenge given the guidelines under which the legislators were working: (1) no new taxes, (2) limited use of the Rainy Day Fund, (3) a conservative revenue estimate, and (4) a promise of “limited government/smaller government.”


The Legislature also found itself with new political forces in play. Many political pundits had predicted that the new “Tea Party” movement would have an impact on the 82nd Session, but most failed to predict just how powerful an influence this block of new legislators would have on the Legislature’s budget and policy agenda.


The appropriations process took many twists and turns, involving complicated interactions between several bills to produce savings, reform school finance and create revenue to fund the appropriations bills. The final result is a state budget that is about $15 billion less than the previous biennium, with only about 18 months of the next two years’ Medicaid being funded and public schools being $4 billion down from what the formulas would require for projected enrollment.   The Legislature openly acknowledged that it will have to fill in the FY13 Medicaid shortfall next session. All state agencies, higher education institutions and public schools took reductions.


Final appropriations for UTMB are much better than they could have been, given the circumstances. In the end, UTMB’s overall GR appropriation is a total of about $472M for next biennium, which includes $11 million for the proposed replacement hospital TRB debt service. UTMB’s hospital appropriation level was a major issue in the negotiations leading to the final total; thankfully the hospital reduction in the end was less than 15%, after being more than 25% for several months of negotiations on the bill.


In addition, UTMB’s Ike recovery funding from last session was carried forward for two more years, a critical help to UTMB due to the fact that some FEMA approvals are finalizing much later than expected. Although this funding had been appropriated last session, it was still a major step for the Legislature to give us access for two more years; they could have swept any unencumbered funds and used them for a host of other state budget needs. Even though that action would seem unlikely given the more than $1 billion in FEMA dollars these funds draw, there were several times during the negotiations when it appeared likely that UTMB would lose access to a portion of the appropriated funds. Thankfully, the Legislature’s final decision gives us full access through the coming biennium; we can continue with our Ike recovery as planned. This result was nothing short of miraculous work on the part of the Senate and House leadership and their staff.  


Financial issues and contracting issues surrounding the correctional health care contract have long been a source of concern for UTMB. Prior arrangements have resulted in all budget shortfalls being borne by UTMB until such time that the Legislature could meet and provide a supplemental appropriation to cover the amount of money UTMB had spent on offender health care. After much discussion with key leadership in the executive branch and both houses, changes to the correctional health care program will now place the financial responsibility for the program’s funding in the TDCJ budget. UTMB (and Texas Tech) will become vendors for health care services through a direct contract with TDCJ. The role of the correctional managed health care committee will be determined by TDCJ and will focus on dispute resolution, standards of care and review.


In addition to the budgetary issues related to UTMB’s future, many other issues affect our ongoing delivery of health care services. Funding for indigent care, trauma, diabetes and family planning were among the many reductions, along with reductions in Medicaid programs and rates. Higher Education Coordinating Board programs for graduate medical education and student loans were reduced. All of these affect UTMB and our fellow academic health centers.


In other areas of interest, there were no major scope of practice changes in the health care arena, except for an amendment that requires insurance companies to accept bills from chiropractors. There was no increase in scope of practice specifically for nursing or any of the allied health fields. Students were big losers in the state budget, with large reductions in student loan programs such as Texas Grants. Major reductions in funding were also seen in the women’s health care arena, especially for family planning programs.


As House Bill 1 finally left the Senate, the vote was 20-11. As House Bill 1 finally left the House, the vote was 97-53


Remember, it’s still not over.  The budget bills and major policy bills are on their way to the Governor, and he has until June 19th for vetoes.    And with the special session (possibly the first of several) starting today, anything can happen.  


As usual, stay tuned for the “rest of the story!”

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