AUSTIN – Even though they're faced with a tight budget this year, state lawmakers should be able to start working on the addition of one or two new flagship universities to the state's higher-education system, Lt. Gov. David Dewhurst said Friday.

Dewhurst, leader of the Senate, said that because the creation of new top-tier universities would take several years, there is no reason the process couldn't start this year with a combination of state aid and money raised by any school that is selected.

"The way to do it is to allow our emerging research universities to raise money locally and bring in more research dollars, and then have the state match that," the lieutenant governor said.

His assessment conflicts with Gov. Rick Perry, who said this week that the tight budget situation would probably prohibit lawmakers from designating another "Tier 1" university this year.

Although Dewhurst said it will be up to the Legislature to designate the new flagship school or schools, higher-education experts said the three most likely candidates are the University of Texas at Dallas, the University of Houston and Texas Tech University in Lubbock. The new flagship schools would join the University of Texas at Austin and Texas A&M University.

Dewhurst cited figures from former University of Texas System Chancellor Bill Cunningham, who estimated that it would take up to 10 years and additional funding of $100 million to $200 million to establish a new Tier 1 school in the state.

"It can't be done overnight. We're talking about incremental dollars to hire more faculty and make other improvements over a long period of time," Dewhurst said. That would translate into $20 million to $40 million each two-year budget for 10 years.

"If a university is putting up half of that money through fundraising and research, are you going to tell me that the state of Texas couldn't come up with the another $10 million to $20 million times two or three schools?" he said.

On other issues regarding higher education, the Republican said that rather than setting caps on rising tuition rates, he would prefer to see the Legislature adopt a sliding scale on funding and tuition, where if the state puts in more money, colleges and universities have to reduce planned tuition hikes.

"If we can't put as much money in, then there would be flexibility for them to increase tuition within a certain range," he said.

On public education, Dewhurst said lawmakers will redesign the accountability system for schools and work on a few other improvements, but there will not be any major overhaul of the school finance system before the 2011 legislative session. The last major changes were made in 2006.

He said the state business tax – adopted in 2006 as part of the school funding overhaul – is not likely to see major changes, although he is promoting new tax credits for businesses that expand health-care insurance for their employees.

On the political front, Dewhurst said he is planning to run for a third term as lieutenant governor in 2010, though he is being encouraged to run for the U.S. Senate if one of Texas' seats opens up. U.S. Sen. Kay Bailey Hutchison is widely expected to run for governor next year.

Regarding the fight between Senate Democrats and Republicans this week over Senate rules and voter ID legislation, Dewhurst said he believes members will move on when they resume work later this month.

As for whether he could have mitigated the partisan fight, he said: "I'm not aware of anything else I could have done other than to stay out of it and be fair in my rulings."