An institution must adopt an operating budget for each fiscal year, which runs from September 1 through August 31. The UH System Board of Regents approves the budgets of each UH System university and the system administration.   That budget is funded from several revenue sources with state appropriations funding and tuition and fees being the largest.
 
State funding for universities is largely determined by the semester credit hours generated by that institution. This flows through the formulas. The Legislature can decide to fund formulas at a greater or lesser level, and that affects total funds for all institutions. A greater investment in higher education is the number one priority for the UH System.

In recent years, the Legislature has granted more flexibility to university systems to set their tuition and fee rates. Major objectives of universities have been to keep the cost of education affordable for students and prevent decisions to raise fees and tuition from reducing the institution's state appropriation.