LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session March 14, 1995 TO: Honorable Irma Rangel, Chair IN RE: House Bill No. 420 Committee on Higher Education By: Ogden House of Representatives Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 420 (Relating to the admission standards, tuition, fees, and governing boards of general academic teaching institutions and university systems and to testing and remedial education by public institutions of higher education) this office has determined the following: The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. The bill would : 1) require each governing board to set admission standards for general academic institutions which ensure that each admitted student is prepared to do college-level course work; 2) limit governing boards' expenses, reimbursements, naming of buildings, employment at institutions, contracting, alcohol use, and term limits. It would also permit the Governor to remove a board member for cause and require boards of regents to conduct public hearings before increasing tuition and fees; 3) require the Coordinating Board to study the organization and governance of public institutions of higher education; and 4) repeal the Texas Academic Skills Program (TASP), V.T.C.A., Education Code Sections 51.306 and 51.3061. The estimates for costs to local government are based on the assumption that 13,699 students currently admitted to public senior colleges and universities would not qualify for admission and would choose to attend a local community college. The shift of students from the senior colleges to community colleges would cost the local colleges an estimated $17.8 million annually (based on the current estimated cost to local taxing authorities of $1,300 per student). However, there would be local savings to community colleges due to reduced demand for required remedial work. These savings are estimated at $6.5 million annually, for a net cost to local community colleges of $11.3 million per year. The estimates for general revenue savings are based on the assumption of shifting 13,699 students from senior to community colleges for a reduced demand for formula funding of $33.1 million annually. Reduced demand for formula funding for remedial courses at community colleges is estimated at $8.1 million annually. The repeal of TASP would decrease annual administrative costs at the Coordinating Board by $240,000 annually. The probable fiscal implication of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Fiscal Probable Cost to Probable Savings Year Local to Community College General Revenue Districts Fund 001 1996 $11,300,000 $41,400,000 1997 11,300,000 41,400,000 1998 11,300,000 41,400,000 1999 11,300,000 41,400,000 2000 11,300,000 41,400,000 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. Source: Higher Education Coordinating Board LBB Staff: JK, MK, WRR