LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
April 24, 1995
TO Honorable Bob Bullock Honorable Pete Laney IN RE:
: Lieutenant Governor Speaker of the House Conference Committee Report for
Senate Chamber House of Representatives House Bill No. 1792
Austin, Texas Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on House Bill No. 1792 (relating to tuition, fees,
and other charges at public institutions of higher education) this office has determined the
following:
The bill would increase undergraduate resident tuition charged by public general academic and
health-related institutions by $2 per hour per year, starting with $34 per hour in FY 1998 and
rising to $40 per hour in FY 2001. In addition, the minimum tuition charge for a resident
undergraduate enrolled in a general academic institution would increase to $120 for each
semester and $60 for each six-week summer session. It is anticipated that increases in resident
tuition would generate an estimated increase state revenue of $15.6 million in FY 1998,
increasing to $63.4 million in FY 2001.
The bill would increase nonresident tuition charged by public general academic and
health-related institutions to an amount calculated by the Coordinating Board as the average
charges a Texas resident would pay if attending college in any of the five most populous states
(excluding Texas). It is anticipated that increased nonresident tuition would generate an
estimated increase in tuition revenue of $19.1 million in FY 1996, increasing to 19.5 million in
FY 2001. In addition, it is assumed that 10 percent of current nonresident students would decide
not to attend Texas public institutions for an estimated decrease demand for formula funding of
$7.3 million in FY 1996, increasing to $7.5 million in FY 2001.
Assuming continuation of the current policy of supplanting general revenue funding with
increased tuition revenue, the net impact of increased nonresident tuition is an estimated savings
to general revenue of $26.4 million in FY 1996, increasing to $27 million in FY 2001.
The bill would allow institutions to increase tuition for optometry to three time the general
undergraduate tuition rate and undergraduate pharmacy tuition to two times the general
undergraduate tuition rate. Institutions are currently allowed by statute to retain increased
pharmacy and optometry tuition revenue. The allowable increases are estimated to generate
increased revenue to institutions of $2.15 million in FY 1996, increasing to $2.73 million in FY
2001.
The bill would increase law tuition for resident students from the current $60 per hour to $75 per
hour. Law tuition for nonresident students would increase from the current $150 per hour to
$200 per hour. Assuming continuation of the current policy of supplanting general revenue
funds with increased tuition revenue, increased law tuition is estimated to produce general
revenue savings of $2.10 million per year.
The bill would exclude continuing adult education programs offered by general academic,
health-related, and State technical institutions from tuition and fee exemptions or waivers as well
as from residency considerations. It is anticipated that excluding continuing education programs
from tuition and fee exemptions would generate an estimated $100,000 in local revenue for
institutions.
The bill would increase the amount of an academic scholarship needed to qualify a student for a
nonresident tuition waiver from the current $200 per year to $500 for FY96 and to $1000 per
year in FY97 and later. In addition, the bill would open the scholarship nonresident tuition
waiver to include students receiving athletic and other non-academic scholarships. It is
anticipated the State will realize savings as result of the increase in the scholarship amount
needed to qualify for a nonresident tuition waiver of approximately $4.1 million in FY96,
increasing to $7.8 million in FY2001. Savings are due to decreased formula funding demands
resulting from students loosing the waiver choosing not to attend college in Texas and increased
tuition paid by those who do choose to continue to enroll. It is anticipated that the State will
incur cost ranging from $8.9 million in FY96 to $8.4 million in FY2001 as a result of opening
the scholarship waiver to include non-academic scholarships. Costs are associated with
increased demand for formula funding resulting from more students enrolling as a result of the
nonresident tuition waiver and decreased tuition revenue. The net impact of the changes to the
scholarship waivers are estimated to be a cost to the State of $4.8 million in FY96, decreasing to
$600,000 in FY2001.
The bill would add Texas A&M University-Kingsville to the border county nonresident tuition
waiver program for students from Mexico with demonstrated financial need. It is estimated that
an additional 50 students from Mexico would participate in the nonresident tuition waiver
program. Increased demand for formula funding for those 50 new students is estimated to be
$211,000 per year.
The bill would create a tuition, fee, and partial room and board exemption program for up to 150
Texas National Guardsmen enrolled in ROTC programs per year if they agree to accept a
commission in the Texas National Guard upon graduation and serve no less than four years as
commissioned officers. The tuition and fee waiver would extend for four academic years for
students, while the room and board exemption would extend for two academic years. The
tuition, fee, and room and board exemption is estimated to cost the State $550,000 in FY 1996,
increasing to $860,000 in FY 2001.
Finally the bill would allow the Coordinating Board, upon petition from an institution located
within 100 miles from an adjacent state, to set a nonresident tuition rate that is lower than regular
nonresident tuition if the Board determined that the lower rate was in the best interest of the
institution and would not cause unreasonable harm to any other institution of higher education.
Because this provision of the bill is permissive and the extent to which qualified institutions
might chose to participate, the fiscal impact of this provision cannot be determined.
Estimates of probable savings to general revenue include: increased resident tuition ($15.6
million in FY98, increasing to $63.4 million in FY2001); increased nonresident tuition ($19.1
million in FY96, increasing to $19.5 million in FY2001); increased Law tuition ($2.1 million per
year); formula funding savings due to decreased enrollment as a result of increased nonresident
tuition ($7.3 million in FY96, increasing to $7.5 million in FY2001); and formula funding
savings due to decreased enrollment as a result of changes to the scholarship waiver program
($3.7 million in FY96, increasing to $7.5 million in FY2001). Estimated increased demand for
formula funding ($210,000 per year) and loss of tuition revenue ($30,000 per year) as a result of
including Texas A&M--Kingsville in the border county nonresident tuition waiver program,
additional formula funding demand as a result of changes in scholarship waivers ($2.9 million in
FY96 , increasing to $3.0 million in FY2001); and tuition losses resulting from changes in
scholarship waivers ($6.0 million in FY96, decreasing to $5.4 million in FY2001) have been
subtracted from estimated general revenue savings. In addition, $550,000 in FY96, increasing to
$860,000 in FY2001 for the tuition, fee, and room and board waiver for ROTC students has also
been subtracted from probable general revenue savings.
Estimates of probable gain to local funds include: increased pharmacy tuition ($1.5 million in
FY96, increasing to $2.0 million in FY2001); increased optometry tuition ($550,000 in FY96,
increasing to $730,000 in FY2001); and $100,000 per year as a result of excluding continuing
education courses from fee waivers and residency considerations)
The probable fiscal implication of implementing the provisions of the bill during each of the first
five years following passage is estimated as follows:
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 Savings to Probable Gain To
Year General Revenue Local Funds
Fund 001
1996 $22,510,000 $2,150,000
1997 26,470,000 2,290,000
1998 42,330,000 2,420,000
1999 58,290,000 2,560,000
2000 74,240,000 2,700,000
2001 90,600,000 2,830,000
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, DF