LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session March 14, 1995 TO: Honorable Irma Rangel, Chair IN RE: House Bill No. 1792 Committee on Higher Education By: Junell House of Representatives Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 1792 (Relating to the tuition charged to nonresident students at certain public institutions of higher education) this office has determined the following: The bill would set the nonresident undergraduate tuition rate at Texas public universities and health-related institutions at an amount equal to the average tuition charged Texas residents in the five most populous states (other than Texas). In academic year 1994-95, the average tuition charged a Texas resident taking 30 hours in California, New York, Florida, Pennsylvania, and Illinois was $222 per hour. The nonresident tuition rate in Texas is currently $176 per hour. The fiscal implications shown below are based on the following assumptions. First, that approximately 10 percent of nonresident students would decide not to attend college in Texas due to increased nonresident tuition. The anticipated decline in students would reduce the demand for general revenue formula funding. Additional savings to general revenue are anticipated due to increased tuition revenue at the institutions. Assuming continuation of the current policy of using an "all funds" funding methodology for universities, increases in tuition income offset general revenue funding. Thus, as tuition income from nonresident students increases, less general revenue would be needed to meet the funding requirements of the public universities. 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 Probable Savings Total Probable Year to General to General Savings to General Revenue Fund 001 Revenue Fund 001 Revenue Fund 001 (Enrollment ( Tuition Decline) Increase) 1996 $10,900,000 $25,650,000 $36,550,000 1997 11,020,000 25,920,000 36,940,000 1998 11,060,000 26,010,000 37,070,000 1999 11,090,000 26,100,000 37,190,000 2000 11,130,000 26,190,000 37,320,000 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