LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
May 1, 1995
TO: Honorable John T. Montford, Chair IN RE: Committee Substitute
Committee on Finance for
Senate House Bill
Austin, Texas No. 1792
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 have the following impact on tuition and fees at
public institutions of higher education:
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. Additional tuition revenue
as a result of increases above $30 per hour would accrue to
institutions and not result in a corresponding decrease in
general revenue appropriation to institutions. It is anticipated
that increases in resident tuition would generate an estimated
increase in revenue to institutions of $15.6 million in FY 1997,
increasing to $79 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 per year. It is anticipated
that an estimated 800 (10 percent) students currently receiving
nonresident tuition waivers would lose those waivers and choose
not to attend Texas public institutions. Savings to general
revenue due to decreased demand for formula funding and increased
tuition revenue from those students loosing nonresident tuition
waivers are estimated to be $3.4 million per year.
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.
The bill would also allow: Texas A&M University to increase the
medical services fee; Texas Tech University to increase the
university center fee; Texas State University System institutions
to increase their recreational sports fee; all public
universities to increase their building use fees; and allow The
University of Texas at Austin to charge a $1 dollar per semester
fee to construct a Martin Luther King, Jr. statue and to
establish a Martin Luther King, Jr. student scholarship program.
All of the proposed fee increases would increase local funds
which are not part of State appropriations, therefore they
represent no fiscal impact to the State.
Estimates of probable savings to general revenue include:
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). 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 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
resident tuition ($15.6 million in FY97, increasing to $79
million in FY2001); 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:
Fiscal Probable Savings Probable Gain To
Year to General Local Funds
Revenue Fund 001
1996 $27,710,000 $2,150,000
1997 31,130,000 17,890,000
1998 31,260,000 33,620,000
1999 31,290,000 49,560,000
2000 31,200,000 65,600,000
2001 31,230,000 81,830,000
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
No fiscal implications to units of local government is
anticipated.
Source: Higher Education Coordinating Board
LBB Staff: JK, MK, DF