LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
April 10, 1995
TO: Honorable Irma Rangel, Chair IN RE: Committee Substitute
Committee on Higher Education for
House of Representatives HouseBill No.
Austin, Texas 2467
FROM: John Keel, Director
In response to your request for a Fiscal Note on House Bill No.
2467 (Relating to tuition rates at public institutions of higher
education) this office has determined the following:
The bill would increase law school tuition from $60 per hour for
Texas resident students and $150 per hour for nonresident
students to $75 and $200 respectively. The bill would allow
institutions offering optometry programs to charge a tuition rate
up to three times the statutory undergraduate tuition rate. It
would allow institutions to raise undergraduate pharmacy tuition
to twice the amount of general undergraduate tuition. Beginning
in fiscal year 1997, the bill would increase the undergraduate
tuition rate of $32 per hour at all public institutions by $2 per
hour, increasing $2 per year until fiscal year 2001 when tuition
would reach $40 per hour. While current policy is to supplant
general revenue appropriations with increased tuition revenue,
the bill would provide that increased undergraduate tuition
revenue shall not be used to reduce general revenue
appropriations to institutions. Finally, the bill would raise
the competitive academic scholarship amount needed to qualify for
a waiver of nonresident tuition from the current $200 per year to
$1000 per year.
It is estimated that the law school tuition increase would
generate $2.1 million per year in savings to general revenue.
Undergraduate, pharmacy, and optometry tuition increases are
estimated to grow from $2.5 million in FY1996 to $66.4 million
in FY2001 if enrollments continue as projected. The increase in
tuition revenue would be retained by the institutions with no
subsequent reduction in general revenue appropriations. The
change to scholarship nonresident tuition waivers is estimated to
cause 1,800 students to drop out of school for a savings to the
state of approximately $7 million per year in formula funding and
for 450 to continue to enroll paying full nonresident tuition.
Estimates of savings to general revenue include the impact of law
school tuition increases, formula funding savings, and increased
tuition paid by students who lose the nonresident tuition waiver.
Estimates of gain to local funds include undergraduate, pharmacy,
and optometry tuition increases which would be retained by the
institutions.
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 Institutions'
Revenue Fund 001 Local Funds
1996 $9,600,000 $2,500,000
1997 9,600,000 2,700,000
1998 9,600,000 18,300,000
1999 9,600,000 34,200,000
2000 9,600,000 50,100,000
2001 9,600,000 66,400,000
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
No fiscal implication to units of local government is
anticipated.
Source: Higher Education Coordinating Board
LBB Staff: JK, MK, WRR