LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session March 28, 1995 TO: Honorable Irma Rangel, Chair IN RE: House Bill No. 2467 Committee on Higher Education By: Coleman House of Representatives Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 2467 (Relating to tuition and fees at public institutions of higher education.) this office has determined the following: The bill would have an impact on several tuition rates at public institutions of higher education. 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. 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 $500 per year. Estimated savings to general revenue assume continuation of the current policy of supplanting general revenue funding with gains in tuition revenue. The estimates also assume that current enrollment projections would not be significantly effected by increased tuition. It is estimated that the law school tuition increase would generate $2.1 million per year in savings to general revenue. Undergraduate tuition increases are estimated to generate general revenue savings of $15.6 million in FY1998, increasing to $63.4 million in FY2001. The change in the scholarship nonresident tuition waive is estimated to cause 724 students to drop out of school and for 180 to continue to enroll paying full nonresident tuition. The net impact of the scholarship waiver change is estimated at $2.8 million per year. The increase in pharmacy and optometry tuition would have no impact on general revenue since these increases are exempt by statute from effecting general revenue appropriations. They would, however, represent an estimated increase in local income of $2.5 million per year. 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 Local Funds General Revenue Fund 001 1996 $5,100,000 $2,300,000 1997 5,100,000 2,500,000 1998 20,700,000 2,600,000 1999 36,500,000 2,800,000 2000 52,400,000 2,900,000 2001 68,500,000 3,000,000 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