LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session May 4, 1995 TO: Honorable David Sibley, Chair IN RE: Committee Substitute Committee on Economic Development for Senate Senate Bill Austin, Texas No. 1528 By: Ellis FROM: John Keel, Director In response to your request for a Fiscal Note on Senate Bill No. 1528 (relating to the establishment of the school-to-work component of the state's workforce development system and to the creation of the Texas Skill Standards Board) this office has determined the following: The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. The bill establishes a school-to-work component of the state's workforce development system. The bill authorizes the use of federal funds to underwrite the costs of planning and establishing a state-local school-to-work component. It is possible that the state could receive up to $60 million for a five-year implementation grant, as authorized under the federal School-to-Work Opportunities Act of 1994. Thirty percent of the grant funds would go to the state, with 10% allowed for administrative costs and 70% of the funds would be distributed at the local level. However, the state has not yet been awarded the implementation grant. The school-based learning element of the program consists of at least two years of secondary education and at least one year of postsecondary education or training. If the program is structured in a way to redirect the use of existing resources and if the total number of students trained remains at FY 95 levels, there could be minimal fiscal impact on junior colleges. However, implementation of the program could also require additional resources. The cost of education at the junior college level is estimated at $3700 per student per year. Depending on the number of students going through the program, costs could range from $3.7 million for 1,000 students to $370 million for 100,000 students. Sources of funds to pay for the costs could include federal funds, gifts, local taxes or general revenue. The Texas Education Agency would be responsible for modifying performance indicators and assisting in a study of workplace liability issues. It would also be responsible for providing services such as technical assistance to schools and professional development activities. The Commissioner of Education would help develop and implement a plan for the preparation and certification of instructors who are proficient in developing curricula for and teaching school-to-work programs. Depending on the activities of the Workforce Development Department the fiscal impact could be minimal or significant to the agency. The Texas Council on Workforce and Economic Competitiveness (TCWEC) would be responsible for strategic planning, oversight and evaluation of school-to-work. It would advise several agencies on the administration and implementation of school to work. It would also evaluate the state's labor market information system and develop integrated databases and information systems to support school to work. The bill creates the Texas Skill Standards Board as an advisory board. TCWEC would be required to provide staff support. It is estimated that TCWEC would require 3 additional FTEs and $141,000 in federal funds each fiscal year to comply with the provisions of the bill. The Texas Employment Commission would be required to coordinate existing services with various state agencies and to provide basic placement services. The costs could be absorbed within existing funding. Costs associated with the collection of data for the labor market information system would add 4 FTEs and require an additional $189,000 per year. It anticipated that federal funds will be available. However, the source of funding could be from general revenue in the event that federal funds are not available. In the event that Job Training Partnership Act (JTPA) funds are accessible for the school-to-work program, the Department of Commerce would require two additional planners at a cost of approximately $116,000 in FY 96 and $100,000 per fiscal year thereafter. The cost of the additional FTE's would come from federal JTPA funds. The fiscal implication to the State or units of local government cannot be determined. Source: Texas Employment Commission, Council on Workforce and Economic Competitiveness, Department of Insurance, Higher Education Coordinating Board, Department of Commerce LBB Staff: JK, LR, RR