LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
February 25, 1997
TO: Honorable Irma Rangel, Chair IN RE: House Bill No. 621
Committee on Higher Education By: Jackson
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB621 ( Relating
to the transfer of the Texas Chiropractic College to the Texas
A&M University System.) this office has detemined the following:
Biennial Net Impact to General Revenue Funds by HB621-As Introduced
Implementing the provisions of the bill would result in a net
negative impact of $(7,410,000) to General Revenue Related Funds
through the biennium ending August 31, 1999.
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 would transfer the Texas Chiropractic
College, including the organization, control, management, and
property to the Texas A&M University System if agreed by both
boards. The bill would establish The Texas A&M University System--Texas
A&M Chiropractic College--Pasadena as a component institution
of the system. The transfer would take effect on September
1, 1997.
Fiscal Analysis
The bill would transfer all land, buildings, facilities, improvements,
equipment supplies or property; contracts or other written obligations;
and any funds dedicated to or held for the use and benefit of
the Texas Chiropractic College to the board of regents for the
use of the college.
The bill would classify employees of
the Texas Chiropractic College on the date of transfer as new
employees of the Texas A&M System for purposes of employee benefits.
However, employees could maintain their years of service for
the purpose of accruing annual leave.
Methodolgy
It is assumed that the college would not be formula funded and
that their total budget as a state institution would be the
same as their current total budget, except for additional costs
for state employee benefits. The fiscal year 1996 expenditures
were $6.6 million. It is assumed that enrollment would remain
stable. Enrollment for spring 1996 was 528 students.
Current
tuition and fees are $13,200 per academic year. Since the Texas
Chiropractic College is not a general academic institution,
the tuition that would apply is not specifically set in statute.
It is assumed that tuition and fees as a public institution
would be similar to the tuition rates currently charged for
the Doctor of Optometry program, or approximately $7,500. Therefore,
the institution would generate approximately $3,960,000 in tuition
and fees. It is assumed that $396,000 of the tuition would
be set aside for Texas Public Education Grants and $360,000
would be used for the Other Educational and General portion
of staff benefits. The cost from the General Revenue Fund would
be $3.4 million per year.
The bill would add new employees
to the state payroll and state funded benefits programs. It
is assumed that the cost of the state benefits programs would
be higher than the existing benefits program. The estimate
for the increased general revenue cost for staff benefits is
approximately $305,000 per year.
According to recent financial
statements, the institution has outstanding debt of approximately
$600,000. This debt and existing lease obligations are being
serviced from current revenues. No information on pending lawsuits
or liabilities is available.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable
Savings/(Cost)
from General
Revenue Fund
0001
1998 ($3,705,000)
1998 (3,705,000)
2000 (3,705,000)
2001 (3,705,000)
2002 (3,705,000)
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 ($3,705,000)
1999 (3,705,000)
2000 (3,705,000)
2001 (3,705,000)
2002 (3,705,000)
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: Agencies: 710 Texas A&M University System
781 Higher Education Coordinating Board
323 Teacher Retirement System and Optional Retirement Program
LBB Staff: JK ,LP ,LD ,DB