LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session March 11, 1997 TO: Honorable Irma Rangel, Chair IN RE: House Bill No. 1795 Committee on Higher Education By: Kamel House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB1795 ( Relating to The University of Texas at Tyler.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB1795-As Introduced Implementing the provisions of the bill would have no fiscal impact to General Revenue Related Funds through the biennium ending August 31, 1999. Beginning in FY 2000, cost savings would be realized as The University of Texas at Tyler makes the transition from upper-level formula funding to the lower four-year formula funding. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. Fiscal Analysis The bill would authorize The University of Texas at Tyler to offer freshmen and sophomore undergraduate programs. Methodolgy It is assumed that freshmen and sophomore enrollment at the University of Texas at Tyler (UT Tyler) would be limited. It is also assumed that all freshmen and sophomore students would have attended another public general academic institution. The estimated increase in full-time student equivalents is 200 in 1998, increasing to 800 by 2002. This estimate assumes a slower development of the lower division programs than experienced by other upper-level institutions converted to a four-year institution, including The University of Texas at Permian Basin, Texas A&M Corpus Christi and Texas A&M International. Since the students would have attended another public general academic institution, the State would not incur additional costs for the freshmen and sophomore students at UT Tyler. The increase in the number of students attending UT Tyler could create a need for additional buildings, capital equipment, and library materials. However, these costs are eligible for support through Permanent University Fund bond proceeds, and no general revenue costs are included. Additional costs could also be incurred for planning, faculty recruitment and program development. Special item funding could be provided for these costs. No amounts for these items are included. In addition, the State would realize costs savings in fiscal years FY 2000 to FY 2008 as The University of Texas at Tyler made the transition from formula funding at the higher upper-level rate to the four-year rate. It is estimated that faculty salary and departmental operating costs would decrease from FY 1998 to FY 2000 by 9% or $150,640; to FY 2001 by 18% or $301,280; and to FY 2002 by 28% or $468,657. 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 Probable Savings/(Cost) Savings/(Cost) from General from General Revenue Fund Revenue Fund 0001 0001 1998 $0 1998 0 2000 0 150,640 2001 0 301,280 2002 0 468,657 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 $0 1999 0 2000 150,640 2001 301,280 2002 468,657 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: 781 Higher Education Coordinating Board 720 University of Texas System Administration LBB Staff: JK ,LP ,DB