LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 1, 1997 TO: Honorable Irma Rangel, Chair IN RE: House Bill No. 1940 Committee on Higher Education By: Price House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB1940 ( Relating to the Texas Academy of Leadership in the Humanities at Lamar University at Beaumont.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB1940-As Introduced Implementing the provisions of the bill would result in a net negative impact of $(402,600) 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. Fiscal Analysis The bill would amend the section of the Texas Education Code establishing the Texas Academy of Leadership in the Humanities at Lamar University at Beaumont. The bill would clarify the mission of the academy, make it eligible for allotments under the Foundation School Program, and address a number of administrative and financial issues. Methodolgy Currently, the Academy enrollment is 160 students. It is assumed that enrollment would increase by 40 students a year. Academy students would be eligible for funding under the Foundation School Program. However, the population likely to be admitted to the academy may not be comparable to that of a typical school district. It is assumed students at the academy would require fewer special education services, would not receive funding-eligible career and technology education, would not generate transportation funding, would not participate in the national school lunch program (the funding basis for compensatory education), and would not be limited in English proficiency. It is assumed that the eligible students would only qualify for regular program funding. To the extent that a student leaves a public school, such as Beaumont ISD, for the academy, the state cost of the Foundation School Program would be reduced. If a Beaumont ISD student in the regular program were to leave the public school, the state would save about $2,624 in regular program allotment. Academy students would also generate a cost to the state based on Foundation School Program allotments and the local share of the program attributable to Beaumont ISD. The funding calculation would be comparable to the mathematics and science academy at the University of North Texas. A comparable calculation would result in a local share of approximately $2,533 per ADA, based on Beaumont ISD property wealth. The small district adjustment would significantly increase the calculated allotment amount, because of the small size of the academy. The estimated Foundation School Program cost per ADA for 350 students would be $3,448. Therefore, the allocation to the academy is estimated to be $915 per ADA, or $320,250. The Academy is also eligible to receive formula funding for college credit courses completed by Academy students, and could receive additional formula funding if the number of college credit courses increases. The Academy also receives special item funding of approximately $43,000. Additional special item funding could be provided for the increased enrollment and/or additional scholarships. 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 Change in Number Savings/(Cost) of State from Foundation Employees from School Fund FY 1997 0193 1998 ($183,000) 8.0 1998 (219,600) 8.0 2000 (256,200) 8.0 2001 (292,800) 8.0 2002 (320,250) 8.0 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 ($183,000) 1999 (219,600) 2000 (256,200) 2001 (292,800) 2002 (320,250) 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: 701 Texas Education Agency - Administration 758 Texas State University System 781 Higher Education Coordinating Board LBB Staff: JK ,LP ,DB