LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session February 5, 1997 TO: Honorable Teel Bivins, Chair IN RE: Senate Bill No. 148 Committee on Education By: Bivins Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB148 ( Relating to the development of certain curricula by the Texas Higher Education Coordinating Board.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB148-As Introduced Implementing the provisions of the bill would result in a net impact of $0 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 require the Texas Higher Education Coordinating Board to develop a core curriculum consisting of at least 42 semester credit hours. A student who successfully completes the core curriculum at an institution of higher education and transfers to another institution of higher education could not be required to take additional core courses. Additionally, the bill would require the Coordinating Board to develop transfer curricula. A student who successfully completes, at one institution, a transfer curriculum developed by the Board for a particular field of study and transfers to another institution could not be required to complete additional lower division requirements for the same field of study. The bill would require that the Coordinating Board adopt rules to implement the provisions of the bill by September 1, 1998. The bill is similar to the core curriculum recommendations part of Texas Performance Review, ED 11, Eliminate Funding for Excessive Undergraduate Credit Hours. Methodolgy Based on data from the Higher Education Coordinating Board, approximately 36,000 students transfer from Texas community colleges to universities each year. It is assumed for purposed of this analysis that each of these students would take an additional six semester credit hours at a community college before transferring but would take nine fewer semester credit hours at the university after transfer. The net result would be the equivalent of 7,200 additional FTE students at community colleges and the equivalent of 10,800 fewer university students. The cost to the general revenue fund of one FTE university student is approximately $4,300. Because university students who transfer from community colleges would take fewer hours, it is estimated that the eventual savings to the general revenue fund would be $46.4 million per year (10,800 FTE students x $4,300). These savings would be partially offset by the increase in hours taken at community colleges. The cost to the general revenue fund for community college students is approximately $2,400. The cost to the general revenue fund of the additional 7,200 FTE community college students is estimated at $17.3 million. It is assumed that the Coordinating Board would adopt rules implementing the provisions of the bill in July 1998. Therefore, community colleges would begin seeing increased enrollments in fiscal year 1999. However, universities would begin seeing decreased enrollments as those students transfer to the universities beginning in fiscal year 2000. Under the present method of funding community colleges using base period enrollment, increased enrollment in community colleges in fiscal year 1999 would not affect appropriations to the community colleges for the 1998-99 biennium. Similarly, it is assumed that the savings from decreased university enrollments would be phased in during the 2000-2001 biennium as students begin meeting the transfer curriculum requirements and are taking fewer hours at the universities. It is assumed that the costs of developing the core curriculum at the Coordinating Board and the costs of implementation at the institutions would have no significant fiscal impact. 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 $0 1998 0 0 2000 (17,280,000) 23,220,000 2001 (17,280,000) 23,220,000 2002 (17,280,000) 46,440,000 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 $0 1999 0 2000 5,940,000 2001 5,940,000 2002 29,160,000 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. The cost to local community college taxing districts of one FTE student is estimated at $1,030. The cost of an additional 7,200 FTE students would be approximately $7.4 million per year beginning in fiscal year 1999. Similar annual fiscal implications would continue as long as the provisions of this bill are in effect. Source: Agencies: 720 University of Texas System Administration 781 Higher Education Coordinating Board 304 Comptroller of Public Accounts 304 Comptroller of Public Accounts LBB Staff: JK ,LP ,LD