LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
March 5, 1997
TO: Honorable Bill Ratliff, Chair IN RE: Senate Bill No. 606
Committee on Finance By: Lucio
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB606 ( Relating
to the establishment of a Regional Academic Health Center) this
office has detemined the following:
Biennial Net Impact to General Revenue Funds by SB606-As Introduced
Implementing the provisions of the bill would result in a net
negative impact of $(17,000,000) 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.
Fiscal Analysis
The bill would authorize the University of Texas System Board
of Regents to establish and operate a Regional Academic Health
Center (RAHC), serving Cameron, Hidalgo, Starr and Willacy counties.
The RAHC would be managed by an undesignated University of Texas
component health institution. The RAHC would provide clinical,
postgraduate, including internship and residency, or other levels
of medical professional education. The bill would authorize
the Board of Regents to provide adequate physical facilities
for use by the RAHC, including library, auditorium, research
facilities, and medical education buildings. Funding for construction
of the facilities may include, but not be limited to, general
revenue appropriations and tuition revenue bonds. The bill
would require that a teaching hospital be furnished and operated
at no cost or expense to the state.
Methodolgy
This analysis assumes implementation with moderate costs and
maximum use of existing resources. The assumptions made in
developing this fiscal note include: (1) expansion of medical
residencies; (2) use of existing classroom and clinical facilities
with appropriate expansion for clinical teaching activities;
(3) no new construction during the first biennium except for
expansion and enhancements to existing clinical facilities;
(4) geographic coverage would be limited to the four-county
area designated in the bill; (5) the RAHC would train medical
students, interns and residents; (6) faculty and staff would
be hired; and (7) on-going instructional and program support
would be needed in areas such as library and telecommunication
resources and services, and faculty/student services.
Based
on the above assumptions, $3.5 million is estimated for enhancing
existing classroom and clinical facilities, and $6.3 million
is estimated for operating costs in fiscal year 1998. In 1999,
operating costs are estimated to be $7.2 million and would increase
in each successive year. Operating costs include professional
and support salaries, employee benefits, stipends, institutional
and program support resources and services, and other costs
necessary to operate the RAHC. FY 2000 estimates include $2.5
million for capital expenditures.
The four-county area currently
supports 28 medical residents. The six-year implementation
plan assumes 80 third- and fourth-year medical students doing
rotations at the RAHC and 50 additional medical residents by
2003.
No specific authority for issuance of tuition revenue
bonds has be given pursuant to Chapter 55 of the Texas Education
Code. Therefore, no cost for debt service has been included.
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 General Employees from
Revenue Fund FY 1997
0001
1998 ($9,800,000) 45.0
1998 (7,200,000) 60.0
2000 (12,070,000) 80.0
2001 (11,470,000) 100.0
2002 (13,680,000) 105.0
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 ($9,800,000)
1999 (7,200,000)
2000 (12,070,000)
2001 (11,470,000)
2002 (13,680,000)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
No significant fiscal implication to units of local government
is anticipated.
Source: Agencies: 720 University of Texas System Administration
352 Bond Review Board
781 Higher Education Coordinating Board
LBB Staff: JK ,RR ,CF