LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 31, 1997
TO: Honorable Bob Bullock Honorable James E. "Pete" Laney
Lieutenant Governor Speaker of the House
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB1907 ( Relating
to tuition and fees charged by public institutions of higher
education, including the redesignation of certain fees as tuition.)
this office has detemined the following:
Biennial Net Impact to General Revenue Funds by SB1907-Conference Committee Report FN Revision 1
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
Tuition and Fees
The bill would amend the Education Code to
reclassify the building use fee as tuition; would specify maximum
charges; would exclude it from the Texas Public Education Grants.
The bill would increase the tuition at a law school from $75
per semester credit hour to $80 per semester credit hour. The
bill would authorize a governing board to waive fees under certain
circumstances including for students enrolled only in distance
learning courses and for students that cannot reasonably be
expected to use the services, provided that waiver of the fees
will still enable the institution to provide the service or
facility and meet any debt obligations.
Undergraduate Cap
The
bill would require the Texas Higher Education Coordinating Board
to exclude, for formula funding purposes, the semester credit
hours of resident undergraduate students that had previously
attempted 170 or more credit hours. The bill would provide
certain exemptions. This section would apply to funding for
the 1999 Fall semester. The bill would allow the institutions
to charge an increased tuition, without exceeding the out-of-state
tuition rate, for students who had attempted 170 or more credit
hours, beginning with the fall semester 1999.
The bill would
authorize tuition rebates of up to $1,000 for Texas resident
students who earned an undergraduate degree by attempting no
more than three hours above the minimum credit hours required
for that program. The bill would require the institutions to
pay the tuition rebates from their local funds and would authorize
institutions to receive general revenue reimbursements during
the appropriations process, effective for students who enter
a baccalaureate degree program on or after September 1, 1997.
Fees
Increases
The bill would authorize the Board of Regents of
The University of Texas System to increase the international
education fee charged to students enrolled at The University
of Texas at Austin and the student union fee charged to students
enrolled at The University of Texas at San Antonio.
Methodolgy
Tuition and Fees
Because the bill reclassifies the building
use fee as tuition but does not authorize an increase in the
total tuition that an institution could charge as compared to
the amount that an institution could previously have charged
for tuition and fees, there would be no impact on the amount
of designated funds for institutions of higher education.
The
bill would increase the amount of tuition charged at a law school
by $5 per semester credit hour, or an increase of $547,325 in
Other Educational and General Income. This increase in Other
E&G would result in a redistribution of general revenue from
the law schools under the all funds methodology. The institutions
with law schools are UT Austin, University of Houston, Texas
Southern University, and Texas Tech University.
It is assumed
that the fee waivers for distance learning courses and for students
that cannot use the facility or services would not have a significant
fiscal impact on the institutions.
Undergraduate Semester
Credit Hour Cap
It is estimated that approximately 4,167 full-time
equivalent students that would be eliminated from formula funding
each year. The savings associated with this provision is estimated
to be $15.9 million beginning in fiscal years 2000 and 2001
as indicated in the table below. Savings in the subsequent
biennia would probably be less as students change their behavior
regarding their degree plan. Not all of the savings would be
realized by institutions of higher education. Certain savings
associated with employee benefits would accrue to the Teacher
Retirement System and Comptroller of Public Accounts.
Institutions
could charge these students tuition at the higher nonresident
rate to offset the loss of general revenue formula funding.
Therefore, there would be no additional impact related to the
all funds methodology of higher education funding.
Tuition
Rebate
The Coordinating Board estimates that approximately
55,000 students earn baccalaureate degrees from Texas public
universities each year and that about 20 percent of these students
would be eligible for the tuition rebate in 2001. The Coordinating
Board estimates the net impact of this provision would be a
savings to general revenue of $2.6 million in FY2001.
Aministrative
Costs
There would be administrative costs associated with the
undergraduate cap and the tuition rebate program. It is assumed
that institutions would modify their systems over the next biennia
at no cost to the state. Ongoing costs are not estimated to
be significant.
Fee Increases
It is estimated that the
increased international education fee at UT-Austin would generate
approximately $111,000 a year in institutional funds beginning
in fiscal year 1998, and that the student union fee increase
at UT San Antonio would generate approximately $349,800 in institutional
funds beginning in Fiscal Year 1998, increasing to $430,230
in Fiscal Year 1999 when the fee is estimated to increase an
additional 10 percent. These fees are auxiliary in nature and
do not affect the state supported educational and general operations
of the university.
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 Revenue Probable Probable
Gain/(Loss) from Savings/(Cost) Savings/(Cost)
Other from General from General
Educational and Revenue Fund for Revenue Fund for
General Income/ Undergraduate Tuition Rebate
GR-Dedicated for Semester Credit
Increases in Law Hour Cap
School Tuition
8022 0001 0001
1998 $547,325 $0 $0
1998 547,325 0 0
2000 547,325 15,900,000 0
2001 547,325 15,900,000 2,600,000
2002 547,325 13,900,000 2,600,000
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 15,900,000
2001 18,500,000
2002 16,500,000
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:
LBB Staff: JK ,LP ,LD