LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 8, 1999
TO: Honorable Irma Rangel, Chair, House Committee on Higher
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB713 by Cuellar (Relating to the consolidation,
modification, or repeal of student financial aid, grant,
and scholarship programs or tuition and fee waivers and
the creation of the Texas Gateway to the Future
Scholarship Program ), Committee Report 1st House,
Substituted
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* Estimated Two-Year Net Impact to General Revenue Related Funds for *
* HB713, Committee Report 1st House, Substituted: negative impact *
* of $(96,429,378) through the biennium ending August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $(34,814,190) *
* 2001 (61,615,188) *
* 2002 (92,699,814) *
* 2003 (131,558,213) *
* 2004 (140,855,483) *
****************************************************
All Funds, Five-Year Impact:
**************************************************************************
*Fiscal Probable Probable Probable *
* Year Savings/(Cost) from Savings/(Cost) from Savings/(Cost) from *
* General Revenue Fund General Revenue Fund General Revenue Fund *
* for Scholarships for Coordinating for Increaes in *
* 0001 Board's Formula Funding *
* Administrative Costs 0001 *
* 0001 *
* 2000 $(34,004,128) $(810,062) $0 *
* 2001 (60,606,097) (1,009,091) 0 *
* 2002 (90,212,024) (1,453,180) (1,034,610) *
* 2003 (128,496,161) (2,027,442) (1,034,610) *
* 2004 (137,612,721) (2,164,191) (1,078,571) *
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Fiscal Analysis
The bill would establish the Texas Gateway to the Future Scholarship
Program. The program would provide college scholarships for a student
who graduated high school not earlier than the 1998-99 school year. The
student must have completed the recommended or advanced high school
curriculum or equivalent curriculum. If the student's high school did
not offer the entire recommended or advanced high school curriculum or
equivalent curriculum, the student must have taken all the courses
offered. Students would be obliged to meet financial need requirements
and to enroll at least one-half of a full course load. To maintain the
scholarship, a student would have to make satisfactory academic progress
toward a degree.
The amount of the scholarships would be based on the average cost of
tuition and fees at a public university, public community college, or
public technical institute, as appropriate. The scholarship amount would
be reduced only if other gift aid for which the person is eligible
exceeds the total cost of attendance.
The Coordinating Board (THECB) would administer the program, including
defining financial need requirements and conduct a study of the
relationship of the college performance of students to their
participation in the recommended or advanced high school curriculum.
THECB would develop a center for financial aid information and establish
a new advisory committee to develop information provided by the center.
The center would maintain a toll-free telephone line.
The bill would require the Texas Education Agency to expand the minimum
standards for school district staff development to include guidelines for
principals, counselors, and teachers to provide middle school students,
junior high school students, high school students, and their parents with
information about higher education, including financial aid
opportunities.
A school district would be limited in the percentage of recommended or
advanced curriculum courses that are offered by distance learning
methods.
Separate from the costs indicated above, the bill would eliminate a
number of existing scholarship programs and transfer these funds to THECB
to operate the scholarship program. Two of these programs are phased
out over a four-year period. The amount of general revenue transferred
for these purposes is $543,528 in fiscal year 2000; $882,108 in fiscal
year 2001; $338,580 in fiscal year 2002; $338,580 in fiscal year 2003;
and $338,580 in fiscal year 2004.
Because of the phasing out of the New Horizons Scholarship Program,
institutions of higher education would retain their portion of the
matching funds which could be used for other purposes. The $735,000 per
year in local match would be phased out over a four-year period.
Methodology
For purposes of this estimate, it is assumed that "financial need" refers
to students whose family income level was less than $15,000 (these
students have an expected family contribution of zero). To determine
scholarship costs, the statewide average costs of tuition and fees at a
community college or four-year institution were used.
Estimates of the number of eligible students were made based on the
number of high school students expected to complete the recommended or
advanced or equivalent curriculum. Historical information on the rate of
high school graduates enrolling and being retained in institutions of
higher education was used to determine the number of students receiving
scholarships. Additional general revenue would be necessary to cover the
increase in formula funding for additional students.
THECB estimates an administrative expense of 1.5 percent to implement the
program each year. It indicates a need for an additional $200,000 for
start-up of the program and $100,000 each year for the operation of the
financial aid center.
Local Government Impact
No significant fiscal implication to school districts is anticipated.
Source Agencies:
LBB Staff: JK, CT, PF