LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
February 23, 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.), As Introduced
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* Estimated two-year Net Impact to General Revenue Related Funds for *
* HB713, As Introduced: negative impact of $(102,617,751) 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 $(40,163,272) *
* 2001 (62,454,479) *
* 2002 (78,446,904) *
* 2003 (92,392,440) *
* 2004 (90,775,091) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from *
* Year General Revenue Fund for General Revenue Fund for *
* Scholarships Coordinating Board *
* 0001 Administrative Costs *
* 0001 *
* 2000 $(39,372,682) $(790,590) *
* 2001 (61,531,507) (922,972) *
* 2002 (77,287,591) (1,159,313) *
* 2003 (90,445,173) (1,947,267) *
* 2004 (89,433,589) (1,341,502) *
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Technology Impact
The Coordinating Board would need to develop an automated system to track
students and to distribute funding to the institutions.
Fiscal Analysis
The bill would establish the Texas Gateway to the Future Scholarship
Program, which would provide scholarships for entering freshman in an
undergraduate or certificate program at Texas public or private
institution of higher education. Beginning in the fall semester 2003, to
qualify for the scholarship, a high school graduate must have completed
the recommended or advanced high school curriculum. Students could
enroll part or full-time. To maintain the scholarship, a student would
have to make satisfactory academic progress toward a degree.
For students attending a public institution, the scholarship would be the
amount of tuition and required fees. For students attending private
institutions, the scholarship amount would be the average statewide
tuition and required fees in a baccalaureate degree program. The
scholarships would be based on financial need.
The scholarship amount would be reduced only if other gift aid for which
the person is eligible exceeds the total cost of attendance.
Separate from the costs indicated above, the bill would eliminate a
number of existing scholarship programs and transfer these funds to the
Coordinating Board to fund this scholarship program. The amount of
general revenue transferred for these purposes is $1,255,578 in fiscal
year 2000; $1,401,160 in fiscal year 2001; $145,582 in fiscal year 2002;
$145,582 in fiscal year 2003; and $145,582 in fiscal year 2004.
Because of the elimination of the New Horizons Scholarship Program,
institutions of higher education would retain $735,000 per year in
matching funds that could be used for other purposes.
Methodology
For purposes of this estimate, it is assumed "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.
Historical information on the rate of high school graduates enrolling and
being retained in community colleges and universities was used to
determine the number of students receiving scholarships. Different
enrollment and retention rates were used for freshmen enrolled in 1999
and those enrolled in 2003 (when recommended high school curriculum
requirement is implemented).
The Coordinating Board estimates an administrative expense of 1.5% to
implement the program and indicates a need for an additional $200,000
for start-up of the program.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
LBB Staff: JK, CT, LD, PF