LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
May 11, 1999
TO: Honorable Bill Ratliff, Chair, Senate Committee on Finance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1398 by Coleman (relating to indigent health care), As
Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Fundsfor *
* HB1398, As Engrossed: negative impact of $(16,803,208) 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 $(5,312,008) *
* 2001 (11,491,200) *
* 2002 (27,800,913) *
* 2003 (27,800,913) *
* 2004 (27,800,913) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Change in *
* Year Savings/(Cost) Revenue Savings/(Cost) Number of State *
* from General Gain/(Loss) to to Local Employees from *
* Revenue Fund Local FY 1999 *
* 0001 *
* 2000 $(5,312,008) $17,351,805 $(6,362,231) 6.0 *
* 2001 (11,491,200) 28,868,340 (13,742,722) 9.0 *
* 2002 (27,800,913) 45,178,053 (20,350,723) 9.0 *
* 2003 (27,800,913) 45,178,053 (20,350,723) 9.0 *
* 2004 (27,800,913) 45,178,053 (20,350,723) 9.0 *
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Fiscal Analysis
The bill would modify the County Indigent Health Care Program (CIHCP),
administered by the Texas Department of Health (TDH).
1. The minimum creditable financial eligibility standard for the
program would be set at 17 percent of the Federal Poverty Level on
January 1, 2000, 22 percent on January 1, 2001, and at not less than 25
but not more than 50 percent of the Federal Poverty Level in subsequent
years.
2. The percentage of county general revenue would be lowered from ten
to eight percent that a county must expend to become eligible for state
assistance, beginning in fiscal year 2002.
3. Section 61.038(b) would increase the state matching ratio from 80
to 90 percent for payments made by the counties eligible for assistance
for health services for eligible persons. In addition, the bill would
provide for a mechanism allowing the department to waive the requirement
that the county meet the minimum expenditure level and provide state
assistance at a lower percentage of the General Revenue Tax Levy if the
county demonstrates that the county is unable to satisfy the eight
percent expenditure level because the county's General Revenue Tax Levy
is growing at a faster rate than its indigent health care expenditures,
or certain other circumstances.
4. The bill would add a Chapter 46 to the Health and Safety Code,
which would create a new account in the state treasury, the Tertiary Care
Facility Account, to be composed of money appropriated to the account
and gifts, grants, and donations. TDH would be required to certify to
the Comptroller, for each designated tertiary care facility, the cost of
unreimbursed tertiary care provided by the facility to persons who reside
outside of the service area of the facility or unit of local government.
In addition, the department would be required to allocate funds
available in the Tertiary Care Facility Account to facilities based on
the percentages computed by dividing the cost of the facility's
unreimbursed tertiary medical services by the total cost of all
facilities' unreimbursed tertiary medical services.
5. The bill would amend Chapter 26 of the Tax code providing for a tax
rate adjustment for indigent health care.
Methodology
1. TDH assumes that a total of nine additional Full-Time Equivalent
positions and associated administrative costs would be incurred in
association with the implementation of the provisions of this bill.
First year staff and some costs have been reduced for a phase-in period.
Administrative costs are assumed to be $250,641 in the first year and
$288,556 in subsequent years.
2. Changing the minimum eligibility standard to 17 percent of the
Federal Poverty Level in fiscal 2000 is assumed to cost $4,393,824
million per year in additional General Revenue Funds. Changing the
standard to 22 percent in 2002 is assumed to cost an additional
$10,535,101. TDH assumes that the average eligibility level set by
counties in subsequent years would be 25 percent and would cost the state
an additional $15,585,418 per fiscal year.
3. Lowering the percentage of county general revenue from ten to eight
percent, beginning in fiscal year 2002, that a county must expend to
become eligible for state assistance is assumed to increase state
expenditures by $11.3 million per year, beginning in fiscal year 2002,
and decrease county expenditures by the same amount. The provision
allowing for a waiver of the requirement that a county expend eight
percent of the general revenue tax levy under certain circumstances is
likely to have a fiscal impact to the state if applied.
4. Increasing the state matching ratio from 80 to 90 percent for
payments made by the counties eligible for assistance for health services
for eligible persons is assumed to increase state expenditures by $0.7
million per year and decrease county expenditures by the same amount.
5. No information is available regarding the amount of gifts, grants,
and donations that might be applied towards the Tertiary Care Fund.
6. The provision amending the tax code is not anticipated to have any
fiscal impact to the state.
Local Government Impact
The estimated impact to units of local government is shown in the table
above. In general, the provisions of this bill would shift more
responsibility to the state to cover expenditures for health services
made at the county level.
The bill would allow effective tax rate increases for taxing units
increasing expenditures for indigent health care. Increased effective
tax rates would probably result in increased adopted tax rates by taxing
units, thus, increasing local revenues in tax years in which indigent
health care expenditures are made. The amount of increase would reflect
increases in expenditures.
Source Agencies: 304 Comptroller of Public Accounts, 501
Department of Health
LBB Staff: JK, BB, KF