LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 23, 1999
TO: Honorable Teel Bivins, Chair, Senate Committee on
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB37 by Ellis, Rodney (Relating to providing
scholarships to students at institutions of higher
education who meet certain academic, citizenship,
financial need, and other requirements), Committee
Report 1st House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB37, Committee Report 1st House, Substituted: negative impact of *
* $(102,237,329) 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 $(40,758,949) *
* 2001 (61,478,380) *
* 2002 (142,605,203) *
* 2003 (145,188,924) *
* 2004 (154,803,817) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Change in Number of State *
* Year General Revenue Fund Employees from FY 1999 *
* forScholarships and *
* Administrative Costs *
* 0001 *
* 2000 $(40,758,949) 4.0 *
* 2001 (61,478,380) 4.0 *
* 2002 (142,605,203) 6.0 *
* 2003 (145,188,924) 6.0 *
* 2004 (154,803,817) 6.0 *
***************************************************************************
Technology Impact
The Texas Higher Education Coordinating Board would have to develop new
information systems to administer this program. The bill would require
tracking of students for a number of years to insure that they complete
the teaching requirement or repay the money.
Fiscal Analysis
The bill would establish the Texas Hope Scholarship Program and the Teach
for Texas Grant Program. The Hope Scholarship would provide college
scholarships for students who graduated from public high school not
earlier than the 1998-99 school year. The student must have completed the
recommended or advanced high school curriculum. If the student's high
school did not offer the entire recommended or advanced high school
curriculum, the student must have taken all the courses offered.
Students would have to meet financial need requirements and enroll at
least three-fourths of a full course load not later than the 16th month
after graduating from high school. These students must come from a
low-income or middle-income family and establish financial need as
defined by the Coordinating Board. The scholarships could be used by
Texas residents at any institution of higher education and would equal
the average cost of tuition and fees at a public university, community
college, or technical institute in Texas. The scholarship amount would
be reduced only if other gift aid for which the person is eligible
exceeds the total cost of attendance. To maintain the scholarship, a
student would have to make satisfactory academic progress toward a
degree.
A Teach for Texas Grant could be double the amount of a Hope Scholarship.
Only college juniors or seniors who are eligible to receive a Hope
Scholarship are eligible for a Teach for Texas Grant. The student would
have to be in a baccalaureate degree program in a teaching field that is
experiencing a critical shortage of teachers; or agree to teach in a
public school that is experiencing a critical shortage of teachers. A
recipient would have to teach full-time for five years to complete the
obligation. A student could receive both the Hope Scholarship and Teach
for Texas Grant. The grant would be considered a loan until the
conditions of the grant are met.
The Coordinating Board would administer the program, including defining
financial need requirements. Each year, the Coordinating Board would
publish the amount of a scholarship for each type of institution. The
Coordinating Board would distribute program rules to each eligible
institution and each school district.
School districts would have to notify students of the scholarship program
and ensure that each student's transcript or diploma indicate the high
school curriculum completed by the student.
The bill would eliminate a number of existing tuition and fee exemption
and scholarship programs. A portion of this revenue would be
transferred to the Coordinating Board to fund this scholarship program.
Another portion would be maintained by the institutions, thus allowing
state general revenue to these institutions be reduced.
Methodology
For purposes of this estimate, it is assumed that "financial need" refers
to students whose expected family contribution is zero. To determine
scholarship costs, the statewide average costs of tuition and fees at
public universities, community colleges, and technical institutes were
used.
Estimates of the number of eligible students were made based on the
number of public high school students expected to complete the
recommended or advanced 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. The awards for the Teach for Texas Grants are reflected in
costs starting in 2002. Additional general revenue would be necessary
to cover the increase in formula funding for additional students.
The Coordinating Board indicates a need for one-time costs for developing
systems for awarding scholarships and tracking students in the Teach for
Texas programs. There would be ongoing maintenance costs for these
systems, as well as, additional staff needed to administer the programs.
Local Government Impact
Community colleges would experience some savings from the repeal of
programs that exempt certain students from tuition and fees at these
institutions.
Source Agencies:
LBB Staff: JK, CT, PF