LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 6, 2001
TO: Honorable Irma Rangel, Chair, House Committee on Higher
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB152 by Brown, Fred (Relating to tuition charged at
state institutions of higher education for a summer term
or session.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB152, As Introduced: negative impact of $(40,558,880) through *
* the biennium ending August 31, 2003. *
* *
* 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 *
* 2002 $(19,784,820) *
* 2003 (20,774,060) *
* 2004 (19,512,760) *
* 2005 (18,303,400) *
* 2006 (17,148,580) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Change in *
* Year Savings/(Cost) Savings/(Cost) Revenue Number of State *
* from General from General Gain/(Loss) Employees from *
* Revenue Fund Revenue Fund from Estimated FY 2001 *
* 0001 0001 Other *
* Educational and *
* General Income *
* Account/ *
* GR-Dedicated *
* 0770 *
* 2002 $(19,784,820) $0 $(19,784,820) 0.0 *
* 2003 (20,774,060) 0 (20,774,060) 0.0 *
* 2004 (21,812,760) 2,300,000 (21,812,760) 0.0 *
* 2005 (22,903,400) 4,600,000 (22,903,400) 0.0 *
* 2006 (24,048,580) 6,900,000 (24,048,500) 0.0 *
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Fiscal Analysis
The bill would reduce tuition rates for summer terms at general academic
institutions, effective with the start of summer 2002 terms.
Methodology
Based on current enrollments, the summer tuition rate reduction results
in an initial tuition revenue loss of $19.8 million a year. It is
assumed that reduced tuition rates would cause an increase in summer
enrollment of 5 percent each year for 5 years. Therefore, the tuition
revenue reductions would also grow by 5% a year to over $24 million in
fiscal year 2006. An equivalent amount of general revenue funds would be
needed to reimburse universities for the loss of tuition revenue.
It is assumed that the increase in students attending the summer terms
would be made up of students who were formerly attending the fall and
spring semesters. Therefore, overall enrollment for the full year would
remain the same. However, the distribution of students attending summer
or fall/spring semesters would change and result in a more efficient use
of classroom space. Based on information from the Texas Higher
Education Coordinating Board, it is estimated that this efficiency might
result in a reduction in physical plant costs of 1 percent each year for
four years or $2.3 million increasing to $6.9 million. The cost savings
would not be realized until Fiscal Year 2004, when new formula amounts
would be generated. However, it is possible that these cost savings
could be offset by increases in utilities costs for the summer terms.
Universities would also realize a reduction in non-appropriated tuition
revenue. These amounts are estimated to be initially $30.7 million per
year increasing to $61.3 million. However, these amounts would not
impact State appropriations.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 781 Texas Higher Education Coordinating Board
LBB Staff: JK, CT, DB