LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session May 8, 2001 TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance FROM: John Keel, Director, Legislative Budget Board IN RE: HB253 by Longoria (Relating to benefits paid to survivors of certain law enforcement officers, firefighters, and other public servants.), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB253, As Engrossed: negative impact of $(2,832,740) 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. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $(1,496,980) * * 2003 (1,335,760) * * 2004 (1,332,740) * * 2005 (1,471,520) * * 2006 (1,318,500) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from * * Year General Revenue Fund Compensation to Victims of * * 0001 Crime Account/ GR-Dedicated * * 0469 * * 2002 $(1,496,980) $(992,520) * * 2003 (1,335,760) (885,040) * * 2004 (1,332,740) (877,560) * * 2005 (1,471,520) (970,080) * * 2006 (1,318,500) (862,600) * *************************************************************************** Fiscal Analysis The bill as substituted modifies the provisions in the Government Code relating to benefits paid to survivors of law enforcement officers, fire fighters, and other public safety workers killed in the line of duty. The bill increases the lump sum death benefit paid to a surviving spouse from $50,000 to $250,000. If there is no surviving spouse, the $250,000 benefit is divided equally among all surviving children regardless of age. If there are no surviving spouses or children, a $250,000 benefit is paid to the surviving parent(s). The bill eliminates monthly benefits for surviving minor children and benefits for surviving dependent siblings. The bill exempts a surviving spouse or minor child who enrolls in an institution of higher education from tuition and fees at that institution, from the cost of housing and food at that institution, and pays to the student the cost of the student's books. Only survivors of public safety personnel killed after September 1, 2000 would be eligible for the increased benefits. Methodology The estimated increased cost to the state for the lump sum payments to a surviving spouse is $2,000,000 per year, based on the 1994-2000 average of 10 deaths a year involving a payment to a spouse. ERS projects that there will also be one $250,000 payment each year to surviving children when there is no eligible surviving spouse, and one $250,000 payment to surviving parents every three years where there is no surviving spouse or children, based on past experience. There will be estimated savings of $18,702 in fiscal year 2002, increasing to $93,510 in fiscal year 2006, due to the elimination of the monthly benefits paid to surviving children. The program is currently funded with General Revenue, but benefits paid to survivors for a death that is attributed to criminally injurious conduct could potentially be funded using the Compensation to Victims of Crime Fund. According to ERS estimates based on previous claims, 40% of the deaths would be attributed to criminally injurious conduct. Therefore, for this estimate, the method of financing for the cash payments to survivors reflects both General Revenue and the Compensation to Victims of Crime Fund. Based on information on the ages of children receiving benefits under the program, it is estimated that in the first year of the bill, 1 dependent child will receive free tuition, fees, books, and room and board at a public university. One additional child will be eligible every other year, with 3 children eligible by fiscal year 2006. According to the Higher Education Coordinating Board, the average cost per student for these expenses is $8,200 per year at a public university. The resulting cost to the institutions is estimated at $8,200 in fiscal year 2002, increasing to $24,600 in fiscal year 2006. The bill specifies that these costs will be paid from General Revenue appropriated to the institutions. Local Government Impact According to the Higher Education Coordinating Board, the average student cost for tuition, fees, books and room and board at a community college is $5,728 per year. Each year an additional one or two children will be eligible to receive the increased benefits and may choose to attend a community college. Source Agencies: 327 Employees Retirement System LBB Staff: JK, SD, SC