LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 7, 2001
TO: Honorable Teel Bivins, Chair, Senate Committee on
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2531 by Junell (Relating to tuition rates at public
institutions of higher education.), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2531, As Engrossed: positive impact of $27,411,228 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 $0 *
* 2003 27,411,228 *
* 2004 39,377,810 *
* 2005 63,421,746 *
* 2006 89,456,862 *
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All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) *
* Year General Revenue Fund from Estimated Other *
* 0001 Educational and General Income *
* Account/ GR-Dedicated *
* 0770 *
* 2002 $0 $0 *
* 2003 27,411,228 27,411,228 *
* 2004 39,377,810 53,840,486 *
* 2005 63,421,746 80,152,224 *
* 2006 89,456,862 106,183,722 *
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Fiscal Analysis
The bill increases the resident tuition rate charged by general academic
teaching institutions (universities) by $2.00 per semester credit hour
each academic year from 2003 until 2007 and by $1.00 per semester credit
hour each academic year from 2008 until 2012. The maximum rate in 2012
would be $55.00. The current rate is $40.00 per semester credit hour.
The bill authorizes universities to charge an additional amount for
designated tuition (formerly called "building use fee") equal to the
rates above. These amounts would be considered institutional funds.
The bill removes the current minimum tuition charge of $120 for each
semester.
The bill exempts students who graduate from Texas high schools while
living in the state with their parent, guardian or conservator from
non-resident tuition, regardless of the citizenship or immigration
status of the student. The student must reside in the state for at least
one year between the first day the person attended a public or private
high school in the state and the date the person graduated from such a
high school or received the equivalent of a high school diploma.
Methodology
Based on information provided by universities in their Legislative
Appropriation Request, the estimated increase in revenue for tuition rate
increases for fiscal year 2003 is $26,032,628. This amount does not
include any adjustments for projected changes in enrollment. Based on
the methodology used for tuition exemption fiscal notes, it is assumed
that additional tuition revenue as result of the increases above $40 per
semester credit hour would result in a corresponding decrease in general
revenue appropriations to the universities.
Universities would also realize additional revenue for increases in
designated tuition rates (formerly called building use fee). However,
these amounts are not appropriated and would not impact General Revenue.
Based on analysis prepared by the Texas Higher Education Coordinating
Board (THECB), exempting students who graduate from Texas high schools
while living in the state with their parents from non-resident tuition
would increase the number of students attending public institutions by
2,392 in fiscal year 2002. It is assumed that 70 percent of these
students would attend community colleges and that 30 percent would attend
universities. It is also assumed that the retention rates for these
students would be 70 percent. Resident tuition paid by new students who
would not have otherwise attended universities is estimated to be
$811,340 in fiscal year 2002 and $1,378,600 in fiscal year 2003.
Universities would also realize an increase in non-appropriated tuition
revenue. However, these amounts would not impact State appropriations.
Since appropriations for formula amounts are based on historical
enrollment, additional formula costs for new students would not be
incurred until fiscal year 2004. The additional General Revenue formula
costs for new students at both universities and community colleges is
estimated to be $14,462,676 in fiscal year 2004 and $16,730,478 in fiscal
year 2005.
Local Government Impact
Community colleges would also receive additional tuition revenue from new
students attending the institutions, who would not otherwise have
attended.
Source Agencies:
LBB Staff: JK, CT, PF, DB