LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 6, 2001 TO: Honorable Dale B. Tillery, Chair, House Committee on Pensions & Investments FROM: John Keel, Director, Legislative Budget Board IN RE: HB3510 by Gutierrez (Relating to the coverage of certain adjunct faculty members of certain institutions of higher education under the Texas Employees Uniform Group Insurance Benefits Act.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB3510, As Introduced: negative impact of $(18,383,702) 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 $(8,754,374) * * 2003 (9,629,328) * * 2004 (10,592,261) * * 2005 (11,651,487) * * 2006 (12,816,636) * **************************************************** All Funds, Five-Year Impact: ***************************************************** * Fiscal Year Probable Savings/(Cost) from * * General Revenue Fund * * 0001 * * 2002 $(8,754,374) * * 2003 (9,629,328) * * 2004 (10,592,261) * * 2005 (11,651,487) * * 2006 (12,816,636) * ***************************************************** Fiscal Analysis This bill makes adjunct faculty members at public community and junior colleges eligible to receive coverage under the Texas Employees Uniform Group Insurance Benefits Act. Eligible adjunct faculty are faculty members who teach six or more semester credit hours per semester or term, and who have been employed as a faculty member of the same public community or junior college for the preceding five years. Based on current policy, the state would pay for 100% of the cost of employee-only coverage and 50% of dependent coverage. Methodology This bill would impact an estimated 2,417 faculty members. The per employee state contribution to the Uniform Group Insurance Program in fiscal year 2002 is estimated to be $3,622, for a total cost of $8,754,374. The state's contribution in fiscal year 2003 is projected to be $3,984, for a total cost of $9,629,328. For the following years, it is assumed that insurance costs will increase 10% each year. Local Government Impact To the extent that community and junior colleges are currently providing some level of health insurance coverage to their adjunct faculty members, those institutions would realize a savings. Source Agencies: 701 Texas Education Agency, 327 Employees Retirement System, 781 Texas Higher Education Coordinating Board LBB Staff: JK, RB, SC, JW