LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 24, 2001
TO: Honorable Teel Bivins, Chair, Senate Committee on
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1101 by Haywood (Relating to faculty compensation
policies at institutions of higher education.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1101, As Introduced: negative impact of $(256,690) 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. *
* *
* T *
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The bill requires each institution of higher education, in January 2002,
to compare the average salary of its tenured and tenure track faculty to
the average salaries for similar faculty at institutions in the ten most
populous states. If the institution's average is below the peer group
average, the institution must begin a program to increase salaries to
the peer group average over the next four biennia. Cost to the state as
a result of additional expenditures for retirement benefits will begin
in fiscal year 2004 and last through the end of the program.
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 (256,690) *
* 2004 (513,379) *
* 2005 (770,069) *
* 2006 (1,026,758) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Savings/(Cost) from *
* General Revenue Fund *
* 0001 *
* 2002 $0 *
* 2003 (256,690) *
* 2004 (513,379) *
* 2005 (770,069) *
* 2006 (1,026,758) *
*****************************************************
Fiscal Analysis
The bill requires institutions to reallocate available resources to cover
the cost of the program. However, a contribution from the general
revenue fund beginning in fiscal year 2004 will be necessary for the
increased cost of retirement benefits.
Methodology
The Higher Education Coordinating Board web-site provides data on
statewide average faculty salaries, and faculty salaries by faculty rank
for the ten most populous states, as well as head-count of faculty in
various categories. It is assumed that the first three ranks (professor,
associate professor, and assistant professor) represent the tenured and
tenure track faculty. $45,456,000 is assumed to be needed over eight
years to provide the salary increases envisioned in the bill, It is
assumed that the institutions will reallocate available funding to pay
the increased salary costs. However, the Legislature could increase
formula funding for universities to cover the cost of salary increases.
In addition, institutions would have to pay costs for increases in
retirement benefits associated with the salary increases. It is assumed
that 75 percent of the salary increases would be paid from General
Revenue Funds and six percent of the salary increases will be required
for additional retirement benefit payments.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 781 Texas Higher Education Coordinating Board, 783
University of Houston System Administration, 758
Texas State University System, 752 University of
North Texas, 720 The University of Texas System,
768 Texas Tech University System, 710 The Texas
A&M University System
LBB Staff: JK, CT, DB, DC