LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 27, 2001
TO: Honorable Teel Bivins, Chair, Senate Committee on
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1465 by Bivins (Relating to the operation, regulation,
and administration of public institutions of higher
education.), As Introduced
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1465, As Introduced: negative impact of $(720,000) 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 $(360,000) *
* 2003 (360,000) *
* 2004 (767,025) *
* 2005 (767,025) *
* 2006 (767,025) *
****************************************************
All Funds, Five-Year Impact:
***************************************************************************
*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 $(360,000) $(360,000) *
* 2003 (360,000) (360,000) *
* 2004 (767,025) (360,000) *
* 2005 (767,025) (360,000) *
* 2006 (767,025) (360,000) *
***************************************************************************
Fiscal Analysis
The bill exempts higher education institutions (institutions) from
several State regulations or requirements.
Institutions would be exempted from certain state purchasing regulations.
Institutions would be exempted from leave and holiday regulations.
Institutional employee leave provisions would be amended to allow
institutions to combine vacation leave, sick leave and holidays.
Institutions would be required to enter into a memorandum of
understanding with the Teacher Retirement System of Texas, the Employees
Retirement System of Texas, and the Texas Higher Education Coordinating
Board concerning awards of accrued leave or other related issues.
The bill would authorize institutions to grant merit salary increases,
including one-time merit payments.
The bill would authorize institutions to pay employees with multiple
appointments for working more than 40 hours a week in lieu of
compensatory time.
The bill would authorize institutions to employ a person who has retired
from state government.
The bill would allow institutions to notify employees by use of
electronic media.
The bill would authorize institutions to pay employees for the accrued
balance of the employee's vacation time even if the employee is
re-employed by the state within 30 days of separation.
The bill would authorize institutions to reduce employees salary for
parking and would eliminate the provision that these funds be used only
for employee parking facilities. In addition, the bill would allow
institutions to reduce employees' salary for club memberships,
recreational sport membership or similar programs.
The bill would authorize institutions to exempt full-time employees from
tuition and fees.
The bill would exempt institutions from interest on overdue payment equal
to or less than $5.
This bill would simplify reporting requirements for institutions, and it
would eliminate the requirement that certain institutions secure the
opinion of the Attorney General on the conveyance of title of any real
property given to those institutions.
Institutions would be exempted from strategic planning requirements.
This bill would authorize institutions to charge a credit card user a
processing fee.
Methodology
Article 1 of this bill would partially implement recommendation ED-4 from
the Comptroller's report, e-Texas: Smaller, Smarter, Faster Government.
This portion of the bill would simplify and deregulate the procurement
process at institutions of higher education. Although institutions could
save money under the bill's provisions, it is assumed any funds saved
through greater efficiencies would be retained by the institutions for
use elsewhere, resulting in no significant fiscal impact on the State.
The provisions of the bill addressing leave, merit salary increases, and
hiring retirees could have an effect on the budgets of institutions of
higher education, as well as on the State's retirement systems.
Additional information from the institutions is needed to determine the
potential cost for these provisions.
The provision allowing institutions to exempt employees from some or all
of tuition or fees could result in a loss of tuition income or dedicated
general revenue accounts. There are approximately 100,000 full-time
equivalent institutional employees. Based on Texas Higher Education
Coordinating Board analysis, it is assumed that two percent of eligible
employees would take advantage of this benefit each year, and each would
take two 3-credit hour classes per year, for which the base tuition is
$240. The estimated reduction in tuition revenue is estimated to be
$360,000 each year. It is assumed that the general revenue would be
needed to reimburse institutions for the loss of tuition income. In
addition, it is assumed that half of these students would not otherwise
enroll, resulting in additional formula funding costs. Since formula
funding is based upon historical enrollment, the general revenue costs
would not be incurred until fiscal year 2004 and are estimated to be
$407,025 for fiscal year 2004 and each fiscal year subsequent.
Institutions could also realize a reduction in non-appropriated tuition
revenue. However, these amounts would not impact State appropriations.
Simplifying reporting requirements of universities could reduce
administrative costs. It is assumed that any funds saved through greater
efficiencies would be retained by the institutions for use elsewhere,
resulting in no significant fiscal impact on the State.
Allowing institutions of higher education to charge a convenience fee to
students using a credit card to pay for tuition, fees and other charges
would increase revenues to the institutions. However, these fees would
be auxiliary in nature and would not impact State appropriations.
Local Government Impact
General revenue would not be used to offset the loss of tuition and fee
revenue for employees at community colleges, resulting in a potential
revenue reduction for community colleges.
Source Agencies: 308 State Auditor's Office, 327 Employees
Retirement System, 304 Comptroller of Public
Accounts
LBB Staff: JK, CT, DB