LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 80TH LEGISLATIVE REGULAR SESSION

April 28, 2007

TO:	Honorable Geanie Morrison, Chair, House Committee on Higher Education
FROM:	John S. O'Brien, Director, Legislative Budget Board
IN RE:	HB1746 by Giddings (Relating to the establishment of a school of pharmacy in the city of Dallas by the University of North Texas System.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for HB1746, As Introduced: a negative impact of ($4,000,000) through the biennium ending August 31, 2009.

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
2008	($2,000,000)
2009	($2,000,000)
2010	($4,185,038)
2011	($4,185,038)
2012	($4,185,038)

All Funds, Five-Year Impact:

Fiscal Year	Probable Savings/(Cost) from GENERAL REVENUE FUND 1	Probable Revenue (Loss) from EST OTH EDUC & GEN INCO 770	Probable Savings/(Cost) from EST OTH EDUC & GEN INCO 770	Change in Number of State Employees from FY 2005
2008	($2,000,000)	$0	$0	6.0
2009	($2,000,000)	$405,000	($405,000)	19.0
2010	($4,185,038)	$810,000	($810,000)	41.0
2011	($4,185,038)	$1,350,000	($1,350,000)	41.0
2012	($4,185,038)	$1,350,000	($1,350,000)	41.0

Fiscal Analysis

The bill would allow the Board of Regents of University of North Texas System to establish and operate a school of pharmacy in the city of Dallas.

Methodology

The University of North Texas System indicates that in fiscal year 2008 they will need six Full Time Equivalent (FTEs) positions including one dean and three other faculty members as well as operating funds to support the facilities and recruiting efforts. Total salary and benefits for these six FTEs is $400,000 and $135,792 respectively. The remaining $1.5 million is for operating expenses. 

In fiscal year 2009, the University of North Texas System indicates they would need to hire additional faculty and administrative staff in preparations for the first entering class. Thirteen additional faculty would be hired in fiscal year 2009. The total cost for these additional FTEs is $1.7 million for salaries and benefits. There would be increases in personnel costs in the future years as the pharmacy school grows in enrollment.

While General Revenue funding would be the only method of financing for fiscal year 2008, beginning in fiscal year 2009, statutory tuition (Fund 770) will be used to support the operation of the pharmacy school. The System has also indicated that Institutional Funds, such as designated tuition will also be used to cover expenses. The pharmacy school would be eligible to receive formula funding in fiscal year 2010. The University of North Texas system estimates the pharmacy school would generate $2.2 million in formula general revenue beginning in fiscal year 2010.

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

763 University of North Texas Health Science Center at Fort Worth, 781 Higher Education Coordinating Board, 769 University of North Texas System Administration

LBB Staff:

JOB, MN, CT, RT, GO