| TO: | Honorable Dan Branch, Chair, House Committee on Higher Education |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | HB59 by Branch (Relating to the establishment of a law school in the city of Dallas by the University of North Texas System.), As Introduced |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2010 | ($1,914,478) |
| 2011 | ($6,610,361) |
| 2012 | ($7,245,485) |
| 2013 | ($7,038,038) |
| 2014 | ($7,342,600) |
| Fiscal Year | Probable (Cost) from GENERAL REVENUE FUND 1 |
Probable Revenue Gain from Est Oth Educ & Gen Inco 770 |
Probable (Cost) from EST OTH EDUC & GEN INCO 770 |
Probable Revenue Gain from Institutional Funds 997 |
|---|---|---|---|---|
| 2010 | ($1,914,478) | $0 | $0 | $0 |
| 2011 | ($6,610,361) | $112,500 | ($112,500) | $704,076 |
| 2012 | ($7,245,485) | $371,064 | ($371,064) | $1,467,223 |
| 2013 | ($7,038,038) | $520,914 | ($520,914) | $2,548,739 |
| 2014 | ($7,342,600) | $871,108 | ($871,108) | $2,657,276 |
| Fiscal Year | Probable (Cost) from Institutional Funds 997 |
Change in Number of State Employees from FY 2005 |
|---|---|---|
| 2010 | $0 | 15.0 |
| 2011 | ($704,076) | 23.0 |
| 2012 | ($1,467,223) | 26.0 |
| 2013 | ($2,548,739) | 30.0 |
| 2014 | ($2,657,276) | 33.0 |
The fiscal impact of the bill will be broken down between faculty, maintenance costs and debt service.
The University of North Texas System indicates that in fiscal year 2010 they will need to hire seven faculty and eight administrative staff. Total costs for these fifteen FTEs is $1,556,193. This amount includes salaries in the amount of $1,210,386 and employee retirement and insurance in the amount of $345,8071. There would also be approximately $358,285 for operating expenses.
In fiscal year 2011, the University of North Texas System indicates they would need to hire additional faculty and administrative staff in preparations for the first entering class. Eight additional FTEs would be hired including, seven new faculty members and one new administrative member. The total cost for all twenty-three FTEs is $2,523,547 for salaries and $720,977 for employee benefits. There would also be other operating costs including $1,567,413 for operation expenses. There would be increases in faculty and administrative staff in the future years reaching 33 FTEs in fiscal year 2014 as well as operating expenses as the law school grows in enrollment.
It is assumed the Tuition Revenue Bonds would be issued in fiscal year 2011, therefore there is no debt service included in Fiscal Year 2011. The cost for the debt service is based on a 20 year note with a 6% interest rate. Using these assumptions, the debt service is $2,615,000 in fiscal year 2011, $2,616,100 in fiscal year 2012, $2,614,200 in fiscal year 2013 and $2,616,100 in fiscal year 2014.
While General Revenue funding would be the only method of financing for fiscal year 2010, beginning in fiscal year 2011, statutory tuition (Fund 770) and institutional funds (including designated tuition and other fees) will be used to support the operation of the law school. Beginning in fiscal year 2012, the law school would be eligible for formula funding. The University of North Texas system indicates that the law school will generate $437,743 in formula general revenue in fiscal year 2012 and fiscal year 2013 and $1,488,324 in fiscal year 2014. The formula funding has been included in the costs associated with the bill.
The Higher Education Coordinating Board indicates that outside consultants, who are experienced with the full procedures of both ABA and SACS accreditation, would be needed for the feasibility study. These costs would be absorbed within current resources.
| Source Agencies: | 769 University of North Texas System Administration, 781 Higher Education Coordinating Board, 352 Bond Review Board
|
| LBB Staff: | JOB, GO, KK, RT
|