Honorable John Zerwas, Chair, House Committee on Higher Education
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
HB119 by Flynn (Relating to tuition assistance for members of the Texas State Guard.), As Introduced
The bill is estimated to have a probable loss of tuition and fee revenue for institutions of higher education in the range of $1.8 to $2.0 million each fiscal year from 2016-2020; however, it is assumed this loss in tuition and fee revenue would be offset by $1.5 million in General Revenue reallocated to institutions of higher education in reimbursement for the exemption due to the repeal of the tuition and fee assistance program for state military forces. Included below is information regarding the estimated fiscal implication.
The bill would amend the Education Code to provide graduate and undergraduate tuition and mandatory fee exemptions to the members of the Texas State Guard (TXSG) not to exceed a total of 120 semester credit hours. The exemption applies to resident statutory and designated tuition and mandatory fees at public higher education institutions, including general academic institutions, health related institutions, public community/junior colleges, and other two year institutions.
To be eligible for the exemption, TXSG members must be a member of the TXSG for one calendar year and commit to serving for a certain number of years during and after enrollment in an undergraduate or graduate degree. The bill would require an individual who does not fulfill the service commitment to repay the amount of exempted tuition and fees back to the institution of higher education. The exemptions take effect in the Fall 2015 semester.
The bill would repeal sections of the Government Code and Education Code relating to tuition and fee assistance at institutions of higher education provided by the adjutant general to state military forces.
Based on analysis of information provided by the HECB, Texas Veterans Commission (TVC), The University of Texas System, Texas A&M University System, Texas State University System, University of North Texas System, University of Houston System, and Texas Tech University System, it is estimated that the provisions of the bill would result in a decrease of tuition and fee revenue at institutions of higher education from the exemption during fiscal years 2016-2020.
Based on information from the Higher Education Coordinating Board (HECB), the estimated number of currently active TXSG men and women is approximately 2,000. It is estimated that between 340 to 390 individuals would utilize the exemption between fiscal years 2016-2020 with the number of recipients increasing each year due to additional TXSG members deciding to use the benefit, becoming eligible for the benefit, or from additional individuals joining TXSG to take advantage of the benefit.
Based on information from the HECB, it is assumed these students would primarily attend general academic institutions and two year institutions. For purpose of this fiscal note, using the average tuition and fee amounts for universities and community colleges and applying these amounts to the estimated numbers of additional students resulted in an estimate of the amount of tuition and fee revenue that institutions would forego as a result of the students using the exemption. Based on these assumptions, it is estimated the institutions will experience losses of tuition and fee revenue from the exemption between $1.8 million and $2.0 million each fiscal year.
Currently, the Texas Military Department (TMD) is appropriated $1.5 million per year for tuition and fee assistance provided by the adjutant general to state military forces. Based on information provided by TMD, it is assumed that since the bill would repeal sections of the Education Code and Government Code providing authority for this financial assistance, there would be a savings in General Revenue of $1.5 million per year from not providing this assistance to TMD. However, it is assumed the $1.5 million in savings would be repurposed as reimbursement to institutions of higher education for the loss in tuition and fee revenue from the exemption. It is assumed additional losses in tuition and fee revenue above $1.5 million each fiscal year would be borne by the institutions of higher education at a level of approximately $0.3 to $0.5 million each fiscal year.
It is assumed that provisions of the bill could result in additional costs in General Revenue from increased formula funding for institutions of higher education due to additional students choosing to attend institutions of higher education because of the receipt of the exemption beginning in fiscal year 2018. However, it is assumed that these amounts would not be significant across all public institutions of higher education and could be absorbed within existing resources.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
401 Military Department, 403 Veterans Commission, 710 Texas A&M University System Administrative and General Offices, 720 The University of Texas System Administration, 758 Texas State University System, 768 Texas Tech University System Administration, 769 University of North Texas System Administration, 781 Higher Education Coordinating Board, 783 University of Houston System Administration