LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION

April 27, 2017

TO:	Honorable J. M. Lozano, Chair, House Committee on Higher Education
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	HB1580 by Howard (Relating to authorization by the Texas Higher Education Coordinating Board for certain public junior colleges to offer baccalaureate degree programs.), As Introduced

The fiscal implications of the bill cannot be determined at this time, but it could result in a net decrease in General Revenue due to decreased formula funding at general academic institutions and health related institutions, and partially offset by increased formula funding at public junior colleges in fiscal years 2020-21. The bill could result in a net decrease in tuition and fee revenue at general academic institutions and health related institutions due to estimated declines in enrollment in certain programs. The net change in General Revenue and institutional funds for institutions of higher education would depend on the number of baccalaureate degree programs offered by public junior colleges and the number of students who choose to enroll in those programs instead of programs at general academic institutions or health related institutions.

The bill would amend the Education Code relating to authorization by the Texas Higher Education Coordinating Board (THECB) for certain public junior colleges to offer baccalaureate degree programs. The bill would allow THECB to authorize baccalaureate degree programs in nursing at public junior colleges that offer a degree program in the field of nursing and have demonstrated a workforce need. The bill would require THECB to authorize baccalaureate degree programs in the fields of applied science and applied technology at each public junior college that previously participated in a pilot project to offer baccalaureate degree programs.

Based on information provided by institutions of higher education, it is assumed that the authorization of baccalaureate nursing programs and applied science programs at some general academic and health related institutions for students who choose to enroll in a public junior college instead of a general academic institution or health related institution. Any decline in enrollment would result in a decrease in tuition and fee revenue at the affected institution.

It is assumed there could be a savings to General Revenue from an estimated decrease in formula funding to certain general academic and health related institutions that experience a decline in enrollment due to the implementations of the provisions of the bill. This savings would also not be seen until at least fiscal year 2020, as formula funding is provided to institutions based on student data prior to the biennium that will be funded. The amount of reduced formula funding would depend on the decline in enrollment resulting from the provisions of the bill, which is unknown.

It is assumed there would be a cost to General Revenue from an estimated increase in formula funding to any public junior college that offered a baccalaureate degree under the provisions of the bill due to additional students enrolling in the program, generating additional contact hours. This cost would not be seen until at least fiscal year 2020. The amount of additional formula funding would depend on the number of programs offered and the level of enrollment in those programs, which is unknown. This analysis assumes this cost would partially offset estimated formula funding savings at general academic and health related institutions.

Local Government Impact

Based on information provided by a sample of community colleges, the establishment of additional baccalaureate degree programs for eligible community college under the provisions of the bill would result in a significant fiscal impact for those community colleges to cover start-up and operating costs. Such costs include, but are not limited to, securing proper regional accreditation, upgrading facilities and libraries to accommodate upper division coursework, and costs associated with faculty recruitment, salary and workload. This analysis assumes these costs would be paid for out of institutional funds, partially offset by any state appropriations from formula funding.

Source Agencies:

320 Texas Workforce 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

LBB Staff:

UP, THo, DEH, ESC