LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION March 3, 2009 TO: Honorable Dan Branch, Chair, House Committee on Higher Education FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB519 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 HB519, As Introduced: a negative impact of ($5,552,110) through the biennium ending August 31, 2011.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
March 3, 2009
TO: Honorable Dan Branch, Chair, House Committee on Higher Education FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB519 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
TO: Honorable Dan Branch, Chair, House Committee on Higher Education
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: HB519 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
Honorable Dan Branch, Chair, House Committee on Higher Education
Honorable Dan Branch, Chair, House Committee on Higher Education
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
HB519 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
HB519 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 HB519, As Introduced: a negative impact of ($5,552,110) through the biennium ending August 31, 2011.
Estimated Two-year Net Impact to General Revenue Related Funds for HB519, As Introduced: a negative impact of ($5,552,110) through the biennium ending August 31, 2011.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2010 ($2,142,850) 2011 ($3,409,260) 2012 ($6,529,212) 2013 ($8,480,605) 2014 ($8,480,605)
2010 ($2,142,850)
2011 ($3,409,260)
2012 ($6,529,212)
2013 ($8,480,605)
2014 ($8,480,605)
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Revenue Gain fromEst Oth Educ & Gen Inco770 Probable (Cost) fromEst Oth Educ & Gen Inco770 Probable Revenue Gain fromInstitutional Funds997 2010 ($2,142,850) $0 $0 $0 2011 ($3,409,260) $405,000 ($405,000) $488,700 2012 ($6,529,212) $810,000 ($810,000) $814,500 2013 ($8,480,605) $1,350,000 ($1,350,000) $1,400,000 2014 ($8,480,605) $1,350,000 ($1,350,000) $1,400,000 Fiscal Year Probable (Cost) fromInstitutional Funds997 Change in Number of State Employees from FY 2009 2010 $0 7.0 2011 ($488,700) 20.0 2012 ($814,500) 47.0 2013 ($1,400,000) 62.0 2014 ($1,400,000) 62.0
Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Revenue Gain fromEst Oth Educ & Gen Inco770 Probable (Cost) fromEst Oth Educ & Gen Inco770 Probable Revenue Gain fromInstitutional Funds997 2010 ($2,142,850) $0 $0 $0 2011 ($3,409,260) $405,000 ($405,000) $488,700 2012 ($6,529,212) $810,000 ($810,000) $814,500 2013 ($8,480,605) $1,350,000 ($1,350,000) $1,400,000 2014 ($8,480,605) $1,350,000 ($1,350,000) $1,400,000
2010 ($2,142,850) $0 $0 $0
2011 ($3,409,260) $405,000 ($405,000) $488,700
2012 ($6,529,212) $810,000 ($810,000) $814,500
2013 ($8,480,605) $1,350,000 ($1,350,000) $1,400,000
2014 ($8,480,605) $1,350,000 ($1,350,000) $1,400,000
Fiscal Year Probable (Cost) fromInstitutional Funds997 Change in Number of State Employees from FY 2009 2010 $0 7.0 2011 ($488,700) 20.0 2012 ($814,500) 47.0 2013 ($1,400,000) 62.0 2014 ($1,400,000) 62.0
2010 $0 7.0
2011 ($488,700) 20.0
2012 ($814,500) 47.0
2013 ($1,400,000) 62.0
2014 ($1,400,000) 62.0
Fiscal Analysis
The bill allows the University of North Texas System to establish and operate a school of pharmacy in the city of Dallas. Under provisions of the bill, until the University of North Texas at Dallas has been administered as a general academic teaching institution for five years, the Board of the University of North Texas System, shall administer the school of pharmacy as a professional school of the system. Before the school of pharmacy is established, the Higher Education Coordinating Board will be required to conduct a study on what actions the University of North Texas System needs to obtain accrediation of the school of pharmacy.
Methodology
The fiscal impact of the bill will be broken down by faculty and operation expenses. The University of North Texas System has indicated the pharmacy school will be located in an existing building, so this estimate does not include any construction costs. The University of North Texas System indicate that in fiscal year 2010 they will need to hire seven FTEs, including four faculty, two staff and one graduate assistant at a total cost of $642,850 which includes salaries, wages, retirement and insurance. There will also be start-up costs of $500,000 per year for the new faculty that both teach and conduct research. The start-up costs will be used to purchase research equipment. The remaining costs for 2010 of $1,000,000 include other operating expenses. In fiscal year 2011, a total of twenty FTEs will be hired including additional faculty, staff and graduate assistants at a total cost of $2,314,260 in salaries and wages and retirement benefits. An additional twenty-seven FTEs will be hired in fiscal year 2012. While General Revenue will be the only method of financing in fiscal year 2010, beginning in fiscal year 2011, statutory tuition (Fund 770) and institutional funds (including designated tuition) will be used to support the pharmacy school as the first entering class enters the program. Beginning in fiscal year 2012, the school of pharmacy will be eligible for formula funding. Based on estimates provided by the University of North Texas System, the formula funding could generate approximately $1.6 million for fiscal year 2012 and $2.7 million in the following year as more students are added. These estimates have been included in the costs associated with the bill.
The fiscal impact of the bill will be broken down by faculty and operation expenses. The University of North Texas System has indicated the pharmacy school will be located in an existing building, so this estimate does not include any construction costs.
The University of North Texas System indicate that in fiscal year 2010 they will need to hire seven FTEs, including four faculty, two staff and one graduate assistant at a total cost of $642,850 which includes salaries, wages, retirement and insurance. There will also be start-up costs of $500,000 per year for the new faculty that both teach and conduct research. The start-up costs will be used to purchase research equipment. The remaining costs for 2010 of $1,000,000 include other operating expenses. In fiscal year 2011, a total of twenty FTEs will be hired including additional faculty, staff and graduate assistants at a total cost of $2,314,260 in salaries and wages and retirement benefits. An additional twenty-seven FTEs will be hired in fiscal year 2012.
While General Revenue will be the only method of financing in fiscal year 2010, beginning in fiscal year 2011, statutory tuition (Fund 770) and institutional funds (including designated tuition) will be used to support the pharmacy school as the first entering class enters the program. Beginning in fiscal year 2012, the school of pharmacy will be eligible for formula funding. Based on estimates provided by the University of North Texas System, the formula funding could generate approximately $1.6 million for fiscal year 2012 and $2.7 million in the following year as more students are added. These estimates have been included in the costs associated with the bill.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 769 University of North Texas System Administration, 781 Higher Education Coordinating Board
769 University of North Texas System Administration, 781 Higher Education Coordinating Board
LBB Staff: JOB, KK, RT, DE, GO
JOB, KK, RT, DE, GO