COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         4096-01

Bill No.:          HB 1518

Subject:           Education, Higher; Higher Education Department

Type:              Original

Date:               January 23, 2008

Bill Summary:            This proposal establishes a tuition grant program for survivors of war veterans.

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 7 pages.

☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☒ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

FISCAL ANALYSIS

ASSUMPTION

Officials at the Department of Higher Education (DHE) assume this bill would create the Military Member Survivor Grant. Recipients would be the survivors of certain veterans who attend public or private institutions of higher education in Missouri. Twenty-five grants would be awarded annually and each grant would be in an amount not to exceed the actual tuition paid or the tuition charged a Missouri resident at the University of Missouri-Columbia. Each recipient would also receive up to $2,000 per semester for room and board and up to $500 per semester for books.

The Coordinating Board for Higher Education and the DHE, the CBHE's administrative arm, would be responsible for administering the program. Duties would include promulgating rules for the implementation of the program, determining each applicant's eligibility for the award, delivering funds to institutions on behalf of each recipient, and providing the forms and procedures for the overall operation of the grant program.

The following is the breakdown of the amount needed to fund the grants including the assumptions used to determine the costs.

                                                Tuition (assuming 3% inflationary increase) 

                                    FY 08             FY 09             FY 10             FY 11             FY 12 

East Central Tuition   $2,130.00        $2,193.90        $2,259.72        $2,327.51        $2,397.33

UCM Tuition              $8,098.36        $8,341.31        $8,591.55        $8,849.30        $9,114.78

                                    Total Costs of Program (Tuition, Room & Board, Books)

                                    FY 09             FY 10                         FY 11                         FY 12 

East Central Rate        $179,847.50    $362,985.85                $549.563.14                $689,733.38

UCM Rate                  $333,532.77    $679,577.51                $1,038,697.25             $1,411,477.55

(1) All 25 grant recipients would either attend East Central College (the least expensive institution of higher education in Missouri, with an in-taxing-district tuition of $2,130 per year for FY 08) or would attend the University of Missouri-Columbia ("UMC") or a more expensive institution (and would thus receive a grant equal to the annual tuition at UMC, which is $8,098.36 for FY08).

(2) Tuition at East Central College and UMC will increase at approximately the rate of inflation,

ASSUMPTION (continued)

which for purposes of this fiscal note is estimated to be about 3% annually.

(3) 25 survivors would receive grants the first year; 25 additional survivors would receive grants the second year, for a total of 50 recipients; and 25 additional survivors would receive grants the third year, for a total of 75 recipients. Additionally (although this is not indicated on the fiscal note) 25 additional survivors would receive grants the fourth year, for a total of 100 recipients. The DHE predicts that there would likely be 100 recipients every year starting the fourth year and continuing for as long as the program is administered.

(4) Each recipient would receive the maximum reimbursement for room and board and for books.

In addition, a DHE staff person would be needed to administer the program. The DHE, therefore, estimates that 1.0 FTE of a Program Specialist position at an estimated salary of $35,000 plus associated expense and equipment would be needed in FY 2009 to implement this program. This Program Specialist would be responsible for overall administration of this program, including reviewing institutional eligibility requirements and working with participating institutions in order to distribute funds accurately and smoothly.

Officials at the University of Missouri, Metropolitan Community College, Linn State Technical College, University of Central Missouri assume that there is no fiscal impact from this proposal.

Officials at the Missouri State University assume a loss of an indeterminate amount of revenue but no additional costs for the school.

Officials at the Truman State University state they are unable to determine the fiscal impact of this proposal.

Officials at the Lincoln University assume minimal impact in the form of tuition and fees from enrolling students who have received scholarships.

Oversight assumes no fiscal impact to the Colleges and Universities as the program is administered by the DHE and the state will pay the eligible students tuition.

ASSUMPTION (continued)

Officials from the Office of the Secretary of State (SOS) state many bills considered by the General Assembly include provisions allowing or requiring agencies to submit rules and regulations to implement the act. The SOS is provided with core funding to handle a certain amount of normal activity resulting from each year’s legislative session. The fiscal impact for this fiscal note to the SOS for Administrative Rules is less than $2,500. The SOS recognizes that this is a small amount and does not expect that additional funding would be required to meet these costs. However, the SOS also recognizes that many such bills may be passed by the General Assembly in a given year and that collectively the costs may be in excess of what the office can sustain with the core budget. Therefore, the SOS reserves the right to request funding for the cost of supporting administrative rules requirements should the need arise based on a review of the finally approved bills signed by the governor.

Oversight assumes the SOS could absorb the costs of printing and distributing regulations related to this proposal. If multiple bills pass which require the printing and distribution of regulations at substantial costs, the SOS could request funding through the appropriation process.

FISCAL IMPACT - Small Business

No direct fiscal impact to small businesses would be expected as a result of this proposal.

FISCAL DESCRIPTION

This bill allows the spouse and children of a soldier who is killed in action after September 11, 2001, or who becomes 80% disabled as the result of an injury sustained in combat action after September 11, 2001, to receive an educational grant for tuition at a public or private college or university in Missouri. The Coordinating Board of Higher Education will award up to 25 grants annually. If the waiting list of eligible survivors exceeds 50, the board can ask the General Assembly to increase the number of grants it is authorized to award. The tuition grant cannot exceed what is charged a resident by the University of Missouri-Columbia. The veteran must have been a Missouri resident when first entering military service and at the time of death or injury in order for his or her survivors to receive this grant. In addition to the full cost of tuition, the grant includes $2,000 per semester for room and board and the actual cost of books up to $500 per semester.

Children are eligible to receive the scholarship until age 25. Spouses are eligible until age 45. No eligible student will receive a grant for more than 100% of tuition when combined with similar funds given to the student.

The provisions of the bill will expire six years from the effective date.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Department of Higher Education

University of Missouri

Linn State Technical College

Metropolitan Community College

Office of the Secretary of State

Missouri State University

Truman State University

University of Central Missouri

Lincoln University

                                                                                                Mickey Wilson, CPA

                                                                                                Director

                                                                                                January 23, 2008