Fiscal Note & Local Impact Statement
127 th General Assembly of Ohio
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BILL: |
DATE: |
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STATUS: |
SPONSOR: |
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LOCAL IMPACT
STATEMENT REQUIRED: |
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CONTENTS: |
Expand the authority of the Board of Regents to regulate higher
education programs and tuition and make other changes to higher education law |
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STATE FUND |
FY 2007 |
FY 2008 |
FUTURE YEARS |
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General Revenue Fund |
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Revenues |
- 0 - |
- 0 - |
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Expenditures |
One-time increase of
$250,000 associated with the development of the Master Plan |
- 0 - |
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Potential increase of
$83,750 to $100,000 for program reviews and other administrative costs |
Increase of $335,000 to
$400,000 for program reviews and other administrative costs |
Increase of $335,000 to
$400,000 for program reviews and other administrative costs |
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Potential increase
associated with a community college system |
Potential increase
associated with a community college system |
Potential increase
associated with a community college system |
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General
Funds of State-Assisted Colleges and Universities |
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Revenues |
- 0 - |
Potential increases or
decreases |
Potential increases or
decreases |
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Expenditures |
- 0 - |
Potential increases or
decreases |
Potential increases or
decreases |
Note: The state
fiscal year is July 1 through June 30.
For example, FY 2007 is July 1, 2006 – June 30, 2007.
·
Master Plan. The Board of Regents
estimates approximately $250,000 in one-time costs for the creation of a Master
Plan to implement statewide goals of higher education and minimal costs in
future years for updating the Master Plan.
·
Administration of program reviews and tuition ranges. The bill gives the Board of Regents the authority to approve and
disapprove degree programs and set in-state undergraduate tuition ranges at
state institutions of higher education.
According to the Board of Regents the costs could amount to
approximately $100,000 per year for program reviews and between $35,000 and
$100,000 per year for setting tuition ranges.
·
The Higher Education Purchasing Commission. The Board of Regents estimates that the Commission is likely to
require a director and administrative support staff with a cost of
approximately $150,000 per year. The
Board of Regents also indicates that reimbursement for Commission members'
expenses and maintenance could cost an additional $50,000 per year.
·
Community college system. The
creation of a community college system spanning all areas of the state is
likely to have capital and some other one-time costs in the short run, however,
it is impossible to estimate those costs at this time. To the extent that this system attracts more
students to pursue post-secondary education, state-subsidy and tuition revenue
for higher education could also increase.
·
State-assisted colleges and universities. The bill authorizes the Board of Regents to approve or disapprove
degree programs and set in-state undergraduate tuition ranges. Any decisions made by the Board of Regents in
these two areas could affect enrollment, revenues, and expenditures of
individual state-assisted colleges and universities. The Higher Education Purchasing Commission could potentially
decrease institutions' expenditures through shared contracts. The establishment of a community college
system could require changes to colleges' and universities' spending in order
to make resources and courses available in all areas of Ohio. Such a system could also result in
additional state subsidy and tuition revenue to provide services for additional
students.
·
No
direct fiscal effect on political subdivisions.
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The Board of Regents is a
nongoverning entity that guides the development of higher education policy and
coordinates policy implementation. The
Board makes policy recommendations and administers state funding and financial
aid for institutions of higher education and is responsible for approving
institutions' program changes, collecting data, and providing fiscal and
operational oversight of public institutions of higher education. Currently, the Board of Regents does not
exercise direct managerial control over individual institutions of higher
education.
Currently, the Chancellor of
the Board of Regents is appointed by the Board. The bill requires the Board's appointment of the Chancellor to be
subject to approval of the Governor and makes the Chancellor a member of the
Governor's cabinet. The bill also
expands the authority of the Board in regulating public institutions of higher
education and makes some other changes to higher education law. The analysis, below, discusses each of the
major provisions that have fiscal effects on the state or public institutions
of higher education.
Master Plan
The bill calls for the Board
of Regents to create a Master Plan that will include goals for higher education
and plans to implement those goals. The
Master Plan will address six major areas of improvement:
(1)
Access
to affordable, high quality higher education for all Ohioans, with a focus on
credit transfer and academic preparation in high school;
(2)
Student
success and degree attainment;
(3)
Identification
and evaluation of excellent academic programs;
(4)
Elimination
of duplicate programs, services, and facilities;
(5)
Achievement
in scientific and technical development to meet Ohio's economic needs;
(6)
Research
and workforce development programs to create economic opportunities.
According to the Regents, the Master Plan
mandated by the bill would require research beyond that in which the agency is
already engaged. The Regents estimates
that it would require several additional resources including: one senior staff member devoted full-time to
management and coordination of the plan, one employee to act as administrative
support, paid consultants and expenses for travel, accommodation, supplies,
etc. The Regents has produced two other
master plans before and estimated approximately $250,000 in costs to recreate
the process. Once the Master Plan is
created, the Regents indicates that the ongoing costs of updating the Master
Plan would be minimal.
Administration of program reviews and tuition ranges
The bill would give the
Board of Regents the authority to implement their statewide goals of higher
education, including the power to mandate a minimum and maximum in-state
undergraduate tuition to each of Ohio's state-assisted colleges and
universities, create degree programs that are in the state's interest, and
eliminate degree programs and program funding that they deem redundant.
The additional
administrative responsibilities associated with approval and disapproval of colleges' and
universities' programs and the responsibilities of setting tuition ranges would
also require additional costs. The
Regents indicates that additional external contractors would be needed to
conduct more in-depth program reviews required by the bill and estimates that,
at 20 reviews a year, the cost would be approximately $100,000 for consulting
services. The determination of tuition
ranges would require additional staff as well.
According to the Regents, the required man hours could range from
one-quarter of a full-time equivalent staff member if only basic administration
is required, to one full-time senior finance staff member if a detailed study is
required. The Regents estimates that a
small staff commitment would cost approximately $35,000 - $40,000 per
year. The commitment of a full-time
senior staff member could cost approximately $100,000 per year.
Individual state-assisted
institutions of higher education could be affected by the changes made in the
bill. Tuition ranges set by the Board
of Regents could be higher or lower than the ones individual institutions may
establish themselves, therefore affecting their tuition revenues and expenditures. If the Regents disapproves and dissolves
programs, enrollment could decrease at affected institutions, lowering their
tuition revenues and state funding.
Enrollment could increase at institutions with new programs mandated by
the Regents and at institutions that retain a program when duplicate programs
at other institutions have been removed, increasing their tuition revenues and
state funding to pay for additional services.
The Higher Education Purchasing Commission
The new Higher Education
Purchasing Commission established by the bill would research ways in which
state-assisted colleges and universities can save money through joint
purchasing contracts. The Commission
would include representatives from the state institutions of higher education,
the Board of Regents staff, and the Department of Administrative Services, and
would have the authority to mandate joint purchases.
The Regents suggests that
the Higher Education Purchasing Commission would likely have a full-time
employee serving as Director of Collaborative Planning and one additional
employee for administrative support. It
estimates that these two employees would cost $100,000 and $50,000
respectively, per year. The meetings
necessary to coordinate the institutions' representatives, the Board of
Regents' employees, and Department of Administrative Services' representatives
would likely require reimbursements for travel, and possibly space and
equipment rental. The Regents estimates
that these costs could amount to approximately $50,000 annually. Notably, the purpose of the Commission is to
identify areas in which institutions of higher education can save money and the
Commission could indirectly decrease individual institutions' expenditures in
the long run.
Community college system
The bill proposes the
development of a statewide community college system. The system is an effort to ensure local availability of higher
education for all Ohioans, establishing community college options within a reasonable
distance from all Ohio communities. The
creation of such a system could also require additional costs; however, the
Regents indicates that it is difficult to quantify these costs at this
time. The system is likely to require
some additional capital investments and other one-time costs in the short
run. Individual colleges and
universities may have to make some changes to their existing resources to
accommodate this newly created system.
To the extent the system attracts more Ohioans to pursue post-secondary
education, colleges and universities may experience additional tuition revenues
and state funding to provide additional services.
LSC fiscal staff: Mary E. Morris, Budget Analyst