FISCAL NOTE

Date Requested: January 23, 2020
Time Requested: 11:14 AM
Agency: Higher Education Policy Commission
CBD Number: Version: Bill Number: Resolution Number:
2551 Introduced HB4483
CBD Subject: Education (Higher)


FUND(S):

Special Revenue

Sources of Revenue:

Special Fund

Legislation creates:

Creates New Revenue, Creates New Expense



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    House Bill 4483, if enacted, would create a full scholarship program for college and trade school students who have been placed in the state foster care system. It would also repeal §18B-10-7b. providing for tuition waivers for high school graduates in foster care. This bill establishes a trust fund for moneys collected from opioid lawsuit settlement awards received by the state. In addition, it would authorize the State Auditor to administer the Opioid Settlement Trust Fund in coordination with the Higher Education Policy Commission to project costs and assure moneys are available to fully fund the scholarships. The legislation would also provide necessary rulemaking authority and establishes a special revenue account for administration by the Higher Education Policy Commission for the benefit of foster care children.
    
    The enactment of this legislation would not require additional general fund appropriations because monies collected from opioid lawsuit settlement awards received by the State are expected to pay the costs of the program. It is typical for the administrative costs for financial aid programs to be paid from the funds accumulated for those programs. The anticipated administrative costs for this Scholarship program, including one position, would be about $65,000.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2020
Increase/Decrease
(use"-")
2021
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 2,045,000 4,945,000
Personal Services 0 65,000 65,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 1,980,000 4,880,000
2. Estimated Total Revenues 0 2,045,000 4,945,000


Explanation of above estimates (including long-range effect):


    It is estimated that about $2.1 million would need to be received from opioid settlement lawsuits in FY 2021 and about $5.0 million upon full implementation to provide enough funding for the scholarships.
    
    Students meeting the following criteria were included in the estimates below:
    
     -Students residing in WV and enrolling part-time or full-time at a public 2-year
     or 4-year institutions and indicating that their parents were deceased or they
     were in foster care or a court dependent/ ward. The number of students was
     estimated based on students enrolling in public in-state institutions for 2018-
     2019 academic year.
    
     -Students enrolling in private in-state institutions was estimated as 5% of the
     total number of individuals indicating their parents were deceased or they were
     in foster care or a court dependent/ ward. Historic trends indicate that about 5%
     of recent high school graduates enroll in private in-state institutions.
    
    Other notes relative to the estimates:
    
     - Semester fees estimates (Table 1):
    
     For students enrolling at a public in-state 2-year institution, the semester
     fees were estimated at $2,020, which is the average semester tuition for
     public in-state 2-year institutions. Room and board fees were not included
     in the semester fees.
    
     For students enrolling on a part-time basis at a public in-state 2-year
     institution, the semester tuition was prorated based on the number of
     credits attempted. Room and board fees were not included in the semester
     fees.
    
     For students enrolling at a public in-state 4-year institution, the semester
     fees were estimated at the in-state annual tuition for the specific
     institution plus room and board fees divided by 2 for full time students.
    
     For students enrolling on a part-time basis at a public in-state 4-year
     institution, the semester fees were based on the semester tuition prorated
     based on the number of credits attempted. Room and board fees were not
     included in the semester fees.
    
     For students enrolling at a private in-state institution, annual tuition and
     room and board fees were calculated in the estimates. Those annual fees are
     estimated at $20,580, based on the highest in-state public 4-year
     institution tuition and room and board fees.
    
     -Student retention across years for student enrolling in public institutions was
     estimated based on historic retention rates for public 2-year and 4-year
     institutions in the state. The following retention rates were used to estimate
     the number of students returning in year 2, 3, and 4.
    
     Year 1 to Year 2 Year 1 to Year 3 Year 1 to Year 4
     2-Year Public Institutions 53%
     4-Year Public Institutions 74% 64% 58%
    
     -Student unmet need for years 2, 3, and 4 in college was estimated as the average
     unmet need in year 1. The following estimates were utilized:
    
     Type of Institution Average Unmet Need
     Students Enrolling in 2-Year Institutions $1,373
     Students Enrolling in 4-Year Institution $7,716
    
     -The number of students enrolling in private in-state institution was estimated
     based on the proportion of freshmen, sophomores, juniors, and seniors known for
     the same population enrolling in public institutions. The following breakdown was
     utilized for the estimates:
    
     Freshman Class – 58%
     Sophomore Class – 20%
     Junior Class – 12%
     Senior Class – 10%
    
     -Student financial aid was calculated as the total of Pell, Promise, and WVHEGP
     funding received for each student each semester for students attending public in-
     state institution. If institutions did not provide a financial aid record for the
     student,it was assumed that the student received $0 in financial aid.
    
     -Financial aid records for students attending private in-state institutions are
     not available. As a result financial aid was not included in the estimate for
     funding for students at private in-state institutions.
    
     -The total amount of funding is estimated as the total student unmet need. The
     unmet need was calculated as the total of semester fees minus the total financial
     aid received by the student in the semester.
    



Memorandum


    If the monies from the lawsuits do not materialize by the fall of 2020, the current high school graduates who were in foster care and received aid under the repealed §18B-10-7b. would not receive tuition waivers provided by that section. The proposed legislation does not specify whether the scholarships are to provide scholarships for students enrolled at out-of-state institutions.



    Person submitting Fiscal Note: Ed Magee
    Email Address: edward.magee@wvhepc.edu