FISCAL NOTE

Date Requested: January 10, 2018
Time Requested: 02:46 PM
Agency: Higher Education Policy Commission
CBD Number: Version: Bill Number: Resolution Number:
1260 Introduced SB83
CBD Subject: Education (Higher)


FUND(S):

0589,0596

Sources of Revenue:

General Fund

Legislation creates:





Fiscal Note Summary


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


Senate Bill 83, if enacted, would require that higher education course catalogs include certain information relating to employment rate, compensation, etc. to help students decide on an area of study; create a voluntary college completion incentive program whereby an institution of higher education accepts less state funding in return for certain incentive bonuses relating to student graduation and employment of graduates; and create a tax credit for West Virginia resident students successfully completing certain courses of study. Although sufficient data cannot be collected for most of the required additional catalog information, it is anticipated that additional costs would not be incurred related to data that could be acquired. Sufficient data could not be collected to determine the incentive amounts, consequently, institutions would not take advantage of incentives and no additional costs would accrue. The estimated cost of the tax credits could extend from $6.5 million to $26.0 million depending upon the percentage of in-state graduates who reside in West Virginia and find employment. It is anticipated that all costs associated with the administration of the tax credit would be paid by the Secretary of Revenue.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2018
Increase/Decrease
(use"-")
2019
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


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


College Catalog To comply with the requirements of the proposed legislation, it would be necessary to acquire the employment rates, compensation and other information for institutional graduates. The use of statistical methods to estimate this information would not be feasible because the size of the limited data population for each program within each institution would be too small. Some information for graduates who reside in West Virginia after graduating is available from the Secretary of Revenue. The Higher Education Policy Commission could supply this information to the institutions. Data would not be available for those graduates who left West Virginia. The institutions could survey these individuals, but it is likely that the response rate would not be at a sufficient level to provide accurate information. A low response rate would be a problem for programs with a low number of graduates. Graduate survey results could be unintentionally skewed if graduates who were not employed, or employed in low income jobs, did not choose to respond because of their perception of their current status or their opinion of the institution. The proposed legislation requires institutions to identify undergraduates who have continued on to postgraduate study. It may be possible for institutions to track a portion of these data through their alumni relations offices. The accuracy of this information would depend upon each institution’s ability to maintain contact with their graduates. The Policy Commission could analyze the West Virginia graduates living in West Virginia from data provided by the Secretary of Revenue and distribute it to institutions using current resources. Institutional Incentives The proposed legislation would initiate a voluntary incentive to improve student success rates by first reducing institutional state appropriations by $100 per year for every in-state student. The incentive would then add $1,000 and $500 for each four-year institution graduate and each two-year institution graduate, respectively, who find full-time employment within 12 months in the State of West Virginia in their area of study. The length of full-time employment required to qualify for the incentive is not defined. It is assumed that an individual employed full-time for one week could be included in the incentive. The definition of the occupations that are within fields of study is not defined. Some jobs may incorporate part of field of study. Military employment and its relationship to fields of study are not addressed by this legislation. The proportion of work related to the field of study necessary to qualify for the incentive is not defined. The job titles that each graduate held within their first year of employment after graduation is not available from any source. For most graduates, the 12-month period would extend to the middle of the month of May. Institutions could survey their graduates for this information, but the reliability of the data would not be sufficient to use for the allocations of appropriations. Because there is no current way to acquire the accurate information necessary for the incentive, it may be difficult for an institution to take advantage of it. As a result the estimated cost of the incentive is zero. Tax Credit The estimated number of graduates qualifying for the $2,000 tax credit is 13,000. It is estimated that if all of the in-state graduates resided in-state and found employment, the annual lost tax revenues would be about $26 million. The estimated lost tax revenues are provided below for lower percentages of in-state graduates residing in-state and finding employment.



Memorandum






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