FISCAL NOTE

Date Requested: February 26, 2016
Time Requested: 10:36 AM
Agency: Higher Education Policy Commission
CBD Number: Version: Bill Number: Resolution Number:
2863 Introduced SB653
CBD Subject: Education (Higher)


FUND(S):

0589

Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


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


Senate Bill 653, 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; to 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 to 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 could 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 maximum cost of the tax credits would be about $26 million. 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
2016
Increase/Decrease
(use"-")
2017
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 26,000,000 26,000,000
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 size for each program within each institution would be too small. Some Information for graduates who reside in West Virginia after graduate is available from the Secretary of Revenue. The Higher Education Policy Commission could supply these data 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 the each institution’s ability to maintain contact with their graduates. The Policy Commission could analyze the West Virginia graduate living in West Virginia from 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 by 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 twelve 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 twelve 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



Memorandum






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