FISCAL NOTE
FUND(S):
Sources of Revenue:
General Fund,Special Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Fiscal Note REVISED 04-08-2009
FY 2010 = $44,448,320; FY 2011 = $47,822,107; FY 2012 = $47,167,347
Summary
The version of Senate Bill No. 373 that passed the Senate countenanced two types of funding increases for the PROMISE Scholarship Program: (1) a $2 million increase in excess lottery funding from $27 million to $29 million beginning in FY 2010, pursuant to proposed W. Va. Code § 29-22-18a(c); and (2) a 2% statutory increase in funding for FY 2010 and a 4% statutory increase in funding for FY 2011, pursuant to proposed W. Va. § 18C-7-7(c). This means that the appropriation for FY 2010 would be $44,448,320 and the appropriation for FY 2011 and thereafter would be $46,226,253 in the Senate version of the bill.
The House Education Committee struck the excess lottery section, but left language in the bill that would effectively provide $2 million in new revenue, plus the 2% statutory increase, for FY 2010 and a 4% statutory increase for FY 2011. This means that the appropriation for FY 2010 would be $44,448,320 and the appropriation for FY 2011 and thereafter would be $46,226,253.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2009
Increase/Decrease
(use"-") |
2010
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
2,000,000 |
4,524,821 |
| 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):
Explanation of Estimates
The Senate version of Senate Bill No. 373 provides for an annual award of $4,750 or the cost of tuition and required fees, whichever is less, for students receiving a new PROMISE Scholarship award on or after January 1, 2009. See proposed W. Va. Code §18C-7-6(a). The Senate version goes on to provide that the Higher Education Policy Commission may increase the maximum annual amount if funds are available. See proposed W. Va. Code § 18C-7-6(a)(3). Finally, the Senate Education Committee indicated that the Student Financial Advisory Board should be strongly encouraged to raise academic standards to a composite ACT score of 23 and minimum subscores of 20. This is not required, however, and these projections do not model an increase in academic criteria. See proposed W. Va. Code § 18C-1-5(c)(6). As a result of the above expectations, the projected number of new recipients would remain unchanged as a result of the Senate version of the bill, increasing slightly in FY 2010 and then decreasing after that because the number of West Virginia high school graduates is expected to increase for one more year and then decline. Assuming no increase in the $4,750 maximum award and no increase in standards, we project the following year-end balances for the program: FY 2010 - $1.5 million; FY 2011 - $1.8 million; FY 2012 - $3.6 million; and FY 2013 - $7.7 million.
The House Education Committee made one significant change to the Senate version of Senate Bill 373: Instead of having the cap apply to the 2009 high school graduating class, the House Education Committee version applies the cap to the 2010 graduating class. This change will have a substantial impact on PROMISE costs for Fiscal Years 2010, 2011, 2012 and 2013.
FY 2010 Budget. At the end of FY 2009, we expect to have a balance of approximately $2 million. For FY 2010, consistent with both the Senate and House Education Committee versions of the bill, we expect to receive $44,448,320 in state appropriations and earn approximately $150,000 in interest for a total of $44,598,320. Consistent with the House Education Committee version of the bill, we expect to incur $46,442,816 and have a carry-forward balance going into FY 2011 of $136,899.
FY 2011 Budget. For FY 2011, consistent with both the Senate and House Education Committee versions of the bill, we expect to receive $46,226,253 in state appropriations and earn approximately $150,000 in interest for a total of $46,376,253. Consistent with the House Education Committee version of the bill, we expect to incur $48,109,006 and have deficit of $1,595,854.
FY 2012 Budget. For FY 2012, consistent with both the Senate and House Education Committee versions of the bill, we expect to receive $46,226,253 in state appropriations and earn approximately $150,000 in interest for a total of $46,376,253. Consistent with the House Education Committee version of the bill, we expect to incur $47,317,347 and have deficit of $941,094.
FY 2013 Budget. For FY 2013, consistent with both the Senate and House Education Committee versions of the bill, we expect to receive $46,226,253 in state appropriations and earn approximately $150,000 in interest for a total of $46,376,253. Consistent with the House Education Committee version of the bill, we expect to incur $45,418,476 and have a carry-forward balance of $957,777 assuming the $4,750 floor award is not increased.
Memorandum
Person submitting Fiscal Note: Terry Hess
Email Address: hess@hepc.wvnet.edu