Bill: SB 150, 84(R) - 2015

Committee

Senate Higher Education

Vote Recommendation

Vote Recommendation Economic Freedom Property Rights Personal Responsibility Limited Government Individual Liberty
No Neutral Neutral Neutral Negative Neutral

Author(s)

Kel Seliger

Bill Caption

Relating to authorizing the issuance of revenue bonds to fund capital projects at public institutions of higher education.

Fiscal Notes

From a fiscal note dated April 6,2015:

State Impact

Estimated Two-year Net Impact to General Revenue Related Funds for SB150, Committee Report 1st House, Substituted: a negative impact of ($524,734,264) through the biennium ending August 31, 2017.

Bonds for components of the Texas A&M University System are assumed to be issued on September 1, 2015, at a 6 percent interest rate with a 20-year level debt service amortization. Based on calculations prepared by the Texas A&M University System, the amount of debt service payments would be $67.2 million beginning in fiscal year 2016. 

Bonds for components of the University of Texas System are assumed to be issued on September 1, 2015, at a 6 percent interest rate with a 20-year level debt service amortization. Based on calculations prepared by The University of Texas System, the amount of debt service payments would be $77.2 million per year beginning in fiscal year 2016. 

Bonds for components of the University of Houston System are assumed to be issued on September 1, 2015 at a 6 percent interest rate with a 20-year level debt service amortization. Based on calculations prepared by the University of Houston System, the amount of debt service payments would be $32.9  million per year beginning in fiscal year 2016. 

Bonds for components of the Texas State University System are assumed to be issued September 1, 2015, at a 6 percent interest rate with a 20-year level debt service amortization. Based on calculations prepared by the Texas State University System, the amount of debt service payments would be $22.4 million per year beginning in fiscal year 2016.

Bonds for components of the University of North Texas System are assumed to be issued on September 1, 2015, at a 6 percent interest rate with a 20-year level debt service amortization. Based on calculations prepared by the University of North Texas System, the amount of debt service payments would be $21.8 million beginning in fiscal year 2016.

Bonds for Texas Woman's University are assumed to be issued on September 1, 2015, at a 5 percent interest rate with a 20-year level debt service amortization. Based on calculations prepared by Texas Woman's University, the amount of debt service payments would be $3.0 million beginning in fiscal year 2016.  

Bonds for Midwestern State University are assumed to be issued on September 1, 2015, at a 6 percent interest rate with a 20-year level debt service amortization. Based on calculations prepared by the Texas Public Finance Authority, the amount of debt service payments would be $2.6 million for fiscal year 2016 in the form of an interest only payment, and $5.0 million per year beginning in fiscal year 2017 for principal and interest.  

The bonds for Stephen F. Austin State University are assumed to be issued on September 1, 2015, at a 6 percent interest rate with a 20-year level debt service amortization. Based on calculations prepared by Stephen F. Austin, the amount of debt service payments would be $4.0 million beginning in fiscal year 2016. 

The bonds for the Texas Tech University System are assumed to be issued on September 1, 2015, at a 6 percent interest rate with a 20-year level debt service amortization. Based on calculations prepared by the Texas Tech University System, the amount of debt service payments would be $21.1 million beginning in fiscal year 2016.  

Bonds for Texas Southern University are assumed to be issued on September 1, 2015, at a 7 percent interest rate with a 20-year level debt service amortization. Based on calculations prepared by Texas Public Finance Authority, the amount of the debt service payments would be $5.5 million beginning in fiscal year 2016. 

Bonds for Texas State Technical College System are assumed to be issued on September 1, 2015, at a 5 percent interest rate with a 20-year level debt service amortization. Based on calculations prepared by the Texas State Technical College System, the amount of debt service payments would be $3.3 million beginning in fiscal year 2016.

No significant fiscal implication to local government.

Bill Analysis

SB 150 would authorize construction at 64 public higher education campuses by amending law to authorize the additional issuance of revenue bonds to the fund the projects. The estimated cost is $3.02 billion.

Vote Recommendation Notes

This bill would abridge the principle of limited government, therefore we oppose this legislation. Our principle of limited government can be affected by an increase or decrease in spending.  This is a significant increase in spending for higher education and there is no compelling reason for the increase. There is no demonstrated need because the universities have not (1) maximized available space and (2) considered the effect of online degree plans. There should be a legitimate purpose for spending more money on higher education institutions. This bill does not show that there is one and will result in an additional estimated $3.02 in debt that taxpayers will be responsible for.  This is not a fiscally responsible policy for good government. 

Source URL (retrieved on 03/29/2024 07:03 AM): http://reports.texasaction.com/bill/84r/sb150?print_view=true