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F I S C A L I M P A C T R E P O R T

SPONSOR Cordova

DATE TYPED 3/4/05

HB 833/aHEC

SHORT TITLE Adult Basic Education Compensation Increases

SB

ANALYST Williams

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$188.9

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to House Bill 764 and Senate Bill 804

Relates to Appropriations in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Commission on Higher Education (CHE)

SUMMARY

Synopsis of HEC Amendment

The House Education Committee amendment clarifies that the two percent compensation in-

crease requested in HB 833 will be directed to employees of adult basic education programs.

Synopsis of Original Bill

House Bill 833 appropriates $188.9 thousand from the general fund to the commission on higher

education for the adult basic education program.

The appropriation would have two components as follows:

•

$88.7 thousand for a compensation increase in FY06 equal to the compensation

allocation in FY05; and

•

$100.2 thousand for an additional two percent compensation increase in FY06.

Significant Issues

According to the Commission on Higher Education, Higher Education Funding Recommenda-

House Bill 833/aHEC -- Page 2

tion dated November 19, 2004, the cost of a 1 percent salary increase for adult basic education

staff is $33,800. Thus, a 2 percent salary increase would cost $67,600, not the $100,200 speci-

fied in the bill.

Prior to the transfer of administration of the adult basic education program to the Commission on

Higher Education, compensation increases were never part of “flow through” funding distributed

to this program and were not included in state employee compensation calculations. Further, in-

stitutions are providing in-kind funding to support the program.

FISCAL IMPLICATIONS

The appropriation of $188.9 thousand contained in this bill is a recurring expense to the general

fund. Any unexpended or unencumbered balance remaining at the end of FY06 would revert to

the general fund.

The Legislative Finance Committee budget recommendation does not include compensation in-

creases for adult basic education staff. The Executive budget recommendation does not extend

the FY05 compensation increase into the FY06 base, but does include an increase in FY06 of

$79.5 thousand assuming a 3.5 percent increase for faculty and 1.25 percent increase for staff.

The CHE did not include either component of adult basic education compensation funding in its

September 1, 2004 budget request.

POSSIBLE QUESTIONS

1.

To what extent are these employees institutional staff as opposed to contractors or ad-

juncts.

2.

To what extent did the classification of these employees change as a result of program

administration moving from Public Education Department to Commission on Higher

Education.

3.

Are there other programs with similar concerns.

AW/yr:njw