Fiscal Note & Local Impact Statement

125 th General Assembly of Ohio

Ohio Legislative Service Commission

77 South High Street, 9th Floor, Columbus, OH 43215-6136 Phone: (614) 466-3615

Internet Web Site: http://www.lsc.state.oh.us/

BILL:

H.B. 275

DATE:

October 7, 2003

STATUS:

As Introduced

SPONSOR:

Rep. Key

LOCAL IMPACT STATEMENT REQUIRED:

No

No local cost

 


CONTENTS:

To provide scholarships to spouses and children of Ohioans killed or disabled during Operation Iraqi Freedom

 

State Fiscal Highlights

 

STATE FUND

FY 2004

FY 2005

FUTURE YEARS

General Revenue Fund

Revenues

- 0 -

- 0 -

- 0 -

Expenditures

- 0 -

Possible minimal increase

Possible minimal increase

Note: The state fiscal year is July 1 through June 30. For example, FY 2004 is July 1, 2003 June 30, 2004.

 

        According to current law, children of Ohioans killed or disabled during Operation Iraqi Freedom are currently eligible to receive War Orphans Scholarships; therefore this provision of the bill does not create an additional expenditure.

        The total cost of providing tuition waivers to spouses of individuals killed in the line of duty during Operation Iraqi Freedom is estimated to be between $98,000 and $109,000. This would be based on all of the spouses taking immediate advantage of the program beginning in FY 2005, and attending a college or university for a total of four years. Spouses of previous conflicts have not been eligible for the tuition waivers provided to public service officers killed in the line of duty, and therefore it cannot be predicted how many spouses might take advantage of this program.

        The costs could increase over time due to additional service deaths, especially since it is difficult to predict when Operation Iraqi Freedom will officially end.

 

Local Fiscal Highlights

 

        No direct fiscal effect on political subdivisions.

 


 


 

Detailed Fiscal Analysis

 

The costs of the programs will depend on the number of individuals who are eligible and will take part in the programs, when an eligible child or spouse begins his or her postsecondary studies, and how long a program participant receives the award. As of October 7, 2003, there were 12 Ohioans who were killed in action during Operation Iraqi Freedom, leaving behind five spouses and seven children. These numbers could increase, since it is difficult to predict when Operation Iraqi Freedom will officially end.

 

The seven children are already eligible to take part in the War Orphans Scholarship program under current law. However, the bill would exclude these children from having their awards reduced if the War Orphans Scholarship program did not have enough funds to cover its obligations. Since these children are eligible to receive War Orphans Scholarships, the bill would make them ineligible to receive the tuition waiver for children of public officers killed in the line of duty.

 

There were 784 War Orphans Scholarship recipients in FY 2003, each receiving an average award of $4,996. If the student attended college for four years (FY 2000 to FY 2003), the average War Orphans Scholarship recipient would have received $17,437. If the student attended college for the maximum five years (FY 1999 to FY 2003), then the average War Orphans Scholarship recipient would have received $21,178. For reference, Table 1 provides the expected average War Orphans Scholarship amounts for FY 2004 through FY 2013 assuming annual increases of 6% and 9% per year. It should be noted that the first child would not be expected to attend college and receive a War Orphans Scholarship until FY 2008.

 

Table 1: Estimated War Orphans Scholarship Award Amounts

Fiscal Year

6% increase

9% increase

FY 2004

$5,296

$5,446

FY 2005

$5,614

$5,936

FY 2006

$5,950

$6,470

FY 2007

$6,307

$7,052

FY 2008

$6,686

$7,687

FY 2009

$7,087

$8,379

FY 2010

$7,512

$9,133

FY 2011

$7,963

$9,955

FY 2012

$8,441

$10,851

FY 2013

$8,947

$11,827

 

Substantially fewer individuals (45 in FY 2003) received the tuition waivers provided for spouses and children of public service officers killed in the line of duty. Currently, public service officer refers to a firefighter, volunteer firefighter, police officer, member of the highway patrol, an individual exercising police powers, or peace officer. Unlike spouses of previous conflicts, this bill would allow spouses of individuals killed in Operation Iraqi Freedom to also take part in the tuition waiver program.

However, the Revised Code does not require the institutions to be reimbursed for the tuition waivers. Instead there is a provision in temporary law (Section 89.06 of Am. Sub. H.B. 95 of the 125th General Assembly) that requires the institutions to be reimbursed through payments made from GRF appropriation item 235-503, Ohio Instructional Grant. During the past five years, the average reimbursement amounts per award recipient were approximately 80% of the average War Orphans Scholarship amounts. An individual receiving one of these tuition waivers may only receive the waiver for up to four years, unlike the War Orphans Scholarship program in which there is a five-year maximum.

If all five spouses take advantage of the program beginning in FY 2005 for the maximum four years, then the expected cost of adding these individuals to the tuition waiver program would be $98,248 if the average award increased by 6% per year, or $108,602 if the average award increased by 9% per year. Note that this assumes that either the spouses did not have an undergraduate degree, or if a spouse had already obtained an undergraduate degree would return to school for additional undergraduate studies. The costs would most likely be higher if any of the spouses began attending a state institution of higher education at a later date because of the expected future increases in tuition.

 

Table 2: Estimated Costs of Providing Tuition Waivers to the Spouses of
Those Killed in Operation Iraqi Freedom

Fiscal Year

6% Increase

9% Increase

FY 2005

$22,459

$23,748

FY 2006

$23,806

$25,885

FY 2007

$25,235

$28,215

FY 2008

$26,749

$30,754

Total

$98,248

$108,602

 

 

 

 

 

LSC fiscal staff: Zak Talarek, Budget Analyst

 

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