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WWAMI-amendments. |
04LSO-0129.L4 |
FISCAL NOTE (SF0079)
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FY 2006 |
FY 2007 |
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NON-ADMINISTRATIVE IMPACT |
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Anticipated Revenue Increase (Decrease): |
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MED. SCHOOL STUDENT FUND |
1,025,000 |
947,500 |
970,000 |
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UW INCOME FUND |
(1,000,000) |
(900,000) |
(900,000) |
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Anticipated Expenditure Decrease: |
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UW INCOME FUND |
1,100,000 |
1,100,000 |
1,100,000 |
Source of revenue increase (decrease):
The legislation provides that all medial contract repayments after July 1, 2004 would be deposited into the Medical School Student Fund. Medical contract repayments after July 1, 2004 would no longer flow to the UW Income Fund. Interest income to the Medical School Student Fund will increase due to the redistribution of revenue.
Assumptions:
The revenue increases (decreases) above reflect anticipated revenues from students currently in repayment status.
Interest income is estimated to be $25,000 for FY05, $47,500 for FY06, and $70,000 for FY07, assuming an annual interest rate of 2.5%. These amounts are included in the projected revenue increase to the Medical School Student Fund.
The legislation also proposes extending the grace period for repayment of a student’s educational cost from four (4) years to seven (7) years or nine (9) years with approval of the dean of the College of Health Sciences. The fiscal impact of this change is the time value of the money being collected over a longer period of time. The reduction in the interest rate from 8% to 4% will effectively cut in one-half the amount of interest calculated on the contract amount. It is not possible to quantify the actual impact on the repayments because it is not possible to determine if a reduction in interest rates and the extension of time before interest accrues will materially affect the number of students that elect to make cash repayments versus service repayments to discharge their debt.
Source of Expenditure Decrease:
Medical contract repayment would no longer flow to the UW Income Fund after July 1, 2004 and the resulting loss would necessitate a $1,100,000 reduction in the budget for the WWAMI medical education program since this is the amount of revenue currently supporting this program.
Prepared by: Phill Harris, UW Phone: (307)766-5768