According to the Legislative Budget Board (LBB), the fiscal implications of SB 1400 are minimal at the state level. The study mandated by the bill, which would be conducted by the Texas Higher Education Coordinating Board in consultation with its standing advisory committee, can be completed using existing agency resources.

This assessment suggests that the administrative workload and associated costs of carrying out the feasibility study—analyzing the potential inclusion of students with prior GATI enrollment in junior college funding formulas—are not expected to require additional appropriations or staffing. The agency is assumed to have sufficient capacity to absorb the study within its current operations.

Furthermore, the fiscal note confirms there is no anticipated impact on local government units. This is consistent with the bill’s focus on state-level higher education policy analysis rather than changes that would directly affect local taxing entities or college district budgets at this stage. However, it’s important to note that if future legislation is introduced based on the findings of this study, there could be downstream fiscal implications depending on how the funding formula is adjusted.

SB 1400 proposes a state-initiated study to evaluate whether students who transfer from a public junior college to a general academic teaching institution (GATI) should be counted for performance tier funding, even if they had previously enrolled at a GATI. While the bill avoids enacting this policy outright, it clearly aims to lay the groundwork for a potential expansion of Texas’s higher education funding formulas. This raises several concerns from a limited-government and fiscal responsibility standpoint.

First, the bill represents a policy solution in search of a problem. The existing performance-based funding model already incentivizes junior colleges to promote student achievement and transfer success. Introducing a study to consider expanding those definitions may unintentionally dilute the accountability goals of the current system. Performance metrics should be tied to clear, attributable outcomes, not expanded to maximize institutional funding for students who may have received significant instruction outside the community college system.

Second, while the fiscal note indicates no significant costs to the state at this stage, the long-term implications are more concerning. This bill opens the door to future funding expansions. If the study recommends broader eligibility and those recommendations are later codified, it could lead to increases in state appropriations to junior colleges without any guarantee of improved student outcomes or efficiencies. The study could also incentivize changes in enrollment practices by institutions seeking to optimize for funding, not student success.

Third, SB 1400 grows government involvement in education policy by tasking the Texas Higher Education Coordinating Board with a detailed investigation of what is ultimately an edge case in current funding rules. Rather than focusing on simplifying or reducing the regulatory complexity of Texas’s education funding, this bill adds another layer of administrative analysis that could be used to justify future interventions. Even with the included sunset provision (2027), the long-term purpose of the study suggests forward movement toward a more expansive and potentially less targeted funding structure.

Finally, while the bill does not impose new regulatory burdens or immediate taxpayer costs, its intent reflects a shift toward broader interpretations of performance-based funding and government involvement in resource allocation. Authorizing studies of this kind risks mission creep and sets a precedent for using data collection exercises to legitimize spending increases down the line.

For these reasons, Texas Policy Research recommends that lawmakers vote NO on SB 1400.

• Individual Liberty: While the bill does not directly restrict or expand individual freedoms, it could lead to future changes in education policy that affect how students are counted in state performance metrics. If these changes lead to funding shifts that prioritize institutional metrics over student choice or academic quality, they could indirectly influence the types of programs offered or incentivize behaviors not aligned with individual student needs. However, in its current form—being only a study—the bill does not intrude on personal freedoms or decisions.
• Personal Responsibility: The bill neither promotes nor undermines the concept that individuals should be responsible for their own educational outcomes. However, there is a slight concern that redefining transfer success metrics could shift the focus away from rewarding institutions for helping first-generation or nontraditional students toward rewarding institutions for students with less clear-cut trajectories, possibly lowering expectations or standards for performance funding.
• Free Enterprise: Though this bill concerns public education, its approach touches on market principles. By potentially expanding the pool of students that count toward performance funding, it may create perverse incentives for institutions to reshape their enrollment strategies around funding rather than outcomes. In doing so, it risks distorting competitive dynamics among community colleges and universities, moving away from a model where institutions are rewarded for efficiently serving students and toward one where outcomes are broadened to secure funding.
• Private Property Rights: The bill does not touch on ownership, land use, or any private property issues.
• Limited Government: This is the clearest area of concern. While the bill may seem modest—merely calling for a study—it ultimately represents an expansion of state involvement in defining and potentially funding new categories of educational outcomes. The bill adds a task to an existing state agency (THECB), which could lead to future regulatory or budgetary changes. Even if the fiscal impact is negligible now, it paves the way for future government growth and intervention in education finance.