LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY, No. 2425
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: SEPTEMBER 17, 2024
SUMMARY
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Synopsis: |
Provides that State pay high school equivalency exam fees for low-income individuals. |
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Type of Impact: |
Annual State expenditure increase from the Workforce Development Partnership Fund. |
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Agencies Affected: |
State Board of Education; Department of Education; Department of Labor and Workforce Development. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
Annual |
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State Expenditure Increase from Workforce Development Partnership Fund |
Less than $900,000 |
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· The Office of Legislative Services (OLS) determines that this bill will result in an annual State expenditure increase from the Workforce Development Partnership Fund. The OLS estimates that expenditures from the fund to pay the fee of a high school equivalency exam, on behalf of a low-income individual, will be less than $900,000 on an annual basis.
· The OLS notes that it does not have access to information that would indicate the number of low-income individuals who take high school equivalency exams each year. Therefore, the office opts to indicate a maximum annual cost of $900,000, which takes into consideration all test takers. The OLS cautions, however, that actual costs will likely be lower.
BILL DESCRIPTION
This bill requires that the State Board of Education, within six months of the bill’s effective date, establish a program to pay the high school equivalency exam fees on behalf of low-income individuals. The bill defines a low-income individual as one who lives in a household in which the household income is not greater than 185 percent of the most recent federal poverty guidelines. The program would not provide payment for more than one exam for an individual. The State cost of the fees would be paid from the Workforce Development Partnership Fund.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS determines that this bill will result in an annual State expenditure increase of less than $900,000 from the Workforce Development Partnership Fund. The Workforce Development Partnership Fund is a dedicated, off budget fund which provides qualified displaced, disadvantaged, and employed workers with training services most likely to provide opportunities for career advancement. It is funded by worker and employer payroll tax contributions. This bill requires that high school equivalency exam fees for low-income individuals will be paid for from the portion of the Workforce Partnership Development Fund that, under current State law, may be used at the discretion of the Commissioner of Labor and Workforce Development.
The OLS estimates that this bill will result in annual State expenditures of less than $900,000. The OLS arrives at its estimate by primarily relying on data published on the Department of Education’s website, which shows the annual number of individuals who completed a test battery for a high school equivalency exam dating back to 2014. A test battery generally refers to a complete series comprised of individual subject matter sub-tests, which test takers are required to pass in order to receive a high school equivalency diploma. The department’s data from 2014 to 2020 specifies the number of individuals completing test batteries for three different tests: the General Education Development (GED) exam; the High School Equivalency Test (HiSET); and the Test Assessing Secondary Completion (TASC). Data from 2021 to 2023 only include information concerning the GED exam. The State no longer offers the HiSET and TASC equivalency assessments.
The OLS notes that it does not have access to information concerning the number of high school equivalency exam takers who would be considered low-income pursuant to the bill. The OLS therefore calculates, for each year dating back to 2017, an estimated maximum annual cost for paying the high school equivalency exam fees of all individuals who completed a test battery. The OLS arrives at $144 as the per person total cost as this is the current price for an individual completing all four sub-tests within the GED exam test battery. As the table below demonstrates, the number of individuals completing test batteries tends to fluctuate slightly from year to year, regardless of the number of test options available. Based on trends in the number of test takers and bearing in mind the staggered elimination of the TASC and HiSET assessments, the OLS finds it reasonable to expect that the number of GED exam takers will increase in future years. Given this likely trend, the OLS opts to estimate a maximum annual expenditure of $900,000, primarily taking into consideration the estimates calculated for 2017, 2018, and 2019. The OLS cautions, however, that actual annual costs resulting from the bill will likely be lower than $900,000 depending on the proportion of test takers that are low-income.
The OLS notes, for the purposes of illustration only, that in the 2023-2024 school year, 37.7 percent of pre-kindergarten through 12 students Statewide met the criteria to be considered low-income.
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Estimate of Maximum Cost for State Payment of All Individuals’ High School Equivalency Exam Fees, 2017 to 2023 |
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Year |
Total Number of Individuals who Completed Test Battery |
GED Total In-Person Testing Price |
Maximum Annual Cost |
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2023* |
2,604 |
$144 |
$374,976 |
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2022* |
1,392 |
$144 |
$200,448 |
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2021* |
1,051 |
$144 |
$151,344 |
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2020** |
1,625 |
$144 |
$234,000 |
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2019** |
6,082 |
$144 |
$875,808 |
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2018** |
5,653 |
$144 |
$814,032 |
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2017** |
6,323 |
$144 |
$910,512 |
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*Data only indicates the number of individuals completing the GED exam test battery. |
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**Data indicates the total number of individuals completing the GED, HiSET, and TASC exam test batteries. |
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Section: |
Education |
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Analyst: |
Senior Fiscal Analyst |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).