This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0542 - School Tax On Certain Railroad Property Distributed Locally
L.R. NO.  2059-01
BILL NO.  SB 542
SUBJECT:  Education:  Tax on certain railroad property
TYPE:     Original
DATE:     January 5, 1996



                              FISCAL SUMMARY

                    ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED                 FY 1997         FY 1998        FY 1999

None                               $0              $0             $0


Total Estimated
Net Effect on All
State Funds                        $0              $0             $0

                   ESTIMATED NET EFFECT ON FEDERAL FUNDS

FUND AFFECTED                 FY 1997         FY 1998        FY 1999

None                               $0              $0             $0


Total Estimated
Net Effect on All
Federal Funds                      $0              $0             $0

                    ESTIMATED NET EFFECT ON LOCAL FUNDS

FUND AFFECTED                 FY 1996         FY 1997        FY 1998


Local Government                   $0              $0             $0


                              FISCAL ANALYSIS

ASSUMPTION

Officials from the State Tax Commission state that applying the average
operating rate in 1994 of $3.10 to the state-assessed valuation of $3.059
billion, indicates the revenues involved totalled $94.8 million in 1994.
They stated this amount would increase in subsequent years as operating tax
rates and valuations increased.  Based on growth from 1988 to 1994, the State
Tax Commission estimates average growth in tax rates and valuations to be
approximately 6.2% per year.

Officials from the Department of Elementary and Secondary Education (DESE)
assume if current law continues, 52 school districts will lose $11,666,608 in
State-Assessed Railroad and Utility (SARRU) revenues.  This amount was
determined by DESE by recalculating the November, 1995 state aid formula
payment with the SARRU taxes received into the Teacher's and Incidental Funds
removed as a deduction in the formula.  In addition, DESE assumes that the
total SARRU revenue would be added to the formula distribution.  No other
changes were assumed.  The other districts of the state would gain this
amount through the formula provided that the $94,916,875 removed from the
deductions would be appropriated for the formula.  The proration on line one
of the formula would have to be slightly higher than 1.0 in order to send the
$11,666,608 lost by the 52 districts to the remaining school districts.  If
the proration were not slightly above 1.0, in all likelihood the General
Revenue money necessary to fund the formula would have been supplanted by
SARRU money, and the districts would have a net loss of the shortfall.   DESE
states the amounts per district are only estimates and are subject to change
due to individual district circumstances.   DESE states no fiscal impact
would result at the state level.

The Oversight Division assumes the 52 school districts that would have lost
$11,666,608 in SARRU revenues under current law would retain this revenue
under the proposed legislation, and the remaining districts would not receive
this amount.  Since DESE's estimate is from November, 1995, the Oversight
Division has adjusted their estimates based on the State Tax Commission's
growth estimate of 6.2% annually, beginning in fiscal year 1997.

FISCAL IMPACT - State Government     FY 1997     FY 1998     FY 1999
                                    (10 Mo.)

                                           0           0           0

FISCAL IMPACT - Local Government     FY 1997     FY 1998     FY 1999
                                    (10 Mo.)
Income-School Districts
  State-Assessed Railroad and Utilities
  Camden R-III                        95,246     101,151     107,422
  Camdenton R-III                    570,425     605,791     643,350
  Climax Springs                      39,568      42,021      44,626
  Cape Girardeau 63                  653,721     694,252     737,296
  Nell Holcomb R-IV                   62,861      66,758      70,897
  Luray 33                            14,717      15,629      16,598
  Cole County R-II                     4,656       4,945       5,252
  Washington                         770,638     818,417     869,159
  Grundy County R-V                   14,171      15,050      15,983
  S. Iron County R-I                  77,876      82,704      87,832
  Iron County C-4                     89,842      95,412     101,327
  Center 58                          209,976     222,994     236,820
  Joplin R-VIII                      680,200     722,372     767,159
  Jefferson County R-VII              45,771      48,609      51,623
  Crystal City 47                     67,439      71,620      76,060
  School of the Osage R-II           323,665     343,732     365,043
  High Point R-III                    31,281      33,220      35,280
  Moniteau County R-V                 20,583      21,859      23,214
  Morgan County R-I                    5,906       6,272       6,661
  Risco R-II                          23,518      24,976      26,524
  New Madrid County R-I              409,538     434,929     461,895
  Couch R-I                           14,832      15,751      16,727
  Cooter R-IV                         32,667      34,692      36,843
  Pettis County R-XII                 15,011      15,942      16,930
  Boncl R-X                            9,986      10,605      11,262
  Westran R-I                        151,783     161,193     171,187
  Centerville R-I                     16,173      17,176      18,241
  Bunker R-III                        29,246      31,059      32,985
  Lesterville R-IV                    33,357      35,425      37,621
  St. Charles R-VI                   709,379     753,360     800,068
  St. Charles R-V                    123,206     130,845     138,957
  Ferguson Florissant R-II           605,172     642,693     682,540
  Pattonville R-III                  560,694     595,457     632,375
  Kirkwood R-VII                     470,912     500,108     531,115
  Lindbergh R-VIII                   417,654     443,548     471,048

FISCAL IMPACT - Local Government     FY 1997     FY 1998     FY 1999
                                    (10 Mo.)

  Mehlville                        1,036,296   1,100,546   1,168,780
  Parkway C-2                      1,846,064   1,960,520   2,082,072
  Affton 101                         214,955     228,282     242,435
  Bayless                            111,504     118,417     125,759
  Brentwood                           71,730      76,177      80,900
  Clayton                            206,150     218,931     232,505
  Ladue School District              275,522     292,604     310,745
  Maplewood-Richmond H               114,147     121,224     128,740
  University City                    378,060     401,500     426,393
  Valley Park                         67,608      71,800      76,252
  Webster Groves                     369,948     392,885     417,244
  Scott County R-V                    53,228      56,528      60,033
  Kelso C-7                            4,751       5,045       5,358
  Bell City R-II                      46,773      49,673      52,753
  Newton Harris R-III                 24,703      26,234      27,860
  Branson R-IV                       139,158     147,786     156,949
  Schell City R-I                     27,666      29,381      31,203
                                  12,389,933  13,158,100  13,973,901
Loss-School Districts
  SARRU-All other Districts     (12,389,933)(13,158,100) (13,973,901)

ESTIMATED NET EFFECT ON
LOCAL GOVERNMENT                           0           0           0

DESCRIPTION

The proposal would remove the language that requires taxes on state-assessed
properties be distributed pursuant to Section 163.031, RSMo (the foundation
formula), beginning with the 1996-97 school year.

This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.


SOURCES OF INFORMATION
Department of Elementary and Secondary Education
State Tax Commission