SB 0579 - Fiscal Note

Fiscal Note - SB 0579 - Sales Ratios Relaxed To 10% From 5%

L.R. NO.  2190-01
BILL NO.  SB 579
SUBJECT:  Property Tax: Equalization Ratios
TYPE:     Original
DATE:     January 15, 1996



                              FISCAL SUMMARY
                    ESTIMATED NET EFFECT ON STATE FUNDS


FUND AFFECTED              FY 1997             FY 1998           FY 1999
State School
Moneys                          $0         ($100,000+)       ($100,000+)
Total Estimated
Net Effect on All
State Funds                     $0         ($100,000+)       ($100,000+)

                   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 1997             FY 1998           FY 1999
School Districts                $0           $100,000+         $100,000+



                              FISCAL ANALYSIS

ASSUMPTION

Officials at the Department of Elementary and Secondary Education assume that
changing the equivalent sales ratio would result in a redistribution of funds
through the Foundation Program. They also noted that the cost to fully fund
the Foundation Formula would increase because more districts would qualify as
equalized even though their assessed values would be lower. They can not
estimate how much the increase would be until they have final sales ratio
information, although they assume the increase would considerably exceed
$100,000 per year because the Formula is a $1,600,000,000 program. They also
noted that although the Formula contains proration provisions in case it is
not fully funded, current plans call for full funding of the Formula.

Officials at the State Tax Commission assume the proposal would provide a
higher variance in assessment ratios before school districts would be
required to increase their levy.  They assume the proposal would have no
fiscal impact on their agency.


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

Cost-Department of Elementary and
Secondary Education
  Increased Transfers to the State
  School Moneys Fund                       0   ($100,000+)   ($100,000+)

ESTIMATED NET EFFECT ON GENERAL
REVENUE FUND                               0   ($100,000+)   ($100,000+)


STATE SCHOOL MONEYS FUND

Income-Department of Elementary and
Secondary Education
  Increased Transfers from General Revenue
  Fund                                     0     $100,000+     $100,000+

Cost-Department of Elementary and
Secondary Education
  Increased Payments to the
  School Districts                         0   ($100,000+)   ($100,000+)

ESTIMATED NET EFFECT ON
STATE SCHOOL MONEYS FUND                   0             0             0

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

Increased Foundation Formula
Distributions                              0      $100,000+     $100,000+

The proposal would also redistribute Formula monies among school districts.

DESCRIPTION

The proposal would require the State Tax Commission to certify equivalent
sales ratios for each school district higher than thirty percent (currently
thirty-one and two-thirds) at thirty-three and one-third percent, on and
after January 1, 1997.  If the equivalent sales ratio would be less than or
equal to thirty percent (currently thirty-one and two-thirds), the State Tax
Commission would reduce the county's reimbursement by fifteen percent.

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