SB 0786 - Fiscal Note

Fiscal Note - SB 0786 - Parental Choice in Education Act

L.R. NO.  2990-01
BILL NO.  SB 786
SUBJECT:  Schools
TYPE:     Original
DATE:     February 12, 1996



                              FISCAL SUMMARY

                    ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED               FY 1997         FY 1998          FY 1999

General Revenue                      ($7,741,016 to   ($7,885,149 to
                          ($50,700)    $15,246,635)     $15,555,929)

Total Estimated
Net Effect on All                    ($7,741,016 to   ($7,885,149 to
State Funds               ($50,700)   ($15,246,635)    ($15,555,929)

                   ESTIMATED NET EFFECT ON FEDERAL FUNDS

FUND AFFECTED               FY 1997         FY 1998          FY 1999


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

Local Government                 $0              $0               $0


                              FISCAL ANALYSIS

ASSUMPTION

Officials of the Department of Elementary and Secondary Education (DESE)
would request an Assistant Commissioner ($67,452) to oversee the newly
created Division of Nonpublic Education, an Executive Secretary ($22,800) to
assist the Assistant Commissioner with budgeting, correspondence, scheduling
and other duties, a Director ($35,616) to monitor student performance and
conduct financial and program audits and a Senior Secretary ($17,952) to
assist the Director in monitoring nonpublic schools' compliance with
standards set in the proposal.

They assume that 4% of pupils from the affected districts would participate
in the program during the first years the program would be in effect. They
also assume that the scholarships would be the Foundation Formula amount.

Since the proposal specifies that scholarships be at least 50% of the per
pupil Foundation Formula distribution, Oversight, for fiscal note purposes,
has ranged the estimates of scholarship amounts from 1/2 of DESE's estimates
to the amount estimated. Oversight also assumes that the new Division would
not formally begin until FY 1998.

Oversight assumes, because of the income limits on those eligible for
scholarships, the average marginal tax rate for tax returns affected by the
scholarship deduction will be 4.5% and that deductions will accrue to
taxpayers affected as the payments are made to schools.

CALCULATIONS

$7,340,460 to $14,680,920 x .045 = $330,320 to $660,640 for a full year.
(FY 1998 would only show effects of two payments to schools.)

Advertisement costs for the proposal would be $1,220 per newspaper column
inch for the text of the proposal, the introduction, title, fiscal note
summary, and affidavit.  The proposal would be on the ballot for the November
1996 general election.


FISCAL IMPACT - State Government        FY 1997       FY 1998       FY 1999

GENERAL REVENUE FUND

Cost to General Revenue Fund
  Secretary of State
  Newspaper Advertisements           ($ 50,700)            $0            $0

  Department of Elementary
  and Secondary Education (DESE)
  Personal Service (4 FTE)                   $0      $151,101      $154,878
  Fringe Benefits                             0        46,448        47,609
  Expense and Equipment                       0        37,846        11,882

Administrative Costs to DESE                 $0    ($235,395)    ($214,369)

  Scholarships                               $0   ($7,340,460   ($7,340,460
                                                           to            to
                                                 $14,680,920)  $14,680,920)

Loss to General Revenue Fund
  Reduced Income Tax                         $0     ($165,161     ($330,320
                                                           to            to
                                                    $330,320)     $660,640)

ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND                  ($50,700)   ($7,741,016   ($7,885,149
                                                           TO            TO
                                                 $15,246,635)  $15,555,929)


FISCAL IMPACT - Local Government        FY 1997       FY 1998       FY 1999

                                             $0            $0            $0

DESCRIPTION

This proposal would provide scholarships to school age children residing in
the St. Louis, Kansas City and Normandy school districts to attend public or
private schools within the districts and establish a Division of Nonpublic
Education within the Department of Elementary and Secondary Education to
monitor the scholarship program.

The proposal establishes income limits for households of scholarship-eligible
school age children and standards for schools receiving scholarship students.

Scholarships would be at least 50% of the per pupil amount to which the
district of residence of a scholarship-receiving student is entitled.

Scholarships would not be taxable income for Missouri state income tax
purposes and the amount of scholarships would be a deduction from Missouri
adjusted gross income.

The proposal contains a severability clause.

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
Secretary of State
Normandy School District

Not Responding: Kansas City School District; St. Louis School District