Fiscal Note - SB 0388 - Funding For School Capital Expenditures and Management of School Funds
L.R. NO. 0868-02
BILL NO. SB 388
SUBJECT: Education, Elementary and Secondary: Gambling
TYPE: Corrected
DATE: March 17, 1997
# Corrected to change the fiscal impact as recalculated by DESE.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
School Building
Revolving Loan $10,000,000 $10,000,000 $10,000,000
General Revenue# ($29,546,087) ($29,550,343) ($29,551,631)
Gaming Proceeds
for Education $0 $0 $0
State School
Moneys $0 $0 $0
Total Estimated
Net Effect on All
State Funds ($19,546,087) ($19,550,343) ($19,551,631)
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None $0 $0 $0
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local
Government# $19,500,000 $19,500,000 $19,500,000
FISCAL ANALYSIS
ASSUMPTION
Officials from the Gaming Commission, Department of Revenue, State Tax
Commission, Office of Administration and State Treasurer's Office assume the
proposal would have no fiscal impact on them.
Officials from the Department of Elementary and Secondary Education (DESE)
assume state costs would be possible due to the increased cost to fully fund
the foundation formula as follows:
1. $10 million of the riverboat proceeds would be redirected to the School
Building Revolving Loan Fund, which would require $10 million from other
funds (General Revenue) to be used to fully fund the formula.
#2. $19.5 million increase to fully fund the formula due to the additional
levy transfers.
3. No savings are assumed due to the guaranteed tax base multiplier change.
DESE assumes the intent was not to result in a savings.
4. One FTE would be needed for the School Building Revolving Loan Fund.
However, this FTE was requested as part of SB 380 (1993). Since the fund
received no appropriation, the FTE has not been funded. The FTE would
implement the provisions of the School Building Loan Program and process
paperwork for the loan program funds.
DESE officials assume the total potential impact to fully fund the cost of
the formula would be $29.5 million. This would be subject to appropriation,
since the General Assembly is not required to fully fund the formula.
The Oversight Division has included an FTE supervisor ($33,048) in the fiscal
impact, rather than an FTE director ($40,872), based on DESE's response to SB
360 (1997).
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
SCHOOL BUILDING REVOLVING FUND
Transfer from Gaming Proceeds for
Education Fund $10,000,000 $10,000,000 $10,000,000
Loans would be made to school districts from the School Building Revolving
Fund for capital improvements. The loans would be repaid with interest.
GENERAL REVENUE FUND
Cost-Department of Elementary and
Secondary Education
Personal Service (1 FTE) ($28,217) ($34,721) ($35,589)
Fringe Benefits (8,050) (9,906) (10,154)
Expense and Equipment (9,820) (5,716) (5,888)
#Foundation Formula (29,500,000) (29,500,000) (29,500,000)
Total Cost-DESE ($29,546,087) ($29,550,343) ($29,551,631)
GAMING PROCEEDS FOR EDUCATION
FUND
Savings-State School Moneys Fund $10,000,000 $10,000,000 $10,000,000
Cost-School Building Revolving Fund ($10,000,000) ($10,000,000) ($10,000,000)
ESTIMATED NET EFFECT ON GAMING
PROCEEDS FOR EDUCATION FUND $0 $0 $0
STATE SCHOOL MONEYS FUND
Income-General Revenue Fund $10,000,000 $10,000,000 $10,000,000
Loss-Gaming Proceeds For
Education Fund ($10,000,000) ($10,000,000) ($10,000,000)
ESTIMATED NET EFFECT ON
STATE SCHOOL MONEYS FUND $0 $0 $0
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
Income-School Districts
#Foundation Formula $19,500,000 $19,500,000 $19,500,000
ESTIMATED NET EFFECT ON
SCHOOL DISTRICTS $19,500,000 $19,500,000 $19,500,000
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of
this proposal.
DESCRIPTION
The proposal would require the excursion gambling boat proceeds deposited in
the Gaming Proceeds for Education Fund in excess of the amount transferred to
the School District Bond Fund to be transferred in the following priority:
the first fifty million would be transferred to the State School Moneys Fund
to fully fund the district entitlements less deductions in lines 1 to 10, the
next ten million would be transferred to the School Building Revolving Fund,
and any remainder would be transferred to the State School Money Fund for the
foundation formula.
The proposal would change the definitions of "district adjusted gross income
per return" and "state adjusted gross income per return" to include tax
return information from the third preceding year, rather than the second
preceding year under current law.
The proposal would change the definition of "free and reduced lunch eligible
pupil count" to be an average number of pupils from the last Wednesday in
January for the second and third preceding school years.
The "guaranteed tax base" would be equal to the average of the state
equalized assessed value per pupil for the second and third preceding years
times two and one hundred twelve thousandths.
For school districts not making certain transfers from the incidental fund to
the capital projects fund, the "operating levy for school purposes" would
mean the sum of tax rates levied for incidental, teachers, debt service and
capital projects with no more than twenty cents, unless authorized by the
voters, of the sum levied in the debt service and capital projects funds.
The proposal would define "current operating costs" as all expenditures for
instruction for grades K-12 and support services excluding capital outlay and
debt service less revenue from food services, student activities and payments
from other districts.
The proposal would allow not more than ten cents of the minimum tax rate of
2.75 to be counted from the debt service and capital projects funds. The
portion of state aid received by a district based on the tax rate in the debt
service or capital projects funds would be placed to the credit of the debt
service or capital projects fund, respectively.
School districts could borrow from the teachers' fund, incidental fund or
capital projects fund to meet obligations in another of those funds, provided
repayment is made within the same fiscal year.
School districts with enrollment increases of at least 15% from the third
preceding year to the current year and have bonded indebtedness of at least
9% of the assessed valuation of the district would be eligible for transfers
between the incidental and capital projects funds to fund payments for
facilities and equipment per section 177.088.
Only loans, not grants, would be funded by the School Building Revolving
Fund. The proposal would add more eligibility requirements for loans and
rank the order districts would be offered credit. The proposal would specify
repayment requirements.
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
Gaming Commission
Department of Revenue
State Tax Commission
Office of Administration
State Treasurer's Office
This Fiscal Note is not an official copy and should not be quoted or cited.