SB 0581 - Fiscal Note

Fiscal Note - SB 0581 - Linn State Technical College; new jobs training program

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 2452-01

BILL NO. SB 581

SUBJECT: Education, Higher: Employees

TYPE: Original

DATE: January 13, 1998

---

FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None	$0	$0	$0
Total Estimated Net Effect on All State Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None	$0	$0	$0
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Revenue assume the proposal would require changes in the system and forms, resulting in minimal fiscal impact. However, they assume any additional administrative costs could be absorbed with existing resources.

Officials from the State Treasurer's Office (STO) state an accounting fund already exists for this program. The proposal could slightly increase the number of accounting transactions that run through this fund. The STO would absorb costs associated with increased transactions through it current appropriations.

Officials from the Coordinating Board For Higher Education state that because the Missouri Job Training Program is run and financed by the Department of Economic Development, and new job credits are withheld through the Department of Revenue, the proposal would not appear to have a fiscal impact on the Department of Higher Education. Because the legislation is enabling and does not mandate Linn State Technical College's participation, and because it does not expand the financing of such programs, the proposal would not appear to increase state costs or to have a fiscal impact on Linn State Technical College. Linn State Technical College estimates that any revenues received for a job training program would be offset by costs of such a program.

Officials from Linn State Technical College stated they do not have an estimate on the amount of program costs they would incur with the New Jobs Training Program because they currently do not have any plans of entering into agreements with employers.

Officials from the Office of Administration assume the proposal would result in no additional costs or savings to them. They assume there would be impact on total state revenues, which would be reported by the Department of Economic Development.

Officials from the Department of Economic Development-Job Development and Training assume the proposal would result in no fiscal impact to the agency. They assume Linn State Technical College's participation could increase program costs or could replace projects currently being provided by other community colleges. However, an estimate could not be determined without knowing which projects Linn State Technical College would participate in. Current program costs are approximately $8 million annually, and approximately $20 million in certificates for the new jobs credit from withholding have been issued, with a maximum limit of $35 million. Linn State Technical College's participation would not be expected to significantly impact the costs.

ASSUMPTION (continued)

The Oversight Division has not included any costs in the fiscal impact section because the legislation is permissive by allowing a state technical college to participate in the program, and Linn State Technical College does not currently have a plan to enter into an agreement with any business to participate in the program.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
	0	0	0
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
	0	0	0

FISCAL IMPACT - Small Business

Small businesses could be fiscally impacted to the extent they would participate in the job training program by receiving reimbursement of program costs.

DESCRIPTION

The proposal would prohibit revenue bonds of Linn State Technical College from being a debt of the state or Board of Regents.

The proposal would expand eligibility of the new jobs credit from withholding and the funding of program services to an employer to include agreements with a state technical college. The proposal would authorize a state technical college to enter into an agreement to establish a project and provide program services to an employer. The agreement could include payment of program costs, costs of on-the-job training for employees, or new jobs credit from withholding.

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 Revenue

State Treasurer's Office

Coordinating Board For Higher Education

Linn State Technical College

Office of Administration

Department of Economic Development

Jeanne Jarrett, CPA

Director

January 13, 1998