This Fiscal Note is not an official copy and should not be quoted or cited.
This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0780 - Makes technical revisions to education laws
COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO. 2874-07
BILL NO. HCS For SB 780
SUBJECT: Education, Elementary and Secondary: Technical Revisions
TYPE: Original
DATE: May 5, 1998
FISCAL SUMMARY
|
ESTIMATED NET EFFECT ON STATE FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| General Revenue | ($4,884,145 TO UNKNOWN) | ($6,137,037 TO UNKNOWN) | ($6,138,364 TO UNKNOWN) |
| School Building Revolving | $1,300,000 | $1,300,000 | $1,300,000 |
| Video Instructional Development and Educational Opportunity | $0 | $0 | $0 |
| Total Estimated
Net Effect on All State Funds* |
($3,584,145 TO UNKNOWN) | ($4,837,037 TO UNKNOWN) | ($4,838,364 TO UNKNOWN) |
*Total impact not expected to exceed $8.5 million in FY 1999 and $10 million in FYs 2000 and 2001.
|
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 |
| School Districts | $2,285,189 TO **UNKNOWN | $1,196,934 TO UNKNOWN | UNKNOWN TO ($403,441) |
** Total impact not expected to exceed $7 million in FYs 1999 and 2000, and $5 million in FY 2001.
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 11 pages.
FISCAL ANALYSIS
ASSUMPTION
Officials from the Attorney General's Office and Office of State Courts Administrator assume the proposal would have no fiscal impact on the agencies.
Alternative Education
Officials from the Department of Social Services (DOS) assume the proposal would have no fiscal impact on DOS.
Officials from the Department of Elementary and Secondary Education (DESE) state that currently DESE incurs the hearing officer costs of the hearings. No additional obligations would be incurred with this legislation.
Technical Revisions
Officials from the Department of Elementary and Secondary Education (DESE) assume the technical revisions to the education laws would result in no fiscal impact to DESE and minimal fiscal impact to local school districts.
DESE officials assume the removal of principals from the definition of tenure for teachers would result in no fiscal impact to DESE or local school districts.
DESE assumes school districts could establish public parks and playgrounds. DESE assumes this would result in no fiscal impact to the department. DESE assumes local school districts would incur the cost of establishing public parks including landscaping and equipment purchases. Since each project would have distinct needs and costs and since this would be optional for local school districts, no data is available for an estimate of the fiscal impact. The Oversight Division assumes this provision would result in no additional fiscal impact because school districts are allowed under current law (section 177.101, RSMo) to establish public parks
and playgrounds. The proposal just rewrites this language in section 177.073.
School Building Fund
Officials from the Department of Elementary and Secondary Education (DESE) assume one FTE Director ($42,936) would be needed to administer the School Building Revolving Fund. The Director would implement the provisions of the School Building Lease Purchase Program and process paperwork for the lease purchase program funds. However, this FTE was requested as part of SB 380 in 1993. Since the fund received no appropriation, the FTE has not been
ASSUMPTION (continued)
funded. Based on DESE's response to SB 360 from 1997, the Oversight Division has included one FTE Supervisor in the fiscal impact.
Based on information from DESE, proceeds from forfeitures amounted to the following:
FY 1995: $1.8 million
FY 1996: $800,000
FY 1997: $1,410,270.
Because of the broad fluctuation in collections between years, Oversight averaged the forfeitures for the three years to include $1.3 million annually in the fiscal impact. Based on this average, the fund transfers would not exceed $440 million until after the fiscal note period.
Officials from the Office of Administration, Office of State Courts Administrator, Attorney General's Office and State Treasurer's Office assume the proposal would result in no fiscal impact to the agencies.
VIDEO Program
Officials from the Department of Revenue (DOR) assume the Video Instructional Development and Educational Opportunity (VIDEO) Fund would continue to receive transfers of the sales tax moneys normally deposited to GR from the rental of videocassettes. The transfers are being made under current law, and this bill would not generate additional revenues for the fund. Slightly over $2.5 million is transferred into the fund annually.
Officials from DESE assume that beginning January 1, 1999, VIDEO revenues would not be deposited into General Revenue. Removing this sunset clause would allow the funds to continue to be dedicated to education.
Oversight has included a loss to the General Revenue Fund and income and cost to the Video Instructional Development and Educational Opportunity Fund for $1.25 million in FY 1999 (50% of $2.5 million, January 1, 1999, through June 30, 1999), and $2.5 million in FY 2000 and FY 2001.
State Aid
Officials from the Department of Elementary and Secondary Education (DESE) assume revising the "operating levy for school purposes" regarding tax rate adjustments could result in increased costs to fully fund the foundation formula. The impact is unknown.
ASSUMPTION (continued)
DESE officials assume if the student membership for the ensuing year is six percent or more less than membership for the second preceding year, the eligible pupil count for calculating the foundation formula would be that for the second preceding year. This would cost to fully fund the foundation formula. No estimate can be made since the number of school districts that would qualify is unknown.
DESE officials assume the above unknown costs to the foundation formula would not exceed $5 million annually.
Officials from DESE state a portion of debt service and capital projects levies could generate state school aid and apply toward minimum operating levy considered in state aid funding. As of Fiscal Year 1998, fifteen districts would qualify for increased state aid, which would result in an additional amount of $3,585,189. Other school districts could qualify by switching lease purchases to general obligation bonds and increase amounts of state aid eligibility. DESE assumes no local costs would be incurred.
Officials from the State Tax Commission (TAX) assume the proposal is designed to give districts a greater benefit in the school foundation formula when they reduce their levy because of reassessment, and to allow those who reduced in 1995 to also benefit. The proposal would result in no fiscal impact to TAX.
Minimum Teacher Salary
Officials from the Department of Elementary and Secondary Education (DESE) assume the minimum teacher salary for 1997-1998 is $18,000; 1998-1999 is left out; $19,000 in 1999-2000; $20,000 in 2000-2001 and thereafter. Teachers with at least a master's degree and 10 years teaching experience would have a minimum salary of $25,000 in 1999-2000 and $26,000 in 2000-2001 and thereafter.
Teacher salary increases are subject to appropriation by the general assembly. There may be some costs to DESE, but they are estimated to be minor. DESE would have to determine the amount to pay each district and process the payment.
Estimated costs of salary increases:
$19,000 = approximately $ 500,000 for 365 FTE
$20,000 = approximately $1,300,000 for 1,224 FTE
$25,000 = approximately $ 350,000 for 287 FTE
$26,000 = approximately $ 800,000 for 590 FTE
The above costs represent the amounts necessary in 1997-98 to get to those levels. The amounts would change each year. The Oversight Division has included costs of $850,000 ($500,000
ASSUMPTION (continued)
+$350,000) in FY 2000, and costs of $2,100,000 ($1,300,000 + $800,000) in FY 2001. The Oversight Division has also calculated costs of increased fringe benefits at 28.03%.
Reading
DESE officials assume that in order for a student to progress from one grade to the next, the reading level must be within one grade level of the grade they are leaving. This could require that gifted and above average achievers be held back since it is possible for them to read at a
level that is two, three or more grades beyond the grade they are physically in. Oversight has not included a fiscal impact for this provision.
School Assessment Program
DESE officials assume extending legislative veto time for the school assessment program would result in no direct fiscal impact. However, funds expended during the two year waiting period could be spent unnecessarily if the program would vetoed within the two-year period. Therefore, the fiscal impact cannot be estimated. Oversight has not included a fiscal impact for this provision since the statewide assessment report is required under current law.
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (10 Mo.) | |||
| GENERAL REVENUE FUND | |||
| Cost-Department of Elementary and | |||
| Secondary Education | |||
| Personal Service (1 FTE) | ($28,934) | ($35,589) | ($36,479) |
| Fringe Benefits | (8,110) | (9,976) | (10,225) |
| Expense and Equipment | (11,912) | (6,283) | (6,471) |
| State Aid-Foundation Formula | (3,585,189 | (3,585,189 | (3,585,189 |
| TO | TO | TO | |
| *UNKNOWN) | UNKNOWN) | UNKNOWN) | |
| Total Cost-DESE | ($3,634,145 | ($3,637,037 | ($3,638,364 |
| TO | TO | TO | |
| UNKNOWN) | UNKNOWN) | UNKNOWN) | |
| Loss-General Revenue | |||
| VIDEO Sales Tax | ($1,250,000) | ($2,500,000) | ($2,500,000) |
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (Continued) | (10 Mo.) | ||
|
ESTIMATED NET EFFECT ON | |||
| GENERAL REVENUE FUND | ($4,884,145 | ($6,137,037 | ($6,138,364 |
| TO | TO | TO | |
| **UNKNOWN) | UNKNOWN) | UNKNOWN) | |
| *Unknown not expected to exceed $5 million annually. | |||
| **Unknown total impact not expected to exceed $10 million in FY 1999 and $11 million in FYs 2000 and 2001. | |||
| SCHOOL BUILDING REVOLVING FUND | |||
| Income-Department of Elementary and | |||
| Secondary Education | |||
| Forfeitures | $1,300,000 | $1,300,000 | $1,300,000 |
| Lease purchases would be entered into with schools from the School Building Revolving Fund for capital improvements. The lease purchases would be repaid with interest. | |||
| VIDEO INSTRUCTIONAL DEVELOPMENT | |||
| AND EDUCATIONAL OPPORTUNITY FUND | |||
| Income-VIDEO Fund | |||
| VIDEO Sales Tax | $1,250,000 | $2,500,000 | $2,500,000 |
| Cost-VIDEO Fund | |||
| VIDEO Programs and Administration | ($1,250,000) | ($2,500,000) | ($2,500,000) |
|
ESTIMATED NET EFFECT ON | |||
| VIDEO FUND | $0 | $0 | $0 |
| FISCAL IMPACT - Local Government | FY 1999 | FY 2000 | FY 2001 |
| (10 Mo.) | |||
| SCHOOL DISTRICTS | |||
| Income-School Districts | |||
| Foundation Formula | $3,585,189 | $3,585,189 | $3,585,189 |
| TO | TO | TO | |
| UNKNOWN | UNKNOWN | UNKNOWN | |
| Cost-School Districts | |||
| Minimum Salary | $0 | ($850,000) | ($2,100,000) |
| Fringe Benefits | 0 | (238,255) | (588,630) |
| Total Cost-School Districts | $0 | ($1,088,255) | ($2,688,630) |
| Loss-School Districts | |||
| Forfeitures | ($1,300,000) | ($1,300,000) | ($1,300,000) |
| Lease purchases would be entered into with DESE from the School Building Revolving Fund for capital improvements. The lease purchases would be repaid with interest. | |||
|
ESTIMATED NET EFFECT ON | |||
| SCHOOL DISTRICTS | |||
| $2,285,189 | $1,196,934 | UNKNOWN | |
| TO | TO | TO | |
| UNKNOWN | UNKNOWN | ($403,441) | |
| FISCAL IMPACT - Small Business | |||
Small businesses offering legal services could be fiscally impacted with work related to due process hearings.
DESCRIPTION
The statewide assessment system report prepared by the State Board of Education could be vetoed by the General Assembly within the next two years (thirty legislative days under current law).
Beginning December 15, 1999, and annually, the State Board of Education would report to the General Assembly on the retention and recruitment of teachers in state's schools.
A child would remain in the interim alternative educational setting pending the due process hearing or until expiration of the time period of the interim alternative educational setting, whichever occurs first.
DESCRIPTION (Continued)
If during an interim alternative educational setting arranged because of disciplinary action involving weapons, drugs or the child is a danger to himself or others, the responsible educational agency proposes to change the child's placement after expiration of the interim placement, and the parents challenge the proposed change, the child would remain in his current placement during pending proceedings.
An expedited due process hearing by the State Board of Education could be requested by a parent to challenge a discipline placement or challenge a manifestation determination. The Board would appoint a hearing officer to hear the case and render a decision. The hearing officer would be an attorney.
The definition of "operating levy" would be revised as it pertains to reassessment. The proposal would make revisions regarding eligibility for state aid.
In school year 1999-2000, the minimum teacher's salary would be $19,000. In school year 2000-2001 and thereafter, the minimum teacher's salary would be $20,000. For full-time teachers with at least a master's degree and at least ten years teaching experience, their minimum salary in school year 1999-2000 would be $25,000 and in school year 2000-2001 and thereafter their minimum salary would be $26,000.
The proposal would change the eligibility requirements for districts to receive minimum salary funding.
The portion of state aid received by a school district based on the portion of tax rate in the debt service or capital projects funds which is included in the operating levy would be placed proportionately in the debt service or capital projects fund.
The proposal would direct transfers to the capital projects fund from the teachers' and incidental funds.
The proposal would require all forfeitures of assets collected for breach of penal laws to be transferred to the School Building Revolving Fund. Total transfers would not exceed four hundred forty million dollars. School districts could submit applications for lease purchases from the fund (under current law, requests for loans and grants could be made). The proposal includes eligibility requirements for lease purchases and prioritizes the funding of the lease purchases.
School districts participating in a lease purchase would repay the lease purchase in no more than ten annual payments made on or before the thirtieth of each year. Lease purchase payments
DESCRIPTION (Continued)
would be deposited in the School Building Revolving Fund. Interest charged to the school district would not exceed three percent.
The proposal makes numerous technical revisions to education laws, including seven-director school districts, changing school district names, allowable indebtedness, destruction of bonds, duplicate checks, requirements for physician exams of pupils, sales of school lunches,
superintendent bonds, principal probation, school buildings, physical education and physiology courses, reorganization of school districts, school holidays, school fraternities and sororities.
The proposal would redefine "operating levy for school purposes" to allow school districts to include up to eighteen cents of the debt service or capital funds projects fund levies as part of the operating levy.
Any portion of the operating levy in excess of ten cents from the debt service and capital projects funds would be authorized by a vote.
School district transportation capital expenditures could not be paid from the Incidental Fund.
DESE would annually report the four-year graduation rate.
Proceeds from the sale or lease of property by school districts identified as financially stressed would, until July 1, 1998, be placed to the credit of the incidental or capital projects fund, with notice of the sale included in the budget and educational plan submitted to DESE .
The proposal would raise the limit for contracts requiring a bid from $5,000 to $12,500.
The proposal would remove the requirement of publishing the districts' audited financial statements.
No student would be promoted until and unless they have shown the ability to read within one grade level of the grade they are leaving, unless the student has a learning disability or other physical disability which prevents them from complying with the requirement.
The proposal contains requirements for a successor school district of the St. Louis Special School District.
Teacher education programs would include faculty participation in direct instruction, mentoring, substitute teaching, job shadowing or action research of no less than forty hours' duration at least once every five years. Participation in the programs would be recognized when promotion and
DESCRIPTION (Continued)
tenure status at the institution is considered.
Sales tax revenues deposited in the Video Instructional Development and Educational Opportunity Fund would not be deposited in the General Revenue beginning January 1, 1999.
No teacher would be certified in elementary or early childhood education after August 28, 2000, if the teacher has not had training in phonics.
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
Department of Social Services
Attorney General's Office
Office of State Courts Administrator
Office of Administration
State Treasurer's Office
Department of Revenue
State Tax Commission
Jeanne Jarrett, CPA
Director
May 5, 1998