This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0194 - Certain inappropriate school fund transfers will not cause state aid reduction
SB 194 - Fiscal Note

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 20-03

BILL NO.: SB 194

SUBJECT: Education, Elementary and Secondary: Fund Transfers

TYPE: Original

DATE: January 26, 1999


FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED FY 2000 FY 2001 FY 2002
None $0 $0 $0
Total Estimated

Net Effect on All

State Funds

$0 $0 $0



ESTIMATED NET EFFECT ON FEDERAL FUNDS

FUND AFFECTED FY 2000 FY 2001 FY 2002
None $0 $0 $0
Total Estimated

Net Effect on All

Federal Funds

$0 $0 $0



ESTIMATED NET EFFECT ON LOCAL FUNDS

FUND AFFECTED FY 2000 FY 2001 FY 2002
Local Government* $0 $0 $0

*$3.9 million would be redistributed among school districts in FY 1999.

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 3 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Elementary and Secondary Education (DESE) assume the revisions to section 165.011 would not increase the cost of the basic state aid formula (Foundation Formula). Other districts violating the transfer provisions have been and would continue to be subject to the requirement to reduce a district's state Basic Formula (Foundation Aid) by the amount of transfer in violation of section 165.011, RSMo.

McDonald County R-I school district would benefit by avoiding the $3.9 million penalty that would otherwise have been deducted from its state aid payment. The $3.9 million deduction would have been redistributed back out to the other school districts as additional state payments, outside the state foundation formula. These impacts would occur in FY 1999 and would be a one-time impact. No impact would be anticipated for FY 2000.

Other districts violating the transfer provisions have been and would continue to be subject to the requirement to reduce a district's state Basic Formula (Foundation Formula) by the amount of transfer in violation of section 165.011, RSMo.

FISCAL IMPACT - State Government FY 2000 FY 2001 FY 2002
$0 $0 $0
FISCAL IMPACT - Local Government FY 2000 FY 2001 FY 2002
$0 $0 $0
$3.9 million would be redistributed among school districts in FY 1999.
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.






DESCRIPTION

The amount deducted from a school district's state aid due to transfers from the Incidental Fund to the Capital Projects Fund would not be made for any transfer prior to the 1999-2000 school year by a district which has an area of greater than four hundred square miles and an assessed valuation per pupil of less than thirty thousand dollars and has had an enrollment increase of at least fifty percent from the fifth school year preceding the year of the transfer to the year of the transfer.

The proposal contains an emergency 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



Jeanne Jarrett, CPA

Director

January 26, 1999