This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0193 - Authorizes Kansas City to put to vote up to 1/2 cent sales tax to fund flood relief projects
SB 193 - Fiscal Note

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 0171-03

BILL NO.: Truly Agreed and Finally Passed SB 193

SUBJECT: Kansas City; Revenue Dept.; Taxation and Revenue-General-Sales and Use

TYPE: Original

DATE: January 29, 1999


FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED FY 1999 FY 2000 FY 2001
General Revenue $0 $71,250 to $285,000 $71,250 to $285,000
Total Estimated

Net Effect on All

State Funds

$0 $71,250 to $285,000 $71,250 to $285,000



ESTIMATED NET EFFECT ON FEDERAL FUNDS

FUND AFFECTED FY 1999 FY 2000 FY 2001
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 ($325,000) $7,125,000 to $28,500,000 $7,125,000 to $28,500,000

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 3 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials of the Department of Revenue (DOR) state this proposal would not fiscally impact their agency.

Officials of the Kansas City Manager's Office state that this proposal could generate up to $25,380,712 for FY 2000 and up to $19,722,130 for FY 2001 if the governing body would seek and receive voter approval to levy a capital improvements sales tax for flood relief projects.

Staff has reflected a one-time cost for a special election of $325,000.

Oversight assumes this proposal is permissive, however there could be a positive fiscal impact if the governing body of Kansas City received voter approval to levy a capital improvements sales tax for flood relief projects. Since the rate of the tax could be imposed at 1/8 of 1 percent, 1/4 of 1 percent, 3/8 of 1 percent or of 1 percent, Oversight has ranged the revenue impact of this proposal from $7,125,000 to $28,500,000 for FY 2000 and $7,125,000 to $28,500,000 for FY 2001. Oversight assumes a 1% collection fee would be retained by DOR, and placed in the General Revenue Fund. Oversight has also reflected this amount as a range.

FISCAL IMPACT - State Government FY 1999 FY 2000 FY 2001
GENERAL REVENUE FUND
Income to General Revenue Fund
1% Collection Fee $71,250 $71,250
to to
$0 $285,000 $285,000

ESTIMATED NET EFFECT TO

GENERAL REVENUE FUND $71,250 $71,250
TO TO
$0 $285,000 $285,000
FISCAL IMPACT - Local Government FY 1999 FY 2000 FY 2001
Income to Flood Relief Projects Fund
Capital Improvements Sales Tax (1/8-1/2 of 1%) $7,125,000 $7,125,000
to to
$0 $28,500,000 $28,500,000
FISCAL IMPACT - Local Government FY 1999 FY 2000 FY 2001
(Continued)
Cost to Local Government
Special Election ($325,000) $0 $0

ESTIMATED NET EFFECT TO

LOCAL GOVERNMENT $7,125,000 $7,125,000
TO TO
($325,000) $28,500,000 $28,500,000
FISCAL IMPACT - Small Business
Small businesses could be affected by this proposal.

DESCRIPTION

This act authorizes Kansas City to submit for public vote a sales tax for the purpose of funding flood relief projects. The act allows the flood relief sales tax to be enacted in lieu of the presently authorized capital improvements sales tax in Section 94.577, RSMo. The act requires notice within one business day after the ordinance is adopted calling for the election, and also negates the provision of Section 115.123, RSMo, concerning specific election days (election authorities are required to provide notice one time as soon as feasible after the city notifies them of the election). Rates up to and including one-half of one cent may be imposed, and more than one election may be called under the statute; the total sales tax rate imposed from all such elections, however, including the rate for the capital improvements sales tax in Section 94.577, RSMo, cannot exceed one-half of one percent. The revenue is to be collected by the Director of Revenue, deposited in the newly created "Flood Relief Projects Fund", and distributed to the city for such projects. The act would terminate the sales tax no later than two years from its adoption.

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

Kansas City Manager's Office

Jeanne Jarrett, CPA

Director

January 29, 1999