COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION



FISCAL NOTE



L.R. No.: 3863-01

Bill No.: SB 1057

Subject: Education, Elementary and Secondary; Gambling

Type: Original

Date: January 28, 2004




FISCAL SUMMARY



ESTIMATED NET EFFECT ON GENERAL REVENUE FUND
FUND AFFECTED FY 2005 FY 2006 FY 2007
General Revenue $0 ($8,000,000) ($8,000,000)
Total Estimated Net

Effect on General

Revenue Fund

$0 ($8,000,000) ($8,000,000)



ESTIMATED NET EFFECT ON OTHER STATE FUNDS
FUND AFFECTED FY 2005 FY 2006 FY 2007
Gaming Proceeds for Education Fund $0 $0 $0
State School Moneys Fund $0 $0 $0
Lottery Proceeds Fund $0 $0 $0
Classroom Trust Fund $0 $0 $0
Total Estimated Net Effect on Other State Funds* $0 $0 $0

*Offsetting Transfers In and Out of Funds Total $12,808,000



Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 5 pages.







ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 2005 FY 2006 FY 2007
Total Estimated

Net Effect on All

Federal Funds

$0 $0 $0



ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 2005 FY 2006 FY 2007
Local Government $0 $0 to $8,000,000 $0 to $8,000,000




FISCAL ANALYSIS



ASSUMPTION



Officials from the Office of State Treasurer indicated this proposal would have no effect on their agency.



Officials from the Department of Elementary and Secondary Education (DESE) indicated that they are unable to estimate the fiscal impact of this proposal. DESE does not have gaming data to estimate the amount of gaming proceeds that might be available in FY06 for the classroom trust fund. Any amount directed to the classroom trust fund reduces the amount that without this proposal would have been available to assist in funding the foundation formula.



Officials from the Missouri Gaming Commission stated this proposed legislation would have no impact on gaming taxes or fees.



According to officials from the Office of Administration - Division of Budget and Planning (BAP), Gaming Proceeds for Education grows approximately 2% each year. Based on the FY 05 estimate, over $4.8M ($240,400,000 x 2%) would be transferred to the Classroom Trust Fund. BAP also stated, as did DESE, that any amount directed to the Classroom Trust Fund reduces the amount that would have been available to assist in funding the foundation formula.



Officials from the Missouri Lottery Commission (LOT) stated that the Missouri Lottery ASSUMPTION (continued)



transfers approximately $8 annually in unclaimed prizes to the Lottery Proceeds Fund for Education. LOT assumes that since Lottery profits are transferred to the Lottery Proceeds Fund according to the Missouri Constitution (Article III, Section 39 (b), this $8 million would then be transferred from the Lottery Proceeds Fund for Education to the Classroom Trust Fund.



FISCAL IMPACT - State Government FY 2005

(10 Mo.)

FY 2006 FY 2007
GENERAL REVENUE
Loss - Reduced Transfer from Lottery Proceeds Fund



$0


($8,000,000)


($8,000,000)
ESTIMATED NET EFFECT ON GENERAL REVENUE

$0


($8,000,000)


($8,000,000)
GAMING PROCEEDS FOR EDUCATION FUND
Savings - Decreased Transfers to State School Moneys Fund

$0


$4,808,000


$4,808,000
Cost - Transfer to Classroom Trust Fund $0 ($4,808,000) ($4,808,000)
ESTIMATED NET EFFECT ON GAMING PROCEEDS FOR EDUCATION FUND



$0




$0




$0
STATE SCHOOL MONEYS FUND
Savings - Decreased Distributions to School Districts

$0


$4,808,000


$4,808,000
Loss - Decreased transfers from Gaming Proceeds for Education Fund

$0


($4,808,000)


($4,808,000)
ESTIMATED NET EFFECT ON STATE SCHOOL MONEYS FUND

$0


$0


$0
FISCAL IMPACT - State Government FY 2005

(10 Mo.)

FY 2006 FY 2007
LOTTERY PROCEEDS FUND
Savings - Decreased Transfer to General Revenue



$0


$8,000,000


$8,000,000
Cost - Transfer to Classroom Trust Fund (Unclaimed Prize Moneys)

$0


($8,000,000)


($8,000,000)
ESTIMATED NET EFFECT ON LOTTERY PROCEEDS FUND

$0


$0


$0
CLASSROOM TRUST FUND
Transfer In - Transfer from Gaming Proceeds for Education

$0


$4,808,000


$4,808,000
Transfer In - Transfer from Lottery Proceeds Fund

$0


$8,000,000


$8,000,000
Transfer Out - Distribution to School Districts (per pupil basis)

$0


($12,808,000)


($12,808,000)
ESTIMATED NET EFFECT ON CLASSROOM TRUST FUND

$0


$0


$0

FISCAL IMPACT - Local Government FY 2005

(10 Mo.)

FY 2006 FY 2007
SCHOOL DISTRICTS
Income - Distribution (on per pupil basis) of funds from Classroom Trust Fund



$0


$12,808,000


$12,808,000
Loss - Reduced Distributions from State School Moneys Fund

$0


($4,808,000 to ($12,808,000)


($4,808,000 to $12,808,000)
ESTIMATED NET EFFECT ON SCHOOL DISTRICTS

$0


$0 to $8,000,000


$0 to $8,000,000


FISCAL IMPACT - Small Business



No direct fiscal impact to small businesses would be expected as a result of this proposal.



DESCRIPTION



This proposal establishes the Classroom Trust Fund.



Under current law, excursion gambling boat proceeds deposited in the Gaming Proceeds for Education Fund (beyond the amount transferred to the School District Bond Fund) are directed to the State School Moneys Fund to be distributed through the foundation formula.



Under this proposal, beginning in fiscal year 2006, any increase in the funds transferred (during fiscal year 2005) from the Gaming Proceeds for Education Fund shall be transferred, on a monthly basis, to the Classroom Trust Fund.



The Classroom Trust Fund will finance school construction, teacher recruitment and professional development, technology enhancements, and school safety. The moneys in the Classroom Trust Fund will be distributed to each district on a per-eligible-pupil basis and are exempt from certificated salary compliance. The Classroom Trust Fund will also receive all unclaimed lottery prize money.



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

Office of Administration

Division of Accounting

Division of Budget and Planning

Department of Public Safety

Missouri Gaming Division

Missouri Lottery Commission

Office of State Treasurer



Mickey Wilson, CPA

Director

January 28, 2004