COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 1767-01
Bill No.: SB 423
Subject: Education, Elementary and Secondary: Aid
Type: Original
Date: February 28, 2001
FISCAL SUMMARY
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| General Revenue | ($1,200,000) | ($1,200,000) | ($1,200,000) |
| State School Moneys | $0 | $0 | $0 |
| Total Estimated
Net Effect on All State Funds |
($1,200,000) | ($1,200,000) | ($1,200,000) |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| School Districts | $1,200,000 | $1,200,000 | $1,200,000 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 4 pages.
ASSUMPTION
Officials from Department of Elementary and Secondary Education indicated that the proposal would not affect their agency, administratively. There would be costs to fully fund the Foundation Formula.
Calculated Levy
Officials assume there would be no additional state or local cost from making the reassessment add-on permanent. However, there would be foregone savings to the state and avoided losses to school districts in the future since the add-on would not be removed in some future year.
Hold Harmless Calculation - Percentage Change in Guaranteed Tax Base
The cost for FY 2002 is estimated at $1.2 million, based on the assumptions that:
a) all hold harmless districts in FY 2001 would remain hold harmless in FY 2002;
b) all hold harmless districts would have the same number of eligible pupils in both years;
c) the Line 2 calculation equals the estimated 2000 assessed valuation times the FY 2001 income factor time the FY 2001 levy for the Incidental and Teachers' Funds;
d) Lines 3 through 6 amounts equal the FY 2001 amounts;
e) Line 7 equals FY 2001 Prop C payment eligible pupils times $780 per eligible pupil times 50%;
f) Line 8 equals the FY 2001 Fair Share payment Average Daily Attendance times $28 per Average Daily Attendee; and
g) Line 9 equals the FY 2001 Free Textbook payment (made in September of 2000).
Oversight notes that projecting costs for any of the proposed changes could be affected by changes in Lines 3 through 8 of the Formula, tax levies for school districts, eligible pupils, and attendance among other factors. For purposes of this fiscal note, Oversight assumes additional costs would remain constant.
| FISCAL IMPACT - State Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| GENERAL REVENUE FUND | |||
| Cost - Increased transfers to State School Moneys Fund | ($1,200,000) | ($1,200,000) | ($1,200,000) |
| ESTIMATED NET EFFECT ON GENERAL REVENUE FUND | ($1,200,000) | ($1,200,000) | ($1,200,000) |
| STATE SCHOOL MONEYS FUND | |||
| Income - Increased Transfers from General Revenue Fund | $1,200,000 | $1,200,000 | $1,200,000 |
| Cost Increased Distributions to School Districts | ($1,200,000) | ($1,200,000) | ($1,200,000) |
| ESTIMATED NET EFFECT ON STATE SCHOOL MONEYS FUND | $0 | $0 | $0 |
| FISCAL IMPACT - Local Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| SCHOOL DISTRICTS | |||
| Income - Increased State Aid | $1,200,000 | $1,200,000 | $1,200,000 |
| ESTIMATED NET EFFECT ON SCHOOL DISTRICTS | $1,200,000 | $1,200,000 | $1,200,000 |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
This proposal would make changes to the state Foundation Formula including:
1) making permanent the recalculated levy; and
2) changing the hold harmless calculation to allow hold harmless districts to receive an increase in their amount per eligible pupil (the difference in the percentage change in the guaranteed tax base and the percentage change in Line 10 of the Formula from the prior year to the current year).
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space. The proposal would not affect Total State Revenue.
SOURCES OF INFORMATION
Department of Elementary and Secondary Education
Jeanne Jarrett, CPA
Director
February 28, 2001