COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 4593-02
Bill No.: SB 1136
Subject: Property, Real and Personal; State Tax Commission; Taxation and Revenue - General; Taxation and Revenue - Property
Type: Original
Date: February 22, 2002
FISCAL SUMMARY
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| General Revenue | ($175,000,000) | (UNKNOWN) | (UNKNOWN) |
| State School Moneys | $0 | $0 | $0 |
| Total Estimated
Net Effect on All State Funds |
($175,000,000) | (UNKNOWN) | (UNKNOWN) |
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| School Districts | $175,000,000 | UNKNOWN | UNKNOWN |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 4 pages.
ASSUMPTION
Officials from the Department of Revenue and the Missouri State Tax Commission stated the proposed legislation would have no impact on their agencies.
Officials from the Office of Administration - Division of Budget and Planning (BAP) stated that the proposed legislation would have a major impact on the cost of the foundation formula. They deferred to the Department of Elementary and Secondary Education for the data and systems to properly calculate the fiscal impact. BAP indicated no fiscal impact to the Office of Administration.
The Department of Elementary and Secondary Education (DESE) stated that they had requested approximately $219 million to fund the foundation formula at a proration factor of 1.0. This proposed legislation would decrease the $219 million to approximately $175 million.
DESE made the following assumptions in computing the $175 million estimate:
| Guaranteed Tax Base = $139,507
Payment eligible pupils = 890,600 Line 1 average tax rate = $3.445 Line 2 average assessed valuation = $60,859,728,544 Line 2 average tax rate with income factor of 1.00 = $3.47 Lines 3-5, 8 = FY01 actual Line 7 = one-half of the FY01 actual increased by 2.5% estimated growth in FY02 Line 9 = FY02 actual distribution Number eligible for Free or Reduced Price Lunch (for Line 14) = 331,000 Proration factor on lines 1 and 14 = 1.0000000 Other factors impacting the cost are: - the additional amount required to be paid to hold harmless districts - payments to the special school districts, Division of Youth Services, and districts with military installations |
| FISCAL IMPACT - State Government | FY 2003 | FY 2004 | FY 2005 |
| GENERAL REVENUE | |||
| Cost - Transfers to State School Moneys Fund | ($175,000,000) | (Unknown) | (Unknown) |
| STATE SCHOOL MONEYS FUND | |||
| Income - Transfers from General Revenue Fund |
$175,000,000 |
Unknown |
Unknown |
|
Cost - Distributions to School Districts |
($175,000,000) |
(Unknown) |
(Unknown) |
| ESTIMATED NET EFFECT ON STATE SCHOOL MONEYS FUND |
$0 |
$0 |
$0 |
| FISCAL IMPACT - Local Government | FY 2003 | FY 2004 | FY 2005 |
| SCHOOL DISTRICTS | |||
| Income - School Districts State Aid | $175,000,000 | Unknown | Unknown |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
This proposed legislation adds a definition of "district equalized assessed valuation" to the definitions that are used in interpreting the state school funding formula. The definition averages a district's assessed valuation from the first and second preceding years. The proposal also revises the definition of "guaranteed tax base" to encompass the average of the third and fourth preceding years, instead of basing the amount on only the third preceding year, as in current law.
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
Office of Administration
Division of Budget and Planning
Department of Revenue
Missouri State Tax Commission
Mickey Wilson, CPA
Acting Director
February 22, 2002