This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0504 - Gaming Commission Fund To Pay All Admin. Costs of Commission
L.R. NO. 2075-03
BILL NO. Perfected SCS for SB 504
SUBJECT: Gaming Commission
TYPE: Original
DATE: May 2, 1996
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
Veterans' Home
Capital ($0
Improvement Trust to
Fund $0 $0 $219,500)
General Revenue $16,896 $16,896
to to
$111,905 ($588,544) ($978,664)
Gaming
Commission ($586,950) ($586,950) ($586,950)
State Highways and
Transportation
Department Fund $475,045 $570,054 $570,054
Total Estimated $16,896 $16,896
Net Effect on All to to
State Funds* $0 ($605,440) ($1,215,060)
*This amount does not reflect the significant unknown cost of planning and
development and machinery.
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
Local Government $0 $0 $0
to
($30,000)
FISCAL ANALYSIS
ASSUMPTION
Officials of the Department of Natural Resources (DNR) and the Missouri
Highway Patrol assume that this proposal would have no fiscal impact to
their agencies.
Officials of the Department of Mental Health assume this proposal would not
fiscally impact their agency. Oversight assumes that there would not be a
current loss to the General Revenue fund since the "Compulsive Gamblers Fund"
has never received funding until FY 96, so there has never been a transfer to
General Revenue. Oversight has not projected any future loss to General
Revenue funds from transfers, as the Compulsive Gamblers Fund is funded by
voluntary contributions from cities and counties with excursion gambling
boats.
Officials of the Gaming Commission stated that this proposal would allow for
the funding of Bingo operations from the Gaming Commission Fund. Currently,
bingo activities within the Commission are funded from General Revenue. The
FY 97 Gaming Commission budget request for Bingo is $586,950.
Officials of the Department of Highways & Transportation (DHT) provided
estimates of the amount of interest to be earned by the State Highways and
Transportation Department Fund (SHTDF). Presently all interest earned in
this fund is credited to the state General Revenue Fund. Current statutes
provide for interest earned by the SHTDF in excess of the amount earned by
the fund in FY 1991 to be credited to that fund. According to DHT officials,
the FY 1991 amount has not been exceeded to-date, resulting in all interest
being credited to the General Revenue Fund. This proposal would require all
interest earned by the SHTDF to be credited to that fund resulting in an
offsetting loss to the General Revenue Fund. Officials estimate (using FY 95
amounts) that the SHTDF could earn $570,054 in interest revenue annually.
This was calculated using an average daily balance of $11,155,658 and
assuming that it would earn 5.11% ($11,155,658 x 5.11% = $570,054).
Officials of the State Tax Commission (TAX) assume that this proposal would
result in a loss of property tax revenue of approximately $30,000 a year.
TAX officials based their estimate of lost tax revenue on 80 acres for each
cemetery except St. Louis County (for St. Louis County they assumed 40 acres)
with the value of the land at $5,000 an acre, assessed as residential at 19%
of value using tax rates in effect in 1994 in each of the named areas.
Officials of the Missouri Veterans Commission (MVC) assume that this proposal
would result in long-term fiscal impact. They stated through contacts with
the Federal Cemetery Grant Program and other states currently operating state
cemeteries, their office has determined that the cost for development of a
single state veteran's cemetery would be approximately three million dollars.
MVC officials assumed that half of this amount would be provided by a federal
matching grant. They assume that the state portion of the cost would be
approximately $1.5 million per cemetery. MVC officials estimated that the
cost of eight cemeteries would cost the state approximately $12 million. MVC
staff stated that the approved value of the land, even if donated, could be
used and offset up to 50% of the state costs.
MVC officials assumed that the annual cost to operate each cemetery would
require from $300,000 to $450,000 depending on the size and the number of
graves to be maintained. In response to a similar proposal MVC staff
indicated that the cost of operations would increase over time as the number
of graves increased. MVC officials assumed that initially they would request
six (6) FTE and increase to nine (9) FTE by the tenth year of operations.
The cost of operations would be partially offset by the VA plot allowance of
$150 per internment of eligible veterans. MVC staff assumed approximately
60% of internments would be eligible veterans; therefore, the cost of
operations would be partially offset each year. MVC officials assume they
would request an additional 2-3 FTEs at Central Office at an additional cost
of $60,000 to $80,000. Costs for maintaining Veterans Cemeteries have been
shown in the General Revenue fund, as this proposal does not allow for the
funding of maintenance for cemeteries from the Veterans Home Capital
Improvement Trust Fund.
MVC officials assumed in response to a similar proposal that the best case
scenario for the development of a state veterans cemetery is the
pre-application would need to be filed by July 1, 1997. The earliest
possible date of Veterans Administration (VA) funding would be October of
1997. Hiring of consultants, selection of architects, and bidding could
conceivably be completed by July of 1998. Construction would require
approximately one year making the completion date around July of 1999. MVC
officials emphasized that this would be a best case situation and that in all
probability the completion would require more time depending on the number of
applications received and the availability of VA funds. Delays could also
result from the outcomes of environmental impact studies, historic site
evaluations, zoning ordinances, etc.
MVC officials assumed in response to a similar proposal that would establish
a veterans' cemetery in Springfield, Missouri, that there would be long-range
effect:
ITEM FY 2000
Salary - Cemetery Manager $ 44,153
Salary - Clerk Typist II $ 17,246
Salary - Labor Supervisor $ 19,909
Salary - 3 Laborer II's $ 51,738
Fringe Benefits $ 41,510
Operating Costs (less salaries) $194,772
VA Plot Allowance ($42,750)
Total $326,578
MVC officials assumed in response to a similar proposal, under the best case
scenario, in FY98 they would be in the planning and construction stages and
would request one (1) Cemetery Manager ($40,000) and one (1) Clerk Typist II
($15,624). Using that same assumption, MVC officials stated that they would
add one (1) Labor Supervisor ($18,036) and three (3) Laborer II's ($15,624)
for six months in FY99.
Officials of the Macon County Assessor's office assume that if land were
acquired in their county this proposal would result in a loss of property tax
revenue of no more than $100.
Officials of the Daviess County Assessor's office assume that if land were
acquired in their county they would incur a loss of property tax revenue of
approximately $325 per year.
Officials of the City of Springfield stated that they had adopted an
ordinance authorizing the City of Springfield, Missouri, to convey
approximately forty-nine acres of land owned by the city to the State of
Missouri for the purpose of establishing a veterans' cemetery. City of
Springfield officials stated that because this land is currently owned by the
city, there would be no loss in tax revenues as a result of this proposal.
Most of the officials at the County Assessor's offices contacted by Oversight
assumed that agricultural land would be used for the cemeteries. Class 4
agricultural land has an average appraised value of $385/acre. Oversight
assumed that 400 acres at $385/acre for a total of $154,000 in 5 locations.
For twenty-five (25) acres in St. Louis County, Oversight assumed there would
be a cost of $5,000/acre or $125,000. According to the Cole County Assessor,
eighty (80) acres within the city limits of Jefferson City would appraise at
$2,000/acre for a cost of $160,000. These land purchases would result in a
total cost of $439,000. Oversight assumes that the acquisition costs for
land, as previously estimated, are representative of expected costs
regardless of the locations that are chosen by the Missouri Veterans
Commission, and have shown those costs in this version. Oversight assumes
that Missouri would qualify for federal grants equaling 50% of the total cost
of the land, or $219,500, leaving $219,500 cost to the state for purchasing
land. Oversight assumes based on MVC's response to a similar proposal that
land acquisition costs would not be reflected until FY99, at best. A
breakdown of the land acquisition portion of the $3,000,000 was not
available. Because it is unknown what portion of the $3,000,000 for each
cemetery would be for planning and development and machinery, Oversight has
reflected a unknown fiscal impact in FY99 for planning and development and
machinery expenses. Oversight assumes that this unknown cost could be
significant.
Oversight further assumed that there would be that long-term ongoing
operating costs for personnel, expenses, and equipment to operate each
cemetery would be $300,000 annually for a total of $2,400,000/year.
Oversight also assumed that the MVC would request two FTEs to coordinate the
activities/ maintenance of the cemeteries at a cost of $60,000/year.
Oversight assumes that the two FTEs that MVC indicated in response to a
similar proposal would be hired in FY98 for the planning and construction
stages would be applicable to each cemetery established. Oversight further
assumes that additional staffing would be added for six months in FY99.
Because this proposal specifically states that the cemeteries would be
established as funds become available and because some of the land could be
donated for veterans cemeteries, Oversight has shown all costs as a range
from $0 to the maximum assumed costs.
Oversight has also shown the potential loss of property tax revenues in the
affected counties as a range from $0 to $30,000 annually based on the State
Tax Commission estimates. Because Oversight assumed that land acquisitions
would not be made until FY99, potential loss of property tax revenues are
reflected beginning in that same year.
There would be long-term fiscal impact due to this proposal in the form of
on-going operating costs for each cemetery established. Oversight also
assumes that there would be revenue from VA plot allowances per internment of
eligible veterans. As the number of internments per year is unknown,
Oversight assumes there would be unknown long- term revenue generated to help
offset the on-going operation costs of the veterans cemeteries.
FISCAL IMPACT - State Government FY 1997 FY 1998 FY 1999
(10 Mo.)
GENERAL REVENUE FUND
Savings - Gaming Commission
Bingo Operation $586,950 $586,950 $586,950
Loss
Interest from SHTDF ($475,045) ($570,054) ($570,054)
Cost-Missouri Veteran's Commission
Personal Services (0, 0-16 FTE, 0-32 FTE) $ 0 $ 0 ($ 0
to to
$467,520) $758,808)
Fringe Benefits $ 0 ($ 0 ($ 0
to to
$137,920) $236,752)
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND $111,905 $16,896 $16,896
to to
($588,544) ($978,664)
STATE HIGHWAYS AND
TRANSPORTATION DEPARTMENT
FUND
Income - Highway & Transportation Dept.
Interest earned by fund $475,045 $570,054 $570,054
GAMING COMMISSION FUND
Cost - Gaming Commission
Bingo Operation ($586,950) ($586,950) ($586,950)
VETERANS' HOME CAPITAL
IMPROVEMENT TRUST FUND
Income-Missouri Veterans Commission
Federal Grant $ 0 $ 0 $ 0
to
$219,500
Cost-Missouri Veteran's Commission
Land acquisition $ 0 $ 0 ($ 0
to
$439,000)
Planning and development, machinery $ 0 $ 0 Unknown
______________________________
Total Cost-MVC $ 0 $ 0 ($ 0
to
$219,500)
ESTIMATED NET EFFECT TO VETERANS'
COMMISSION CAPITAL IMPROVEMENT
TRUST FUND $ 0 $ 0 ($ 0
to
$219,500)*
*This amount does not reflect the significant unknown cost of planning and
development and machinery.
LONG-TERM FISCAL IMPACT
There would be long-term fiscal impact due to this proposal in the form of
on-going operating costs for each cemetery established.
FEDERAL FUNDS
Income-Federal Funds $ 0 $ 0 $ 0
to
$219,500
Cost-Federal Funds
Cemeteries $ 0 $ 0 ($ 0
to
$219,500)
ESTIMATED NET EFFECT
ON FEDERAL FUNDS $ 0 $ 0 $ 0
FISCAL IMPACT - Local Government FY 1997 FY 1998 FY 1999
(10 Mo.)
Loss-Political Subdivisions
Property tax reduction $ 0 $ 0 ($ 0
to
$30,000)
DESCRIPTION
The Veterans' Home Capital Improvement Trust Fund's acceptable uses would be
expanded to include use by the Missouri Veterans' Commission (MVC) for the
construction or renovation of veterans' cemeteries in this state.
This proposal would authorize the Highway Patrol to establish a "Division of
Gaming", provided that the patrol has entered into an enforcement agreement
with the Gaming Commission.
It would provide that money remaining in the "Compulsive Gamblers Fund" at
the end of any biennium would not be transferable to the credit of the
General Revenue Fund.
This proposal would allow the Gaming Commission Fund to be used for all
administrative costs of the Commission. Currently, this fund may only be
used for the administrative costs of the Commission that relate to
excursion gambling boat operations.
It would also provide for all interest earned by the State Highways and
Transportation Department Fund to remain in that fund.
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 Natural Resources
Missouri Veterans Commission
State Gaming Commission
State Tax Commission
Department of Highways & Transportation
Missouri Highway Patrol
Department of Mental Health
Department of Revenue
City of Springfield
Texas County Assessor
Cole County Assessor
Macon County Assessor
Stoddard County Assessor
Daviess County Assessor
St. Louis County Assessor
NOT RESPONDING - Lafayette County Assessor