SB 0798 - Fiscal Note

Fiscal Note - SB 0798 - Charter Schools Act

L.R. NO.  2316-01
BILL NO.  SB 798
SUBJECT:  Education:  Charter Schools
TYPE:     Original
DATE:     February 9, 1996



                              FISCAL SUMMARY
                    ESTIMATED NET EFFECT ON STATE FUNDS


FUND AFFECTED              FY 1997             FY 1998           FY 1999
None                            $0                  $0                $0

Total Estimated
Net Effect on All
State Funds                     $0                  $0                $0

                   ESTIMATED NET EFFECT ON FEDERAL FUNDS


FUND AFFECTED              FY 1997             FY 1998           FY 1999
None                            $0                  $0                $0

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 to $75,000)     ($0 to $75,000)   ($0 to $75,000)


                              FISCAL ANALYSIS

ASSUMPTION
The Oversight Division assumes since the language regarding financial,
program or compliance audits to be conducted by DESE, the State Auditor or
the Committee on Legislative Research is permissive, audits would be
conducted by the Oversight Division as workload permits, assigned by the
Committee and would not require additional staff or resources.

Officials from the State Auditor's Office assume the proposal has the
potential for fiscal impact, but they are unable to determine the amount at
this time.  The Oversight Division assumes that since the language is
permissive, audits could be conducted as the workload permits, and could be
performed with existing resources.

Officials from the Department of Elementary and Secondary Education (DESE)
assume the proposal would require them to provide technical assistance to
sponsors for review of proposed charter schools contracts.  DESE would be
required to provide information on forming, operating and utilizing charter
schools.  The State Board would have authority to terminate contracts under
certain conditions.  DESE assumes they would need one FTE Director ($35,616)
to review contracts, provide technical assistance, assess charter schools,
and work as a liaison between the State Board and charter schools.  DESE
assumes they would distribute information to all school districts on charter
schools during FY 97.  DESE estimates development costs would run $1,000
during FY 97. They assume printing costs for 525 districts at three pages
each and ten cents each would be $157.50.  Mailing and envelopes for 525
districts at $.52 would be $273.00.

Based on a response from DESE to identical legislation from the prior year,
they assumed providing technical assistance to sponsor school districts would
be from existing appropriations and the fiscal impact at the state level
would be minimal.  Therefore, the Oversight Division has shown no
administrative costs for DESE in the fiscal impact.

DESE assumes the cost of schooling in a charter school would be no higher
than the per pupil expenditures in a regular school.  They also assume the
funds for operating the charter schools would be obtained by shifting
existing revenue.  DESE states that the only additional costs would be for
legal and financial review of the contract as required by the proposed
statute.  The cost for legal and accounting fees is assumed to be a cost to
the sponsoring district since participation would be voluntary.  They assume
the cost for legal and accounting fees for review of the proposed contracts
would be estimated at a one-time cost of $5,000 per charter school.  An
estimated fifteen charter schools would be started each year throughout the
state:
       $5,000 per contract x 15 schools = $75,000

The Oversight Division has ranged these costs, since they would depend on the
number of schools participating.

FISCAL IMPACT - State Government   FY 1997   FY 1998   FY 1999
                                  (10 Mo.)

                                         0         0         0

FISCAL IMPACT - Local Government   FY 1997   FY 1998   FY 1999
                                  (10 Mo.)
Cost-School Districts
  Legal Fees and Financial Review   ($0 to    ($0 to    ($0 to
                                  $75,000)  $75,000)  $75,000)

DESCRIPTION

The proposal would authorize charter schools, which could be sponsored by
school boards.  DESE would be required to provide technical assistance to
sponsors for review of proposed  contracts, which would have to be reviewed
by an attorney and a certified public accountant.  The contracts would be
submitted to the board of education.  DESE would be required to provide
school districts information regarding formation and operation of a charter
school.  Schools would not be allowed to charge tuition.  The board would not
be allowed to levy taxes or issue bonds.

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
Oversight Division
State Auditor's Office