HJR 2 -- SCHOOL BOND DEBT LIMIT

This proposed constitutional amendment raises the limit on
bonded indebtedness for school districts from 10% to 15% of the
value of taxable tangible property located in the district.

HJR 2 -- SCHOOL BOND DEBT LIMIT (Kreider)

This proposed constitutional amendment raises the limit on
bonded indebtedness for school districts from 10 to 15 percent
of the value of taxable tangible property located in the
district.

FISCAL NOTE:  Cost to General Revenue Fund of $49,170 in FY 1999.

HJR 2 -- SCHOOL BOND DEBT LIMIT

SPONSOR:  Kreider

COMMITTEE ACTION:  Voted "do pass" by the Committee on Education
- Elementary and Secondary by a vote of 24 to 0.

This proposed constitutional amendment raises the limit on
bonded indebtedness for school districts from 10 to 15 percent
of the value of taxable tangible property located in the
district.

FISCAL NOTE:  Cost to General Revenue Fund of $49,170 in FY 1999.

PROPONENTS:  Supporters say that the bonded debt ceiling has not
changed since 1950. Most states do not have limits; Arkansas has
25% limit.  The current ceiling of 10% forces many districts to
take a piecemeal approach to building, constructing additions
rather than new buildings.  Districts with low assessed
valuation sometimes cannot afford even a small building under
the current ceiling.  About 400 districts with fast growth rates
or low assessed valuation could potentially benefit from this
constitutional amendment.  A higher ceiling could also reduce
the number of lease purchases, which are ultimately more costly
than bond issues. Fiscal monitoring by the Department of
Elementary and Secondary Education should prevent problems with
a district incurring more debt than it can handle under a higher
ceiling.

Testifying for the bill were Representative Kreider; Cooperating
School Districts of Kansas City; Missouri Council of School
Administrators; Missouri State Teachers Association; Missouri
School Board Association; Missouri National Education
Association; Stifel, Nicolaus, and Co., financial advisors, St.
Louis; Cooperating School Districts of Greater St. Louis; and
Kansas City School District.

OPPONENTS:  There was no opposition voiced to the committee.

Becky DeNeve, Research Analyst

HJR 2 -- School Bond Debt Limit

Sponsor:  Kreider

This proposed constitutional amendment raises the limit on
bonded indebtedness for school districts from 10 to 15 percent
of the value of taxable tangible property located in the
district.