SB 0385 - Fiscal Note

Fiscal Note - SB 0385 - Establishes Year 2000 Classroom Fund with gaming proceeds

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 1693-01

BILL NO.: SB 385

SUBJECT: Education, Elementary and Secondary: Classroom Fund

TYPE: Original

DATE: March 16, 1999

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
General Revenue	($27,148,046)	($57,010,896)	($89,792,161)
Year 2000 Classroom	$0	$0	$0
Total Estimated Net Effect on All State Funds	($27,148,046)	($57,010,896)	($89,792,161)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
None	$0	$0	$0
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Local Government	$27,148,046	$57,010,896	$89,792,161

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials from the Gaming Commission assume the proposal would result in no fiscal impact to the commission.

Officials from the State Treasurer's Office assume a new accounting fund would be created in the state treasury for the Year 2000 Classroom Fund. The proposed legislation would slightly increase the number of accounting transactions processed through their accounting system and increase the available funds for investment. The STO would absorb the costs associated with increased accounting transactions and investments through their current appropriations.

Officials from the Office of Administration-Budget and Planning (OA-B&P) assume that in FY 2000 $148.8 million is transferred from the Gaming Proceeds for Education Fund to the State School Monies Fund. No growth is assumed in the Gaming Proceeds for Education. OA-B&P officials assume the transfers would be as follows:

FY 2000 FY 2001 FY 2002

% Transfer 20% 40% 60%

to Y2K

Fund

$ Transfer $29.8 million $59.5 million $89.3 million

to Y2K

Fund

Officials from the Department of Elementary and Secondary Education (DESE) assume they would need one FTE Supervisor ($47,028) to administer the fund disbursements and expenditures. The Oversight Division assumes DESE could make the additional distributions to school districts with existing personnel.

DESE officials assume the impact to the Gaming Proceeds for Education Fund would begin with the FY 2000 budget request. A 5% per year growth factor in this amount is assumed for FY 2001 and FY 2002.

FY 2000 $135,740,229 -- 20% would go to Year 2000 Classroom Fund = $27,148,046

FY 2001 $142,527,240 -- 40% would go to Year 2000 Classroom Fund = $57,010,896

FY 2002 $149,653,602 -- 60% would go to Year 2000 Classroom Fund = $89,792,161

ASSUMPTION (continued)

Funds diverted from the State School Moneys Fund (SSMF) to the Classroom Fund would be replaced by an equal transfer from the General Revenue Fund into the SSMF. Therefore, no fiscal impact to the SSMF has been included.

FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
GENERAL REVENUE FUND
Cost-Department of Elementary and
Secondary Education (DESE)
Transfer to the SSMF	($27,148,046)	($57,010,896)	($89,792,161)
YEAR 2000 CLASSROOM FUND
Income-Department of Elementary and
Secondary Education (DESE)
Transfer from Gaming Proceeds
For Education Fund	$27,148,046	$57,010,896	$89,792,161
Cost-Department of Elementary and
Secondary Education (DESE)
Distributions to School Districts	($27,148,046)	($57,010,896)	($89,792,161)
ESTIMATED NET EFFECT ON
YEAR 2000 CLASSROOM FUND	$0	$0	$0
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
SCHOOL DISTRICTS
Income-School Districts
Distributions from Year 2000 Classroom
Fund	$27,148,046	$57,010,896	$89,792,161
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.

DESCRIPTION

Excursion gambling boat proceeds deposited in the Gaming Proceeds for Education Fund in excess of the amount transferred to the School District Bond Fund are currently transferred to the State School Moneys Fund. The proposal would transfer these moneys as follows: 1) for FY 2000, 20% to the Year 2000 Classroom Fund and 80% to the State School Moneys Fund; 2) for FY 2001, 40% to the Year 2000 Classroom Fund and 60% to the State School Moneys Fund; 3) for FY 2002, 60% Year 2000 Classroom Fund and 40% to the State School Moneys Fund; 4) for FY 2003, 80% to the Year 2000 Classroom Fund and 20% to the State School Moneys Fund; and for FY 2004, 100% to the Year 2000 Classroom Fund.

The amount transferred to the Year 2000 Classroom Fund would be replaced in the State School Moneys Fund from General Revenue.

For FY 2000 and each subsequent fiscal year, the Year 2000 Classroom Fund would be distributed to each school district on a per eligible pupil basis. The moneys could be used by the districts for school construction, renovation or leasing; teacher recruitment, retention, salaries or professional development; or technology enhancements, textbooks or instructional materials.

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

State Treasurer's Office

Gaming Commission

Office of Administration (Budget and Planning)

Jeanne Jarrett, CPA

Director

March 16, 1999