This Fiscal Note is not an official copy and should not be quoted or cited.
This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0399 - Makes "recalculated levy" for school districts permanent
COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO.: 1713-04
BILL NO.: HCS For SB 399
SUBJECT: Education, Elementary and Secondary: School Finance
TYPE: Original
DATE: April 19, 1999
FISCAL SUMMARY
|
ESTIMATED NET EFFECT ON STATE FUNDS | |||
| FUND AFFECTED | FY 2000 | FY 2001 | FY 2002 |
| State School Moneys | $0 | Greater Than ($100,000) | Greater Than ($100,000) |
| Total Estimated
Net Effect on All State Funds |
$0 | Greater Than ($100,000) | Greater Than ($100,000) |
|
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 | $300,000 | Greater Than $400,000 | Greater Than $400,000 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 3 pages.
FISCAL ANALYSIS
ASSUMPTION
Officials from the State Tax Commission assume the proposal would result in no fiscal impact to the agency.
Officials from the Department of Elementary and Secondary Education (DESE) assume the following:
Section 163.011 would permit the tax rate adjustments due to reassessment on Line 1 of the state aid (foundation) formula to become permanent. This language is likely to result in increased costs to fully fund the state aid (foundation) formula. However, the impact is not known. The increased cost is dependent on districts voting increased tax rates. It is not known which district(s) would vote increases or the year that the voted increase might take place. However, the cost to fully fund the formula is anticipated to be in excess of $100,000. There would be an increase in state aid to the district through the formula. DESE officials assume that since this would require a vote, the state aid increase would not go into effect until FY 2001.
Section 165.011 currently requires the amount of an unauthorized transfer to be reduced from the district's state aid in the next fiscal year following the unauthorized transfer. This language stretches out this recovery period for 5 years if the district meets the criteria specified. No cost to DESE. This results in a redistribution of funds to all school districts. This section would require a school district to increase its local levy on or before September 1 of the second year of the second year following the school year of the unlawful transfer. The district would approve an increase to the greater of $2.75 per $100 assessed valuation, or an amount determined by the department to be equal to or greater than the amount of state aid to be deducted for the illegal transfer, with certain conditions. The fiscal impact of raising the assessed valuation would depend on the district and apply only to districts making unauthorized transfers. Currently, under this language, McDonald County School District would experience a $300,000 increase in property tax collections.
| FISCAL IMPACT - State Government | FY 2000 | FY 2001 | FY 2002 |
| (10 Mo.) | |||
| STATE SCHOOL MONEYS FUND | |||
| Cost-Department of Elementary and | |||
| Secondary Education (DESE) | |||
| State Aid | $0 | Greater Than | Greater Than |
| ($100,000) | ($100,000) | ||
| FISCAL IMPACT - Local Government | FY 2000 | FY 2001 | FY 2002 |
| (10 Mo.) | |||
| SCHOOL DISTRICTS | |||
| Income-School Districts | |||
| State Aid | $0 | Greater Than | Greater Than |
| $100,000 | $100,000 | ||
| Increase in Tax Levy | $300,000 | $300,000 | $300,000 |
| Total Income-School Districts | $300,000 | Greater Than | Greater Than |
| $400,000 | $400,000 | ||
| FISCAL IMPACT - Small Business | |||
| No direct fiscal impact to small businesses would be expected as a result of this proposal. | |||
DESCRIPTION
The proposal would require the State Tax Commission, when conducting a second study of equivalent sales ratio, to use a sample consisting of the parcels used in the original study combined with an equal number of newly selected parcels.
The proposal would remove the exception from the definition of operating levy for school purposes that whenever the current operating levy exceeds the tax rate calculated for determining the district's entitlement, then the prior tax rate adjustments required due to reassessment would be eliminated and not applied in determining the tax rate used to calculate the district's entitlement.
Under specified conditions, unlawful transfers by school districts from the incidental fund to the capital projects fund would be deducted from state aid over five years rather than one year.
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 Tax Commission
Jeanne Jarrett, CPA
Director
April 19, 1999