COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 1595-02
Bill No.: SCS for SB 574
Subject: Education, Elementary and Secondary: Tax Credits
Type: Original
Date: March 21, 2001
FISCAL SUMMARY
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| General Revenue | ($126,908) | ($74,184 to $824,184) | ($76,075 to $826,075) |
| Total Estimated
Net Effect on All State Funds |
($126,908) | ($74,184 to $824,184) | ($76,075 to $826,075) |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| School Districts | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 4 pages.
ASSUMPTION
Officials from the Secretary of State's Office (SOS) assume the rules, regulations and forms issued by the Department of Elementary and Secondary Education could require as many as 10 pages in the Code of State Regulations. For any given rule, roughly half again as many pages are published in the Missouri Register as in the Code because cost statements, fiscal notes and the like are not repeated in the Code. These costs are estimated. The estimated cost of a page in the Missouri Register is $23. The estimated cost of a page in the Code of State Regulations is $27. The actual costs could be more or less the SOS's estimated cost of $615 for FY 2002. The impact of this legislation in future years is unknown and depends upon the frequency and length of rules, filed, amended, rescinded or withdrawn.
Oversight assumes the SOS could absorb the costs of printing and distributing regulations related to this proposal. If multiple bills pass which require the printing and distribution of regulations at substantial costs, the SOS could request funding through the appropriation process. Any decisions to raise fees to defray costs would likely be made in subsequent fiscal years.
Officials from the Department of Elementary and Secondary Education (DESE) assume there would be an unknown reduction in General Revenue tax revenues attributable to businesses utilizing the tax credits created under this bill. The amount of this impact is not known.
DESE would require a Supervisor ($47,616), and DESE's Information Technology (IT) section could need to develop a web-based application process as well.
DESE officials assume there would be a benefit to school districts. However, receipt of this benefit would depend on application and approval for participation in the program. Furthermore, it would be necessary for the districts to attract businesses willing to provide money to the program so that the businesses could receive the tax credits. The extent of participation in the program by businesses can not be determined by DESE.
Officials from the Department of Revenue (DOR) stated their workload measures but did not provide an estimate of staffing needs or revenue impact.
This legislation would require modifications to the individual income tax system. The Division
ASSUMPTION (continued)
of Taxation estimates these modifications, including programming changes, would require 1,384 hours of contract labor at a cost of $46,170. Modifications to the income tax returns and schedules would be completed with existing resources. State Data Center charges would increase due to the additional storage and fields to be captured. Funding in the amount of $9,007 would be requested for implementation.
Oversight notes that there are about 100,000 withholding tax accounts and, therefore, assumes that DOR would not require additional employees due to this proposal.
| FISCAL IMPACT - State Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| GENERAL REVENUE FUND | |||
| Loss-General Revenue Fund | |||
| Dropout tax credit program | $0 | ($0 to $750,000) | ($0 to $750,000) |
| Cost-Department of Revenue | |||
| Reprogramming Costs | ($55,177) | $0 | $0 |
| Cost-Department of Elementary and Secondary Education (DESE) | |||
| Personal Service (1 FTE) | ($40,672) | ($50,027) | ($51,277) |
| Fringe Benefits | ($13,556) | ($16,674) | ($17,091) |
| Expense and Equipment | ($17,503) | ($7,483) | ($7,707) |
| Administrative Costs to DES | ($71,731) | ($74,184) | ($76,075) |
| ESTIMATED NET EFFECT ON | |||
| GENERAL REVENUE FUND | ($126,908) | ($74,184 to $824,184) | ($76,075 to $826,075) |
| FISCAL IMPACT - Local Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| SCHOOL DISTRICTS | |||
| Income-School Districts | |||
| Business Contributions | Unknown | Unknown | Unknown |
| Cost-School Districts | |||
| Program Costs | (Unknown) | (Unknown) | (Unknown) |
| ESTIMATED NET EFFECT ON | |||
| SCHOOL DISTRICTS | $0 | $0 | $0 |
FISCAL IMPACT - Small Business
Small businesses would expect to be fiscally impacted to the extent that they would incur costs for contributions to the dropout program and receive tax credits for those contributions.
DESCRIPTION
This proposal would create a pilot program of tax credits for employers who contribute to a school dropout abatement program. The Department of Elementary and Secondary Education would establish rules for setting up and approving dropout abatement pilot programs and would select several districts for participation in pilot programs; the districts would represent various parts of the state and choices would emphasize districts with high dropout rates. Specific amounts of credit for different types of contribution are detailed in the proposal. School districts could apply to Department of Elementary and Secondary Education for permission to establish pilot programs. The Department would also provide the requisite information to the Department of Revenue. Total credits granted pursuant to the program would be limited to $750,000 in a fiscal year.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space. The proposal would not affect Total State Revenue.
SOURCES OF INFORMATION
Department of Elementary and Secondary Education
Department of Revenue
Secretary of State
Jeanne Jarrett, CPA
Director
March 21, 2001