LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
March 24, 1995
TO: Honorable Bill Ratliff, Chair IN RE: Committee Substitute
Committee on Education for Senate
Senate Bill No. 5
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on Senate Bill No.
5 (relating to state financing of public school facilities) this
office has determined the following:
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
This bill would create a funding program for school facilities.
Funds would be provided to school districts for both existing
debt and new debt for construction of school facilities.
For new debt, districts with property wealth up to $280,000 per
unweighted ADA would be eligible to participate in the program.
The program would provide funding for new debt using a guaranteed
yield of $28 per penny per unweighted ADA for up to $0.25 of debt
service tax effort.
The estimates for new debt are based on current information (as
of 2/1/95) for district property values, average daily attendance
(ADA) and tax rates and are subject to change as these data are
updated.
Other assumptions used to estimate the cost associated with new
debt include:
20 year maturity date for debt issued
8% Annual Percentage Rate for debt issued
$2 billion in new debt to meet critical need, as presented by TEA
to the Senate Interim Committee on School Facilities, issued in
1996.
$1 billion in additional new debt issued in 1998, 1999, 2000, as
indicated by current trends in local debt issuance.
The cost of the program to assist with new debt would be
approximately $172 million for the biennium.
The bill would also create a program to assist districts with
current debt service (I&S) tax rates above $0.25. Eligible
districts would receive a guaranteed yield per penny equal to the
statewide average yield for tax rates beyond $0.25. The formula
would also make an adjustment for growth, providing districts
with historically high growth a higher yield per penny.
The cost of the program to assist with existing debt would be
approximately $114 million for the biennium.
TEA also indicates that there may be some administrative costs to
the state associated with data collection through the Public
Education Information Management System (PEIMS), but that cost
cannot be determined.
The probable fiscal implication of implementing the provisions of
the bill during each of the first five years following passage
is estimated as follows:
Fiscal Probable Cost Out
Year of General
Revenue Fund 001
1996 $147,047,566
1997 146,826,845
1998 148,343,091
1999 150,238,588
2000 151,720,793
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
Source: Legislative Budget Board
LBB Staff: JK, DH, DF