LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 17, 1997
TO: Honorable Bill Ratliff, Chair IN RE: Senate Bill No. 1795
Committee on Finance By: Wentworth
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB1795 ( Relating
to the taxable value of property of a school district that does
not offer each grade level from kindergarten to 12th grade.)
this office has detemined the following:
Biennial Net Impact to General Revenue Funds by SB1795-As Introduced
Implementing the provisions of the bill would result in a net
negative impact of $(6,800,000) to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
The bill would amend Subchapter B, Chapter 42 of the Texas Education
Code by adding Section 42.106 relating to the taxable value
of property for computing a district's local share of the Foundation
School Program, or local fund assignment (LFA). The new section
would apply to districts that do not offer all 12 grade levels
and pay tuition to other district(s) for the education of its
students. For these districts, the tax base for the calculation
of the LFA would be adjusted by taking the amount of tuition
paid into account. The bill would take effect September 1,
1997.
Methodolgy
The bill would reduce the local share of the Foundation School
Program for those districts that do not offer all 12 grades
and that pay tuition to a neighbor to educate its students.
In turn, this would increase the state shares for affected
districts. Fifty-one districts would be impacted by the bill.
In
employing the formula provided in the bill, the 51 districts
would have cost the state an additional $3,382,667 for tier
I had the bill been in effect in 1994-95. Although the bill
does not apply to tier II directly, a reduction in property
value could result in an increase in the measure of tax effort,
which would increase tier II funding for qualifying districts.
This may be offset, however, by the limitation of the tax rate
cap on access to tier II monies.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable
Savings/(Cost)
from Foundation
School Fund
0193
1998 ($3,400,000)
1998 (3,400,000)
2000 (3,400,000)
2001 (3,400,000)
2002 (3,400,000)
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 ($3,400,000)
1999 (3,400,000)
2000 (3,400,000)
2001 (3,400,000)
2002 (3,400,000)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
Affected local districts would receive additional state aid
of approximately $3.4 million each year.
Source: Agencies: 701 Texas Education Agency - Administration
304 Comptroller of Public Accounts
LBB Staff: JK ,RR ,DD