LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              April 5, 2001
  
  
          TO:  Honorable Paul Sadler, Chair, House Committee on Public
               Education
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB2704  by Reyna, Arthur (Relating to the cost of
               education adjustment for a school district that
               participates in the social security retirement
               program.), As Introduced
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB2704, As Introduced:  negative impact of $(47,562,000) through      *
*  the biennium ending August 31, 2003.                                  *
*                                                                        *
*  The bill would make no appropriation but could provide the legal      *
*  basis for an appropriation of funds to implement the provisions of    *
*  the bill.                                                             *
**************************************************************************
  
General Revenue-Related Funds, Five-Year Impact:
  
          ****************************************************
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2002                        $(23,770,000)  *
          *       2003                         (23,792,000)  *
          *       2004                         (24,161,000)  *
          *       2005                         (24,285,000)  *
          *       2006                         (24,425,000)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
         *****************************************************
         * Fiscal Year      Probable Savings/(Cost) from      *
         *                     Foundation School Fund         *
         *                              0193                  *
         *      2002                            $(23,770,000) *
         *      2003                             (23,792,000) *
         *      2004                             (24,161,000) *
         *      2005                             (24,285,000) *
         *      2006                             (24,425,000) *
         *****************************************************
  
Fiscal Analysis
  
The bill changes the cost of education index used in state funding
computations for school districts that pay social security taxes for all
their employees.  The bill would add 0.062 to the current index values.
  
  
Methodology
  
According to the Texas Education Agency (TEA), there are fourteen school
districts that currently pay social security taxes for all their
employees.

To determine the effects of this bill, the TEA modified the cost of
education index values for the 14 districts.
  
  
Local Government Impact
  
Certain school districts would experience an increase in revenue as
reflected in the state impact table above.
  
  
Source Agencies:   701   Texas Education Agency
LBB Staff:         JK, CT, RN