LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 20, 2001
TO: Honorable Paul Sadler, Chair, House Committee on Teacher
Health Insurance, Select
FROM: John Keel, Director, Legislative Budget Board
IN RE: HJR106 by Gallego (Proposing a constitutional amendment
relating to the provision of group health benefits for
active and retired public school employees,
distributions from the permanent school fund, and the
school employees primary health coverage fund.), As
Introduced
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HJR106, As Introduced: positive impact of $113,658,000 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. *
* *
* There would be an additional cost of $80,000 in fiscal year 2002 *
* for publication of the resolution *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $65,108,000 *
* 2003 48,550,000 *
* 2004 871,000 *
* 2005 (17,308,000) *
* 2006 (32,957,000) *
****************************************************
All Funds, Five-Year Impact:
***************************************************************************
*Fiscal Probable Probable Probable Probable *
* Year Revenue Revenue Revenue Savings/(Cost) *
* Gain/(Loss) Gain/(Loss) Gain/(Loss) from General *
* from Available from State from Permanent Revenue Fund *
* School Fund Employees School Fund 0001 *
* 0002 Primary Health *
* Coverage Fund *
* 2002 $65,188,000 $278,063,000 $(343,250,000) $(80,000) *
* 2003 48,550,000 287,517,000 (364,900,000) 0 *
* 2004 871,000 287,624,000 (347,980,000) 0 *
* 2005 (17,308,000) 297,564,000 (368,971,000) 0 *
* 2006 (32,957,000) 308,014,000 (394,766,000) 0 *
***************************************************************************
Fiscal Analysis
This resolution proposes a constitutional amendment to allow certain
counties and school districts to levy an additional ad valorem tax to pay
for group health benefits for active and retired public school
employees. The new ad valorem tax would have to be approved by the
voters.
The proposed amendment also would establish a new distribution formula
for the Permanent School Fund (PSF). It would also create a new fund,
the School Employees Primary Health Coverage Fund. The School Employees
Primary Health Coverage Fund would be used solely to provide group health
benefits for active and retired public school employees.
Currently, only dividends and interest received by the PSF are
distributed to the Available School Fund (ASF). Under the proposed
amendment, there would be an ongoing annual distribution from the PSF to
the ASF and the School Employees Primary Health Coverage Fund (excluding
fiscal years 2002 and 2003) equal to at least three percent but not more
than seven percent of the average fair market value of the PSF at the end
of each of the preceding twelve quarters; in accordance with the rate
adopted by a vote of two-thirds of the total membership of the State
Board of Education. However, for fiscal years 2002 and 2003, five
percent of the average fair market value of the PSF on the first day of
the appropriate fiscal year would be transferred to the ASF and the
School Employees Primary Health Coverage Fund.
Currently, all distributions from the PSF are transferred to the ASF.
The proposed amendment would require at least 50 percent, but not more
than 75 percent, of the total distribution from the PSF to be deposited
to the ASF; the balance would go to the School Employees Primary Health
Coverage Fund. The Legislature, in the General Appropriations Act, would
determine the apportionment between funds.
This proposed constitutional amendment would be submitted to the voters
at an election to be held November 6, 2001.
Methodology
This estimate includes only changes due to the proposed change in the
distribution formula for the Permanent School Fund (PSF).
This analysis was based on the projected total returns of the PSF over
the next five years. It assumes that the distribution rate would be
five percent in each year. It also assumes that 75 percent of the PSF
distribution would go to the ASF and the remaining 25 percent to the
School Employees Primary Health Coverage Fund.
Local Government Impact
The change to the Available School Fund would have an impact on the state
revenues available for property-wealthy school districts.
Source Agencies: 307 Secretary of State, 701 Texas Education
Agency, 304 Comptroller of Public Accounts
LBB Staff: JK, CT, RN, PF