LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 4, 2001 TO: Honorable Teel Bivins, Chair, Senate Committee on Education FROM: John Keel, Director, Legislative Budget Board IN RE: SB1785 by Nelson (Relating to the limit on assistance under the state program for assisting school districts with the payment of existing debt.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB1785, As Introduced: negative impact of $(84,000,000) 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. * * * * The Senate Committee Substitute for SB 1, as approved by the * * Senate, includes funding in the Texas Education Agency bill pattern * * to cover the cost associated with this legislation. * * * * * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $(45,500,000) * * 2003 (38,500,000) * * 2004 (38,500,000) * * 2005 (38,500,000) * * 2006 (38,500,000) * **************************************************** All Funds, Five-Year Impact: ***************************************************** * Fiscal Year Probable Savings/(Cost) from * * Foundation School Fund * * 0193 * * 2002 $(45,500,000) * * 2003 (38,500,000) * * 2004 (38,500,000) * * 2005 (38,500,000) * * 2006 (38,500,000) * ***************************************************** Fiscal Analysis The bill increases the tax limitation for the existing debt allotment (EDA) under Texas Education Code, Chapter 46, Subchapter B. The bill would amend section 46.034(a) by increasing the existing debt tax rate limit from $.12 to $.29, effective September 1, 2001. This bill changes the funding of the existing debt allotment at $.29 from a permissive action, if funds are available, to a mandatory action. Methodology In fiscal year 2001, the ceiling rate for the EDA was raised from $.12 to $.29 per $100 of valuation, at a cost of approximately $62,000,000. Increasing property values and adjustments for student projections have resulted in an estimated cost for fiscal year 2002 of $45,500,000 over current law cost, and $38,500,000 for fiscal year 2003. Local Government Impact No fiscal implication to units of local government is anticipated. School districts would be required to reduce related tax effort by a corresponding amount to reflect this increase in state assistance. Source Agencies: 701 Texas Education Agency LBB Staff: JK, CT, PF, JM