LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 78TH LEGISLATIVE REGULAR SESSION
 
May 10, 2003

TO:
Honorable Teel Bivins, Chair, Senate Committee on Finance
 
FROM:
John Keel, Director, Legislative Budget Board
 
IN RE:
SB1865 by Bivins (Relating to the delay or deferral of certain payments and transfers by the comptroller of public accounts.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for SB1865, As Introduced: a positive impact of $1,589,058,000 through the biennium ending August 31, 2005.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2004 $0
2005 $1,589,058,000
2006 ($1,608,021,000)
2007 $0
2008 $0




Fiscal Year Probable Savings/(Cost) from
GENERAL REVENUE FUND
1 		Probable Savings/(Cost) from
FOUNDATION SCHOOL FUND
193 		Probable Revenue Gain/(Loss) from
AVAILABLE SCHOOL FUND
2 		Probable Savings/(Cost) from
General Revenue Dedicated
2004 $0 $0 $0 $0
2005 $869,544,000 $845,239,000 ($125,725,000) $2,372,000
2006 ($888,507,000) ($845,239,000) $125,725,000 ($2,372,000)
2007 $0 $0 $0 $0
2008 $0 $0 $0 $0

Fiscal Year Probable Revenue Gain/(Loss) from
STATE HIGHWAY FUND
6 		Probable Savings/(Cost) from
Other Funds		 Probable Revenue Gain/(Loss) from
TRS TRUST ACCOUNT FUND
960 		Probable Revenue Gain/(Loss) from
ERS Trust Account
2004 $0 $0 $0 $0
2005 ($373,170,000) $3,849,000 ($368,545,000) ($26,405,000)
2006 $373,170,000 ($3,849,000) $369,404,000 $26,429,000
2007 $0 $0 $0 $0
2008 $0 $0 $0 $0

Fiscal Year Probable Revenue Gain/(Loss) from
School Districts
2004 $0
2005 ($845,239,000)
2006 $845,239,000
2007 $0
2008 $0

Fiscal Analysis

The bill would defer certain fiscal year 2005 payments until fiscal year 2006.

The bill would defer the following payments and transfers: 1) the August 2005 foundation school program payments to school districts until September 2005; 2) the June, July and August 2005 transfers from the general revenue fund to the teacher retirement system until September 2005; 3) the August 2005 employee retirement system payment until September 2005; 4) the June and July 2005 allocations of motor fuels taxes until September 2005.

The deferred payments to the retirement systems would be repaid with interest.  


Methodology

The fiscal 2005 delays are based on the Legislative Budget Board's recommended appropriation for the Foundation School Program, Teacher Retirement System, and Employment Retirement System.  Interest payment estimates for the repayment of retirement systems were based a 2.15% interest rate.  Interest owed the retirement systems adds to approximately $1 million to the general revenue cost in fiscal 2006. 

The Comptroller assumes that delays would result in $18 million in additional borrowing costs in fiscal 2005 related to cash flow.  The net interest rate on this borrowing is assumed to be 1.125%. This cost is included in the general revenue estimate shown in the above tables. 


Local Government Impact

The impact on school districts is shown in the above tables.


Source Agencies:
304 Comptroller of Public Accounts, 323 Teacher Retirement System, 327 Employees Retirement System, 701 Central Education Agency
LBB Staff:
JK, JO, SD, WP, RS