Colorado Legislative Council Staff

STATE and LOCAL

REVISED CONDITIONAL FISCAL NOTE

(replaces Fiscal Note dated March 27, 1998)

TABOR Refund Impact

State General Fund Expenditure Impact

Cash Fund Revenue and Expenditure Impact

Local Revenue Impact

TITLE:            CONCERNING THE RETENTION OF STATE REVENUES IN EXCESS OF THE CONSTITUTIONAL LIMITATION ON STATE FISCAL YEAR SPENDING FOR CERTAIN FISCAL YEARS FOR THE PURPOSE OF FINANCING CERTAIN GOVERNMENT PURPOSES, AND, IN CONNECTION THEREWITH, PROVIDING FINANCIAL ASSISTANCE FOR PUBLIC SCHOOL CAPITAL CONSTRUCTION PROJECTS AND PROVIDING ADDITIONAL REVENUES FOR STATE AND LOCAL TRANSPORTATION NEEDS AND FOR PUBLIC HIGHER EDUCATION CAPITAL CONSTRUCTION PROJECTS.

Summary of Legislation

            This rerevised bill, as amended on Senate 2nd Reading (Senate Journal, April 15, 1998, page 829), would submit a question to the registered electors of the State of Colorado at the next general election in November 1998, to create the State Excess Revenue Trust Fund in the State Treasury. All interest derived from the deposit and investment of moneys in the fund would be credited to the fund. Between FY 1997-98 and FY 2001-02, the State Treasurer would annually transfer from the General Fund to the State Excess Revenue Trust Fund the lesser of $200 million, or the amount of state revenues that are in excess of the fiscal year spending limitation imposed by Section 20 (7)(a) of Article X of the State Constitution. Revenues transferred to the State Excess Revenue Trust Fund would be considered to constitute a voter-approved revenue change, and would not be included in state or local government fiscal year spending for purposes of Section 20 of Article X of the State Constitution, and Section 24-77-102 (17), C.R.S.

            For fiscal years commencing on and after July 1, 1999, but prior to July 1, 2004, the General Assembly would annually transfer revenues from the State Excess Revenue Trust Fund as follows:

            •   30 percent to the School Construction and Renovation Fund, as enacted by HB 98-1231 ($60 million);

            •   15 percent to the Higher Education Account of the Capital Construction Fund created in Section 24-75-302, by this bill ($30 million); and

            •   55 percent to the Highway Users Tax Fund (HUTF) created in 43-4-201 (1)(a), C.R.S ($110 million).

            The moneys transferred to the HUTF would be allocated as follows: 60 percent to the State Highway Fund; 22 percent to the county treasurers; and 18 percent to the cities and incorporated towns.

            The bill would take effect following proclamation by the Governor of the vote of the registered electors at the 1998 general election. Since the bill is conditional upon voter approval, the bill is assessed as having conditional state and local fiscal impact. 

TABOR Refund Impact

            Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase or decrease in state revenue from changes in fees, fines, licenses, or other revenue sources will affect the amount of the state revenue to be refunded.

State Expenditures

          The bill authorizes the annual transfer of the lesser of $200 million, or the excess revenues prescribed by Section 20 of Article X of the State Constitution to the State Excess Revenue Trust Fund beginning with FY 1997-98 for a period of five years. The projected excess TABOR revenue for FY 1997-98 would be transferred in FY 1998-99, and would be available for distribution to the School Construction and Renovation Fund ($60 million), to the Higher Education Account of the Capital Construction Fund ($30 million), and to the Highway Users Tax Fund ($110 million) beginning in FY 1999-00. Projected TABOR excess revenues and the amount that would be available for annual transfer to these funds based on the Colorado Legislative Council staff March 1998 economic forecast for FY 1997-98 through FY 2002-03 is identified in the table below.

Projected TABOR Excess Revenue and the Transfer to the

State Excess Revenue Trust Fund FY 1997-98 through FY 2002-03

(in millions of dollars)

            In addition to the projected transfer of $200 million, moneys in the State Excess Revenue Trust Fund would earn interest for approximately nine months before the transfer to the School Construction and Renovation Fund, the Higher Education Account of the Capital Construction Fund, and the Highway Users Tax Fund.

Election Expenditure Impacts (For Informational Purposes Only)

            A General Fund line-item in the 1998-99 Long Appropriations Bill will fund the costs of publicizing any initiative or referendum proposal in newspapers and for printing and distribution of the Blue Book to all electors. The General Assembly spent $291,267 GF for one state-wide ballot proposal on the November, 1995 ballot and $1,042,014 GF for the 12 proposals that appeared on the November, 1996 ballot.

            The 1996 General Election fixed costs for mailing the Blue Book to 1.35 million registered voters was $174,036 for postage and $3,800 for obtaining mailing addresses. These costs will be the same regardless of the number of issues on the ballot. Variable costs included: Spanish translation of $11,215; newspaper publication of $644,828; printing costs of $206,806; and other costs of $1,328. Total costs were $1,042,014 GF. Fixed costs totaled $177,837 and variable costs were $72,015 per ballot issue.

            Based on the costs incurred for the 1996 Blue Book, one ballot issue cost $249,852 to print and mail to the public. The $72,015 of incremental cost would be added for each issue to the basic mailing costs of $177,837.

Local Government Impact

             The bill would increase HUTF distributions to counties and municipalities beginning in FY 1999-00. In addition, money will be available through the School Construction and Renovation Fund for capital construction projects at the school district level beginning in FY 2000-01.

Spending Authority

            The fiscal note would imply that no appropriations or spending authority are required for FY 1998-99 to implement the provisions of the bill.

Departments Contacted

            Legislative Council