Colorado Legislative Council Staff

STATE and LOCAL

FISCAL NOTE

State General Fund Expenditure Impact

School District Revenue and Expenditure Impact


Drafting Number:

Prime Sponsor(s):

LLS 98-643

Rep. Romero

 

Date:

Bill Status:

Fiscal Analyst:

January 31, 1998

House Education

Janis Baron (866-3523)

 

TITLE:            CONCERNING THE IMPLEMENTATION OF THE CLASS SIZE REDUCTION PILOT PROGRAM FOR THE REDUCTION OF CLASS SIZES IN THE ELEMENTARY GRADES, AND MAKING AN APPROPRIATION THEREFOR.



Summary of Legislation


STATE FISCAL IMPACT SUMMARY

FY 1998/99

FY 1999/2000

State Revenues

General Fund

Other Fund



 



 

State Expenditures

General Fund — Department of Education - Administration


$ 29,758


$ 27,608

FTE Position Change — Department of Education

    Nonclassified Position

0.5 FTE

Contract Labor

0.5 FTE

Contract Labor

Local Government Impact — See School District Impact of the fiscal note.


            The bill includes the following provisions related to the Class Size Reduction Pilot Program:

 

               directs the Department of Education (DOE) to establish a Class Size Reduction Pilot Program and to select up to six school districts annually with a demonstrated economic or scholastic need for the program;

               allows all school districts to apply for selection;

               specifies that participating school districts will receive per pupil incentive payments to reduce the pupil-teacher ratios in kindergarten through fifth grade;

               establishes dates certain for the application and notification process;

               allows school districts two options for participation in the pilot program:

                 Option One     Requires the school district to provide a reduced class size for all pupils in each classroom for the full regular school day.

                 Option Two     Requires the school district to provide a reduced class size for all pupils in each classroom for at least one-half of the full regular school day. If operating under option 2, directs the school district to devote that half day primarily to the subjects of reading and mathematics.

               provides that the pilot program be funded with one-half of the inflationary adjustment made to the statewide base per pupil funding for FY 1998-99;

               places requirements on the State Board of Education regarding implementation of the program;

               specifies that selected school districts shall receive incentive payments based upon their application in a lump sum payment;

               requires school districts which receive incentive payments but fail to implement the class size reduction program for all grades and classes shall repay moneys received;

               requires a school district receiving incentive payments to implement a staff development training program;

               directs the DOE to contract for an independent evaluation of the program by March 28, 2005;

               repeals the pilot program on July 1, 2005;

               and includes a blank appropriation clause.


            The bill is effective upon signature of the Governor.



State Expenditures


            Department of Education, State Administration — The department will require $29,758 General Fund in FY 1998-99 and $27,608 in FY 1999-00 to implement the bill’s provisions. The bill allows school districts to apply for participation in and incentive payments under the Class Size Reduction Pilot Program, beginning with the 1998-99 school year, with applications submitted to the state department no later than July 1 prior to the commencement of the school year. The State Board of Education is required to select no more than six school districts each year to participate in the pilot program and notify the selected school districts in writing no later than August 1 prior to commencement of the school year. The State Board is required, through rule, to develop application forms, selection criteria, areas of study for staff development training, data collection requirements, and enforcement procedures. Additionally, the State Board is required to allocate incentive payments, collect data, and monitor the respective pilot programs to: (1) ensure compliance; and (2) ensure there is no overpayment of state moneys. At the state level, the department will require an additional half-time nonclassified senior consultant to work with the State Board in carrying out its responsibilities.


            Incentive Payments to School Districts Participating in the Pilot Program — The bill requires that the pilot program be funded through the use of one-half of the inflationary adjustment made to the statewide base per pupil funding made for the FY 1998-99 budget year, pursuant to Section 22-54-104 (5) (a), C.R.S.


            HB 98-1234, Concerning the Financing of Public Schools — Currently includes a two percent inflation increase in school finance funding for public schools for FY 1998-99. Each one percent inflationary increase to school finance costs approximately $31.5 million. Thus, under HB 98-1278, approximately $31.5 would come “off the top” of moneys appropriated in HB 98-1234 to fund the pilot program established in this bill.


            Evaluation — The bill requires the department to contract for an independent evaluation of the program on or before March 28, 2005, with funding provided in the annual Long Bill. It is estimated that for FY 2004-05, the Department of Education will require $50,000 to evaluate the Class Size Reduction Pilot Program.



Expenditures Not Included


            Pursuant to the Joint Budget Committee’s budget policies, the following expenditures have not been included in this fiscal note:

 

               health and life insurance costs ($1,105); and

               short-term disability costs ($57).



School District Impact


            HB 98-1234 includes a 2 percent inflationary increase in per pupil funding over FY 1997-98, or approximately $63 million in new funding. Under HB 98-1278, one-half of that increase is to be dedicated to the Class Size Reduction Pilot Program. Thus, $31.5 million in funding would be made available to six school districts in FY 1998-99 to implement the pilot program. Staff development requirements at the district level (identified in the bill) will result in increased costs to the school districts choosing to participate in the pilot; these costs are not quantified at this time. This fiscal note assumes that moneys appropriated for the Class Size Reduction Pilot Program will be for additional teachers. To the extent that districts are operating their buildings at full capacity, additional classroom space will be needed at district expense.



Spending Authority


            The fiscal note indicates that for FY 1998-99, the Department of Education should receive a General Fund appropriation of $29,758 for administration.

 

NOTE:            Moneys appropriated in HB 98-1234 should reflect the “off-the-top” funding for HB 98-1278, which requires that one-half of the inflationary increase provided for school finance be used to fund the Class Size Reduction Pilot Program.



Departments Contacted


            Education