Colorado Legislative Council Staff

CONDITIONAL STATE and LOCAL

FISCAL NOTE

TABOR Refund Impact

State General Fund Expenditure and Cash Fund Revenue Impact

Local Revenue and Expenditure Impact

TITLE:            CONCERNING THE RETENTION OF A PORTION OF STATE REVENUES IN EXCESS OF THE CONSTITUTIONAL LIMITATION ON STATE FISCAL YEAR SPENDING FOR THE PURPOSE OF TRANSFERRING MONEYS TO THE HIGHWAY USERS TAX FUND.

Summary of Legislation

            The bill would place an issue on the November 1998 General Election Ballot that, if approved by the electorate, would transfer one-third of the amount of state revenues in excess of the state fiscal year spending limitation for that fiscal year as prescribed by Section 20 of Article X of the State Constitution to the Highway Users Tax Fund. The transfer for FY 1997-98 would occur on January 31, 1999, and the transfer for FY 1998-99 would occur on November 1, 1999. The transfer for each year thereafter would occur on November 1. The transfers would not be considered appropriations subject to six percent state appropriation limits (24-75-201.1, C.R.S.) nor would they be included in either state or local government constitutional spending limits. The bill would be placed on the 1998 General Election ballot upon the Governor’s signature and the provisions within the bill would become effective upon proclamation by the Governor of the vote of the registered electorate at the 1998 General Election.

State Revenues

            The bill’s implementation depends upon a vote of the electorate at the next General Election, therefore, the bill is assessed as having a conditional fiscal impact. Upon voter approval, the bill would transfer one-third of the estimated TABOR surplus revenues in FY 1997-98 to the Highway Users Tax Fund. The table below indicates the estimated TABOR surplus from FY 1997-98 to FY 2002-03 and the estimated one-third transfer to the HUTF. These funds would not be subject to the six percent spending limits (Arveschoug-Bird). For FY 1998-99, the HUTF would receive an additional $108.1 million in revenue. The State Highway Fund would receive 60 percent of that amount or $64.9 million.

Projected Transfer to the Highway Users Tax Fund

FY 1997-98 through FY 2002-03

(in millions of dollars)

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

            Upon voter approval, the bill would transfer from the general Fund the amounts indicated in the preceding table to the HUTF. This would transfer $108.1 million in FY 1998-99 and $95.4 million in FY 1999-00. These funds would not be subject to the six percent spending limits (Arveschoug-Bird).

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

            Local governments would receive additional HUTF distributions under the formula prescribed in the bill. Under the formula specified, cities would receive 18 percent and counties would receive 22 percent. The table below provides the distribution of the additional funds to cities and counties.

Spending Authority

            This fiscal note implies that no additional spending authority would be required for FY 1998-99 to implement this bill.

Departments Contacted

            Treasury         Legislative Council Staff