Colorado Legislative Council Staff

STATE and LOCAL

CONDITIONAL FISCAL NOTE

State General Fund Expenditure Impact

Cash Fund Revenue and Expenditure Impact

School District Revenue Impact

TITLE:            CONCERNING THE USE OF STATE REVENUES IN EXCESS OF THE CONSTITUTIONAL LIMITATION ON STATE FISCAL YEAR SPENDING FOR SCHOOL DISTRICT CAPITAL CONSTRUCTION PROJECTS.

Summary of Legislation

            This bill would submit a question to the registered electors of the State of Colorado at the next general election in November 1998, to authorize the State Treasurer to annually transfer the amount of state revenues that are in excess of the fiscal year spending limitations imposed upon the state by Section 20 of Article X of the State Constitution to the School District Capital Construction Fund. The bill would apply to the excess revenues for FY 1997-98, and each fiscal year thereafter. Transfers to the fund or grants and loans provided from the fund would not be included in state or school district fiscal year spending. Moneys in the School District Capital Construction Fund would be subject to annual appropriation by the General Assembly and would be used to provide grants or loans to school districts for qualified capital construction projects beginning in FY 2000-01, and for the administrative expenses incurred by the State Board of Education in managing the program.

            Grants and loans may be used for school district capital construction projects involving instructional facilities, including classrooms, libraries, physical plants, and associated administrative areas. Grants and loans may not be used for athletic, recreational, or other non-instructional facilities.

            Applications would be submitted to the State Board of Education annually beginning in 1999, but no later than July 1. Applications would be evaluated and prioritized based on the following criteria in descending order:

            •   projects designed for immediate safety hazards or health concerns at an existing school facility;

            •   projects in a school district that has a lower relative wealth compared to other school districts in the state;

            •   projects that address enrollment growth issues within a school district;

            •   projects designed to incorporate technology into the educational environment; and

            •   all other capital construction projects.

            The State Board of Education would submit a prioritized list of eligible capital construction projects to the Joint Budget Committee no later than December 1 of each year for consideration for inclusion in the General Appropriation bill for the following budget year beginning with the 2000-01 fiscal year. No loan would be made unless the terms of the loan require it to be repaid within the same fiscal year in which it is made, or the school district has received voter approval in advance for the loan. Capital construction projects would be funded in the priority and in the amounts for each project as determined by the State Board.

            Grants made to school districts would be for no more than the difference between the valuation for assessment per pupil and the average valuation for assessment per pupil statewide, expressed as a percentage of the statewide average, multiplied by the cost of the capital construction project. For school districts where the valuation for assessment per pupil is equal to or exceeds 150 percent of the statewide average, the interest rate charged would not be less than the prime rate. For school districts where the valuation for assessment per pupil is less than 150 percent of the statewide average, the interest rate charged would be discounted from the prime rate based on the proportion of the difference between the valuation for assessment per pupil for the school district and 150 percent of the statewide average.

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

State Expenditures

            Grants and Loans. The bill authorizes the annual transfer of the excess revenues prescribed by Section 20 of Article X of the State Constitution to the School District Capital Construction Fund beginning with the excess revenues for FY 1997-98. The projected excess TABOR revenue for FY 1997-98 would be transferred in FY 1998-99, and would be available for grants or loans to school districts in FY 2000-01. Projected TABOR excess revenues and the amount that would be available for annual transfer to the School District Capital Construction Fund based on the Colorado Legislative Council staff December 1997 economic forecast for FY 1997-98 through FY 2002-03 is identified in the table below.

Projected TABOR Excess Revenues to be

Transferred to the School District Capital Construction Fund

FY 1997-98 through FY 2002-03 (millions of dollars)

            Administrative Expenses. The Department of Education will incur administrative expenses beginning in FY 1999-00 in order to provide staff support to the State Board of Education in prioritizing the grant and loan awards from moneys in the School District Capital Construction Fund. The Department of Education indicates that 2.0 FTE Contract Labor, Principal Consultant, would be required for this purpose. Expenses associated with administration of the program are identified in the table below.

SB 98-150 Department of Education Administrative Expenses

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;

            •   short-term disability costs;

            •   inflationary cost factors;

            •   leased space; and

            •   indirect costs.

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.

School District Impact

          School districts would be eligible to apply to the State Board of Education for grants and loans for qualified capital construction projects. Grants and loans would be awarded beginning in FY 2000-01.

Spending Authority

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

Departments Contacted

          Legislative Council                Education