Colorado Legislative Council Staff

STATE

REVISED FISCAL IMPACT

(Replaces fiscal impact dated March 12, 1999)

Drafting Number:

Prime Sponsor(s):

LLS 99-0724

Rep. Alexander

Sen. Epps

Date:

Bill Status:

Fiscal Analyst:

April 13, 1999

House 2nd Reading

Scott Nachtrieb (303-866-4752)

 

TITLE:            CONCERNING THE DEVELOPMENT OF A WESTERN SLOPE STATE MILITARY VETERANS’ CEMETERY, AND MAKING AN APPROPRIATION THEREFOR.



Fiscal Impact Summary

FY 1999/2000

FY 2000/2001

FY 2001/2002

State Revenues

Federal Fund

Cash Fund Exempt



Revenue Increase


$2,500,000

Revenue Increase



Revenue Increase

State Expenditures

General Fund

Federal Fund

Cash Fund Exempt


$300,000


$61,200



$2,500,000




$59,282

FTE Position Change

0.0 FTE

0.0 FTE

1.5 FTE

Other State Impact: None

Effective Date: Upon the Governor’s signature.

Appropriation Summary for FY 1999-2000:

$300,000 GF - Department of Human Services

$ 61,200 GF - Department of Revenue

Local Government Impact: None


 

Summary of Legislation


            The bill, as amended by the House Appropriations Committee, April 9, 1999, would create a voluntary income tax checkoff beginning January 1, 1999, for three years that would be used to assist in funding the construction, operation, and maintenance of a military veteran’s cemetery on the Western Slope. The Department of Human Services (DHS) would be authorized to build and maintain a veteran’s cemetery on the Western Slope. A provision of current law that prohibits the use of General Funds (GF) for this purpose would be eliminated and $300,000 GF would be appropriated to the Western Slope Military Veteran’s Cemetery Fund from the GF set-aside funds allotted each house. Twenty acres of the Grand Junction Regional Center would be designated for use as the cemetery and would be deemed a public purpose as required by the State Land Board. DHS would be directed to seek federal funds to construct the cemetery and reimburse the initial GF appropriation. Fees would be assessed for any qualified non-Colorado veteran which would want to be buried in the cemetery.



State Revenues


            The DHS would be directed to apply for federal funds to construct the cemetery and reimburse all of the qualified costs of developing the cemetery. It is estimated that DHS would apply for $2.5 million in federal funds in FY 2000-01. Of that amount, $300,000 would be used for reimbursing the GF appropriation and the remaining $2.2 million would be used to construct the cemetery. The DHS would also be allowed to impose a fee for all qualified non-Colorado residents that wanted to be buried at the cemetery. The number of non-Colorado residents that would want to be buried in the cemetery and the amount of fee revenue generated annually have been estimated to be minimal.


            Earmarked income tax contributions would be deposited in the Western Slope Military Veteran’s Cemetery Fund and the General Assembly would annually appropriate money from the fund to the DHS for maintaining the cemetery. Currently, six income tax checkoffs appear on the 1998 individual income tax return for returns to be filed in 1999. These include: Colorado Non-Game and Endangered Wildlife Fund, Colorado Domestic Abuse Fund, Colorado Homeless Prevention Activities Fund, Colorado Child Care Improvement Fund, Colorado Special Olympics Fund, and the United States Olympic Committee Fund*. The number and value of contributions that would be made to benefit public education is unknown. Furthermore, the impact that adding one more tax checkoff to the income tax form will have on the number and amount of donations to the current list of six checkoff programs is unknown.


            The table below identifies the number of income tax returns, the total donation, and the average donation that was recorded on income tax returns filed in 1998.


Value of Individual Income Tax Checkoffs Filed During 1998*


Tax Checkoff Name

Number

of Returns

Total

Donation

Average

Donation

Non-Game Wildlife

Child Care Improvement

Special Olympics

Domestic Abuse

Homeless Prevention

   Total

52,171

33,896

31,142

41,825

  36,455

195,489

$408,823

188,538

190,538

270,615

     238,566

$1,297,080

$7.84

5.56

6.12

6.47

  6.54

$6.64

             *The Olympic Committee checkoff was not in effect for returns filed in 1998.





State Expenditures


            The addition of the individual income tax checkoff to benefit the Western Slope Military Veteran’s Cemetery would require a new line on the income tax return for the tax year 1999 that will be filed by taxpayers in 2000. This would be handled as part of the annual rewrite process by the Department of Revenue. However, a key will have to be added to the income tax return system in order to track the contributions. The Department of Revenue would require 900 hours of computer programming contract labor in order to accommodate the new checkoff. Based on an hourly rate of $68 per hour, total one-time programming costs would be $61,200 in FY 1999-00.


            Since donations from the voluntary contribution program will not be received until after January 1, 2000, it is assumed that the Department of Revenue will require a cash advance from the cash fund to cover the up-front costs associated with making the necessary changes to accommodate the additional tax checkoff. The cash advance would be repaid from the income tax check-off contributions.


            It is estimated that 286 qualified persons would be buried in the cemetery annually. The total cost of constructing the veterans cemetery is estimated to be $2.5 million. In FY 1999-00, $300,000 GF would be used for architecture, engineering, and other professional services to begin the project. For FY 2000-01, DHS anticipates receiving $2.5 million in federal funds, of which $300,000 would be used to reimburse the $300,000 GF appropriation. Approximately $2.2 million would be needed to construct the facility and purchase equipment for ongoing maintenance. Ongoing maintenance and operations would be funded from the contributions received from the income tax check-off. The operating costs are based on the costs estimates provided by the Colorado Cemetery Association. The FY 2001-02 operating cost is estimated to be $59,282 CFE and 1.5 FTE. The annual cost of ongoing maintenance in FY 2002-03 when the cemetery is in full operation is estimated to be approximately $115,872 CFE and 3.0 FTE.



State Appropriations


            This fiscal note implies that the Department of Revenue would require a $61,200 Cash Fund Exempt appropriation in FY 1999-00 to implement this bill. The bill also contains a $300,000 General Fund appropriation to the Department of Human Services for the development and construction of the Western Slope Military Veterans’ Cemetery.



Departments Contacted

 

            Human Services         Revenue