Sales/use tax-removal of 4th cent.

06LSO-0439.L1

FISCAL NOTE

TOTAL	FY 2007	FY 2008	FY 2009
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Decrease:
GENERAL FUND	143,000,000	146,600,000	150,600,000
LOCAL SOURCES FUND	0	0	0

Source of revenue decrease: (1) Reduction in the state sales and use tax rate from 4% to 3%. (2) Diversion of under-the-cap severance taxes from the General Fund to local governments to offset decrease in sales and use taxes to local governments from rate reduction. The estimates in the table above reflect the total projected revenue decrease from the sales and use tax rate decrease and the diversion of severance taxes to local governments.

Assumptions:

All estimates are based on January 2006 CREG projections of sales and use taxes and severance taxes.

REDUCTION IN TAX RATE	FY 2007	FY 2008	FY 2009
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Decrease:
GENERAL FUND	98,700,000	101,200,000	103,900,000
LOCAL SOURCES FUND	44,300,000	45,400,000	46,700,000

The table immediately above shows the result of decreasing the state sales and use tax rate from 4% to 3%. The state sales and use tax is distributed 69% to the General Fund and 31% to local governments.

DIVERSION TO LOCAL GOVTS.	FY 2007	FY 2008	FY 2009
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase (Decrease):
GENERAL FUND	(44,300,000)	(45,400,000)	(46,700,000)
LOCAL SOURCES FUND	44,300,000	45,400,000	46,700,000

The table immediately above shows the result of diverting under-the-cap severance taxes from the General Fund to local governments in order to maintain the amount or revenues to local governments that otherwise would have been distributed to them if the sales and use tax rate were 4% instead of 3%. This diversion would be distributed monthly in the same proportions as distributions under W.S. 39-15-111(b)(iii) and W.S. 39-16-111(b)(iii).

Any additional fiscal or personnel impact is not determinable due to insufficient time to complete the fiscal note process.

Prepared by:   Dean Temte, LSO  Phone:   777-7881