Common school reserve account funding.

08LSO-0317.C1

FISCAL NOTE

This bill contains an appropriation of $56,514,455 from the GENERAL FUND to the School Foundation Program Account.  This appropriation is effective immediately.

	FY 2008	FY 2009	FY 2010
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase (Decrease):
COMMON SCHL. RESERVE ACCT	56,514,455	0	0
SCHOOL FOUNDATION FUND	(56,514,455)	0	0

Source of revenue increase (decrease):

Diversion of Federal Mineral Royalties (FMRs) over the $200 million cap from the School Foundation Program (SFP) to the Common School Permanent Fund (CSPF) Reserve Account.

Assumptions:

The above estimates are based on investment revenue estimates provided by the State Treasurer's Office dated January 28, 2008.

This bill annually appropriates funds from over-the-cap FMRs that would otherwise be distributed to the SFP to the CSPF Reserve Account in the amount which CSPF investment earnings exceed the spending policy amount established in W.S. 9-4-713. This new diversion would only take place after the current diversion of FMRs to the Hathaway student scholarship account and the higher education endowment has reached its maximum combined total of $505.0 million. The Hathaway student scholarship account and the higher education endowment are projected to reach their maximum balances in FY08, based on January 2008 CREG projections.

Similar to the current diversion to the Hathaway student scholarship account and the higher education endowment, this proposed diversion would be reduced as necessary to ensure an unencumbered balance of $100 million in the SFP as of July 1 of each fiscal year. CRITICAL ASSUMPTION: The above estimates assume diversions would not need to be reduced to maintain the $100 million SFP balance.

This bill is effective immediately, therefore this new diversion to the CSPF Reserve Account would begin in FY08. The School Foundation Program is held harmless in FY08 by the appropriation in the bill. No FMR diversions to the CSPF Reserve Account are anticipated in FY09 and FY10, based on current investment income projections.  

Prepared by:   Dean Temte, LSO    Phone: 777-788