School finance-local resources.

11LSO-0197.C3

CORRECTED COPY

FISCAL NOTE

	FY 2012	FY 2013	FY 2014
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase, net of increased entitlement payments:
SCHOOL FOUNDATION FUND	76,729	75,898	75,975

Source of revenue increase, net of increased entitlement payments:

W.S. 21-13-102(g) is repealed and the amounts that would have normally been provided to qualifying recapture school districts under this law would no longer be provided to them and would be collected by the State. 

Assumptions:

The amounts above represent a net revenue increase after taking into account additional revenue and expenditures with the re-direction of revenues from county treasurers.  Estimated revenues use January 2011 CREG assessed valuations. The net increase in revenues to the School Foundation Program is detailed in the table below.

	FY 2012	FY 2013	FY 2014
Total increase in revenues to School Foundation Program re-directed from school districts	$774,345,897	$780,049,897	$797,118,497
Decrease in recapture revenues to School Foundation Program	(179,437,942)	(176,758,186)	(178,033,953)
Net increase in revenues to School Foundation Program	594,907,955	603,291,711	619,084,544
Increase in entitlement payments to districts from decrease in local resource	(594,831,227)	(603,215,813)	(619,008,569)
Anticipated Revenue Increase, net of increased entitlement payments	76,729	75,898	75,975

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	FY 2012	FY 2013	FY 2014
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue (Decrease):
SCHOOL FOUNDATION FUND	(12,640,000)	(12,640,000)	(12,640,000)
Anticipated Expenditure (Decrease):
SCHOOL FOUNDATION FUND	(12,640,000)	(12,640,000)	(12,640,000)

Source of Expenditure and Revenue Decrease:

Decrease in interest paid to the Common School Permanent Land Fund (CSPLF) from the School Foundation Program (SFP) for borrowing cost to make payments to school districts.

Corresponding decrease in interest revenue to the Common School Land Income Fund flowing to the School Foundation Program.

Assumptions:

Under current law, in school year 2010-11, it is estimated that the SFP will borrow $365 million from the CSPLF, costing an estimated $12.64 million in interest. Under this bill, it is estimated that the School Foundation Program (SFP) will no longer have to borrow from the Common School Permanent Land Fund (CSPLF) based on the expenditure (entitlement payment) schedule to school districts. This will result in a decrease in SFP expenditures of $12.64 million, and result in a corresponding interest revenue decrease to the SFP.

By decreasing the SFP’s cash flow needs, this bill will allow the State Treasurer to invest the $365 million needed for borrowing in longer term securities, allowing for the opportunity of greater total returns on the Common School Permanent Land Fund portfolio. Total returns for the permanent funds are expected to be just under 7% over the long term (10 plus years).

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

(Information provided by Sharon Garland, Treasurer’s Office; 777-7475

Matthew Willmarth, LSO; 777-7881)