School finance.

12LSO-0141.C2

                                                         

FISCAL NOTE

 

 

FY 2013

FY 2014

FY 2015

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Increase

 

 

 

SCHOOL FOUNDATION FUND  

6,500,000

6,500,000

6,500,000

 

 

 

 

Anticipated Expenditure Increase:

 

 

 

SCHOOL FOUNDATION FUND  

7,400,000

5,400,000

3,500,000

 

Source of revenue increase: Recapture revenues from recapture districts

 

Source of expenditure increase: Increase in entitlement payments to entitlement districts due to phase in of new regional cost adjustment over 4 years

 

Assumptions:

 

The January 2012 fiscal profile for the School Foundation Program Account (SFPA) estimates school district funding under current law with the 2011 Hedonic Wage Index (HWI) updated as part of the regional cost adjustment. It is estimated that by not changing the current regional cost adjustment statute (the greater of the HWI, Wyoming Cost of Living Index (WCLI), or a minimum of 100), both the educational resource block grant model “guarantee” and SFPA school district entitlement expenditures will increase $7.6 million.  SFPA revenues from recapture districts are not estimated to change.

 

Under this bill, the regional cost adjustment is changed by removing the WCLI as an option.  This is estimated to increase the education resource block grant model “guarantee” by $816,212 per year.  This impact is already included in the current fiscal profile. It is estimated SFPA school district entitlement expenditures will increase $7.3 million per year and SFPA recapture revenues will increase $6.5 million per year.

 

However, the change in entitlement payments to school districts to this new regional cost adjustment is phased-in over four (4) school years – the year of next model recalibration.  School districts which experience a reduction in total entitlement payments because of the change in the regional cost adjustment will be phased-in from the method currently provided by law.  The entitlement payment decrease will be reduced by 25 percent each year, such that school year 2015-16, in which 25 percent of the difference will be paid, will be the last year in which the phase-in is applied.

 

Since the SFPA is profiled with the current law still applied and with the updated HWI, the profile reflects increased expenditures of $7.6 million per year.  However, with the phase-in of the reduction in school district block grant guarantee amounts, there is estimated to be additional increases in expenditures from the SFPA of $7.4 million in FY 2013, $5.4 million in FY 2014, $3.5 million in FY 2015, and $1.6 million in FY 2016.  

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These estimates assume that there is no external cost adjustment and enrollment is static.  Further, this estimate does not consider the other change in the bill that the HWI will be updated annually.  The change to update the HWI annually may result in an expenditure/revenue increase or decrease, of which the amount is indeterminable.

 

Unexpended, unobligated amounts from the School Foundation Program Account appropriated to the Legislative Service Office under 2010 Wyoming Session Laws, Chapter 39, Section 334(f)(ii), shall be available for expenditure by the Legislative Service Office. Unexpended, unobligated funds appropriated from the School Foundation Program Account to the Attorney General under 2010 Wyoming Session Laws, Chapter 39, Section 2, Section 15, for purposes of the school finance litigation law office are reappropriated for expenditure by the Legislative Service Office beginning July 1, 2012 and ending June 30, 2014. The unexpended, unobligated amounts described in the paragraph are also being made available for expenditure in 12LSO-0140.C4 (Education Accountability) sponsored by the Joint Education Interim Committee.

 

Expenditure of these funds in this bill shall be for professional consulting expertise and other support necessary for analysis and evaluation of the data used in the education resource block grant funding model monitoring process and other reports for use by the Joint Appropriations Interim Committee and the Joint Education Interim Committee pertaining to model adjustment and maintaining model integrity. Professional consulting expertise may be retained by the Legislative Service Office only upon approval of the Management Council.

 

Prepared by:   Matt Willmarth / Dean Temte, LSO Phone: 777-7881