Higher education reserve accounts.

12LSO-0216.C1

                                                         

FISCAL NOTE

 

 

FY 2013

FY 2014

FY 2015

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Increase (Decrease):

 

 

 

GENERAL FUND            

(489,596)

(288,555)

(136,601)

HATHAWAY STUDENT SCHOLARSHIP RESERVE ACCOUNT       

      396,987

      265,822

      136,601

EXCELLENCE IN HIGHER EDUCATION ENDOWMENT RESERVE ACCOUNT  

       92,609

       22,733

0

 

Source of revenue increase and decrease:  Investment income earned on funds within the Hathaway Student Scholarship Reserve Account and the Excellence in Higher Education Endowment Reserve Account will remain in these accounts instead of going into the General Fund. These reserve accounts are invested as part of the State Agency Investment Pool (SAP).

 

Assumptions: The Hathaway Student Scholarship Reserve Account and the Excellence in Higher Education Endowment Reserve Account are invested as part of the SAP which is projected to yield 2.5% for fiscal years 2013 through 2015.

 

The Hathaway Student Scholarship Reserve Account projections are based on a projected cash balance of $15,879,481 for fiscal year 2013, $10,632,898 for fiscal year 2014 and $5,464,036 for fiscal year 2015.

 

The Excellence in Higher Education Endowment Reserve Account interest income projections are based on a projected cash balance of $3,704,355 for fiscal year 2013. For fiscal year 2014, interest income is based on a projected cash balance of $909,338 and for fiscal year 2015, it is based on a $0 balance.  Current projections indicate funds will need to be taken from the Excellence in Higher Education Endowment Reserve Account during fiscal years 2013 through 2015 in order to distribute the 5% spending policy amount to the University & community colleges since investment income projections for fiscal years 2013 through 2015 are projected to be 2.4% (This does not include any projections for capital gains and does not compound the interest which will now remain in the accounts).

 

 

 

 

 

 

 

Prepared by:   Alex Kean, LSO   Phone: 777-7881

(Information provided by: Sharon Garland, Treasurer’s Office Phone: 777-7475)