NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

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F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Aragon

 

DATE TYPED:

2-02-03

 

HB

 

 

SHORT TITLE:

5 Percent Budget Shift for School Districts

 

SB

297

 

 

ANALYST:

Segura

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

 

 

*See Fiscal

Impact

Recurring

GF

 

 

 

 

 

 

 

SOURCES OF INFORMATION

 

Responses Received From

Legislative Education Finance Committee (LESC)

State Department of Education (SDE)

Schools Districts

 

SUMMARY

 

     Synopsis of Bill   

 

Senate Bill 297 represents an Executive initiative to require school districts to demonstrate a five percent shift in their operational budgets from administration to direct instruction before fiscal year 2004.  The bill  contains an emergency clause.

 

     Significant Issues

 

Section 1 of Senate Bill 297 provides that the State Department of Education shall not approve a school district budget for fiscal year 2004 that does not demonstrate a five percent shift of total budgeted state funds as compared to fiscal year 2003 from administration into direct instruction.

 

FISCAL IMPLICATIONS

 

Senate Bill 297 proposes to implement the Governor’s direction to local school districts to find

savings equal to five percent of their respective budgets, which the executive estimates to be


$88.2 million.  These monies are to be redirected into teacher salaries,  and other direct classroom expenditures.  The governor is proposing a six percent salary increase for teachers only.  

 

ADMINISTRATIVE IMPLICATIONS

 

According to school districts, the five percent shift would have a significant impact on public school operations.

 

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

 

Senate Bill 297 duplicates the Executive’s FY04 budget recommendation for Public School Support. An attachment is provided that reflects FY04 budget differences between the State Board of Education, Legislative Education Study Committee, Legislative Finance Committee and executive.

 

TECHNICAL ISSUES

 

The title of Senate Bill 297 should read “for” fiscal year 2004 instead of “before”.

 

OTHER SUBSTANTIVE ISSUES

 

According to information developed by representatives of school superintendents, school business managers, and the State Department of Education, the function of the chart of accounts, direct instruction, receives 60.2 percent of the total operational budget of schools. This is more than the executive estimate of 56 percent. In addition, after factoring various parts of the budget to reflect where the five percent would be shifted, the attached chart shows that a reduction in salaries and benefits affecting school personnel within functions 2 through 10, represents program areas such as special education, school nurses,  speech therapists,  librarians, counselors, maintenance and other essential school personnel.

 

The State Department of Education states that applying the five percent to various districts would only generate $36.5 million.  SDE reports in some districts, the five percent would be impossible to shift to direct instructional services. 

 

RS/njw

Attachments