NOTE: As provided in LFC policy, this report is intended 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 in any other situation.

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(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

Local Government Division (LGD), Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Bill

This bill provides a general fund appropriation of $5.0 to the LGD for liability insurance, indebtedness and administrative costs associated with the unincorporaiton of Spaceport City in Dona Ana county.

Significant Issues

Effective January 1, 1999, Spaceport city became an incorporated municipality. For FY99, the projected general fund revenue is expected to be $500 dollars as is the same as in FY2000. The city is also expected to receive approximately $30.0 in Small Cities Assistance Act funds for FY2000 according to the LGD. The LGD also has indicated that Spaceport city has already begun incurring liabilities and expenses for insurance and administrative costs, including telephone and post office box costs in FY99.

For municipalities, the gross receipts tax revenue is the primary source of general fund revenue; however, since Spaceport city does not have business establishments, they have no base for gross receipts tax revenue.

The LGD also has indicated that the city of Spaceport has adopted a resolution calling for a special election to vote on disincorporation of the municipality.

FISCAL IMPLICATIONS

This bill makes a general fund appropriation of $5.0 to the LGD for the purpose stated above for expenditure in FY2000. Unexpended or unencumbered balances remaining at the end of FY2000 revert to the general fund.

OTHER SUBSTANTIVE ISSUES

The LGD has indicated that the Spaceport city has incurred liabilities and expenses in FY99 which are not related to unincorporation.

POSSIBLE QUESTIONS

How will the expenses being incurred in FY99 that are not related to unincorporation be covered?

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