[1] 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 in any other situation.

 

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

 

 

 

SPONSOR:
Stapleton

 

DATE TYPED:

02/04/02

 

HJR

12

 

SHORT TITLE:

Permanent School Fund Distribution

 

SB

 

 

 

ANALYST:

Smith

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY02

FY03

 

 

 

 

(49,115.5)

See Narrative

Recurring

Land Grant Permanent Fund

 

 

49,115.5

 

See Narrative

 

Recurring

Supplemental School Fund

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

State Investment Council (SIC)

    

SUMMARY

 

     Synopsis of Bill

 

The resolution proposes to increase the distribution from the Land Grant Permanent Fund (LGPF) by 0.8 percent to 5.5 percent. Currently, the distribution is set at 4.7 percent. The  increase would be restricted to the portion providing income to the common school fund.  The increase would accrue to the newly created “supplemental school fund”. The supplemental school fund would be used only to supplement but not replace existing school funding.

 

FISCAL IMPLICATIONS

 

The estimate assumes that it would take Congress the balance of FY03 to enact enabling legislation. In addition, the estimate assumes that the other beneficiaries of the fund would be held harmless over time.

 

SIC has stated that the distribution from the LGPF could be increased by 0.1 percent without eroding the corpus of the fund. As the accompanying graph demonstrates, this proposal would generate increasingly smaller distributions over time.


By the year 2030, the corpus of the LGPF would be sufficiently eroded as to generate less under a 5.5 percent distribution plan than it would under current law                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                  

OTHER SUBSTANTIVE ISSUES

 

It is probably impossible to construct a statute that would prevent future legislatures from using this fund as an offset to public school funding.

 

SS/ar/njw

Attachment

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