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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SPONSOR: |
HEC |
DATE TYPED: |
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HB |
745/HECS/aHAFC |
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SHORT TITLE: |
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SB |
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ANALYST: |
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REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
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$16,400.0 |
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Non-Rec |
Cash
Balances |
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(Parenthesis ( ) Indicate Revenue Decreases)
State Department of Education (SDE)
SUMMARY
Synopsis
of HAFC Amendment
The House Appropriation and Finance Committee Amendment to House Education Committee Substitute for House Bill 745 amends Section 22-8-41 NMSA 1978 to impose limitations on the amount of operational cash balance that could be retained by a school by a school district or charter school.
Significant
Issues
The bill is designed to establish practical limits on the amount of operational cash balance that a district or charter school can retain while allowing sufficient revenue to provide adequate cash flow at the start of a new fiscal year.
The HAFC amendments strikes FY 2004, and inserts 2006, which will provide additional time to conform to the requirements of the language stating that “prior to approval of a school district’s or charter school’s budget the state superintendent shall verify that the reductions from the school equalization guarantee distribution have been taken”.
In addition, on page 2, line 19, the amendment inserts “ For fiscal years 2004 and 2005 , with the approval of the state superintendent , a school district or charter school may budget so much of its operational cash balance as is needed for nonrecurring expenditures, including capital outlay.
FISCAL IMPLICATIONS
The bill will generate
$16,400.0 to be used as a credit in determining the 2003-2004 SEG.
Synopsis of Original Bill
The House Education
Committee Substitute for House Bill 745 changes the level of cash balance
credit from $9 million to $16.4 million.
ADMINISTRATIVE IMPLICATIONS
The SDE will ensure that districts abide by the mandates of House Bill 745.
RELATIONSHIP
Relates to HB2/a
According to SDE,
depending upon the amount of cash balances recaptured, the use of such as a
credit might violate the prohibition against using cash balance to pay for
salaries and benefits, Section 22-8-41.C NMSA 1978.