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:

Nava

 

DATE TYPED:

3/15/03

 

HB

 

 

SHORT TITLE:

Public School Debt Guarantee, CA

 

SJR

9

 

 

ANALYST:

Neel

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

NFI

See Narrative

 

 

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

LFC Files

 

Responses Received From

 

SUMMARY

 

     Synopsis of Bill

 

Senate Joint Resolution 9 proposes amending Article 12 of the state constitution to guarantee debt issued by public school districts with the corpus of the Permanent School Fund (PSF).  SJR 9 requires school districts’ debt be necessary and used for capital outlay.  Additionally, SJR 9 requires that the guarantee by the PSF not endanger the corpus of the fund. 

 

SJR 9 also requires the consent of the US congress and will be presented to voters at the next general election. 

 

     Significant Issues

 

According to SIC, provisions in SJR 9 would not adversely impact the PSF.

 

FISCAL IMPLICATIONS

 

According to SIC, there will be no significant impact to its operations.  However, by using the PSF as a guarantee school districts will be able to receive advantageous interest rates. According to SIC, higher triple AAA bond ratings for school districts would allow lower interest rates, saving the state approximately $10.0 million over a ten year period or $7.0 million in present value. 

 

SN/njw