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

SPONSOR Gonzales

DATE TYPED 2/14/05

HB 300/aHEC

SHORT TITLE Statewide School Bus Operation Shortfall

SB

ANALYST Chabot

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$1,500.0

Non-recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Transportation (DOT)

Public Education Department (PED)

SUMMARY

Synopsis of HEC Amendment

The House Education Committee amendment increases the appropriation to $1.5 million for the

purpose of funding the increase in fuel costs for school bus operations.

Synopsis of Original Bill

House Bill 300 appropriates $1.022 million from the general fund to PED for the purpose of

funding the increase in fuel costs for school bus operations. The bill includes an emergency

clause.

Significant Issues

PED reports diesel fuel has increased approximately 21 percent according to the Lundberg Let-

ter, a national, independent research firm that reports on petroleum based fuel costs. DOT re-

ports bulk diesel fuel was $1.03 per gallon at the start of the fiscal year, rose to a high of $1.61

and has since declined to $1.32. This equates to an average increase of 29 percent in New Mex-

ico.

House Bill 300/aHEC -- Page 2

However, PED did not indicate in its analysis any school districts that are facing operating

budget shortfalls for transportation services.

FISCAL IMPLICATIONS

The appropriation of $1.022 million contained in this bill is a non-recurring expense to the gen-

eral fund. Any unexpended or unencumbered balance remaining at the end of fiscal year 2005

shall revert to the general fund.

ADMINISTRATIVE IMPLICATIONS

Since fuel costs vary throughout the state, PED will have to determine an equitable method of

distributing the appropriation to reimburse school districts for the increased costs.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

The increased fuel costs will have to be absorbed by the school districts. There could be disrup-

tion of school bus services if school districts are unable to pay the extra costs.

POSSIBLE QUESTIONS

1.

Which school districts have identified budget shortfalls because of increased fuel costs.

2.

Do contracts with private operators have clauses for contract increases due to increased

fuel costs.

GAC/lg:yr