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committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

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

SPONSOR HGUAC

DATE TYPED 3/6/05

HB 946/HGUACS/aHAFC

SHORT TITLE State Museum Exhibit Fund

SB

ANALYST Hadwiger

APPROPRIATION

(in $000s)

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY06

FY07

$360.0 Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE

(in $000s)

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

($360.0) Recurring

General Fund

$360.0 Recurring State Museums Im-

provements and

Exhibits Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Cultural Affairs Department (DCA)

SUMMARY

Synopsis of HAFC Amendment

The amendment would provide that revenues earned by a particular division of DCA would be

expended by that division.

Synopsis of HGUAC Substitute

The HGUAC substitute for House Bill 946 creates a State Museums Improvements and Exhibits

Fund consisting of money appropriated to the fund, gifts, grants, donations, interest income, and

fifteen percent of the state museum and monument admission fees and rentals. Money in the

fund would be appropriated to DCA. Unexpended balances would not revert. Funds would be

House Bill 946/HGUACS/aHAFC -- Page 2

used for development, implementation and maintenance of exhibitions at state museums and for

maintenance and repairs of museum facilities. The bill would be effective July 1, 2006.

Significant Issues

The fund would provide DCA with a dedicated source of revenues for development of exhibits

and maintenance of facilities.

Currently, each museum is supported by a foundation that raises funds to pay for costs for exhib-

its. The foundations raise funds for educational programs, collections, exhibits, capital im-

provements, and other special programs. The foundations generate revenues from the museum

gift shops, memberships, and a wide range of fundraising activities. Foundation funds are not

budgeted in annual appropriations and are not used for general operating expenses. In FY03,

LFC staff gathered information on foundation support at just five of the DCA museums, showing

that the five foundations generated $2.85 million in support for these facilities and programs.

Additionally, the legislature has generally given DCA nonreverting appropriations, allowing the

agency to retain its general fund and other revenues from one year to the next.

FISCAL IMPLICATIONS

If enacted, HB946/HGUACS would move about $360,000 in DCA operating revenues into the

State Museums Improvements and Exhibits Fund beginning in FY07. This would have one or

more of following three consequences for DCA funding and operations: 1) reductions in staff

and programs at the museums and monuments due to reduced operating funds, 2) increased gen-

eral fund appropriations to backfill the lost admission and rental revenues, or 3) use of revenues

in the new fund to pay for current operational costs that meet the specified uses for the fund.

DCA anticipates that the additional revenues may be used to enhance exhibits sufficiently to

minimize or eliminate the need for additional General Fund support in FY07 and beyond.

It should be noted that total recurring General Fund revenues are projected to increase only 0.3

percent from FY06 to FY07 according to the February 2005 consensus revenue estimates, so ad-

ditional General Fund revenues may not be available to backfill the lost fee revenues to support

DCA operations in FY07.

Continuing Appropriations

This bill creates a new fund and provides for continuing appropriations. The LFC objects to in-

cluding continuing appropriation language in the statutory provisions for newly created funds.

Earmarking reduces the ability of the legislature to establish spending priorities.

POSSIBLE QUESTIONS

1.

How would DCA adjust its operations to accommodate the loss of admission revenues

for operations in FY07.

2.

How would the additional funds be used to enhance the attractiveness of its museums to

cultural tourists.

DH/lg:yr