Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.


Fiscal Note Detail

Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 9,854,780 9,854,780

Explanation of above estimates (including long-range effect):

    The purpose of this bill is to remove provisions for using assumed assessed values for the purpose of computing local share under the Pubic School Support Program. The bill removes provisions for increasing the county boards’ local share responsibility for funding the basic foundation education formula when property assessments are not at least fifty-four percent of market value as indicated by the latest assessment ratio study and it makes legislative findings with respect to the effect of under assessed property values on school funding and the obligations of assessors and the tax commissioner.
    The bill rescinds changes in the calculation of local share that are to take effect beginning with the 2013-14 year that will be problematic. If the changes do take effect as scheduled, local share is to be based on an estimation of taxable assessed valuations provided by the state tax commissioner as of December 1 each year, and such estimation is to be based on the assumption that all residential, commercial and industrial property will be assessed at least at 60% of appraised valuation.
    If the assessed valuation of such property in a county is not being assessed within 10% of the 60%, as determined by the latest sales ratio analysis, the assessed valuation of all property in the county is to be adjusted accordingly. This provision could cause a serious budget issue for a particular county board of education, because local share could be calculated on much higher assessed valuations than the assessed valuations that will be used for the collection of tax revenues. The county would not be receiving state aid or tax collections for the difference.
    In addition, local share is normally calculated on 90% of each county board’s regular levy tax collections, disregarding the allowances for delinquencies, exonerations and discounts, whereas with the changes that are scheduled to take effect in 2013-14, the local share percent for the county boards that find themselves in this situation would be increased to 98%. Many county boards have granted salary or other employee benefits with this additional local revenue source; eliminating this source would cause these county boards to be in a position of having to rescind these increases.
    In addition to eliminating these problematic issues for particular county boards, this bill could potentially save the state approximately $9,854,780 in state aid per year. Under current statutes, since county assessors have until March 3 of each year to complete the assessments of taxable property and issue their certificates of assessed valuation, the local share calculation submitted with the Department of Education’s appropriation request on December 15 each year is based on estimated assessed valuation, and then the calculation is updated once the certificates of assessed valuations are received.
    Over the past three years, the increase in local share between the estimate and the actual has averaged $9,854,780. With the changes that are scheduled to take effect beginning with the 2013-14 year, there will be no provision to update the estimated local share calculations.



    Person submitting Fiscal Note: Pam Bird for Joe Panetta
    Email Address: