FISCAL NOTE



FUND(S):



Sources of Revenue:

Other Fund N/A

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


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


The purpose of this bill is to reduce the amount of the allowance for uncollectibles (delinquencies, exonerations, and discounts) in the calculation of local share for the years 2014-15, and thereafter, from 5% to 4%.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2014
Increase/Decrease
(use"-")
2015
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 -3,619,206 -3,619,206
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 -3,619,206 -3,619,206
2. Estimated Total Revenues 0 0 0


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


Reducing the allowance rate for uncollectibles from 5% to 4% will increase the preliminary local share calculations by an estimated amount of $5,170, 295; however, since 30% of the increase is dedicated for Step 7, the estimated decrease in the amount required for state aid to schools will be approximately $3,619,206. However, based on the Interpretive Rule issued by the State Tax Department, the preliminary local share calculations will need to be updated when the county assessors issue their certified assessed valuations for the year, on or about March 3, 2014, so the estimated amount for FY15 will most likely change. In addition, comparing actual regular levy tax collections to the projected gross tax collections for the 2012-13 year, actual collections were approximately 9% less than projections, statewide. To more accurately reflect actual tax collections, based on the 2012-13 data, the allowance for uncollectibles would need to be increased, rather than decreased.



Memorandum






    Person submitting Fiscal Note: Brenda Freed
    Email Address: bfreed@access.k12.wv.us