Date Requested: May 24, 2017
Time Requested: 11:21 AM
Agency: Education, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
4024 Introduced SB1008
CBD Subject: Governor -- Bills Requested By


FUND(S):

0317

Sources of Revenue:

General Fund

Legislation creates:

Decreases Existing Expenses



Fiscal Note Summary


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


    The purpose of the bill is to increase regular levy rates and allow counties meeting certain requirements to decrease levy rates to the extent the rate exceeds the county's total basic foundation program, and to set forth maximum levies for general current expense purposes to be used annually beginning with the 2018-2019 school year. The net savings to the State for the 2018-19 year and beyond due to the proposed legislation's impact on the Public School Support Plan (PSSP) is an estimated $57,018,545. This reduction in state aid funding to the county boards of education will be completely offset by increased regular levy tax collections.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 -57,018,545
Personal Services 0 0 0
Current Expenses 0 0 -57,018,545
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


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


    The total estimated cost savings to the State for the proposed legislation is $57,018,545.
    
    The local share calculation under the Public School Support Plan (PSSP) is revised to be calculated upon the maximum allowed regular levy rate of 22.95 cents per $100 in assessed valuation for Class I property. The Class I regular levy rate is currently 19.40 cents. Using the higher regular levy rate, the local share amount increases from $454,486,958 (at the 19.40 rate) to $535,942,023, which is an increase of $81,455,065.
    
    The increase in the local share amount is offset by an increase in Steps 7a and 7b under the PSSP totaling $24,436,520 . The Step 7a (Improvement of Instructional Programs) allowance is calculated as the previous year appropriation for Step 7a plus 10% of the growth in local share over the previous year. Ten percent of the growth in local share is $8,145,507. The Step 7b (21st Century Technology Systems) allowance is calculated as the previous year appropriation for Step 7b plus 20% of the growth in local share over the previous year. Twenty percent of the growth in local share is $16,291,013.
    
    The $81,455,065 increase in local share, less the increased Step 7a allowance of $8,145,507 and less the increased Step 7b allowance of $16,291,013 equals $57,018,545.
    
    The reduction in state aid funding to the county boards of education will be completely offset by increased regular levy tax collections since the legislation sets the regular levy rates at the maximum for all county boards of education. Under certain circumstances, county boards of education will be permitted to reduce their regular levy rate below the maximum rate, but the legislation prevents them from reducing the rate more than the difference between their total basic foundation allowance and their local share calculated at the maximum levy rates.
    
    The estimated local share impact and corresponding Step 7a and Step 7b increases will vary annually based on the assessed property values for each county. For purposes of this fiscal note, the most recent assessed property values (March 2017) were utilized in the calculation.



Memorandum


    



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