2.  Basically, puts a “price tag” on proposed legislation  A fiscal note estimates: ◦ Costs and savings and ◦ Revenue gains or losses that ◦ Result from proposed legislation  A way for Agencies to convey estimates of financial impacts of legislative policy changes on their budgets  A tool to help legislators and fiscal analysts understand how a bill might impact the state budget as a whole, individual agencies, and sometimes local governments

3.  Governed by M.S. § 3.98  Process managed by and completed fiscal notes are approved by MMB and posted to their website.  Details of what notes must include – will discuss later  Limit any comments or opinions to technical or mechanical defects of a bill. Do not express opinions on the merits of the proposal

4. DHSDHS DNRDNR DORDOR

5.  In a proposed bill, the agency is:  receiving an appropriation  collecting money  administering a grant or program  administering statues being modified by the bill  One that has the most (or some…) knowledge about the effects of it

6.  Fiscal notes are: ◦ An administration product, reviewed and approved by Minnesota Management & Budget ◦ For support of legislative decision-making ◦ Of keen interest to stakeholders on every side of the issue and to those who represent other issues competing for limited resources.  Therefore: Credibility, clarity, and consistency are extremely important

7.  Afraid we would pad costs of things we don’t like; shave costs when we like  We “absorb” the costs of things we like  Delays, or inability to complete a fiscal note by the requested time – can be very short timelines  “Hot button” transportation controversies – transit vs roads, asphalt vs concrete, metro vs non-metro, contractors vs employees

8.  Just in the last year.... Bills related to:  Rail inspectors added  Work Zone Safety  Money appropriated so people could ride buses for free on election day  Criteria for the I-494 construction rehab project  A large transportation funding package

9. 9 House or Senate requests fiscal note via Fiscal Note Tracking System (FNTS) MMB notified of request, reviews bill, and assigns agency or agencies Agency Fiscal Note Coordinator (FNC) notified of request, reviews request & bill; reviews internal bill reviews; requests assistance - Agency subject matter experts Agency staff analyze the bill, complete impacts for their area and sends to FNC FNC completes & consolidates fiscal note, gets approvals and signs off in FNTS Fiscal Note Process Flow

10. 10 Executive Budget Officer (EBO) reviews fiscal note. Executive Budget Officer signs off on the fiscal note in FNTS Completed fiscal note e-mailed to chief author, committee chair, fiscal analyst & requester Fiscal Note Process Disapproves Approves

11.  Bill Description - determine what the bill does  Articulate your assumptions  Budget structure & base  Estimating cost & revenue impacts, and FTEs  Long-Term Fiscal Impacts  Local Government Impacts  Cover Sheet

12.  Develop objective, operational statements regarding the immediate impacts of the bill (over 4 year period).  Think about the timing – need to break into fiscal years.  Separate primary from secondary impacts and focus on the primary impacts. Don’t stretch it!  Get the data you need to back up your assumptions and provide a basis for your calculations.  Include internal resources as well as external.  Use the fiscal note training aids we will provide.

13.  Equation or formula used to determine the impact of the proposal on expenditures and/or revenues  Displays both program and administrative impacts  Must be based on assumptions in previous section  Should be laid out in easy to follow calculations  Need to include change in FTE’s  Section for long term impacts also

14.  Cost and revenue estimates – break out by impact to different “programs and budget activities” in MnDOT biennial budget structure  Know how your business area’s programs and operations are distributed within the biennial budget structure.  Fiscal notes must show the bill’s estimated change to the base budget forecast.

15.  Describe any unfunded mandates, impacts of shifting costs from the state to the local level, etc.  Describe which local units of government are affected  Describe impacts that may not be obvious to legislators  These are difficult to quantify—it is okay to talk generally about impacts to local governments without specific dollar amounts

16.  Has implications and creates expectations for the entire agency  We may not know the extent to which costs can be absorbed until the final budget bill is complete— don’t make promises we can’t keep  Can only do if it’s entirely within scope of what’s already being completed  MnDOT very rarely does in fiscal notes – let legislature decide whether to appropriate

17.  It’s not enough to just say – “this doesn’t impact MnDOT….”  Assumptions leading to a “no fiscal impact” response should be documented in the supporting narrative section  The fiscal note must explain why there is no fiscal impact to MnDOT

18.  Know what the fiscal note says before testifying.  Do not disagree with or contradict a MnDOT fiscal note when testifying  If discussing costs for a program (calendar) year, mention that this equates to a fiscal year cost of X – to tie it back to a fiscal note

19.  We are completing fiscal note aids to make life easier for people completing fiscal notes.  Different rates to use, assumptions under certain circumstances, etc  Will send out fiscal note aids at the start of the 2015 session, and with every fiscal note request.  Questions?