COMMITTEE ON LEGISLATIVE RESEARCH OVERSIGHT DIVISION FISCAL NOTE L.R. No.:0853S.03I Bill No.:SJR 2 Subject:Constitutional Amendments; Initiative and Referendum Petitions Type:Original Date:January 24, 2023Bill Summary:This joint resolution modifies provisions relating to initiative petitions. FISCAL SUMMARY ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026 General Revenue* $0 or (More than $10,000,000)* $0$0Total Estimated Net Effect on General Revenue $0 or (More than $10,000,000)*$0$0 *The potential fiscal impact of “(More than $10,000,000)” would be realized only if a special election were called by the Governor to submit this joint resolution to voters. *SOS has updated the estimated cost of a statewide special election after examining actual reimbursement costs for the General Primary and General Election during 2022. ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net Effect on Other State Funds $0$0$0 Numbers within parentheses: () indicate costs or losses. L.R. No. 0853S.03I Bill No. SJR 2 Page 2 of January 24, 2023 SAK:LR:OD ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net Effect on All Federal Funds $0$0$0 ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net Effect on FTE 000 ☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any of the three fiscal years after implementation of the act or at full implementation of the act. ☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of the three fiscal years after implementation of the act or at full implementation of the act. ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Local Government$0*$0$0 *Transfer out and transfer in net to zero if the Governor calls a special election. L.R. No. 0853S.03I Bill No. SJR 2 Page 3 of January 24, 2023 SAK:LR:OD FISCAL ANALYSIS ASSUMPTION Officials from Office of the Secretary of State (SOS) assume this bill would decrease the number of required signatures for a successful initiative petition proposing a constitutional amendment. The current requirement of 8% of voters from the previous gubernatorial election in six out of eight congressional districts will be about 171,000 signatures for the 2024 petition cycle. The proposed change to require 7% in six out of eight districts would decrease that minimum number to about 150,000 signatures, an approximately 12.5% decrease. This decrease in signatures may lead to an decrease in pages submitted per petition and therefore a decrease in processing costs when signatures are submitted for verification. The referendum petition submitted in 2017 contained over 250,000 valid signatures and cost approximately $32,000 in state resources to process for sufficiency, which SOS does with existing staff. Assuming that other petitions achieve a similar proportion of signatures above the minimum requirements, a decrease of about 12.5% in processing costs could reach or exceed $4,000 per petition in savings between FY 2026 and FY 2027. Based on an average amount of four petitions submitted for verification per election cycle, this would result in total savings of up to $16,000, which would be absorbed by the office. This decrease does not include resources conserved by local election authorities, nor does it include the potential for an increased number of initiative petitions submitted for verification, which could lead to increased processing costs. Additionally, each year, a number of joint resolutions that would refer to a vote of the people a constitutional amendment and bills that would refer to a vote of the people the statutory issue in the legislation may be considered by the General Assembly. Unless a special election is called for the purpose, Joint Resolutions proposing a constitutional amendment are submitted to a vote of the people at the next general election. Article XII section 2(b) of the Missouri Constitution authorizes the governor to order a special election for constitutional amendments referred to the people. If a special election is called to submit a Joint Resolution to a vote of the people, section 115.063.2 RSMo requires the state to pay the costs. The cost of the special election has been estimated to be $10 million based on the cost of the 2022 primary and general election reimbursements. The Secretary of State’s office is required to pay for publishing in local newspapers the full text of each statewide ballot measure as directed by Article XII, Section 2(b) of the Missouri Constitution and Section 116.230-116.290, RSMo. Funding for this item is adjusted each year depending upon the election cycle. A new decision item is requested in odd numbered fiscal years and the amount requested is dependent upon the estimated number of ballot measures that will be approved by the General Assembly and the initiative petitions certified for the ballot. In FY 2014, the General Assembly changed the appropriation so that it was no longer an estimated appropriation. L.R. No. 0853S.03I Bill No. SJR 2 Page 4 of January 24, 2023 SAK:LR:OD For the FY24 petitions cycle, the SOS estimates publication costs at $70,000 per page. This amount is subject to change based on number of petitions received, length of those petitions and rates charged by newspaper publishers. The Secretary of State’s office will continue to assume, for the purposes of this fiscal note, that it should have the full appropriation authority it needs to meet the publishing requirements. Because these requirements are mandatory, the SOS reserves the right to request funding to meet the cost of the publishing requirements if the Governor and the General Assembly again change the amount or continue to not designate it as an estimated appropriation. Oversight has reflected, in this fiscal note, the state potentially reimbursing local political subdivisions the cost of having this joint resolution voted on during a special election in fiscal year 2024. This reflects the decision made by the Joint Committee on Legislative Research that the cost of the elections should be shown in the fiscal note. The next scheduled statewide primary election is in August 2024 and the next scheduled general election is in November 2024 (both in FY 2025). It is assumed the subject within this proposal could be on one of these ballots; however, it could also be on a special election called for by the Governor (a different date). Therefore, Oversight will reflect a potential election cost reimbursement to local political subdivisions in FY 2024. Officials from the St. Louis City Board of Elections assume increased voter approval thresholds could result in fewer petitions as the higher bar could discourage circulation efforts. Fewer petitions could result in decreased staffing and overtime to work petitions leading to fiscal savings. Oversight notes there is no way to determine if increased voter approval thresholds would result in fewer petitions. Oversight assumes this proposal will have an insignificant fiscal savings, if any to local election authorities; therefore, Oversight will not reflect an impact on the fiscal note. Officials from the Missouri House of Representatives, Missouri Senate, Jackson County Board of Elections, Platte County Board of Elections, Kansas City Board of Elections, and St. Louis County Board of Elections their respective organizations. Oversight does not have any information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal note for these agencies. Oversight only reflects the responses received from state agencies and political subdivisions; however, other local election authorities and county clerks were requested to respond to this proposed legislation but did not. A listing of political subdivisions included in the Missouri Legislative Information System (MOLIS) database is available upon request. L.R. No. 0853S.03I Bill No. SJR 2 Page 5 of January 24, 2023 SAK:LR:OD FISCAL IMPACT – State GovernmentFY 2024 (10 Mo.) FY 2025FY 2026GENERAL REVENUETransfer Out - SOS - reimbursement of local election authority election costs if a special election is called by the Governor $0 or (More than $10,000,000)*$0$0 ESTIMATED NET EFFECT ON GENERAL REVENUE $0 or (More than $10,000,000)* $0$0 *SOS has updated the estimated cost of a statewide special election after examining actual reimbursement costs for the General Primary and General Election during 2022. FISCAL IMPACT – Local GovernmentFY 2024 (10 Mo.) FY 2025FY 2026LOCAL POLITICAL SUBDIVISIONS Transfer In - Local Election Authorities - reimbursement of election costs by the State for a special election $0 or More than $10,000,000* $0$0 Costs - Local Election Authorities - cost of a special election if called for by the Governor $0 or (More than $10,000,000)*$0$0 ESTIMATED NET EFFECT ON LOCAL POLITICAL SUBDIVISIONS$0$0$0 *SOS has updated the estimated cost of a statewide special election after examining actual reimbursement costs for the General Primary and General Election during 2022. FISCAL IMPACT – Small Business No direct fiscal impact to small businesses would be expected as a result of this proposal. FISCAL DESCRIPTION Currently, initiative petitions must receive signatures from 8% of voters in two-thirds of the state’s congressional districts in order to place an amendment to the constitution on the ballot. Upon voter approval, this resolution would require initiative petitions to receive signatures from L.R. No. 0853S.03I Bill No. SJR 2 Page 6 of January 24, 2023 SAK:LR:OD 7% of voters from all congressional districts in order to place an amendment to the constitution on the ballot. Currently, initiative petitions proposing amendments to the constitution must receive approval from a simple majority of the votes cast thereon in order to pass. Upon voter approval, this resolution would require initiative petitions proposing amendments to the constitution to receive approval from a number of votes greater than or equal to a majority of registered voters in order to pass. Only citizens of the United States properly registered to vote in the state of Missouri shall be considered legal voters. This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space. SOURCES OF INFORMATION Office of the Secretary of State Missouri House of Representatives Missouri Senate Jackson County Board of Elections Platte County Board of Elections St. Louis City Board of Elections St. Louis County Board of Elections Kansas City Board of Elections Julie MorffRoss StropeDirectorAssistant DirectorJanuary 24, 2023January 24, 2023