Legislative staff explains fiscal notes: how costs, local impacts and avoided costs are considered

Bill Zeprinick, manager of the fiscal note section at Legislative Council staff, told the Colorado Forest Health Council on Nov. 14 that fiscal notes are “an objective nonpartisan analysis of the fiscal impacts of proposed legislation.” He said fiscal notes are required by law and intended as a decision-making tool for legislators, though they are not binding on appropriations decisions.

Zeprinick described what fiscal notes contain: a plain-language summary of the bill, estimates of revenue and expenditure impacts, analysis of impacts on state agency workloads and systems, and a narrative section for local government impacts. He said Legislative Council staff rely primarily on information from affected state agencies and local governments, but also use academic studies, other states’ experience and in-house expertise when preparing estimates.

Council members asked whether fiscal notes capture costs shifted to counties. Zeprinick said notes typically include a local government section that outlines how a bill might affect counties and municipalities, but staff cannot produce line-by-line budgets for every local jurisdiction given the number of counties, municipalities and special districts in Colorado. He advised sponsors and agencies to submit specific studies or data to make a case for avoided-cost effects, and said that staff will include such avoided-cost discussion in the narrative when evidence supports it.

On process, Zeprinick said agencies ordinarily have five business days to respond to fiscal note requests and that staff generally scope fiscal notes to the upcoming budget year plus one out year (a two-year window) unless the scope is adjusted for a specific proposal. He also explained that fiscal notes are updated for amendments offered during the legislative process, and that the office records departmental differences when it disagrees with an executive agency’s estimate.

Zeprinick encouraged council members and agency staff to forward questions and supporting studies to Legislative Council staff during the session. He offered to share tools the office provides agencies, such as common policy assumptions and response worksheets, and to be available for follow-up during the legislative session.

The presentation concluded with an offer of contact information and an invitation for agencies and bill sponsors to provide additional evidence (studies, localized cost data) if they want staff to consider avoided-cost or dynamic impacts in the narrative portions of fiscal notes.