FISCAL NOTE
Date Requested: February 08, 2017 Time Requested: 05:19 PM |
Agency: |
Higher Education Policy Commission |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
1214 |
Introduced |
HB2118 |
|
CBD Subject: |
|
---|
|
FUND(S):
0596
Sources of Revenue:
General Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
HB 2118 would abolish the West Virginia Council for Community and Technical College Education; transfer the power and duties of the council to the governing boards of the institutions of higher education; and provide for the disposition or transfer of assets and property of the council.
The enactment of this legislation would have a substantial negative financial impact on the State, institutions and students served by public higher education. The Council is a critical and necessary partner in with the West Virginia Department of Commerce and others in the process to attract businesses such as Procter and Gamble and Macy’s to West Virginia. Corporations will not locate to the State without significant workforce investment commitments from a State agency that serves as the coordinating entity for Community and Technical Colleges. This coordination cannot occur at the local level.
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 |
8,200,000 |
8,200,000 |
Personal Services |
0 |
2,200,000 |
2,200,000 |
Current Expenses |
0 |
6,000,000 |
6,000,000 |
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):
Lost Tax Revenues
If the Council was abolished, a corporation that was otherwise attracted to West Virginia would choose another location upon learning that workforce training coordination and support was not available at the State level. If the corporation would earn $50 million per year at its new location and it paid the West Virginia 6.5% income tax rate, the loss of corporate income tax revenue to the state would be approximately 6.5%. Although this number may be high as a result of potential corporate tax deductions, the loss does not include an estimate of foregone increases in state tax revenue from the economic impact of a new corporate presence.
Grant Revenues
The Council receives federal and state grants that would not be received directly by institutions including that are critical for workforce training:
Perkins- 8.4 million awarded annually (the CTCS only gets a small portion of that, but the Council is the eligible agency)
SPNEG- (Federal Department of Labor National Emergency Grant) 5.25 million
Bridging the Gap- 25 million
National Governor’s Association- $10,000
NASA Space Grant- $500,000 (this is a grant through WVU but the work is coordinated through this office)
Benedum Petroleum Tech- $250,000
In the past 6 years the Council has received the following grants used to train West Virginia’s workforce:
Green Up- 6 million
Green Collar- 1 million
FIPSE- (Fund for Improvement of Postsecondary Education) $634,990
Benedum College Transition- $259,000
Shared Services
The Council provides financial aid services to three institutions. The additional net costs that would be incurred from the employment of three additional financial aid directors and termination of the Council’s shared services function would be about $208,000.
The Council provides facility management services to the Community and Technical Colleges. If each institution employed a director of facilities management, the addition net cost from the employment of the directors and the termination of the Council’s facilities management function would be about $1,134,000.
The elimination of the Council’s $742,000 state appropriation would have a severe impact on students’ ability obtain the needed workforce education to live productive lives. Current and future tax revenues would also be considerably less than they would be if the Council remains in service to the State.
Memorandum
Person submitting Fiscal Note: Ed Magee
Email Address: edward.magee@wvhepc.edu