FISCAL NOTE
Date Requested: March 24, 2021
Time Requested: 09:46 AM |
| Agency: |
Lottery Commission, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3480 |
Originating |
HB3300 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
State Lottery Fund; State Excess Lottery Fund
Sources of Revenue:
Special Fund
Legislation creates:
Creates New Fund: Income Tax Reduction Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
Pursuant to Section 11B-2-33(b)(3) of HB 3300, $164,451,840 would be directed into the new income tax reduction fund from the State Excess Lottery Fund. Currently, the State Excess Lottery Fund serves several state bonding requirements. A reduction of $164,451,840 in the State Excess Lottery Fund would effectively limit the State's bond covered to date ratio by 2.3 coverage points, inherently rising the cost to State Government.
Additionally, if Section 11B-2-33(b)(4) of HB 3300 contemplates the addition of limited video lottery terminal permits and machines over and above the amount of terminals currently permitted to operate, which is unclear at this time, the Lottery and the State could see an increase in revenues associated therewith. However, at this time, the Lottery projects such change would have a minimal impact as the Lottery currently has the ability to offer up to 9,000 permits to operate limited video lottery terminals and does not currently have the demand for such permits.
Outside of the foregoing two sections, HB 3300 projects to have little additional impact on State Government revenues and costs because the remaining provisions relate to the transfer of current revenues from Lottery accounts to the income tax reduction fund and do not include new mechanisms for generating revenue or further costs to State Government.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2021
Increase/Decrease
(use"-") |
2022
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| 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):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
Please see Summary, above, and Memorandum, below.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
HB 3300 will have the following impact on the Lottery:
1) Section 11B-2-33(b)(2) of HB 3300 would direct the State's share from the Lottery game "Keno Go" from the State Lottery Fund to the new income tax reduction fund. The projected impact is a reduction in the State Lottery Fund of $511,500, dollars which currently go towards education, tourism and senior citizens. There are additional planned lottery games that may fall under this section in the future.
2) Section 11B-2-33(b)(3) of HB 3300 would direct the State's share from Limited Video Lottery games from the State Excess Lottery Fund to the income tax reduction fund. The projected impact is a reduction in the State Excess Lottery Fund of $164,451,840, dollars which currently go to State bond coverage, Promise scholarships, etc. As indicated above, this appropriation would result in the reduction of the State's bond coverage by 2.3 coverage points, most certainly raising the costs to the State to do business.
3) If Section 11B-2-33(b)(4) of HB 3300 contemplates the addition of limited video lottery terminal permits and machines over and above the amount of terminals currently permitted to operate, which is unclear at this time, the Lottery and the State could see an increase in revenues associated therewith. However, at this time, the Lottery projects such a change would have a minimal impact as the Lottery currently has the ability to offer up to 9,000 permits to operate limited video lottery machines and does not currently have the demand for such permits.
4) Section 11B-2-33(b)(5) of would direct the State's share from Sports Wagering from the State Lottery Fund to the income tax reduction fund. The projected impact is a reduction of $2,100,000 from the State Lottery Fund, dollars that are currently spent towards education, tourism and senior citizens.
5) Section 11B-2-33(b)(6) would direct the State's share from Interactive Wagering, less one percent that is deposited into the racing association pension funds, from the State Lottery Fund to the income tax reduction fund. Although it is difficult to project the impact from Interactive Wagering because the program has yet to be in existence a full year, the Lottery projects the financial impact to approach a $1,500,000 reduction to the State Lottery Fund, dollars that are currently spent on education, tourism and senior citizens.
Person submitting Fiscal Note: W. Brian Nickerson, Managing General Counsel
Email Address: bnickerson@wvlottery.com