FISCAL NOTE

Date Requested: January 23, 2023
Time Requested: 02:56 PM
Agency: Auditor, State of WV
CBD Number: Version: Bill Number: Resolution Number:
1932 Introduced HB2767
CBD Subject: Constitutional Officers


FUND(S):

State Funds

Sources of Revenue:

General Fund

Legislation creates:

Creates New Expense



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


The purpose of proposed House Bill 2767 is to provide a housing allowance of $2,000 per month for designated constitutional officers including the Attorney General, State Auditor, Secretary of State, Commissioner of Agriculture and the State Treasurer.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2023
Increase/Decrease
(use"-")
2024
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 129,200
Personal Services 0 0 9,200
Current Expenses 0 0 120,000
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):


Our examination of the proposed legislation indicates the total amount of housing allowances authorized in the Bill would total $120,000 each fiscal year upon full implementation consisting of $24,000 each fiscal year for the five covered constitutional officers named in the Bill. In addition, our background research indicates the potential for any such housing allowances depending upon their structure and the prevailing provisions of the Internal Revenue Code in Calendar Year 2025 to be deemed as a “Taxable Employee Fringe Benefit”. If so deemed, any housing allowances paid would be subject to Social Security and Medicare Tax Withholding and requisite employer matchings which would result in approximately $9,200 in additional costs under the Bill utilizing the current rate of employer matching of 7.65%. As a result, we have arrived at an estimate of total costs upon full implementation of approximately $129,200. It should be noted that Taxable Employee Fringe Benefits while subject to Social Security and Medicare Taxes are not considered as “salary” for retirement purposes under the West Virginia Public Employees Retirement System. Accordingly, there is no potential retirement matching cost component involved in the payment of housing allowances.



Memorandum


It should be noted the provisions of the proposed legislation would not take effect until Calendar Year 2025, effectively the second half of 2025 Fiscal Year commencing on July 1, 2024. Accordingly, the total expenditures required during the initial year of implementation of the proposed Bill (Fiscal Year 2025) would consist of $60,000 for Housing Allowances and $4,600 for Social Security and Medicare matching expenditures for a total of approximately $64,600.



    Person submitting Fiscal Note: Michael E. Sizemore, CPA
    Email Address: Mike.Sizemore@wvsao.gov