FISCAL NOTE
Date Requested: February 22, 2023
Time Requested: 08:53 AM |
| Agency: |
Education, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3771 |
Comm. Sub. |
SB638 |
|
|---|
| CBD Subject: |
Education (K12) |
|---|
|
FUND(S):
N/A
Sources of Revenue:
Other Fund County Funded
Legislation creates:
Creates New Expense
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
There is no cost to the State under the Public School Support Plan (PSSP) to fund the employee unused personal leave bonus up to a maximum 10-days annually for all personnel as stated in the proposed legislation. Consequently, the total estimated cost would have to be borne by the county boards of education. The estimated cost to county boards under the proposed legislation would be a maximum of $58,811,986 with a median cost being $29,405,993.
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 |
58,811,986 |
58,811,986 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
58,811,986 |
58,811,986 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The proposed legislation provides a bonus to all applicable personnel for unused personal leave up to a maximum 10-days annually for all personnel. The estimated cost to the state under the proposed legislation would be a maximum $58,811,986 with a median cost being $29,405,993. The cost estimate includes funding for fixed costs at 8.29%. Retirement was not calculated in the cost estimate as clarified in the committee substitute bill language.
The cost estimate is based on SY23 certified personnel collections which totaled 24,037.15 professional educator and 13,875.61 service personnel positions. The maximum cost estimate assumes that all personnel will annually be eligible for a payout equal to 10-days. The median cost estimate assumes that all personnel will annually be eligible for a payout equal to 5-days. Daily payout rates equal to approximately $159 for professional educators and $116 for service personnel were utilized in the calculation. These amounts are equal to the average minimum daily substitute pay rate for professional educators and service personnel respectively. This amount will vary statewide based on current language included in the proposed legislation stating the bonus is to be equal to the average daily rate of a substitute by school district for each position class.
Memorandum
Under the current language included in the proposed legislation, there is no mention of a State funding source to provide the bonus for unused personal leave. Consequently, the total estimated cost would have to be borne by the county boards of education. This cost would be paid for out of available county resources such as local excess levy funds (if applicable to a county and if the excess levy call includes a provision that would allow for this use of levy funds), the portion of regular levy funds not statutorily required to be put toward the county’s local share of the total basic program allowance, or any future savings realized by potentially reduced substitute costs as a result of the proposed legislation’s impact on absenteeism.
Please note that federal funds can only be used to pay state-mandated bonuses for employees whose salaries are also funded by a federal funding source. Non-federally funded salary employee bonuses cannot be paid for out of federal funds due to federal supplement not supplant regulations.
The actual cost of the proposed legislation will vary annually due to actual employee personal leave balances impacting the cost. While WVDE does have access to employee leave balances, we have no way of determining the number of days each employee would choose to be paid out annually or how alternative uses of unused leave balances available to some groups of employees under existing statutes would impact such payouts.
The proposed legislation requires the rate of pay for the bonuses be aligned with the average daily rate of a substitute in the position within the county on an employee-by-employee basis. However, not all positions require substitutes, so they would not have an average daily rate. Additionally, this could create a large variance in the daily bonus amount received among position groups not only at a county level but also statewide.
By striking the authorizing language of the first sentence of 18A-4-10a, the proposed legislation would potentially take away a county board of education’s authorization to provide their own leave incentive bonuses for employees or defined groups of employees. Note that county boards of education will incur additional costs if they choose to fund the daily rate payout at an amount greater than the average daily substitute pay rate if it is determined they have the ability to do so. This is currently unclear based on the current language included in the proposed legislation. Such county level costs are not included in the above estimates.
The proposed legislation is unclear as to whether the bonus mandate is to be in addition to county sponsored leave bonuses currently in place as allowed in the current statute or if the legislation is intended to supplant those bonuses.
The proposed legislation does not speak to the statute which currently provides state funded bonuses for classroom teachers who have used less than 4 personal leave days in a school year (WVC 18A-4-10(c)). WVDE believes that unless the statute is revised, classroom teachers would be eligible for both bonuses.
WVDE believes the statute can be interpreted to allow the total accrued personal leave balance of an employee to be applied to the 10-day bonus conversion rather than only those days accrued in the school year in which the bonus is paid out. The bill language should be reviewed to ensure the intent is explicitly outlined.
The West Virginia Department of Education (WVDE) believes there may be a large fiscal impact created by the proposed legislation that will be seen by the Consolidated Public Retirement Board (CPRB) and the Public Employees Insurance Agency (PEIA). However, WVDE does not have the expertise to estimate such a cost.
Person submitting Fiscal Note: Samuel E. Pauley
Email Address: sepauley@k12.wv.us