FISCAL NOTE
Date Requested: January 14, 2016 Time Requested: 12:45 PM |
Agency: |
Tax Department, State |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
1190 |
Introduced |
SB125 |
|
CBD Subject: |
Tax |
---|
|
FUND(S):
General Revenue Fund
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.
The stated purpose of this bill is to increase the cigarette tax incrementally by a total of $1 per pack in order to fund substance abuse and workforce development initiatives. The bill sets forth timing of increases. The bill details how the newly generated funds are to be distributed.
Based on current cigarette tax revenue and the effective dates of the increases, an increase in the cigarette tax rate to $1.05 will increase revenue by up to $71.5 million in FY2017, an increase to $1.30 will increase revenue by up to $95.0 million in FY2018, and an increase to $1.55 will increase revenue by up to $115.3 million in each year thereafter. The bill dedicates portions of the revenue increases to “workforce development initiatives” and “substance abuse programs.” The bill incrementally increases these dedications of revenue. The revenue dedication is $10.0 million in FY2017, $15.0 million in FY2018, and $20.0 million in FY2019 and thereafter each for substance abuse programs and workforce development. This leaves $51.5 million in FY2017, $65.0 million in FY2018, and $75.3 million in FY2019 and thereafter in unallocated General Revenue Fund revenue. The provisions of the this bill that provide for the first $20 million (FY2017), $30 million (FY2018) and $40 million (FY2019) of tax collections to be dedicated to specific programs might result in a negative impact on cash flow for other General Revenue Fund programs at the beginning of each fiscal year.
Administrative costs to the Tax Department will be $23,000 in the current fiscal year, $30,000 in FY2017, and $30,000 in each year thereafter.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2016 Increase/Decrease (use"-") |
2017 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) |
1. Estmated Total Cost |
23,000 |
30,000 |
30,000 |
Personal Services |
0 |
10,000 |
10,000 |
Current Expenses |
0 |
0 |
0 |
Repairs and Alterations |
0 |
0 |
0 |
Assets |
0 |
0 |
0 |
Other |
23,000 |
20,000 |
20,000 |
2. Estimated Total Revenues |
0 |
71,500,000 |
115,300,000 |
Explanation of above estimates (including long-range effect):
Based on current cigarette tax revenue and the effective dates of the increases, an increase in the cigarette tax rate to $1.05 will increase revenue by up to $71.5 million in FY2017, an increase to $1.30 will increase revenue by up to $95.0 million in FY2018, and an increase to $1.55 will increase revenue by up to $115.3 million in each year thereafter. The bill dedicates portions of the revenue increases to “workforce development initiatives” and “substance abuse programs.” The bill incrementally increases these dedications of revenue. The revenue dedication is $10.0 million in FY2017, $15.0 million in FY2018, and $20.0 million in FY2019 and thereafter each for substance abuse programs and workforce development. This leaves $51.5 million in FY2017, $$65.0 million in FY2018, and $75.3 million in FY2019 and thereafter in unallocated General Revenue Fund revenue. The provisions of the this bill that provide for the first $20 million (FY2017), $30 million (FY2018) and $40 million (FY2019) of tax collections to be dedicated to specific programs might result in a negative impact on cash flow for other General Revenue Fund programs at the beginning of each fiscal year.
Administrative costs to the Tax Department will be $23,000 in the current fiscal year, $30,000 in FY2017, and $30,000 in each year thereafter.
Memorandum
The stated purpose of this bill is to increase the cigarette tax incrementally by a total of $1 per pack in order to fund substance abuse and workforce development initiatives. The bill sets forth timing of increases. The bill details how the newly generated funds are to be distributed.
The terms “substance abuse programs” and “workforce development initiatives” are not well defined. This could prove problematic.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov