FISCAL NOTE

Date Requested: February 08, 2017
Time Requested: 04:16 PM
Agency: Alcohol Beverage Control Administration
CBD Number: Version: Bill Number: Resolution Number:
1139 Introduced HB2049
CBD Subject: Alcoholic Liquors and Beers


FUND(S):

General

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.


    This bill will increase the WVABCA's budget for salaries and salary enhancements ($400 per year of service) paid to Enforcement Inspectors, Agents and Supervisors as noted in the pay scale included in the bill. The bill does not note the corresponding increase in benefits paid to the Enforcement Inspectors, Agents and Supervisors receiving the pay raise. Further the affected groups' annual salaries would impact the WVABCA's budget.
    
    The WVABCA is a special revenue agency, therefore general revenue transfers would likely be reduced to account for salaries and benefits proposed to be paid to Enforcement Inspectors, Agents and Supervisors.
    
    The bill's annual length of service award is an annual salary enhancement based on $400 for each year of service upon completion of 2 years of service. This $400 amount would increase annually in perpetuity as each Inspector, Agent and Supervisor’s years of service increases until retirement. Again this would significantly impact general revenue transfers.
    



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 933,033 944,073 466,517
Personal Services 933,033 944,073 466,517
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):


    * The numerical data is from the **2013 fiscal note** for this same bill and only notes the potential salary and benefits data has been provided by the WVABCA Personnel Department:
    
    Additional revenue would be spent on Personal Services which would increase to account for increased salaries and benefits (insurance federal tax issues, health costs, retirement and etc.) for only WVABCA Enforcement Inspectors, Agents and Supervisors.
    
    Personal services would need to be increased by varying amounts in future years beyond 2018 to account for the annual salary enhancement/length of service award for only for WVABCA Enforcement Inspectors, Agents and Supervisors.
    
    WVABCA Budgeted position impact (the ½ FY 2017 impact would be roughly estimated at half of 2017 or $466,517), these numbers do not include any new hires or retirements
    
    FY 2014 = $899,912.52
    FY 2015 = $910,952.52
    FY 2016 = $921,992.52
    FY 2017 = $933,032.52
    FY 2018 = $944,072.52
    
    Total projected 5.5 year costs (from 2013) = $5,054,398.86 (this number would likely be higher in today's numbers)
    
    All these numbers (provided by WVABCA HR Dept.) assume no new hires and no changes to retirement and federal withholding requirements.
    
    The bill will have a fiscal impact by increasing WVABCA’s budget for salaries and benefits.
    
    The WV Division of Personnel (“DOP”) is currently conducting a comprehensive classification and compensation review of all state agencies that is potentially undermined by singling out these particular classifications of employees at a single agency for unique treatment in this bill. Another course of action would be to await the final results of DOP’s review and recommendations before codifying classifications and salaries.
    
    The employee classifications specified in this bill are not unique to the WVABCA and its enforcement division. Other agencies across state government have similar positions with the same or similar function. To address only one class of employee at one agency could create certain inequities.
    
    The bill is contrary to the fair and equitable classification process and creates the potential for grievances among similarly classified employees who are not included within the bill’s limited reach. Such an arrangement may create two pay scales – one for WVABCA Enforcement and another for the rest of state government.
    
    In 2015, The bill impacted 25 employees in the WVABCA Enforcement Division while other administrative employees in the Enforcement Division would not be eligible for these salary enhancements as well as all other WVABCA employees (approximately 56).
    



Memorandum


    The bill is technically placed in the wrong code since it covers personnel issues it should be in the WV DOP’s code sections. (See W.Va. Code §5-5-1 et seq. – Salary Increases for State Employees).
    
    The bill is not clear if the bill covers both current exempt and civil service employees.
    
    The bill creates an annual salary enhancement (length of service award of $400/year for each year of service applied retroactively) similar to the state employees’ annual increment for Enforcement Employees only. The statutory language authorizing such an enhancement may not be correct (See W.Va. Code §5-5-2 - Increment).
    
    The bill fixes the salary and salary enhancements of Enforcement Inspectors and Agents. Any future salary increases or salary enhancements would need to be specifically granted and amended into statute otherwise the Enforcement Employees would not benefit. There would likely not be any overtime payments possible to Enforcement Inspectors and Agents once their salary was set by statute.
    
    The bill is not clear as to whether the Enforcement Employees would continue to receive the annual state employees’ increment and also the proposed salary enhancement/length of service award.
    
    The bill states that the evaluation and testing of Enforcement Employees is for advancement but does not prohibit demotion or firing for failure to pass or complete certain evaluation and testing nor does it permit any merit based promotion or salary increase.
    



    Person submitting Fiscal Note: Anoop Bhasin,General Counsel on behalf of WVABCA
    Email Address: Anoop.K.Bhasin@wv.gov